Texas-San Antonio-Nacogdoches at El Charro Road Sublease - J. C. Penney Co. Inc. and BSI Business Services Inc.
Premises at: Nacogdoches at El Charro Road
San Antonio, Texas
J. C. PENNEY COMPANY, INC.,
Landlord,
TO
BSI BUSINESS SERVICES, INC.,
Tenant.
SUBLEASE
INDEX
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Article Page
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ACCESS TO DEMISED PREMISES...................................... 19
ALTERATIONS.AND IMPROVEMENTS.................................... 9
APPLICABLE LAW.................................................. 20
ASSIGNMENT AND SUBLETTING....................................... 14
ATTORNEYS' FEES................................................. 21
CONDEMNATION.................................................... 12
COVENANT OF TITLE, AUTHORITY AND QUIET POSSESSION .............. 6
DAMAGE AND DESTRUCTION.......................................... 13
DEFAULT AND LANDLORD'S REMEDIES................................. 16
DEFINITIONS..................................................... 1
DEMISE OF PREMISES.............................................. 4
ENTIRE AGREEMENT................................................ 22
HAZARDOUS MATERIALS............................................. 21
HOLDING OVER.................................................... 15
INDEMNIFICATION................................................. 11
INSURANCE....................................................... 10
INTERPRETATION.................................................. 2
LANDLORD'S PROPERTY REPRESENTATIVE.............................. 19
LEGAL REQUIREMENTS.............................................. 9
LIENS........................................................... 12
NOTICES......................................................... 19
OFFICE LEASE.................................................... 3
OPTIONS TO EXTEND............................................... 4
PARKING AND ACCESS.............................................. 10
PARTIAL INVALIDITY.............................................. 20
REAL ESTATE TAXES AND OTHER TAXES............................... 10
REMEDIES CUMULATIVE............................................. 20
RENT............................................................ 5
RENT RIDER AND EXHIBITS TO LEASE................................ 3
RENT TAX........................................................ 15
REPAIRS......................................................... 9
SIGNS........................................................... 9
SUCCESSORS AND ASSIGNS; MODIFICATIONS .......................... 20
SURRENDER OF PREMISES........................................... 15
TENANT'S FIXTURES AND PERSONALTY................................ 9
TENANT'S WORK................................................... 7
TERM............................................................ 4
USE AND OPERATION OF DEMISED PREMISES........................... 7
UTILITIES....................................................... 9
WAIVER OF JURY TRIAL............................................ 20
WAIVER OF PERFORMANCE BY EITHER PARTY........................... 19
RENT RIDER
EXHIBIT A - DESCRIPTION OF THE DEMISED PREMISE AND THE LAND
ON WHICH THE DEMISED PREMISES ARE LOCATED
EXHIBIT B - SITE PLAN OF OFFICE BUILDING
EXHIBIT C - OFFICE LEASE
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THIS INDENTURE OF SUBLEASE, dated as of
JANUARY 11, 1996, by and between J. C. PENNEY
COMPANY, INC. a Delaware corporation, with a
mailing address of P. O. Box 10001, Dallas, Texas
75301-2105 ("Landlord"), and BSI BUSINESS
SERVICES, INC., a Delaware corporation with
offices at 5001 Spring Valley Road, Farmers
Branch, Texas 75244-3910 ("Tenant").
THE PARTIES HERETO DO HEREBY MUTUALLY
COVENANT AND AGREE AS FOLLOWS:
DEFINITIONS The following terms for purposes of this
lease shall have the meanings hereinafter
specified:
(a) "COMMENCEMENT DATE" - the date upon
which this lease is fully executed and delivered.
(b) "DEMISED PREMISES" - that portion of
the Penney Premises comprising the Office
Building, as such Office Building is shown on
Exhibit B attached hereto.
(c) "EVENT OF DEFAULT" - as defined in the
"DEFAULT AND LANDLORD'S REMEDIES" article.
(d) "FIXED RENT" - the rent payable under
paragraph A. of the Rent Rider.
(e) "FLOOR AREA" - the number of square
feet of floor area at each level or story of the
Office Building lying within the exterior faces of
exterior walls (except party walls as to which the
center line, not the exterior faces shall be used
for measurement purposes).
(f) "LEASE YEAR" - in the case of the
first Lease Year, the period commencing on the
commencement of the term hereof and expiring on
the 31st day of December, 1996; thereafter each
Lease Year hereunder shall comprise the next
following 12 month period, except that in the
event of the expiration or termination of this
lease, the last Lease Year hereunder shall end on
the date of such expiration or termination.
(g) "LEGAL REQUIREMENTS" - Federal,
state, county and municipal laws, ordinances,
rules, regulations and orders, and the rules,
regulations
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and orders of all duly constituted governmental
agencies, authorities and subdivisions.
(h) "PENNEY PREMISES" - the Office
Building and the land demised under the Office
Lease, including the Demised Premises.
(i) "OFFICE BUILDING" - the building
located on the land described on Exhibit A.
(j) "OFFICE LEASE" - that certain lease
dated as of June 9, 1981, by and between Hines
Industrial, Ltd., as lessor and Landlord, as
lessee, covering the Penney Premises, as amended.
(k) "OVERLANDLORD" - the landlord under
the Office Lease.
(l) "THIRD PARTY" - any party other than
Landlord or a corporation which controls, is
controlled by or is otherwise affiliated with
Landlord.
(m) "UTILITY FACILITIES" - all water,
electric, gas, sanitary and storm sewer lines, other
utility lines, and appurtenant equipment providing
utility service for the Office Building.
INTERPRETATION For purposes of interpreting the provisions
of this lease the following shall apply:
(a) The words "term of this lease", "the
term hereof", or words of like import shall be deemed
to refer to the initial term of this lease together
with any extension or renewal thereof.
(b) Words and phrases used in the singular
shall be deemed to include the plural and vice versa,
and nouns and pronouns used in any particular gender
shall be deemed to include any other gender.
(c) Captions throughout this lease and the
index are inserted only as a matter of convenience
and are not to be given any effect whatsoever in
construing this lease.
