Exhibit 10.14
LEASE
AGREEMENT
THIS LEASE AGREEMENT
(“this Lease”) is
entered into as of the 15th day of December, 2005 between C.P.
INVESTMENTS, INC., an Alabama corporation (hereinafter referred to
as the “Landlord”), and COMPUTER PROGRAMS AND SYSTEMS,
INC., a Delaware corporation (hereinafter referred to as the
“Tenant”).
WITNESSETH:
The Landlord, for and in
consideration of the rents, conditions, terms and covenants herein
specified to be paid, performed and observed by the Tenant, does
hereby let, lease and demise to the Tenant, and the Tenant does
hereby lease and take from the Landlord, that certain real estate
with accompanying improvements and appurtenances located at 6508
Wall Street in the City and County of Mobile, State of Alabama and
more particularly identified as Building 11 on Exhibit A
attached hereto and incorporated herein by reference (the
“Demised Premises”) upon the following terms and
conditions:
NOW, THEREFORE
, in consideration of the premises
and the rents, covenants and conditions hereinafter contained, the
Landlord and the Tenant do hereby covenant, promise and agree as
follows:
1. Landlord does hereby lease unto
Tenant and Tenant does hereby lease from Landlord the Demised
Premises for a term of one hundred twenty (120) calendar
months commencing as of December 15, 2005 (hereinafter
referred to as the “Lease Term”).
2. Tenant shall during the first
year of the Lease Term, pay to the Landlord an annual rental of
Seventy Two Thousand, and No/100 Dollars ($72,000.00) unless abated
or diminished as hereinafter provided, in equal monthly
installments of Six Thousand, and No/100 Dollars ($6,000.00) in
advance, on the 1st day of each month, commencing upon the 15th day
of December, 2005. For each of the remaining nine years of the
Lease Term, the rental rate shall be adjusted, as of March 31,
2006 and on March 31 of each year thereafter, in accordance
with changes in the Consumer Price Index (“CPI”) as
published by the Bureau of Labor Statistics for All Urban Consumers
(CPI-U), 1982-84 = 100. Upon each such lease rate adjustment date,
the lease rate for the upcoming year of the Lease Term shall be an
amount equal to the monthly lease rate for the immediately
preceding year multiplied by a fraction, the denominator of which
shall be the CPI for January, 2005 and the numerator of which shall
be the CPI for the month of such lease rate adjustment. It is the
intention of the parties that the determination of the adjusted
lease rate shall not be distorted by any changes in the method by
which the CPI is determined or the form in which the CPI is
presented, including but not limited to, changes in the reference
year on which the CPI is based or changes in the components of the
CPI. Accordingly, if the method by which the CPI is determined or
the form in which the CPI is presented is hereafter changed, the
index used in the numerator of the fraction described above shall
be adjusted so that such index is determined and presented on the
same basis as the CPI used in the denominator of such fraction. To
the extent
possible, such adjustment shall be based on any
adjustment factor published by the U.S. Department of Labor or any
successor governmental agency. If for any reason the index used in
the numerator of such fraction cannot be determined on the same
basis as the CPI used in the denominator of such fraction, or if
the CPI is not hereafter published, the adjusted lease rate shall
be determined by reference to the index of consumer prices then
published by the U.S. Government, or an agency thereof, that most
nearly resembles the CPI as in effect for January, 2005.
In addition to the foregoing, the
rental may also be re-negotiated at such future times that
additional rental space may become available for use by Tenant at
the Demised Premises.
Notwithstanding the foregoing, the
parties hereby agree that ninety (90) days prior to the
expiration of the first five (5) years of the Lease Term, they
shall obtain an appraisal, in accordance with the procedures set
forth below, in order to determine the Fair Market Rental Value of
the Demised Premises. Upon the completion of such appraisal, the
rental rate for the sixth (6 th ) year of the Lease Term shall
be adjusted to an amount equal to the Fair Market Rental Value as
set forth in said appraisal.
