Exhibit 10.12
LEASE
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THIS LEASE, made this 1st day of June, 1999, by and between GRIDLEY
ENTERPRISES, INC., an Illinois Corporation, hereinafter referred to as "Lessor,"
and ILLINOIS PCS, L.L.C., an Illinois Limited Liability Company, hereinafter
referred to as "Lessee."
WITNESSETH
WHEREAS, Lessor is the owner of certain Premises located at 000 Xxxx Xxxxx
Xxxxxx in the Village of Xxxxxxx, County of XxXxxx, State of Illinois, including
a building consisting of approximately 4620 square feet, hereinafter referred to
as the "Premises," and
WHEREAS, Lessee desires to occupy and utilize the Premise for placement of
its telecommunications facilities and the conduct of its telecommunications
business, and
WHEREAS, Lessor has made specialized improvements to the building on the
Premises to facilitate Lessee's telecommunications operations and the housing of
Lessee's electronic switching and associated equipment, all at the request of
Lessee and as designed, designated and specified by Lessee and its consultant,
Communications Management Specialists, and
WHEREAS, Lessor has agreed to let, lease and demise the Premises to Lessee,
and Lessee has agreed to accept a lease of the Premises as hereinafter set
forth.
NOW THEREFORE, in consideration of the covenants and agreements hereinafter
set forth, Lessor hereby lets, leases and demises the Premises unto Lessee, and
Lessee hereby accepts the lease of the Premises on the terms, stipulations and
covenants hereinafter set forth and covenants and agrees to perform the same as
follows:
1. Leased Premises and Term of Lease
---------------------------------
Lessor does hereby let, lease and demise unto Lessee, its successors and
assigns, the following described Premises in the Village of Xxxxxxx, County of
XxXxxx, State of Illinois:
Xxx 0 xxx xxx Xxxx 0/0 xx Xxx 0 xx Xxxxx 26 in the Original
Town, now Village, of Xxxxxxx, as platted by Kent and
Carlisle, in XxXXXX COUNTY, ILLINOIS
Commonly known as 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx,
with all appurtenances and rights thereto belonging, including the right of
ingress and egress, for itself, its servants, agents and employees to have and
to hold for a term of ten (10) years, commencing on or about the 1st day of June
1999 and continuing to and including the 31st day of May, 2009. At the
expiration of said term, Lessee shall have the right and option to renew this
Lease on the same terms and conditions for a period of five (5) years, provided
however, that not less than 90 days prior to the expiration of the term of the
Lease, Lessee shall give written notice to Lessor of its election to exercise
said option. At the expiration of the lease renewal term provided above, if
that option was exercised, Lessee shall have the right and option to again renew
this Lease on the same terms and conditions for a period of five (5) years,
provided however, that not less than 90 days prior to the expiration of the term
of the renewal, Lessee shall give written notice to Lessor of its election to
exercise said option.
2. Rent
----
This monthly and annual base rent shall be as follows, payable in advance
on or before the first day of each month during the term of this Lease or any
extension or renewal thereof:
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Monthly Annual
Rent Period Base Rent Base Rent
------------------------------- ----------- -----------
June 1, 1999 - May 31, 2004 $4,425.00 $53,100.00
June 1, 2004 - May 31, 2009 $4,867.50 $58,410.00
June 1, 2009 - May 31, 2014 $5,354.25 $64,251.00
June 1, 2004 - May 31, 2019 $5,889.68 $70,676.16
All payments of rent by Lessee shall be made to Lessor at such place or
places as Lessor may in writing designate or direct.
3. Real Estate Taxes
-----------------
Lessee shall be responsible for and shall pay all real estate taxes
associated with the Premises during the term of this Lease or any extension or
renewal thereof. Lessor shall pay all real estate taxes for calendar year 1998
which are payable in calendar year 1999 and shall pay 5/12 of the real estate
taxes for the calendar year 1999 which are payable in calendar year 2000.
4. Utilities, Security System and Refuse Removal
---------------------------------------------
Lessee shall be responsible for and shall pay any and all charges
associated with utility services provided to the Premises during the term of the
Lease or any extension or renewal thereof, including electric, natural gas,
telephone, water and sewer. Lessee shall also be responsible for and shall pay
any and all charges associated with any security system installed on the
Premises and the security service rendered to Lessee in connection therewith.
Lessee shall also be responsible for and shall pay any and all refuse removal
charges.