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(d) All charges and sums, in addition to
Fixed Rent, payable by Tenant to Landlord hereunder
shall be deemed additional rent.
(e) Whenever in this lease it is provided
that a party shall or may perform any act, in the
absence of any provision to the contrary, such act
(i) may be performed by an agent of, or
independent contractor for, such party, and (ii)
shall be performed at the sole cost and expense of
such party.
(f) Notwithstanding anything to the
contrary herein contained, whenever pursuant to
the Office Lease, Overlandlord or a Third Party is
responsible to Landlord for the performance of any
obligations which are also obligations of Landlord
under this lease, Landlord shall be deemed to have
complied with its obligation if it shall take
steps as are reasonable to cause Overlandlord or
such Third Party to comply with such obligations,
and Landlord shall have no other or further
obligation or liability to Tenant.
(g) All words with capital initial
letters are defined terms, and shall have the
meanings ascribed thereto in the "DEFINITIONS"
article or as elsewhere defined in this lease.
OFFICE LEASE Landlord represents and warrants that
Exhibit C contains a true and correct listing of
the documents comprising the Office Lease. Tenant
acknowledges that it has received a copy of each
document comprising the Office Lease. It is
understood and agreed that Landlord is not the
owner of the Demised Premises, but that this lease
is a sublease under the Office Lease, hereinbefore
more fully described. Tenant represents and
acknowledges that it is familiar with all of the
terms, covenants, provisions and conditions of the
Office Lease and agrees that this lease is made
subject to all of such terms, covenants,
provisions and conditions of the Office Lease.
RENT RIDER Attached to this lease and hereby made a
AND EXHIBITS TO part hereof are the following, which for the
LEASE purpose of identification have been initialed by
the parties hereto or their attorneys:
RENT RIDER - a statement of the Fixed Rent
payable hereunder, together with provisions
pertaining to the payment thereof.
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EXHIBIT A - a description of land on
which the Office Building is located.
EXHIBIT B - a site plan showing the
location of the Office Building.
EXHIBIT C - a listing of the documents
comprising the Office Lease.
DEMISE Landlord hereby demises and leases
OF to Tenant and Tenant hereby leases from Landlord,
PREMISES the Demised Premises to have and to hold for the
term hereinafter set forth.
Tenant acknowledges that it has
inspected the Demised Premises and accepts same
"as is", and acknowledges that Landlord has made
no representations or warranties in respect of the
Demised Premises, the condition thereof or the use
to which the Demised Premises may be devoted,
except to the extent, if any, expressly set forth
herein. Tenant further acknowledges that Landlord
shall not be liable to Tenant for any damage to
Tenant's personal property or leasehold
improvements occasioned by the condition of the
Office Building, including the roof, or otherwise,
or by breakage or stoppage of mains or pipes
therein or on other parts of the Office Building.
TERM The term of this lease shall commence on
the date Landlord tenders delivery of possession of
the Demised Premises to Tenant, and shall expire on
January 31, 2002, unless extended or terminated as
provided herein.
OPTIONS Tenant shall have the right and option to
TO extend the term of this lease as hereinafter set
EXTEND forth, provided that all of the following express
conditions have been fully satisfied:
1. During the term of this lease, no Event of
Default has occurred.
2. At the time Tenant exercises its option(s)
to extend the term of this lease, Tenant is
not in default under this lease.
3. Under those certain Indentures of
Sublease by and between Landlord and
Tenant covering premises located at (a)
Four Echelon Plaza, Laurel Road and
Britton Place, Vorhees, New Jersey, (b)
Park Central IV, Dallas, Texas, (c)
Providence Towers, Farmers Branch, Texas,
or (d) 5665 Foxridge, Mission, Kansas,
Tenant
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is not in default and no Event of Default
(as defined, respectively, therein) has
occurred.
4. At the time Tenant exercises its
option(s) to extend the term of this
lease, Tenant's minimum net worth as
determined in accordance with generally
accepted accounting principles is not
less than Twenty Three Million Dollars
($23,000,000.00), and Tenant's working
capital as determined in accordance with
generally accepted accounting principles
is not less than Eleven Million Dollars
($11,000,000.00), and Tenant so certifies
in an affidavit signed by an independent
certified public accountant.
5. At the time Tenant exercises its
option(s) to extend the term of this
lease, Tenant's current ratio (i.e., the
ratio of current assets to current
liabilities) is not less than 1.62 to 1,
and Tenant so certifies in an affidavit
signed by an independent certified public
accountant.
Provided Tenant has fully complied with conditions 1
through 5 above each time that Tenant exercises an
option to extend, then Tenant shall have two (2)
successive options to extend the term of the Lease
each for a separate additional period of five (5)
years, from the date upon which the term would
otherwise expire. Each such extension shall be upon
and subject to the same terms, covenants and
conditions, other than rent, as those specified in
this lease, except that Tenant may not exercise again
any option previously exercised. If Tenant elects to
exercise any of said options, it shall do so by
giving Landlord notice of such election at least
eighteen (18) months before the beginning of the
additional period for which the term of this lease is
to be extended by the exercise of such option. If
Tenant gives such notice, the term of this lease
shall be automatically extended for the additional
period of years covered by the option so exercised
without execution of an extension or renewal lease.
If Tenant shall exercise any of said options, then in
lieu of the rental specified in this lease, Tenant
shall pay Landlord the rent during the option periods
as provided for in the Rent Rider attached hereto.
RENT Effective as of the Commencement Date and
throughout the term hereof, Tenant shall pay to
Landlord, without offset or deduction, the rent
provided for in the Rent Rider without notice or
demand therefor.
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COVENANT Landlord represents and warrants that
OF TITLE, Landlord has a good leasehold estate in the
AUTHORITY Demised Premises under and by virtue of the Office
AND QUIET Lease and has full right and lawful authority to
POSSESSION enter into and perform Landlord's obligations
under this lease, subject to the Office Lease, and
subject to all documents and matters to which this
lease and the Office Lease are subject and
subordinate. If Tenant shall perform its covenants
and discharge its obligations hereunder, Tenant
shall have and enjoy, during the term hereof, the
quiet and undisturbed possession of the Demised
Premises without hindrance or ejection by
Overlandlord, Landlord or any party claiming by,
through or under Overlandlord, Landlord, except as
otherwise provided herein, and Landlord will
defend Tenant in the peaceful and quiet possession
of the Demised Premises.
