Exhibit 10.23
LEASE
THIS LEASE ("Lease"), made the 1st day of September, 1994, between
XXXXXX X. XXXXX, ("Landlord") and HORIZON HEALTH SYSTEMS, INC., a Tennessee
corporation ("Tenant")
W I T N E S S E T H:
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1. Premises, Term, and Rent. Landlord leases to Tenant and Tenant
leases from Landlord the first floor (other than common areas and the
portion thereof being leased to Ren Corporation-USA) (the "Premises") of the
structure located at 0000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx (the
"Building"). The Premises contain approximately 16,930 square feet. The term
of this Lease shall be from the 1st day of November, 1994 to the 31st day of
October, 1999, at an annual rental of $215,857.50, payable in monthly
installments of $17,988.13 each, which rental Tenant covenants to pay as and
when due. All monthly installments ("monthly rental") shall be paid in
advance, on or before the last day of each month, without demand, to Landlord
at the address set forth hereafter. If not paid when due said rental shall
bear interest at the maximum legal contract rate. (Each period commencing on
November 1 and ending on the next October 31 is referred to herein as a
"Lease Year".)
2. Appurtenances. Landlord grants to Tenant and covenants that Tenant
shall have during the term of this Lease, at no additional cost to Tenant,
the non-exclusive use of the parking spaces in the parking lot adjoining the
Building and the non-exclusive use of any and all public restrooms,
elevators, and common areas. Landlord will furnish Tenant with cards so as to
enable Tenant and its employees to use the Building's security system.
3. Renewal Term. Provided Tenant is not then in default hereunder,
Tenant may at its option renew this Lease for one (1) five (5) year period
commencing on the 1st day of November, 1999, upon all terms, conditions, and
obligations set forth herein except as provided in Section 4 hereof. Tenant
shall provide Landlord with notice at least ninety (90) days before the
expiration of the original term of this Lease if it desires to exercise said
option.
4. Renewal Rent. Base Rental during the renewal term will be as
follows:
(a) Landlord and Tenant shall first attempt to agree, prior to ninety
days before the expiration of the initial term, on the annual rental to be
paid during the renewal term should Tenant exercise its option to renew. In
the event Tenant and Landlord are unable to agree on such rental, if Tenant
exercises its option, the annual rental that Landlord shall pay during such
extended term shall be $213,817.50 per year plus any increase as determined
in accordance with the provisions of subdivision (b) of this Section.
(b) (1) As promptly as practicable after the end of the initial term of
this Lease (or the immediately preceding renewal term, as appropriate),
Landlord shall compute the increase, if any, in the cost of living since the
commencement of this lease based upon the Consumer Price Index--United
States (1982 = 100), All Urban Consumers (the "Index"), published by the
Bureau of Labor Statistics of the United States Department of Labor.
(2) The Index number for the month immediately preceding the
commencement of this Lease, shall be the "base Index number", and the
corresponding Index number for the first month of the renewal term in
question shall be the "current Index number."
(3) The current Index number shall be divided by the base Index
number. From the quotient thereof, there shall be subtracted the number 1,
and any resulting positive number multiplied by 100 shall be deemed to be the
percentage of increase in the cost of living.
(4) The percentage of increase multiplied by $213,817.50 shall be
the increase required to be determined by subdivision (a) of this Section.
(5) Landlord shall, within a reasonable time after obtaining the
appropriate data necessary for computing such increase, give Tenant notice of
any increase so determined, and Landlord's computation thereof shall be
conclusive and binding (but shall not preclude any adjustment that may be
required in the event of a published amendment of the Index figures upon
which the computation was based) unless Tenant shall, within sixty (60) days
after the giving of such notice, notify Landlord of any claimed error
therein.
(c) The annual rent, as so determined (i.e., the aggregate of
$213,817.50 and the "increase" calculated in accordance with subparagraphs
(1) to (4) of subdivision (b) of this Section, inclusive, shall be due and
payable to Landlord in equal monthly installments commencing with the first
month of the renewal term in question (any retroactive payments then due
being payable within five days after giving of such notice), and in the event
of any subsequent redetermination of such amount the adjustment thus
indicated shall be made promptly between Landlord and Tenant.
(d) If publication of the Index shall be discontinued, the parties shall
thereafter accept comparable statistics on the cost of living for the City of
Nashville, Tennessee, they shall be computed and published by an agency of
the United States or by a responsible financial periodical of recognized
authority then to be selected by the parties. In the event of (1) use of
comparable statistics in place of the Index as above mentioned, or (2)
publication of the Index figure at other than monthly intervals, there shall
be made in the method of computation herein provided such revisions as the
circumstances may require to carry out the intent of this Section.