5. Maintenance
-----------
Lessor agrees to repair and maintain the structural and exterior portion of
the Premises, including the roof thereof. Lessor shall have no other
obligations except as expressly provided in this lease. Lessee shall be
responsible for maintaining all interior portions of the building and all
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equipment, fixtures or systems which it has, itself, provided, including but not
limited to the Liebert climate control units, the 300 KW diesel generator, the
transfer switch, and the FM200 fire suppression equipment.
Lessor's employees, representatives and contractors shall have the right to
enter upon the Premises at any time during reasonable business hours for the
purpose of examining or inspecting the same or making any repairs.
6. Quiet Enjoyment and Non-Disturbance
-----------------------------------
Lessor covenants and warrants that, subject to any trust deeds or mortgages
now of record or hereafter placed on record, it is the owner of the Premises.
Lessee, upon payment of rents as herein provided and performance of the
provisions hereof on its part to be performed, shall peacefully possess and
enjoy the Premises during the term hereof and any extension of renewal thereof
without any interruption or disturbance.
7. Defense of Suit
---------------
Lessee agrees that in the event Lessor is joined in any suit instituted
against Lessee arising out of the possession by Lessee of the Premises, Lessee
shall defend such suit for itself and Lessor, and Lessee agrees to pay all
costs, expenses and attorneys fees which may be incurred in defending such suit,
as well as, any judgment which may be awarded against Lessor and/or Lessee.
8. Specialized Improvements
------------------------
Lessee acknowledges that the building on the Premises was designed and
constructed as a storage building and that the intended use under this lease is
other than the buildings intended purpose. Lessee acknowledges that Lessor has
made specialized improvements to the building on the Premises to facilitate
Lessee's telecommunications operations and the housing of Lessee's
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electronic switching and associated equipment, including but not limited to the
specialized electrical system, ground field and lightning protection. Lessee
shall provide the pad and housing for Lessee's backup generator and shall
install the 300 kW diesel generator and transfer switch provided by Lessee in
connection therewith. Lessee shall provide and pay all costs associated with
installation of the electrical services and ground field. Lessee acknowledges
that it shall provide and install its own FM200 fire suppression system and
Liebert climate control devises.
Lessee acknowledges that the improvements made to conform the building to
Lessee's purposes were designed and the modifications to the building were made
as designated and specified by Lessee and its consultant, Communications
Management Specialists ("CMS"). Therefore, Lessee assumes all risk associated
with the design and use of the building for Lessee's telecommunications
operations and the housing of Lessee's electronic switching and associated
equipment, and Lessee acknowledges and agrees that Lessor shall have no
liability whatsoever for or arising out of the redesign of the building by
Lessee and its consultant.
9. Responsibility for Modifications to Building
--------------------------------------------
Lessee was responsible for the design of the modifications, renovating and
remodeling of the building on the Premises to meet its needs and has accepted,
individually or through its consultant, CMS, all such modifications, renovating
and remodeling as constructed by Lessor and its contractors. Lessee hereby
agrees to forever release and hold Lessor harmless for any and all loss,
liability, deficiency or damage, direct or indirect, suffered or incurred in
respect of any claim relative to, arising out of, involving or claimed to be
related to, arising out of or involving the possession, design, construction,
modifications, renovating and remodeling of the building on the Premises,
including the ground field.
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10. Condition of Premises
---------------------
Lessee accepts the Premises in their present condition which was modified
for Lessee, at Lessor's expense, as designed and specified by Lessee and its
consultant, CMS. Lessee agrees at its own expense to do any and all additional
renovating and remodeling which may be necessary to place the Premises in such
condition that said Premises may be occupied by Lessee for business purposes.
Lessee further acknowledges and agrees that all of the design, construction,
renovating and remodeling necessary to place the Premises in its present
condition was done under the supervision and direction of Lessee. Lessee
further agrees it will promptly pay for all additional materials and labor
required to place the Premises in satisfactory condition for use so that no
person, firm or corporation shall be entitled to a mechanic's lien for labor and
materials furnished in the renovation and repair and remodeling of the
improvements on the Premises. Lessee further agrees that it will obtain
approval in writing of the Lessor prior to the commencement of further
renovation, repair or remodeling.