Anything herein to the contrary
notwithstanding, Tenant acknowledges that this lease
is a sublease, subject and subordinate to the Office
Lease, and the aforesaid documents and matters.
Tenant further acknowledges that no right, power or
privilege granted to Tenant hereunder may be
exercised or enjoyed by Tenant, and no term, covenant
or condition of this lease benefiting Tenant or
binding Landlord shall be operative if, and to the
extent, that such exercise, enjoyment or operation
would not be permitted by or would violate or be in
conflict with any term, covenant or condition of the
Office Lease, and that in the event of the expiration
or termination of the estate of the tenant under the
Office Lease for any reason whatsoever, including but
not limited to, the exercise by landlord or tenant
thereunder of an option to terminate said estate, or
the nonexercise by the tenant thereunder of an option
to extend the term of the Office Lease, or the
partial termination of the tenant's estate under the
Office Lease by reason of such tenant's election to
exclude the Demised Premises from the premises
demised thereunder, this lease shall automatically
terminate on the day preceding the date of expiration
or termination of the estate of the tenant under the
Office Lease, and Landlord and Tenant shall thereupon
be relieved of all liability hereunder, except that
Tenant shall remain liable for the performance of all
obligations under this lease, actual or contingent,
which shall have arisen on or prior to the date of
the termination of this lease.
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USE AND Tenant shall not use or occupy the Demised
OPERATION Premises or permit the Demised Premises to be used
OF DEMISED or occupied in violation of any Legal Requirements
PREMISES or in any manner which would violate the certificate
of occupancy for the Demised Premises. The Demised
Premises may be only occupied for general office
purposes. As an inducement to Landlord to enter into
this lease, Tenant covenants to continuously operate
the Demised Premises for the aforementioned specific
uses during normal business hours Monday through
Friday.
Tenant will operate the Demised Premises
so as not to jeopardize or harm the reputation and
goodwill of Landlord or of the Office Building, and
shall at all times conduct its business in a
reputable and dignified manner and not in a
disreputable manner.
TENANT'S If during the term of this lease, Tenant
WORK desires to make any alterations or improvements to
the Demised Premises ("Tenant's Work"), Tenant
shall obtain Landlord's written approval before
commencing such work.
In performing Tenant's Work, Tenant shall
comply with all reasonable requirements of Landlord
including the following specific requirements:
(a) Tenant's general contractor
and all subcontractors
shall be approved by
Landlord, which approval
shall not be unreasonably
withheld or delayed.
(b) At Landlord's request,
Tenant will cause its
general contractor to
furnish Landlord prior to
the commencement of
Tenant's Work with a
completion and payment
bond, naming both Landlord
and Tenant as
beneficiaries.
(c) Tenant's plans and
specifications shall show
any modifications to the
existing utility facilities
and sprinkler system.
(d) The installation of all
electrical facilities shall
conform to the National
Electric Code and meet the
requirements of Landlord's
fire
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underwriter (presently
Factory Mutual Engineering
Association).
(e) All electrical equipment
and fixtures shall carry a
UL label.
(f) Tenant's plans shall show
all proposed roof
penetrations for vents and
equipment as well as
reinforcing curb work and
flashing incident thereto.
(g) Landlord shall have the
right to enter upon the
Demised Premises at all
reasonable times for the
purpose of inspecting
Tenant's Work; provided,
however, that such right
shall not be deemed to
impose any duty on
Landlord or in any way
affect Tenant's
obligation under the
"INDEMNIFICATION"
article.
(h) The approval by Landlord
of any feature of
Tenant's plans and
specifications shall not
be deemed an
acknowledgment by
Landlord as to the
correctness or adequacy
of any such feature.
(i) Tenant shall not store any
materials outside of the
Demised Premises.
(j) Tenant's contract with
its general contractor
and each subcontract
shall include a
guarantee that the work
covered by such contract
will be free from
defects in workmanship
and materials for a
period of at least one
year after substantial
completion of the work,
which guarantee shall
inure to the benefit of
Landlord as well as
Tenant.
(k) Tenant shall secure all
necessary alteration
permits as well as
whatever certificates of
occupancy may be
required in connection
with Tenant's use and
occupancy of the Demised
Premises.
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(l) No such work shall violate
any of the provisions of
the Office Lease.
UTILITIES Beginning with the commencement of the
term, Tenant will pay for all utility services
directly to the utility company furnishing such
service.
Landlord or Overlandlord shall have the
right upon reasonable notice to Tenant to cut off
and discontinue any utility service to the Demised
Premises for the purpose of effecting repairs to
Utility Facilities or in the case of an emergency,
and no such action by Landlord or Overlandlord or
any interruption of utility service shall be
deemed an eviction or disturbance of possession of
Tenant. Nothing contained in this paragraph shall
be deemed to modify Tenant's repair obligations as
otherwise provided for in this lease.
REPAIRS Tenant shall be responsible for all
repairs to the Demised Premises.
ALTERATIONS Tenant shall not make any alterations or
AND improvements to the Demised Premises, without the
IMPROVEMENTS Landlord's written consent to each and every such
alteration or improvement.
LEGAL Tenant will comply with all Legal
REQUIREMENTS Requirements respecting the use and occupancy of the
Demised Premises.
TENANT'S Upon the expiration or prior termination of
FIXTURES AND the term hereof Tenant shall remove all of its
PERSONALTY fixtures and other personal property from the Demised
Premises, and shall repair any damage to the Demised
Premises caused by such removal. To the extent that
the same shall not be so removed, Landlord may at its
option (i) treat same as abandoned and dispose of
same in whatsoever manner it shall see fit without
being liable to Tenant in any way for such
disposition, or (ii) remove and store same on behalf
of and at the expense of Tenant, without liability to
Tenant for loss thereof or damage thereto.
