Exhibit

10.14




 




ADDENDUM TO

STANDARD OFFER, AGREEMENT AND ESCROW 

INSTRUCTIONS




 




FOR PURCHASE OF

REAL ESTATE




 




This ADDENDUM TO STANDARD OFFER, AGREEMENT AND ESCROW

INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (“Addendum”) is entered into as of

March 24, 2003 between SCP Park Meadows, LLC, an Indiana limited liability

company (“Buyer”), and Medical Control Services, Inc., a California corporation

(“Seller”).




 




A.                                   Buyer

and Seller have entered into that certain Standard Offer, Agreement and Escrow

Instructions for Purchase of Real Estate Purchase of even date herewith (the

“Purchase Contract”), with respect to certain real property more particularly

described therein (the “Property”).  The

Purchase Agreement and this Addendum shall collectively be referred to herein as

the “Agreement.”




 




B.                                     Buyer

and Seller desire to clarify and more particularly describe their respective

rights and obligations under the Agreement. 

This Addendum shall supercede and control over any conflicting provision

in the Purchase Contract.  Other than as

clarified and more particularly described in this Addendum, the terms of the

Purchase Agreement shall remain in full force and effect.




 




NOW THEREFORE, for good and valuable consideration,

the receipt and sufficiency of which is acknowledged, the parties agree as

follows:




 




1.                                       Addendum

to Paragraph 4.1.  Seller shall have

the right to terminate the Agreement should Buyer fail to timely make the

Deposit.  Upon such date as Buyer has

approved the form of Lease (as defined below) in Buyer’s sole discretion, the

Deposit shall be immediately released to Seller by Escrow Holder without the

requirement of further instruction and the Deposit shall become

non-refundable.  The Deposit shall be

applied to the Purchase Price if Escrow closes pursuant to the terms of this

Agreement.  If the Escrow fails to close

under this Agreement as a result of Buyer’s default after approval of the form

of Lease, then the Deposit shall be retained by Seller as provided under

paragraph 21 of the Purchase Contract. 

The Deposit shall be refundable to Buyer in the event Buyer fails to

approve the form of Lease, or if the escrow fails to close under the Agreement

as a result of Seller’s default under the Agreement.




 




2.                                       Addendum

to Paragraph 8.5.  Buyer will pay

for all other closing and assumption costs, including any special title

endorsements.  Buyer and Seller shall

each pay the costs of their respective legal counsel.




 




3.                                       Addendum

to Paragraph 9.1(a) through (b). 

Buyer has satisfied itself with respect to the matters described in

paragraphs 9.1(a) through 9.1(b), inclusive, and the Buyer Contingencies stated

therein are deemed satisfied.




 




4.                                       Addendum

to Paragraph 9.1(c).  Buyer has

obtained a Phase I Environmental Assessment with respect to the Property in

accordance with ASTM Standard E 1257-94 (“Phase I”) at Buyer’s sole cost.  A “Hazardous Substance” for purposes of the

Agreement is defined as any substance whose nature and/or quantity of

existence, use, manufacture, disposal or effect, render it subject to Federal,

state or local regulation, investigation, remediation or removal as potentially

injurious to public health or welfare. 

A “Hazardous Substance Condition” for 




 





























 




purposes of this Agreement is defined as the existence on, under or

relevantly adjacent to the Property of a Hazardous Substance that would require

remediation and/or removal under applicable Federal, state or local law.  Buyer has satisfied itself with respect to

the environmental aspects of the Property and the Buyer Contingency stated in

paragraph 9.1(c) is deemed satisfied.




 




5.                                       Addendum

to Paragraph 9.1(e) through (g). 

Buyer has satisfied itself with respect to the matters described in

paragraphs 9.1(e) through 9.1(g), inclusive, and the Buyer Contingencies stated

therein are deemed satisfied.




 




6.                                       Addendum

to Paragraph 12.1.  Seller hereby

represents and warrants that: (i) Seller is the owner of the Property and/or

has the full right, power and authority to sell, convey and transfer the

Property to Buyer as provided herein, and to perform Seller’s obligations

hereunder, (ii) Seller has no knowledge of any actions, suits or

proceedings  pending or threatened

before any commission, board, bureau, agency, arbitrator, court or tribunal

that would affect the Property or the right to occupy or utilize the same,

(iii) Seller will promptly notify Buyer and Brokers in writing of any Material

Change affecting the Property that becomes known to Seller prior to the Closing

and (iv) Seller is not the subject of a bankruptcy, insolvency or probate

proceeding.