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5. Additional Rent. For the purposes of this Section, the term,
"Base Year Expenses" shall mean the sum total of the following expenses
("Expenses") attributable to the first Lease Year: All real estate taxes and
special assessments levied on the real property of which the Premises are a
part, fire and casualty insurance premiums, utilities that are not
separately metered to tenants, and all other expenses of maintaining and
operating the Building and the property of which the Building is a part to be
borne by Landlord pursuant to Section 7 or otherwise. Tenant agrees to pay to
Landlord as additional rent in all Lease Years after the first Lease Year.
Tenant's pro-rata share (based on square footage) of the amount by which the
sum of the foregoing Expenses exceed Base Year Expenses.
Expenses shall not include costs incurred in connection with capital
improvements, except to the extent that capital improvements result in a
decrease in Expenses. Moreover, it is not intended that Tenant be required to
pay its share of any increased tax assessments resulting from additional
improvements constructed for other tenants in the Building after the Building
has been fully completed and assessed.
Landlord shall be entitled to estimate the total amount of Expenses to
be paid by Tenant during each Lease Year and, upon notice to Tenant of such
estimate, to collect such estimate in twelve (12) equal installments, each
such installment to be due and payable with each monthly rental installment
payable under this Lease.
Within a reasonable time after the end of each Lease Year, Landlord
shall submit to Tenant a statement of the actual amount of Expenses and
amount due from Tenant hereunder for such Lease Year, and within thirty (30)
days after receipt of such statement, Tenant shall pay the difference between
the actual amount owed and the estimates paid during such Lease Year, or in
the event of overpayment, Landlord shall credit the amount of such
overpayment toward the next monthly rental installments. Tenant may review
Landlord's records relating to Operating Expenses, at Tenant's expense,
during normal business hours.
6. Lessee's Repairs and Utilities. Tenant will keep the Premises,
including without limitation, interior walls, floors, same are at the
commencement of this term or may be put in during the continuance thereof,
reasonable wear and tear and damage by fire, other casualty, or condemnation
excepted, and will promptly replace all glass broken during the said term
with glass of the same quality.
To the extent separately metered to Tenant, Tenant shall be responsible
for the payment of all bills and/or assessments for electrical, natural gas,
water and sewer and other utilities serving the Premises. To the extent that
Landlord shall be billed for any such services by the provider thereof Tenant
shall reimburse Landlord for the amount thereof within fifteen (15) days of
being furnished with a statement from Landlord with respect thereto. If the
amount due as shown on such statement is not paid when due, it shall bear
interest at the maximum legal contract rate until paid.
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7. Lessor's Repairs. Landlord shall maintain and keep in good repair and
working order the roof, exterior walls, sprinkler system, HVAC system,
electrical wiring, and plumbing system of the Building, the adjoining yard
and parking lot, and all underground water and sewerage pipes. Landlord will
keep the Building insured against damage by fire and other casualty. Landlord
will furnish Tenant with janitorial service.
8. Right of Entry. Landlord may at reasonable times and on reasonable
notice to Tenant enter the Premises to inspect them and make any repairs
required by Section 7 or required by Section 6 that Tenant has failed to
make, and during the ninety (90) days preceding the expiration of this Lease,
may show the Premises to persons who may wish to lease same, provided Tenant's
occupancy is not interfered with. If Landlord makes any repairs required to
be made by Tenant under Section 6, Tenant shall pay Landlord as additional
rent a sum equal to the amounts expended by Landlord plus interest thereon at
the maximum legal contract rate within ten (10) days after Landlord presents
Tenant with a statement setting forth the repairs made and the amounts
expended.
9. Renovations and Alterations of Premises. Subject to Landlord's
approval of all plans and specifications for material renovations and
alterations and subject to the condition that Tenant shall allow no lien to
be place against the Premises [of the Building], Tenant shall have the right,
as its sole cost and expense, to renovate, alter, and use the Premises in
connection with its business and to make related improvements. All
alterations, additions, repairs, replacements and improvements made to or
upon the Premises shall be deemed to be part of the Premises and shall become
the property of Landlord upon the expiration or termination of this Lease;
provided, however, that trade fixtures, machinery, and equipment that are
installed by Tenant and removable without materially injuring the Premises
shall remain the property of Tenant.