SIGNS Tenant shall not erect or maintain any
signs on the exterior of the Demised Premises
except such signs which comply with the Office
Lease and which have been approved in writing by
Landlord (and the Overlandlord, if necessary).
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PARKING Tenant shall have the right during the term
AND of this lease to use the parking areas and access
ACCESS drives located on the Penney Premises.
REAL ESTATE Tenant shall pay to Landlord within 10 days
TAXES AND after demand therefor all real estate taxes and
OTHER TAXES special assessments due or which may become due in
respect of the Penney Premises for each Lease Year of
the term hereof. In the event Tenant pays to Landlord
estimated tax payments for a Lease Year in excess of
the actual taxes paid by Landlord for such Lease
Year, then Landlord shall credit such excess towards
Tenant's tax liability for the next succeeding year.
Such payments by Tenant to Landlord shall be
apportioned between Landlord and Tenant at the
commencement and then again at the expiration of the
term of this lease to the end that Tenant shall pay
all such sums only in respect of such periods of time
which fall within the term of this lease.
Tenant shall pay as and when due all
personal property taxes, inventory taxes, business
license fees and other taxes incident to the
operation of Tenant's business, which if not paid
would become a lien on the Penney Premises or any
part thereof.
INSURANCE Throughout the term hereof, Tenant shall
keep the Office Building insured against loss or
damage by fire and the perils commonly covered
under the extended coverage endorsement to the
extent of at least that percentage of the full
replacement cost thereof (exclusive of the cost of
foundations, excavations and footings below the
lowest basement floor, without any deduction being
made for depreciation) necessary to keep Tenant
from being deemed a coinsurer as to the risks
covered.
Throughout the term hereof, Tenant shall
maintain in full force and effect, a policy of
comprehensive public liability insurance covering the
Demised Premises and the business of Tenant with
limits of liability per occurrence of not less than:
$3,000,000.00 for injury to or death of any one
person, $3,000,000.00 for injury to or death in any
one accident and $1,000,000.00 for loss of or damage
to property (including property of Landlord) or
$4,000,000.00 combined single limit for injury to or
death of persons and loss of or damage to property,
which insurance shall provide contractual coverage of
Tenant's liability to Landlord assumed under the
"INDEMNIFICATION" article.
Throughout the term hereof, Tenant shall
keep in full force and effect workers' compensation
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insurance and employer's liability insurance
affording (i) protection under the workers'
compensation law of the State in which the Penney
Premises are located and (ii) employer's liability
protection with limits of not less than
$1,000,000.00.
At all times during the performance of any
Tenant's Work, Tenant shall maintain in full force
and effect "all risk" builder's risk insurance for
the full replacement value of such Tenant's Work.
All insurance required to be maintained by
Tenant pursuant to this article shall be written by
companies licensed to do business in the State in
which the Penney Premises are located, and shall name
as insureds Tenant, Landlord, the Overlandlord, and
any other parties required to be so named under the
Office Lease. All such insurance may be maintained in
whole or in part under blanket policies covering
other locations of Tenant. Prior to the commencement
of the term hereof, Tenant shall furnish Landlord
with certificates evidencing the existence of the
insurance required to be carried by Tenant pursuant
to this article, which certificates shall specify
that the insurance evidenced thereby will not be
canceled or materially changed unless the insurer has
given Landlord at least 30 days' prior written
notice, and the certificate evidencing the public
liability notice shall also state that such insurance
covers the liability of Tenant assumed under the
"INDEMNIFICATION" article.
Anything in this lease to the contrary
notwithstanding, Landlord shall not be liable to
Tenant or to any insurance company insuring Tenant
for any loss or damage to any property of Tenant
located on the Demised Premises which was or could
have been covered by fire and extended coverage or
water damage insurance even though such loss or
damage may have been occasioned by the negligence of
Landlord, its agents or employees, nor shall Tenant
be so liable to Landlord for any loss or damage to
the Demised Premises, but only to the extent that the
tenant under the Office Lease is relieved under the
Office Lease of such liability to Overlandlord.
INDEMNIFICATION
Tenant shall defend, indemnify and hold
harmless Landlord and its employees and agents, and
any other parties required to be indemnified by
Landlord pursuant to the Office Lease and their
employees and agents, from and against any and all
costs, losses and expenses, liability, damages,
settlements and claims for damages (including
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reasonable attorney's fees and the costs of
defending any action) suffered, incurred, or
arising from or as a result of (a) injury to or
death of persons, or damage to or destruction of
property, occurring on the Demised Premises, (b)
the actual or alleged negligence or willful acts
or omissions of Tenant or any subtenant of Tenant,
and their respective employees or agents,
regardless of where such negligence, acts or
omissions occurred, (c) Tenant's use or occupancy
of the Demised Premises or its operations therein,
and (d) the breach by Tenant of any of the terms
of this lease or Tenant's failure to perform any
of its obligations hereunder. The foregoing
indemnity agreement shall in no way be deemed
released, waived, modified or limited in any
respect by reason of any insurance, or surety bond
furnished by any contractor of Tenant or any
allegation or judicial determination that the
claim in question arose as a result of or was
based upon the acts, omissions or negligence of
Landlord.
LIENS Tenant will not permit any mechanic's,
materialman's or like statutory lien to be placed
upon the Demised Premises or any part thereof. If
any such lien shall be filed as the result of work
done on or materials furnished to the Demised
Premises by or for Tenant, Tenant shall cause same
to be discharged of record within 20 days, failing
which Landlord may pay same, without inquiring as
to the validity of same, and Tenant shall
forthwith reimburse Landlord for the amount so
paid. Nothing in this lease shall be construed as
constituting the consent or request of Landlord,
expressed or implied by inference or otherwise,
to any contractor, subcontractor, laborer or
materialman for the performance of any labor or
services or the furnishing of any materials for
any improvement, alteration, addition or repair of
or to the Demised Premises or any part thereof.
