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EXHIBIT 10.21
ADDENDUM TO LEASE
I. RECITALS
This Addendum to Lease (hereinafter "Addendum") is entered
into by and between SIERRA EQUITIES, INC., a corporation (hereinafter
"Landlord") and MESA GENERAL HOSPITAL, INC., an Arizona corporation
(hereinafter "Tenant") for the purpose of amending and modifying that
certain Lease dated July 29, 1977, whereby Landlord leased to Tenant
certain premises located at 515 North Mesa Drive, Mesa, Arizona 85201
(hereinafter "Lease"). For good and valuable consideration, receipt of
which is hereby acknowledged the parties hereto agree as follows:
II. MODIFICATIONS
A. Rent Adjustments
Paragraph "4. RENT, (b)" of the Lease is amended and modified
to provide as follows:
"(b) Except as provided in `(f)' below, on or before the first
day of each and every month of each thirty six (36) month
period (the `Adjustment Period'), the first of which shall
commence August 1, 1986 in addition to the Fixed Rent due
pursuant to subparagraph (a) above, Tenant shall pay as
additional rent an additional amount (the `Adjustment') to be
determined in accordance with the with the variations, if any,
in the costs of living as shown by the Consumer Price Index
for all Urban Consumers, as published by the Bureau of Labor
Statistics, United States Department of Labor, or any
successor agency (the `CPI'). The Adjustment for each month of
each Adjustment Period shall be an amount equal to fifty per
cent (50%) of the difference between (i) the product obtained
by multiplying the Fixed Rent by a fraction, the numerator of
which shall equal the CPI reported for the fourth calendar
month immediately prior to the first day of such Adjustment
Period and the denominator of which shall equal the CPI
reported for the fourth calendar month preceding the
Commencement Date, or, if a Market Reappraisal Date has
occurred, then the fourth calendar month preceding the most
recent Market Reappraisal Date and (ii) the Fixed Rent. The
computation of the Adjustment for each month of each
Adjustment Period shall be made without regard to whether any
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Adjustment was payable with respect to any preceding
Adjustment Period. In no event shall the calculation of the
amount of the Adjustment operate to reduce the total paragraph
3 below the Fixed Rent. In the event, that the necessary CPI
figures are not available to compute the Adjustment upon the
commencement of any Adjustment Period, Tenant shalt continue
to pay the Fixed Rent plus the Adjustment in effect, if any,
for the prior Adjustment Period (the `Tentative Adjustment' )
until such CPI figures become avail-able, at which time the
appropriate Adjustment for each month of such Adjustment
Period shall be determined. Immediately following such
determination, either Landlord shall refund to Tenant the
amount by which the sum of all Tentative Adjustments actually
paid during such Adjustment Period exceeds the sum of all
Adjustments properly payable during such Adjustment Period, or
Tenant shall pay to Landlord the amount by which the sum of
all Adjustments properly payable during such Adjustment Period
exceeds the sum of all Tentative Adjustments actually paid
during such Adjustment Period. In the event the CPI is no
longer published, Landlord and Tenant shall determine another
index of similar nature showing changes in the cost of living
to be used to calculate the Adjustment due Landlord. If
Landlord and Tenant cannot agree on the selection of an index
or if Landlord and Tenant disagree as to the computations
called for in this subparagraph (b), any disagreed matters
shall then be resolved by arbitration in the county in which
the Premises are located, in accordance with the then rules of
the American Arbitration Association. The Fixed Rent and any
Adjustments are sometimes collectively referred to as the
`Rent'."
B. Periodic Reappraisals
The Lease is supplemented by the addition to "4. RENT" of the
Lease of the following subparagraph "(f)":
"(f) For the purpose of this Lease the term `Market
Reappraisal Date' shall mean, if Tenant exercises its option
to extend the Term of the Lease, the first day of the 120th
month of the Term and the first day of the 180th month of the
Term. On each Market Reappraisal Date during the Term of this
Lease, the Fixed Rent shall be adjusted to the then fair
market rental value (hereinafter `Fair Rental Value') of the
Premises as determined below; and in no event shall the amount
of the Fixed Rent, after such adjustment, be less than the
Fixed Rent in effect immediately prior to such adjustment.
There shall be no Adjustment (as defined in `(b)' above) paid
during the period following the Market Reappraisal Date until
the commencement of the next Adjustment Period and thereupon
the Fixed Rent, as adjusted pursuant to this paragraph '(f)'
shall be the Fixed Rent for purposes of computing adjustments
pursuant to paragraph determining the Fair Rental Value of the
Premises, leasehold improvements made during the Term of the
Lease, at the sole cost and expense of Tenant (exclusive of
any allowance or contribution of Landlord) shall not be
considered a part of, or included in, the determination of the
Fair Rental Value.
Landlord shall give the Tenant notice of Landlord's
determination of the Fair Rental Value (the `Landlord's
Determination') on or before the Market Reappraisal Date in
question. Landlord's Determination shall be the Fair Rental
Value of the Premises unless Tenant, within ten (10) days
after Tenant's receipt of the Landlord's Determination, gives
notice in writing to Landlord that Tenant objects to
Landlord's determination and sets forth Tenant's determination
of Fair Rental Value (the `Tenant's Determination').