11. Fixtures and Equipment
----------------------
Lessee may install at its own expense on the Premises any fixtures,
equipment or facilities necessary to conduct its business. Upon the expiration
of the original term of this Lease or any extended term thereof, Lessee shall
remove from the Premises any fixtures, equipment or facilities installed by
Lessee and shall repair any damage occasioned by such removal.
12. Alterations
-----------
Lessee agrees that it will make no alterations on or to the Premises
without the prior written consent of the Lessor, and such consent shall not be
unreasonably withheld or delayed. Such alterations will be paid for by Lessee.
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13. Ordinances and Rules Compliance
-------------------------------
Lessee covenants and agrees that it will comply with all ordinances and
building rules and regulations of the Village of Xxxxxxx, County of XxXxxx and
State of Illinois.
14. Insurance
---------
The Lessee shall pay and maintain insurance on its own equipment.
Lessee, at its own cost and expense, throughout the term of this Lease
shall maintain (or reimburse Landlord for maintaining, if such be the case) the
following insurance with respect to the Premises:
a) General public liability insurance against claims for
personal injury, death, or property damage occurring
upon, in or about the Premises, such insurance to
afford protection to the limit of not less than One
Million Dollars ($1,000,000) in respect to injury or
death to a single person, and to the limit of not less
than One Million dollars ($1,000,000) in respect to any
one accident, and to the limit of not less than Five
Hundred Thousand Dollars ($500,000) in respect to
property damage;
b) fire with full extended coverage insurance for Lessee's
personal property and contents.
Lessor, at its own cost and expense, throughout the term of this Lease
shall maintain insurance for the full replacement value of the building on the
Premises.
15. Hazardous Conditions
--------------------
Lessee covenants that it will not knowingly allow any condition to exist
which will damage the improvements on the Premises or create a fire hazard.
16. Damage or Destruction
---------------------
Lessor agrees that if the building in which the Premises are located is
damaged or destroyed and Lessee provides written notice thereof, Lessor shall
notify Lessee within five (5) days from the
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date of written notice of such destruction or damage whether or not Lessor
intends to restore the Premises, and if Lessor so elects to restore said
Premises, Lessor shall promptly undertake to replace or repair any improvements
which were damaged or destroyed and shall diligently proceed to complete such
replacement and/or repair within a reasonable time. If Lessor fails to notify
Lessee within said five (5) day period, or notify Lessee that Lessor does not
intend to restore the Premises, or if Lessor fails to restore the same to usable
condition within a reasonable time, then this Lease shall terminate.
17. Return of Possession
--------------------
Lessee covenants with Lessor that at the expiration of the Lease,
possession of said Premises shall be given to Lessor. Lessee further covenants
with Lessor that upon non-payment of the whole or any part of the rent at the
time when the same is promised to be paid and the expiration of a ten (10) day
grace period thereafter, Lessor, at its election, may either xxx for said rent
due, or declare this lease in default and all rent due during the term of the
lease shall immediately become due and payable.
18. Vacation of Premises
--------------------
In case the Premises shall be vacated during the term of this lease, and
Lessee neglects to pay the rent on said Premises, Lessor shall have the right to
take immediate possession of the Premises and in their discretion may re-let the
same and apply the proceeds upon this Lease, said Lessee to remain liable for
that portion of the rent and any costs which Lessor is unable to recover from
any re-letting of the Premises, including reasonable attorneys fees incurred in
connection with the collection of any amounts owed to Lessor under this lease.
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19. Default of Lessor
-----------------
In the event of any default by Lessor of any condition, agreement, term or
provision of this lease and the continuance of such default for thirty (30) days
after written notice thereof has been given by Lessee to Lessor, then and in
such event, Lessee shall have the right then or at any time thereafter while
such default or defaults shall continue, to elect:
(a) To cure the default by taking whatever action or making
any payment that may be required to cure the default and in the
event that Lessee makes any such payment, then Lessee may deduct
such payment from the rent due under this lease; or
(b) To declare this lease forfeited and the term ended.
20. Default of Lease
----------------
If Lessee shall default in the payment of rent when due or in the
performance of any of the covenants and agreements of Lessee herein, or if
Lessee shall abandon the Premises, or if a receiver be appointed for Lessee's
property, or if the interest of Lessee herein shall be levied upon, Lessor may,
in addition to all other remedies provided by the lease, exercise and enforce
any of the following remedies, and the election of one remedy shall not preclude
enforcement of any other remedy, and failure of Lessor to insist on strict
compliance shall not preclude enforcement of any subsequent similar breach. No
default under this lease shall be enforced until thirty (30) days after written
notice shall have been sent by Lessor to Lessee stating the nature of the breach
complained of, and Lessee may, within said thirty (30) days, remedy any breach
of the terms of this lease, otherwise such breach shall be in full force and
effect and Lessor may prosecute the remedies herein or as provided by law.