Tenant shall give Landlord at least 10
days' prior notice of Tenant's intention to
commence any Tenant's Work to the Demised Premises
such work and shall take such steps as are
permitted under the mechanic's lien law of the
State where the Demised Premises are located to
avoid or limit the filing of mechanic's,
materialmen or like liens against the Demised
Premises.
CONDEMNATION If 50% or more of the Floor Area of the
Demised Premises shall be taken by condemnation,
and this lease shall not terminate because neither
Landlord nor Overlandlord shall have elected to
terminate the term of the Office Lease or exclude
the Demised Premises from the Office Lease as a
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result of such taking, then Tenant shall have the
option of terminating the term of this lease by
giving Landlord notice to such effect within 60
days after the taking of title by the condemning
authority, and upon such notice being given the
term of this lease shall terminate. If less than
50% of the Floor Area of the Demised Premises
shall be so taken, or if 50% or more of such Floor
Area shall be so taken and Tenant does not elect
to terminate the term of this lease, Landlord
shall restore the building on the Demised Premises
to anarchitectural whole, but only to the extent
that the net proceeds of the condemnation award
designated for or fairly attributable to the
Demised Premises received by Landlord will defray
the cost of such restoration.
If the term of this lease terminates as the
result of any condemnation, any unearned rent and
other charges shall be refunded by Landlord to
Tenant; if the term of this lease does not so
terminate, the Fixed Rent and any additional rent
shall be reduced proportionally with the Floor Area
taken by such condemnation. During the course of any
restoration work being performed by Landlord, the
Fixed Rent fairly allocable to the space which is
being restored shall abate until such restoration
work shall have been completed.
Any award to which Landlord or Tenant may be
entitled by reason of any condemnation of all or any
part of the Penney Premises, including the Demised
Premises, and any award or payment in respect of
Tenant's leasehold estate, shall belong to and be the
property of Landlord, and Tenant hereby assigns to
Landlord all rights which it may have in and to any
such award or payment. Notwithstanding the foregoing,
Tenant shall be entitled, to the extent permitted by
the condemning authority, to make a separate claim
for its damages in respect of its moving expenses and
any of its trade fixtures taken by the condemning
authority and for any other award specifically
payable by law to tenants; provided, however, that
any claim or award for such damages shall not reduce
or adversely affect any award or payment to which
Landlord, or Overlandlord as landlord under the
Office Lease, would otherwise be entitled but for
this sentence.
DAMAGE AND If the Demised Premises shall be damaged
DESTRUCTION or destroyed in whole or in part, by fire or other
casualty required to be insured against by Tenant
hereunder Tenant shall at Landlord's option,
either (i) restore the Demised Premises in accordance
with as-built plans and specifications for the
damaged or destroyed improvements provided
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to Tenant by Landlord, or (ii) deliver the
insurance proceeds to Landlord.
During the course of restoration of the
Demised Premises there shall be no abatement of rent
unless the Demised Premises shall have been rendered
untenantable by reason of such damage or partial
destruction, in which case the Fixed Rent and the
additional charges (other than utilities) shall abate
until the Demised Premises shall once again become
tenantable.
ASSIGNMENT Except as provided in the immediately
AND succeeding sentence, Tenant shall not assign this
SUBLETTING lease, sublet the Demised Premises in whole or in
part, grant any license or concession or other
right of occupancy in respect of the Demised
Premises, or encumber its rights under this lease
without the prior consent of Landlord in each
instance first had and obtained, and any attempted
assignment, subletting, grant of license or
concession, or encumbrance made without such
consent shall be absolutely void. Tenant may
assign this lease to any successor that acquires
all or substantially all of the assets or business
of Tenant, whether by asset sale, merger or
otherwise, provided that at the time of such
assignment all of the following express conditions
have been fully satisfied:
1. During the term of this lease, no Event of
Default has occurred;
2. At the time of such assignment, Tenant is
not in default under this lease;
3. Under those certain Indentures of
Sublease by and between Landlord and
Tenant covering premises located (a) Four
Echelon Plaza, Laurel Road and Britton
Place, Vorhees, New Jersey, (b) Park
Central IV, Dallas, Texas, (c) Providence
Towers, Farmers Branch, Texas, or (d)
5665 Foxridge, Mission, Kansas, Tenant is
not in default and no Event of Default
(as defined, respectively, therein) has
occurred;
4. At the time of such assignment, Tenant's
minimum net worth as determined in
accordance with generally accepted
accounting principles is not less than
Twenty Three Million Dollars
($23,000,000.00) and Tenant's working
capital as determined in accordance with
generally accepted accounting principles
is not less than Eleven Million Dollars
($11,000,000.00), and Tenant so certifies
in an affidavit signed by an independent
certified public accountant; and
14
<PAGE>
5. At the time of such assignment, Tenant's
current ratio (i.e., the ratio of current
assets to current liabilities) is not
less than 1.62 to 1, and Tenant so
certifies in an affidavit signed by an
independent certified public accountant.
If this lease shall be assigned or the Demised
Premises or any part thereof be sublet, as above
provided, Landlord may, after an Event of Default,
collect rent from the assignee or subtenant, as the
case may be, and apply the net amount received
against the rent reserved hereunder. No such
assignment, subletting or grant shall be deemed to
release Tenant, or any guarantor of Tenant's
obligations hereunder, from any of Tenant's
obligations under this lease, and Tenant shall remain
primarily liable for such obligations.
SURRENDER On the expiration or earlier termination
OF PREMISES of the term hereof Tenant shall surrender
possession of the Demised Premises to Landlord,
together with the keys thereto, in the same
condition as at the commencement of the term,
normal wear and tear excepted. No act or thing
done by Landlord or its agents during the term
hereof shall be deemed an acceptance of a
surrender of the Demised Premises, and no
agreement to accept a surrender of the Demised
Premises shall be valid unless the same be made in
writing and subscribed by the Landlord.
For the period of 180 days prior to the
expiration of the term hereof, Landlord shall have
the right to display on the exterior of the building
on the Demised Premises (but not in any window or
doorway thereof) a sign advertising that the Demised
Premises is for rent, and during such period Landlord
may show the Demised Premises to prospective tenants
during normal business hours.