Thereafter, Landlord and Tenant may negotiate to establish the
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Fair Rental Value, or Landlord may employ and pay an MAI real
property appraiser to determine the Fair Rental Value and
submit to Tenant and Landlord a report of such appraisal (the
`Landlord's Appraisal'). If Landlord employs an MAI real
property appraiser, Tenant shall also employ an MAI real
property appraiser to determine the Fair Rental Value and to
submit an appraisal report to Landlord and Tenant (the
`Tenant's Appraisal'). If Landlord's and Tenant's Appraisals
differ by less than five percent (5%), the greater of the two
shall be the Fair Rental Value if Landlord's and Tenant's
Appraisals differ by more than five percent (5%), Landlord and
Tenant shall each instruct their respective appraisers to
jointly appoint a third appraiser to determine the fair market
rental value (the `Third Appraisal'), and each shall pay
one--half (1/2) the cost of the Third Appraisal. Whichever of
the three appraisals is the furthest from the median shall be
disregarded, and the average of the remaining two shall be the
Fair Rental Value binding upon Tenant and Landlord. If the
Fair Rental Value, has not been determined before the Market
Reappraisal Date in question, Tenant shall pay to Landlord the
amount set forth in Landlord's Determination until the Fair
Rental Value has been determined. If the Fair Rental Value
finally determined is less than the Landlord's Determination,
Landlord agrees to credit any over-payments made by Tenant to
the next due installments, of Fixed Rent. Landlord and Tenant
shall each bear the fees and expenses of their respective
appraisers and, the fees and expenses of the third appraiser,
if any, shall be shared equally by Landlord and Tenant."
C. Term
The definition of "Term" as set forth on page 1 of the Lease
is amended and modified to provide as follows:
"Term (paragraph 3): 120 Months"
D. Fixed Rent
The definition of "Fixed Rent" as set forth on page 1 of the
Lease is amended and modified to provide as follows:
"Fixed Rent (paragraph 4(a)): $87,695.00."
E. Commencement Date
The definition of the "Commencement Date" as set forth on page
1 of the Lease is amended and modified to provide as follows:
"Commencement Date" (paragraph 3): August 1, 1983."
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F. Right of First Refusal
If, at any time during the term of this Lease, Landlord shall
receive a bona fide offer from any third person to purchase the premises or
shall make a bona fide offer to any third person to sell the premises, Landlord
shall in either event, prior to the execution of a contract with said third
person, serve upon the Tenant a notice (herein "Notice of Offer") in writing
describing in detail the terms of such offer and the intention of Landlord to
accept the same. The Tenant shall have the right for 30 days thereafter to
notify Landlord, in writing, of its intent to purchase the premises on the terms
and provisions set forth in the Notice of Offer. Tenant agrees that Tenant
shall, within 14 days from the date Tenant gives Landlord Tenant's notice of
intent to purchase, execute a contract to purchase the premises upon the terms
and conditions set forth in the Notice of Offer. If Tenant shall not within the
30 day period elect to acquire the premises upon the terms and conditions set
forth in the Notice of Offer, the Landlord may then sell the premises to said
third person provided said sale is on the terms and conditions and for the price
set forth in the Notice of Offer. If Tenant fails to execute a contract to
purchase the premises within 14 days following Tenant's giving of its notice of
intent to purchase to Landlord, then Landlord shall have the same rights as if
Tenant shall have not elected to acquire the premises and, in addition, Tenant
shall be deemed to have committed a non-curable material default under the terms
and provisions of the Lease.
G. Extension
(1) Generally
The Lease is hereby amended and supplemented so as to
provide the Tenant herein the right to extend the Term of the Lease in
accordance with the terms of this section "G. Extension" for one (1) ten year
extension commencing on the expiration of the original term (e.g., July 31,
1993) and terminating 120 months thereafter (e.g., July 31, 2003).
(2) Exercise of Extension
Landlord hereby grants to Tenant the right to extend
the initial Lease Term for the extension described above; provided that, the
exercise of such extension shall be strictly conditioned upon the satisfaction,
or written waiver by Landlord, of the following terms and conditions:
(a) Tenant shall give written notice to Landlord of
its election to exercise the extension not later than 90 days prior to the end
of the initial Lease Term; and
(b) Upon the commencement of the extension this Lease
shall be in full force and effect and Tenant shall not be in breach of or in
default under any provision of the Lease.
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(3) Effect of Extension
The extension shall be deemed to be a continuation of the
initial Term of the Lease and shall not be deemed to be the commencement of a
new term. Adjustments and reappraisals resulting in increases in rent under the
Lease shall continue in the manner provided for in the Lease following the
commencement of the extended Term as if the extended Term had originally been a
portion of the original Term of the Lease.
III. EFFECT OF AMENDMENT
Except as expressly amended or modified herein the Lease shall
remain in full force and effect.
"Landlord"
SIERRA EQUITIES, INC.,
a corporation
Dated: August 11,1983 By: /s/ SHIRLEY HOUGH
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Title: Vice President/Secretary
"Tenant"
MESA GENERAL HOSPITAL, INC.,
an Arizona corporation
Dated: August 11, 1983 By: /s/
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Title: President
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