 




7.                                       Addendum

to Paragraph 12.2.  BUYER

ACKNOWLEDGES AND AGREES THAT, OTHER THAN THE LIMITED REPRESENTATIONS SET FORTH

IN SECTION 12.1 OF THIS ADDENDUM, SELLER MAKES NO REPRESENTATIONS OR

WARRANTIES, EXPRESS OR IMPLIED, AS TO THE PROPERTY.  DURING THE CONTINGENCY PERIODS DESCRIBED IN SECTION 9.1 OF THE

PURCHASE CONTRACT, BUYER WILL CONDUCT ANY AND ALL INSPECTIONS OF THE PROPERTY

TO ITS FULL AND COMPLETE SATISFACTION, AND IT BUYER ACQUIRES THE PROPERTY FROM

SELLER, BUYER ACKNOWLEDGES THAT IT WILL BE PURCHASING THE PROPERTY WITH FULL

KNOWLEDGE OF ALL DEFECTS.  SELLER

ACKNOWLEDGES THAT IT IS FULLY CAPABLE OF EVALUATING THE PROPERTY’S SUITABILITY

FOR BUYER’S INTENDED USE.  THE PURCHASE

PRICE IS A PURCHASE PRICE REPRESENTING THE FACT THAT THE PROPERTY IS BEING

PURCHASED BUY BUYER ON AN “AS-IS,” “WHERE-IS” AND “WITH ALL

FAULTS” BASIS.  BUYER HEREBY WAIVES

ALL RIGHTS AND PRIVILEGES ARISING OUT OF, OR WITH RESPECT OR IN RELATION TO,

ANY REPRESENTATIONS (OTHER THAN THE LIMITED REPRESENTATIONS SET FORTH IN

SECTION 12.1), WARRANTIES OR COVENANTS (OTHER THAN THE EXPRESS COVENANTS OF

SELLER SET FORTH IN THE AGREEMENT TO EFFECT THE TRANSFER OF THE PROPERTY TO

BUYER), WHETHER EXPRESS OR IMPLIED, WHICH MAY HAVE BEEN MADE OR GIVEN, OR

WHICH MAY BE DEEMED TO HAVE BEEN MADE OR GIVEN, BY SELLER.




 




8.                                       Addendum

to Paragraph 13.  As of the date

hereof, portions of the Property are subject to certain leases (the “Existing

Leases”) described in Exhibit A attached hereto.  Seller hereby represents and warrants that it has provided to

Buyer true and correct copies of the Exiting Leases and agrees that it shall

not modify or extend such Existing Leases prior to the Closing without the

prior consent of Buyer.  Seller shall

transfer and assign its rights as landlord under the Existing Leases to Buyer

at the Closing and Buyer shall immediately thereafter transfer




 




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and assign its rights in the Existing Leases to RevCare, as tenant

under the Lease (“Tenant”); provided, however, that Buyer shall honor and

perform and shall not revoke the Existing Leases in the event that Tenant fails

to perform under the Lease.




 




9.                                       Addendum

to Paragraph 22.  Except for the

need for any party to seek a provisional remedy in a court of law to secure or

preserve the rights and benefits conferred in the Agreement, including

injunctive relief, any controversy

or dispute arising out of the Agreement shall be determined by binding

mediation.  Mediation hearings shall be

held in Orange County, California.  Any

such controversy shall be mediated by a single mediator who shall be a neutral

and impartial lawyer with excellent academic and professional credentials

specializing in general commercial matters, with experience in the field of

contract law and real estate acquisitions. 

If the parties cannot agree on the selection of the mediator within ten

(10) calendar days, the mediator shall be selected in accordance with the

Commercial Mediation Rules of the American Arbitration Association.  The mediator shall hear and determine said controversy

in accordance with applicable law, the intention of the parties as expressed in

the Agreement and any amendments thereto, and upon the evidence produced at any

mediation hearing, all based upon such procedures and rules of limited and

expedited discovery as are established by the mediator.  The award shall be rendered within twenty

(20) days after the conclusion of the final hearing, and may include attorneys’

fees and costs to the prevailing party pursuant to Paragraph 16 of the Purchase

Contract.  Judgment may be entered on

the award in any court of competent jurisdiction.




 




10.                                 Addendum

to Paragraph 24.3.  Buyer will keep confidential any information

or data received or delivered in its review and inspections of the Property,

Seller and Tenant.  If requested by

Seller, Buyer will promptly provide Seller with a copy of any written report

relating to the Property prepared for Buyer by any third party. If a sale is

not consummated, all books and records provided by or through the Seller will

be promptly returned to Seller, and any third party reports will become the

property of Seller upon reimbursement to Buyer of the costs of such reports.




 




11.                                 Additional

Modifications to Purchase Contract. 