HOLDING OVER Should Tenant, or any of its successors in
interest, hold over the Demised Premises, or any
part thereof, after the expiration of the term of
this lease, unless otherwise agreed in writing,
such holding over shall constitute and be
construed as a tenancy from month-to-month only,
at a Fixed Rent rental equal to the Fixed Rent
payable for the last month of the term of this
lease. The foregoing shall not, however, be
construed as Landlord's consent for Tenant to hold
over.
RENT TAX Tenant shall pay any tax which may
hereafter be imposed upon the rent payable
hereunder, and if any such tax shall be imposed
upon Landlord, Tenant shall reimburse Landlord for
the amount
15
<PAGE>
thereof within 30 days after payment thereof by
Landlord; provided, however Landlord shall pay any
federal, state or local income taxes imposed on
Landlord's income from this lease.
DEFAULT AND Each of the following events ("Event of
LANDLORD'S Default") shall be deemed to be a default by Tenant
REMEDIES under this lease:
(a) Tenant shall fail to pay any
installment of the rent hereby reserved or
pay any additional rent, and such failure
shall continue for (i) a period of 10 days
after notice thereof from Landlord, or (ii)
for a period of 10 days after the due date
if Landlord shall have previously given
Tenant 3 or more notices for prior defaults
in the payment of rent.
(b) Tenant shall fail to comply with
any term, provision, or covenant of this
lease, other than the payment of rent, and
such failure shall persist for 20 days after
notice thereof to Tenant.
(c) Tenant shall make an assignment
for the benefit of creditors.
(d) Tenant shall file a petition
under any section or chapter of the National
Bankruptcy Code, as amended, or under any
similar law or statute of the United States
or any State thereof; or Tenant shall be
adjudged bankrupt or insolvent in
proceedings filed against Tenant thereunder,
and such adjudication shall not be vacated
or set aside or stayed within 120 days.
(e) A receiver or trustee shall be
appointed for all or substantially all of
the assets of Tenant and such receivership
shall not be terminated or stayed within 120
days.
If Tenant fails (a) to perform any of its
obligations hereunder and such failure (i) if it
relates to a matter which is not of an emergency
nature, shall persist for a period of 10 days after
Landlord shall have given Tenant notice of such
failure (or if such failure cannot with due diligence
be cured within such 10 day period, if Tenant shall
fail to proceed to cure such failure within such 10
day period and thereafter prosecute the curing of
such failure with due diligence), or (ii) if it
relates to a matter which in Landlord's
16
<PAGE>
judgment reasonably exercised is of an emergency
nature, shall remain uncured for a period of 24
hours after Landlord shall have given Tenant
notice of such failure, or (b) to make any payment
which Tenant agrees to make, then Landlord shall
have the right to perform such obligation, or make
such payment, as Tenant's agent, and in Landlord's
sole discretion as to the necessity therefor, and
the full amount of the cost and expense entailed
in performing such obligation, or of the payment
so made, together with interest thereon at the
maximum legal rate from the date of payment, shall
immediately be owing by Tenant to Landlord as
additional rent.
This lease and the term and estate hereby
granted are subject to the limitation that
whenever an Event of Default shall have happened
and be continuing, Landlord shall have the right
at its election, then or at any time thereafter
while any such Event of Default shall continue,
and notwithstanding the fact that Landlord may
have some other remedy hereunder or at law, to
give Tenant notice of its intention to terminate
the term of this lease on a day specified in such
notice, which date shall not be less than 5 days
after the date of giving of such notice, and on
the date specified in any such notice, all right,
title and interest of Tenant hereunder shall
thereupon expire, and Tenant shall then quit the
Demised Premises and surrender the same to
Landlord but shall remain liable as hereinafter
provided. In the event any such notice is given,
Landlord shall have the immediate right of
re-entry and possession of the Demised Premises
and the right to remove all persons and property
therefrom. Should Landlord elect to re-enter as
herein provided or should Landlord take possession
pursuant to legal proceedings or pursuant to any
notice provided for by law, Landlord may from time
to time re-let the Demised Premises or any part
thereof for such term or terms and at such rental
or rentals and upon such terms and conditions as
Landlord may deem advisable with the right to make
alterations in and repairs to the Demised Premises.
If the term of this lease shall have been
terminated as above provided or as otherwise
permitted by law, Landlord may enter upon the Demised
Premises, and again have, repossess and enjoy the
same as if this lease had not been made, and in any
such event, neither Tenant nor any person claiming
through or under Tenant shall be entitled to
possession or to remain in possession of the Demised
Premises but shall forthwith quit and surrender the
Demised Premises.
17
<PAGE>
If Landlord shall re-enter and obtain
possession of the Demised Premises by reason of or
following an Event of Default, whether or not the
term of this lease shall have terminated, (i)
Landlord shall have the right, without notice, to
repair or alter the Demised Premises in such
manner as to Landlord may seem necessary or
advisable so as to put the Demised Premises in
good order and to make the same rentable, and
shall have the right, at its option, to re-let the
Demised Premises or any part thereof, and Tenant
shall pay on demand all expenses incurred by
Landlord in obtaining possession, and in altering,
repairing and putting the Demised Premises in good
order and condition, and in re-letting the same,
including fees of attorneys, architects, and other
experts, and also any other legitimate expenses or
commissions, and (ii) Tenant shall pay Landlord
upon the rent payment dates specified herein, in
each year following such re-entry until the end of
the term of this lease, the sums of money which
would have been payable by Tenant as rent and
additional rent hereunder upon said payment dates
if Landlord had not re-entered and resumed
possession of the Demised Premises, deducting only
the net amount of rent, if any, which Landlord
shall actually receive in the meantime from and by
any re-letting of the Demised Premises, and Tenant
shall remain liable for all sums, aforesaid, as
well as for any deficiency. Landlord shall have
the right from time to time to begin and maintain
successive actions or other legal proceedings
against Tenant for the recovery of such deficiency
or damages or for a sum equal to any installment
or installments of rent and any other sums payable
hereunder, and to recover the same upon the
liability of Tenant herein provided, which
liability shall survive the institution of any
action to secure possession of the Demised
Premises.