10. Fire or Other Casualty. If the Premises should be damaged or
destroyed by fire or other casualty so as to cause a material alteration in
the character of the Premises and to prevent Tenant from using them in
substantially the manner theretofore used, either Landlord or Tenant may
terminate this Lease upon giving notice to the other within fourteen (14) days
after the casualty occurs. Should such termination occur on any day other
than the last day of a monthly rental period, any unearned prepaid rental
shall be refunded to Tenant.
If the Premises are materially damaged by fire or other casualty and
neither party elects to terminate this Lease, or if the Premises should be
damaged by fire or other casualty and still be fit for Tenant's continued use
in substantially the same manner as theretofore used, then this Lease shall
continue in effect and the Premises shall be restored by Landlord. If the
event causing damage was not caused by the fault of Tenant, while such
restoration is in progress, Tenant shall be entitled to a fair and appropriate
abatement of the rental to be paid, said abatement to be based on the amount
and value of the Premises used by Tenant. Should the damage necessitating
such restoration occur on any day other than the last day of a monthly rental
period, then the amount of prepaid rental to be refunded to Tenant shall be
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based on the amount and value of undamaged space used by Tenant during the
remainder of said monthly rental period.
11. Surrender of Premises. At the expiration of the term of this
Lease, Tenant shall peaceably yield up to Landlord the Premises and all
erections and additions made thereto except as hereinbefore provided, in good
repair in all respects, reasonable use, wear and tear and damage by fire or
other casualty or by condemnation excepted.
12. Holding Over. Should Tenant hold over the term hereby created
with the consent of Landlord, Tenant shall become a tenant from month to
month at the monthly rental then payable hereunder and otherwise upon the
covenants and conditions in this Lease contained, and shall continue to be
such tenant until thirty (30) days after either party serves upon the other
notice of intention to terminate such monthly tenancy. Should such
termination occur on any day other than the last day of any rental period,
any unearned prepaid rent shall immediately following surrender of the
Premises to the Landlord, be refunded to Tenant.
13. Use of Premises. The Premises shall be used only for general
office use and purposes relating to Tenant's business as now conducted.
Tenant will not, however, at any time use or occupy the Premises in violation
of laws, ordinances, or regulations of any government or agency having
jurisdiction or in violation of Landlord's insurance contract(s).
14. Insurance. All property of any kind that may at any time be used,
left or placed on the Premises during the term of this Lease shall be at the
sole risk of the Tenant. Tenant shall carry contents coverage insurance on
its contents.
To the extent not covered by insurance, Tenant will save, indemnify and
hold Landlord free and harmless from any and all liability or any injury, loss,
or damage to person or property arising out of any cause associated with its
business or use of the Premises, including its omission to act.
Tenant agrees to provide public liability insurance naming Landlord as
additional insured to protect Landlord from loss customarily covered by such
insurance in at least the following amount:
$1,000,000 - Combined Single Limit
15. Quiet Enjoyment. As long as Tenant is not in default hereunder,
Landlord covenants that Tenant shall peaceably hold and enjoy the Premises,
subject to the terms of this Lease. All entrances, exits, approaches, and
means of entrance and approach, and all access to light and air now enjoyed
by the Premises, shall be and remain intact and uninterrupted by any act of
Landlord during the term of this Lease.
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16. Eminent Domain. If the whole of the Premises shall be taken or
condemned by any competent authority for any public use or purpose or if such
portion thereof shall be taken or condemned as shall materially change the
character of the Premises so as to prevent Tenant from using them in
substantially the same manner as theretofore used, the term hereby granted
shall cease on the day prior to the taking of possession by such authority or
the day prior to vesting of title in such authority, whichever first occurs,
and an appropriate pro rata portion of any rent paid in advance by Tenant
shall be refunded.
If a portion of the Premises shall be condemned or taken, and if such
taking does not result in a material alteration in the character of the
Premises so as to prevent Tenant from using them in substantially the same
manner as theretofore used, then this Lease shall continue in effect, and any
damage to the Premises shall be repaired by Landlord. After the date Tenant
is required to surrender possession of the portion taken, the rental payable
hereunder shall be reduced in proportion to the decrease in the fair rental
value of the Premises.
If all or a portion of the adjoining parking area shall be condemned or
taken so as to deprive Tenant of necessary parking or so as to in some other
way materially affect the Tenant's ability to conduct its business, then
Tenant may at its option cancel and terminate this Lease upon giving the
Landlord notice within thirty (30) days of such taking. In the event Tenant
shall elect not to cancel and remain in possession and occupation of the
Premises, however, the terms and conditions of this Lease shall remain in
full force and effect.