The Closing of the transaction contemplated by the Agreement is

contingent upon the execution of a master lease of the entire Property by

Tenant, and Buyer, as landlord (the “Lease”), and delivery to Buyer, as

landlord, of two (2) unconditional, irrevocable letters of credit (the “Letters

of Credit”), each issued by a bank approved by Buyer in its reasonable

discretion.  Buyer acknowledges that

Seller shall be using proceeds from the sale of the Property to obtain the

Letters of Credit.  The  first Letter of Credit (the “First LC”)

shall be in an amount, at all times, equal to Six Hundred Fifty Thousand

Dollars ($650,000), and shall be self-renewing throughout the initial Lease

term.  The second Letter of Credit (the

“Second LC”) shall be in an amount, at all times, equal to Four Hundred

Thousand Dollars ($400,000).  The Second

LC shall be self-renewing throughout the initial Lease term, but shall be

subject to release commencing twelve (12) months following the Closing, subject

to Buyer’s receipt of a written request therefor from Tenant (“Notice”), and

provided all of the following conditions are satisfied:




 




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(a)                                  Tenant’s

most recent audited financial statements have been certified by a firm of

independent accountants, including such accountants’ opinion thereon, and such

opinion is unqualified; and




 




(b)                                 Tenant

has not failed to pay any monetary obligation to Buyer due under the Lease on

the due date thereof during the 12-month period immediately preceding Buyer’s

receipt of the Notice; and




 




(c)                                  Tenant

is not in Breach of the Lease (as defined in the Lease); and




 




(d)                                 Tenant’s

EBDA (as defined below) for the 12-month period as of the end of the quarter

immediately preceding the Buyer’s receipt of the Notice is at least Two Hundred

Thousand Dollars ($200,000).  “EBDA” means, with

reference to any 12-month period, net income for such period plus all amounts

deducted in arriving at such net income amount in respect of all amounts

properly charged for depreciation of fixed assets and amortization of

intangible assets during such period. 

EDBA shall not include any extraordinary, one time, nonrecurring income.




 




The Lease will be

delivered by Tenant pursuant to the terms of that certain letter agreement

between Seller and Buyer dated December 31, 2002 (the “LOI”), shall contain

the terms set forth in the LOI, and shall be executed within five (5) business

days of Buyer’s receipt of same. 

Notwithstanding anything to the contrary contained in the LOI, the Lease

shall provide that Tenant shall be entitled to a one-time tenant improvement

allowance in the amount of Fifty Thousand Dollars ($50,000) for the costs

relating to the tenant improvements (relating to the lobby, exterior painting,

parking lot and landscape) to be performed by Buyer which shall be detailed by

Buyer and furnished to Seller within sixty (60) days of the Closing.  In the event that Lease and the Letter of

Credit are not executed within five (5) business days of the receipt thereof,

Buyer may extend the period for execution; provided that the escrow deposit shall

remain refundable pursuant to the terms of the Purchase Contract and this

Addendum.




 




12.                                 Counterparts.  This Addendum may be executed in multiple

counterparts, each of which shall be deemed in original, but all of which,

together, shall constitute one and the same instrument.




 




13.                                 Partial

Invalidity.  If any portion of the

Agreement as applied to either party or to any circumstances shall be adjudged

by a court to be void or unenforceable, and then such portion shall be deemed

severed from the Agreement and shall in no way affect the validity or

enforceability of the remaining of the Agreement.




 




14.                                 Governing

Law.  This Addendum shall be

governed by California law.




 




15.                                 Entire

Agreement.  The Purchase Contract,

this Addendum and the LOI set forth all of the promises, covenants, agreements,

conditions and undertakings of the parties hereto with respect to the subject

matter hereof, and supersede all prior and contemporaneous agreements and

understandings, negotiations, inducements or conditions, express or implied,

oral or written.




 




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16.                                 Amendment;

Waiver.  To be effective, any

amendment or waiver of the Agreement must be in writing and be signed by the

party against whom enforcement of the same is sought.  Neither the failure of any party hereto to exercise any right,

power or remedy provided under the Agreement where otherwise available in

respect hereof at law or in equity, or to insist upon compliance by any other

party with its obligations hereunder, nor any custom or practice of the parties

at variance with the terms hereof, shall constitute a waiver by such party of

its right to exercise any such right, power or remedy or to demand such

compliance.  The rights and remedies of

the parties hereto are cumulative and not exclusive of the rights and remedies

that they otherwise might have now or hereafter, at law, in equity, by statute

or otherwise.




 




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IN WITNESS WHEREOF, the parties hereto have executed

this Addendum as of the day and year first-above written.




 




 




	

  SELLER:


  	

  BUYER:


  
	

   


  	

   


  
	

  MEDICAL CONTROL

  SERVICES, INC.,


  a California corporation


  	

  SCP PARK MEADOWS, LLC,

  an  Indiana


  limited liability company


  
	

   


  	

   


  
	

  BY:


  	

    /s/ Fred

  McGee


  	

   


  	

  BY:


  	

    /s/ John B.

  Urbahns


  	

   


  
	

  NAME:


  	

    Fred McGee


  	

   


  	

  NAME:


  	

      John

  B. Urbahns


  	

   


  
	

  TITLE:


  	

         CFO


  	

   


  	

  TITLE:


  	

             MEMBER


  	

   


  
										





 




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