Nothing herein contained shall be deemed
to require Landlord to wait to begin such action
or other legal proceedings until the date when
this lease would have expired by limitation had
there been no such default by Tenant.
In lieu of all other claims for damages
on account of such termination, Landlord shall be
entitled to recover from Tenant as liquidated
damages an amount equal to the excess of all Fixed
Rent reserved hereunder for the unexpired portion
of term hereof over the fair rental value of the
Demised Premises at the time of termination for
such unexpired portion discounted at the rate of
6% per annum from the date such rents would have
18
<PAGE>
become due under this lease to the date of such
termination.
NOTICES All notices, demands, requests,
designations and consents by either party hereto
to the other party shall be in writing and shall
be sent by Registered or Certified Mail (Return
Receipt Requested) addressed to:
Landlord - J. C. Penney Company, Inc.
Attn: Real Estate Counsel
P. O. Box 10001
Dallas, Texas 75301-2105
Tenant - at the address of Tenant set forth at
the head of this lease.
All such communications shall be deemed
given on the date of mailing. The foregoing addresses
may be changed from time to time by either party by
notice given to the other party, as aforesaid.
ACCESS TO Tenant shall permit Landlord and
DEMISED Overlandlord and authorized representatives of
PREMISES each to enter the Demised Premises at all
reasonable times for the purpose of: serving or
posting thereon notices required by Legal
Requirements; conducting periodic inspections; and
performing any work thereon required to be
performed by Landlord pursuant to this lease or
that Landlord or Overlandlord in the reasonable
exercise of its judgment may deem necessary to
prevent waste, loss, damage or deterioration to or
in connection with the Demised Premises.
LANDLORD'S Landlord hereby designates Ray Emma as its
PROPERTY representative ("Property Representative") to handle
REPRESENTATIVE Tenant's property management and maintenance concerns
and requests regarding the Demised Premises. Landlord
shall cause the Property Representative (i) to
respond promptly and diligently to all questions,
inquiries and concerns of Tenant regarding the
condition of the Demised Premises, and (ii) to
perform or cause to be performed all of Landlord's
management obligations hereunder. Until such time as
Landlord notifies Tenant in writing of a different
Property Representative or address, Tenant shall
contact the Property Representative at the following
address:
Mr. Ray Emma
J. C. Penney Company, Inc.
P. O. Box 10001
Dallas, Texas 75301-2104
(214) 431-1621
19
<PAGE>
WAIVER OF One or more waivers of any covenant, term
PERFORMANCE or condition of this lease by either party shall
BY EITHER not be construed as a waiver of a subsequent
PARTY breach of the same or any other covenant, term or
condition; nor shall any delay or omission by
either party to seek a remedy for any breach of
this lease or to exercise a right accruing to such
party by reason of such breach be deemed a waiver
by such party of its remedies or rights with
respect to such breach. The consent or approval by
either party to or of any act by the other party
requiring such consent or approval shall not be
deemed to waive or render unnecessary consent to
or approval of any similar act.
SUCCESSORS All covenants, agreements, provisions and
AND conditions of this lease shall be binding upon and
ASSIGNS; inure to the benefit of the parties hereto and
MODIFICATIONS their heirs, devisees, executors, administrators,
successors in interest and assigns, and shall be
deemed to run with the land.
No modification of this lease shall be
binding unless evidenced by an agreement in writing
signed by Tenant and signed in Landlord's name by one
of Landlord's duly authorized officers.
REMEDIES Except to the extent expressly otherwise
CUMULATIVE provided herein, all rights, privileges and remedies
afforded either of the parties hereto by this lease
or by law shall be deemed cumulative, and the
exercise of any one of such rights, privileges and
remedies shall not be deemed to be a waiver of any
other right, privilege or remedy provided for herein
or granted by law.
PARTIAL If any covenant, term or condition of this
INVALIDITY lease or any application thereof shall be invalid or
unenforceable, the remainder of this lease and any
other application of such covenant, term or condition
shall not be affected thereby.
APPLICABLE This lease shall be construed according
LAW to, and be governed by, the law of the State in
which the Office Building is situated.
WAIVER OF The parties hereto waive trial by jury,
JURY TRIAL to the extent permitted by law, in any action,
proceeding or counterclaim brought by either of them
against the other on any matter whatsoever arising
out of or in any way connected with this lease, the
relationship of Landlord and Tenant,
20
<PAGE>
Tenant's use or occupancy of the Demised Premises,
and any emergency statute or any other statutory
remedy.
ATTORNEYS' If any rent or additional rent or other
FEES charges owing from Tenant to Landlord under this
lease are collected by or through an
attorney-at-law, Tenant shall pay the fees of
Landlord's attorneys not to exceed 15% of the
greater of the amount collected or the judgment,
if any, rendered in Landlord's favor.
HAZARDOUS Tenant agrees and acknowledges that in
MATERIALS accordance with the article hereof captioned
"DEMISE OF PREMISES" Tenant is accepting the
Demised Premises in an "as is" condition.
Except (i) as necessary in accordance
with Tenant's normal course of business as
described in the article hereof captioned "USE AND
OPERATION OF DEMISED PREMISES", and (ii) in strict
compliance with all applicable environmental laws,
Tenant shall not, by way of Tenant's use of or by
way of Tenant's installation of Tenant's
improvements in the Demised Premises, or
otherwise, use, cause or permit any hazardous
material to be located, discharged or disposed in,
on or about the Demised Premises or any part of
the Penney Premises.
Tenant shall defend, indemnify and hold
Landlord harmless from any and all claims, losses,
damages, suits, penalties, costs, liabilities and
expenses (including without limitation any clean
up costs and reasonable investigation expenses,
and attorney's fees) arising directly or
indirectly out of or brought on account of any
claim for loss or damages to the Demised Premises
or the Penney Premises, any injury to any person
or persons or property, or loss of life, any
contamination of or adverse effect on the
environment, or any violation of any environmental
laws, rules, regulations or codes of any
governmental authority, entity or agency, caused
by or resulting from any hazardous or toxic
material which Tenant may release, spill, emit,
discharge, use, keep, bring upon, or transport
through, in or upon the Demised Premises or the
Penney Premises.