The entire award of damages or compensation for a taking of the
Premises, whether such taking be in whole or in part, shall belong to and be
the property of Landlord, except for such compensation as may be made for
Tenant's moving or relocation expenses, Tenant's business interruption
losses, and for the taking of Tenant's trade fixtures, which compensation
shall belong to and be the property of Tenant.
If the Premises shall be taken or condemned by any governmental
authority for temporary use or occupancy, this Lease shall continue in full
force and effect without reduction or abatement of rent, and the rights of
the parties shall be unaffected by the other provisions of this Section. In
the event of such temporary taking the entire award of damages in respect of
the Premises shall belong to Tenant and Landlord assigns Tenant any and all
interest it may have in such award. To the extent Tenant is prevented by such
temporary taking or occupancy from fulfilling its obligations hereunder,
Tenant's failure to do so shall not be deemed a default under this Lease.
17. Assignment and Subleasing. The Tenant may not assign or encumber
this Lease or sublet the Premises, either in whole or in part, without the
prior written consent of Landlord and of Ren Corporation-USA or its assigns
so long as it or its assigns is the beneficiary of the first deed of trust
encumbering the real property of which the Building is a part. Such consent
will not be unreasonably withheld. Consent to one assignment or subletting
will not be deemed a consent to any other. The transfer of the majority of the
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voting stock of Tenant if Tenant is a corporation, the transfer of a majority
of the partnership interests in Tenant if Tenant is a partnership, and any
transfer by operation of law will be deemed "assignments" requiring
Landlord's consent. In the event of any assignment or subleasing, Tenant shall
remain fully responsible under this Lease.
18. Attorney's Fees. In the event it becomes necessary for Landlord to
employ an attorney to enforce collection of the rents agreed to be paid, or
to enforce compliance with any of the covenants or agreements herein
contained, Tenant shall be liable for reasonable attorney's fees, costs and
expenses incurred by the Landlord.
19. Notice. Any notices required to be sent hereunder shall be hand
delivered or sent by certified mail to the following addresses:
LESSOR: Xxxxxx Xxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
LESSEE: Horizon Health Systems, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
A copy of any such notice will be sent to Ren Corporation-USA at 0000
Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000 or such other address as Ren
Corporation-USA may designate.
20. Default and Remedies. Each of the following events shall constitute
a default or breach of this Lease by Tenant:
(a) If Tenant, or any successor or assignee of Tenant while in
possession, shall file a petition in bankruptcy or insolvency or for
reorganization under any bankruptcy act, or shall voluntarily take advantage
of any such act or shall make assignment for the benefit of creditors.
(b) If involuntary proceedings under any bankruptcy laws or
insolvency act shall be instituted against Tenant, or if a receiver or
trustee shall be appointed for all or substantially all of the property of
Tenant, and such proceedings shall not be dismissed or the receivership or
trusteeship vacated within sixty (60) days after the institution or
appointment.
(c) If Tenant shall fail to pay Landlord any rent or additional
rent together with any interest thereon within (5) days after Landlord
notifies Tenant that it is unpaid.
(d) If Tenant shall fail to perform or comply with any of the other
conditions of this Lease within thirty (30) days after notice by Landlord to
Tenant specifying the condition to performed or complied with; or, if the
performance cannot be reasonably
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had within the 30-day period, Tenant shall not in good faith have commenced
performance within the 30-day period and shall not diligently proceed to
completion of performance.
In the event of any default hereunder, Landlord at any time thereafter,
may re-enter the Premises and expel, remove, and put out Tenant or any person
or persons occupying the Premises and may remove all personal property
therefrom. Upon re-entry Landlord may, at its option, relet the Premises or
any part thereof as the agent of Tenant, and Tenant shall pay Landlord the
difference between the rent hereby reserved for the portion of the term
remaining at the time of re-entry and the amount received under such
reletting for such portion of the term. Upon re-entry Landlord may at its
option, terminate this Lease and at any time thereafter recover from Tenant
all sums then due as well as the amount by which all rent and other payments
to be made by Tenant exceed the reasonable rental value of the Premises for
the remainder of the Lease term.
All actions taken by Landlord pursuant to this Section shall be without
prejudice to any other remedies that otherwise might be used for the
collection of arrears of rent or for the preceding breach of covenant or
conditions.
Landlord may elect, but shall not be obligated, to comply with any
condition, agreement, or term required hereby to be performed by Tenant, and
Landlord shall have the right to enter the Premises for the purpose of
correcting or remedying any such default and to remain until the default has
been corrected or remedied, but any expenditure for such correction by
Landlord shall not be deemed to waive or release the default of Tenant or the
right of Landlord to take any action as may be otherwise permissible
hereunder in the case of any default.