On or about the date that is ninety
(90) days prior to the expiration of the fifth (5
th
) year of the Lease
Term, Landlord and Tenant shall consult with one another for the
purpose of appointing a mutually acceptable qualified independent
appraiser. If the parties are unable to agree on an appraiser
within ten (10) days, such Fair Market Rental Value shall be
determined by a panel of three independent appraisers, one of whom
shall be selected by each of Landlord and Tenant within five
(5) days thereafter. If one party appoints an appraiser
pursuant to the immediately preceding sentence, and if the other
party fails to appoint a second appraiser within the applicable
time limit, the appraisal shall be made by such appraiser. On or
before the tenth day after appointment of the second appraiser, a
third appraiser shall be selected by agreement of the first two
appraisers. Landlord and Tenant shall split all fees and expenses
of the appraisers. Each appraiser appointed pursuant to the
foregoing procedure shall be experienced, have equivalent
qualifications to those of a senior member of the American Society
of Appraisers, shall be independent of Landlord and Tenant, and
shall be instructed to determine Fair Market Rental Value in
accordance with the uniform standards for professional appraisal
practice or the equivalent, before the 45 th day after the appointment of the
last of such appraisers to be appointed, and such determination
shall be final, binding and conclusive upon the parties. If three
appraisers shall be appointed, the determination of Fair Market
Rental Value shall be the average of the three appraisals rendered
by the appraisers. In the event, however, that the lowest or the
highest of the three appraisals, or both, varies by more than ten
percent (10%) from the middle appraisal, the appraisal or
appraisals so varying shall be disregarded and the average of the
remaining appraisals, or the remaining appraisal, shall be the
determination of Fair Market Rental Value.
For purposes of this section,
(i) “Fair Market Rental Value” means an amount
determined by an Independent Appraisal (as defined below) on the
basis of, and shall be equal in amount to, the rental rate which
would be obtained in an arm’s-length transaction between an
informed and willing tenant under no compulsion to lease and an
informed and willing landlord under no compulsion to rent; and
(ii) “Independent Appraisal” means the procedure
specified above for determining Fair Market Rental
Value.
-2-
3. Landlord represents and warrants
that (A) it is the owner in fee simple of the Demised
Premises; (B) the Demised Premises are free and clear of all
liens and encumbrances other than the lien of current ad valorem
taxes, easements for roads and utilities serving the Demised
Premises, setbacks and other conditions of title as may be set
forth in any recorded plat, easements and restrictions of record
that do not interfere with the present use of the Demised Premises,
and those liens and encumbrances set forth on Exhibit B attached
hereto (the “Permitted Encumbrances”);
(C) Landlord has not received any notification from any
governmental authority of any pending public improvements affecting
the Demised Premises or requiring any repairs, replacements or
alterations to the Demised Premises that have not been
satisfactorily made; (D) Landlord has no knowledge of any
pending or threatened condemnation or appropriation of all or any
part of the Demised Premises by any governmental authority or other
entity having the right of eminent domain; and (E) to the best
of Landlord’s knowledge and belief, there are no applicable
laws, ordinances or regulations that would prohibit or interfere
with the use of the Demised Premises by Tenant for its intended use
thereof.
Landlord covenants that Tenant, by
paying the rent herein reserved and performing and observing all of
the covenants and agreements herein agreed by Tenant to be kept and
performed, may peaceably hold and enjoy the Demised Premises with
exclusive control and possession thereof during the full Lease Term
without hindrance or interruption by Landlord and that Landlord
will warrant and defend Tenant in peaceful and quiet enjoyment of
the Demised Premises against the claims of all persons claiming
through or under Landlord, except condemning and similar
authorities.
4. The Tenant shall assess the
Demised Premises and shall pay promptly as and when they become due
all real estate taxes and all assessments, water rates and water
charges, and other governmental levies and charges, general and
special, ordinary and extraordinary, unforeseen as well as
foreseen, of any kind, which are assessed or imposed upon the
Demised Premises or any part thereof, or become payable during the
term of this Lease.
During the term of this Lease,
Tenant may attempt to have the assessed valuation of t