Landlord agrees to comply with all
environmental laws affecting the Demised Premises
with respect to the acts or omissions of Landlord
which accrued prior to the delivery of possession
of the Demised Premises to Tenant, except for
compliance required or resulting from the acts or
omissions
21
<PAGE>
of Tenant, its agents, employees, contractors and
all other third parties. Notwithstanding anything
to the contrary in this lease, with respect to the
Demised Premises, nothing shall be deemed to limit
Tenant's recourse, rights and remedies against
Landlord under environmental laws and Landlord's
recourse, rights and remedies against Tenant under
environmental laws.
ENTIRE This lease constitutes the entire
AGREEMENT agreement between Landlord and Tenant, and each
party acknowledges to the other that it is not
relying on any representations or agreements other
than those specifically set forth in this lease.
IN WITNESS WHEREOF, Landlord and Tenant
have caused this lease to be duly executed and
sealed as of the day and year first above written.
LANDLORD:
ATTEST: APPROVED J. C. PENNEY COMPANY, INC.
--------
/s/ [ILLEGIBLE] S.W. By: /s/ [ILLEGIBLE]
------------------------- -------- ---------------------------
Assistant Secretary ATTORNEY Senior Vice President
TENANT:
ATTEST: BSI BUSINESS SERVICES, INC.
By: /s/ [ILLEGIBLE]
-------------------------- ---------------------------
Secretary Senior Vice President
22
<PAGE>
STATE OF TEXAS )
)SS.:
COUNTY OF COLLIN )
This instrument was acknowledged before me on the 11th day of
January, 1996, by Ted L. Spurlock, a Vice President of J. C. PENNEY COMPANY,
INC., a Delaware corporation, on behalf of said corporation.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission Expires:
ELAINE R. LESHER
MY COMMISSION EXPIRES
April 15, 1996 /s/ Elaine R. Lesher
------------------------------ -----------------------------
Notary Public, State of Texas
STATE OF Texas )
) SS.:
COUNTY OF Collin )
On this the 11th day of January, 1996, before me, a Notary Public
duly authorized in and for the said County in the State aforesaid to take
acknowledgments, personally appeared Lawrence A. [ILLEGIBLE] to me known and
known to me to be Senior President of BSI BUSINESS SERVICES, INC., one of the
corporations described in the foregoing instrument, and acknowledged that as
such officer, being authorized so to do, he executed the foregoing instrument
on behalf of said corporation by subscribing the name of such corporation by
himself as such officer and caused the corporate seal of said corporation to
be affixed thereto, as his free and voluntary act, and as the free and
voluntary act of said corporation, for the uses and purposes therein set
forth.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My Commission Expires:
ELAINE R. LESHER
MY COMMISSION EXPIRES
April 15, 1996 /s/ Elaine R. Lesher
------------------------------ -----------------------------
Notary Public
<PAGE>
RENT RIDER
A. Effective as of the Commencement Date, Tenant shall pay
Landlord the following Fixed Rent for the Demised
Premises at the following annual rates for the
following periods, payable in equal monthly
installments in advance on or before the first day of
each calendar month; however, if the Commencement Date
occurs on a day other than the first day of the month,
Tenant shall pay on the Commencement Date a pro rata
share of a full monthly installment of Fixed Rent:
<CAPTION>
MONTHLY
TERM COMMENCING ON ENDING ON ANNUAL RATE INSTALLMENTS
---- ------------- --------- ----------- ------------
Initial Term Commencement
Date 1-31-1997 $493,660.00 $41,138.33
Initial Term 2-1-1997 1-31-2002 $572,300.00 $47,691.67
1st Option Period 2-1-2002 1-31-2007 $663.467.00 $55,288.92
2nd Option Period 2-1-2007 1-31-2012 $769,156.00 $64,096.33
B. Until it receives other instructions in writing from Landlord,
Tenant shall pay all Fixed Rent and other charges and payments
due under this lease by check to the order of
J. C. Penney Company, Inc.
Salt Lake City Accounting
P.O. Box 27704
Salt Lake City, Utah 94127-0704
Unit No. #6210
****************
Attached to and forming part of lease dated as of January 11, 1996,
by and between J. C. PENNEY COMPANY, INC., as Landlord, and BSI
BUSINESS SERVICES, INC., as Tenant, covering certain premises
situated at Nacogdoches at El Charro Road, San Antonio, Texas.
Initialed for Initialed for
identification identification
for Landlord: for Tenant:
By /s/ S.W. By /s/ [ILLEGIBLE]
-------------- -----------------
Attorney
RR-1
<PAGE>
EXHIBIT A
DESCRIPTION OF THE LAND ON WHICH THE OFFICE BUILDING IS LOCATED:
Lot 26, Block 2, New City Block 16673, VALENCIA UNIT 7a, in the City
of San Antonio, Bexar County, Texas, according to plat thereof,
recorded in Volume 9000, Page 235, Deed and Plat Records of Bexar
County, Texas.
****************
Attached to and forming part of lease dated as of January 11, 1996,
by and between J. C. PENNEY COMPANY, INC., as Landlord, and BSI
BUSINESS SERVICES, INC., as Tenant, covering certain premises
situated at Nacogdoches at El Charro Road, San Antonio, Texas.
Initialed for Initialed for
identification identification
for Landlord: for Tenant:
By /s/ S.W. By /s/ [ILLEGIBLE]
-------------- -----------------
Attorney
<PAGE>
EXHIBIT B
Site Plan of Office Building
Attached
****************
Attached to and forming part of lease dated as of January 11,
1996, by and between J.C. PENNEY COMPANY, INC., as Landlord, and BSI
BUSINESS SERVICES, INC., as Tenant, covering certain premises
situated at Nacogdoches at El Charro Road, San Antonio, Texas.
Initialed for Initialed for
identification identification
for Landlord: for Tenant:
By /s/ S.W. By /s/ [ILLEGIBLE]
------------------ ------------------
Attorney