21. No Waiver. The subsequent acceptance of rent hereunder by
Landlord shall not be deemed a waiver of any preceding breach of any
obligation hereunder by Tenant other than the failure to pay the particular
rental so accepted, and the waiver of any breach of any covenant or condition
by Landlord shall not constitute a waiver of any other breach regardless of
knowledge thereof.
22. Gender. Wherever appropriate herein, the words "Landlord" and
"Tenant" and the pronouns referring thereto, shall be construed singular or
plural, masculine, feminine, or neuter as the facts warrant.
23. Broker. Landlord and Tenant warrant that they have dealt with no
broker in connection with this Lease.
23. Waiver of Subrogation. Landlord and Tenant hereby waive all
rights of recovery and causes of action that either has or may have or that
may arise hereafter against the other, whether caused by negligence,
intentional misconduct, or otherwise, for any damage to premises, property or
business caused by any perils covered by fire and extended coverage,
building, contents, and business interruption insurance, or for which either
party
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may be reimbursed as a result of insurance coverage affecting any loss
suffered by it; provided, however, that the foregoing waivers shall apply
only to the extent of any recovery made by the paries hereto under any policy
of insurance now or hereafter issued, and further provided that the foregoing
waivers shall be ineffective if they invalidate any policy of insurance of
the parties hereto, now or hereafter issued. Landlord and Tenant will use
their best efforts to have their respective insurance companies waive their
rights of subrogation as contemplated herein.
24. Signs. Tenant shall have the right to erect, affix or paint signs
on or about the Premises and the right at its option to remove said signs
upon the termination of this Lease, it being agreed that Tenant shall repair
any damage to the exterior of the Building caused by the removal of said
signs.
25. Subordination. Upon written notice by Landlord to Tenant, this
Lease shall be and become subject and subordinate to any and all mortgages or
deeds of trust now existing, or that hereafter may be executed, covering the
Building or the Premises, for the full amount of all advances made or to be
made thereunder and without regard to the time or character of such advances,
together with interest thereon, and subject to all the terms and provisions
thereof. Tenant agrees to execute, acknowledge and deliver upon request any
and all documents or instruments requested by Landlord or necessary or proper
to insure the subordination of this Lease to any such mortgages or deeds of
trust. Tenant acknowledges that this Lease will be subject and subordinate to
the first deed of trust in favor of Ren Corporation-USA.
26. Estoppel Letters. Either party hereto shall at any time and from
time to time upon not less than ten (10) days prior written notice from the
other execute, acknowledge and deliver to the requesting party a statement in
writing certifying that this Lease is unmodified and in full force and effect
(or if modified, stating the nature of such modification and certifying that
this Lease, as so modified, is in full force and effect), and the dates to
which the rental and other charges are paid in advance, if any, and
acknowledging that there are not, to the certifying party's knowledge, any
uncured defaults on the part of the other party hereunder, and that no event
has occurred that, by the giving of notice or the passage or time or both,
would constitute a default, or specifying such defaults or events if they are
claimed. Any such statement requested by either party may be relied upon by
any prospective purchaser or encumbrancer of the Building or the Premises.
Failure of a party to deliver such statement within such time shall be
conclusive upon such party that this Lease is in full force and effect,
without modification, except as may be represented by the requesting party,
that there are no uncured defaults in the requesting party's performance, and
that not more than two months rental has been paid in advance. Ren
Corporation-USA or its assigns may request such an estoppel certificate and
will be provided copies of all other such certificates as long as it or its
assigns is the beneficiary of the first deed of trust encumbering the real
property of which the Building is a part.
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27. Entire Agreement. The entire understanding between the parties is
set out in this Lease, this Lease supersedes and voids all prior proposals,
letters and agreements, oral or written, and no modification or alteration of
this Lease shall be effective unless evidenced by an instrument in writing
signed by both parties. The law of the State of Tennessee shall be applicable.
28. Heirs, Successors and Assigns. All the terms, covenants, and
conditions hereof shall be binding upon and inure to the benefit of the
heirs, executors, administrators, successors, and assigns of the parties
hereto.
29. Memorandum Lease. This Lease shall not be recorded, but, upon the
request of either party, a short form lease will be executed and recorded.
IN WITNESS WHEREOF, the parties hereto have set their respective hands
or caused this instrument to be duly executed on or as of the day and date
first above written.
LESSOR:
/s/ Xxxxxx Xxxxx
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XXXXXX XXXXX
LESSEE:
HORIZON HEALTH SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxx
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Title: President
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