(a) In the event of any such default, Lessor may elect to
cancel this lease and terminate the right of Lessee to possession
of said Premises and without further notice or demand may, by its
officers or agent, re-enter into and upon said Premises
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or any part thereof with or without process of law and repossess
the same and without relinquishing Lessor's right to past and
future rents.
(b) In the event of the default of payment of rent, Lessor
may declare the full amount of rent then due and all rent to
become due for the remaining period of the lease immediately due
and payable.
(c) Lessor may re-enter and relet said Premises for such
rent and upon such terms as may then prevail and such re-entry
shall not be deemed a cancellation of this lease, and Lessee
shall be entitled to credit for the sum realized from such
reletting and shall be liable for the balance as provided in the
lease and the terms and conditions thereof, for the unexpired
term, but in no event shall Lessor be liable to Lessee for any
excess in rents, if any, obtained through such reletting.
21. Holdover Tenancy
----------------
If Lessee shall remain in the demised Premises after the expiration of the
term, such holding over shall not constitute a renewal or extension of this
Lease other than on a month-to-month basis terminable by either party on thirty
(30) days notice to the other. Such month-to-month lease shall be on all of the
same terms and conditions as in this Lease contained except for the term.
22. Waiver
------
The failure of Lessor to insist upon strict performance of the terms,
covenants, agreements or conditions herein contained, or any of them, shall not
constitute or be construed as a waiver or relinquishment of Lessor's right to
thereafter enforce any such term, covenant, agreement, or condition, but the
same shall be continued in full force and effect.
23. Assignment or Sublease Prohibited
---------------------------------
Lessee may not assign this lease, or any interest thereunder, nor may it
sublease the Premises or any part thereof without prior written approval from
Lessor. In addition, Lessor shall be given notice of any change of control of
Lessor or any change in its organizational structure.
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24. Successors and Assigns
----------------------
The conditions, covenants and agreements in this Lease set forth shall be
binding upon the parties hereto, and upon their successors and assigns.
Notwithstanding anything herein to the contrary, Lessee may pledge its interests
in this Lease to any lender to secure financing for Lessee's business
operations.
25. Notice
------
Notices under this lease shall be sent by U.S. Mail, postage prepaid and
addressed as follows:
Lessor: Gridley Enterprises, Inc.
000 Xxxx Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxx Xxxxxxx
Lessee: Illinois PCS, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxx
26. No Oral Agreements
------------------
It is expressly agreed between Lessor and Lessee that there is no verbal
understanding or agreement which in any way changes the terms, covenants and
conditions herein set forth, and that no modification of this lease shall be
effective unless made in writing and duly executed by the Lessor and Lessee.
27. Force Majeure
-------------
Neither Lessor nor Lessee shall be responsible for failure to perform their
obligations under this Lease, nor be liable for loss or damage resulting from
such failure, where the same arises from or through acts of God, explosions,
sabotage, accidents, riots, civil commotions, act of any foreign
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country, fire or other casualty, legal requirements, energy shortages, or causes
beyond reasonable control.
28. Option to Purchase Premises
---------------------------
The Lessor hereby grants to Lessee the option to purchase the Premises from
Lessor at the expiration of the fifth year of this Lease for the sum of Four
Hundred Fifty Thousand Dollars ($450,000.00), provided Lessee will have fully
performed the Lease and made all payments required up to that time, and provided
further that written notice of Lessee's election to exercise the option is
received by Lessor on or before March 1, 2004. If Lessee fails, neglects or
refuses to exercise this option within the time prescribed therefore for any
reason, then and in that event this option shall lapse and cease to be of any
legal effect.
The Lessor also grants to Lessee the option to purchase the Premises from
Lessor at the end of the term of this Lease or the end of any extension or
renewal thereof, provided Lessee will have fully performed the Lease and made
all payments required up to that time, and provided further that written notice
of Lessee's election to exercise the option is received by Lessor at least 90
days prior to the expiration of the term of this Lease or any extension or
renewal thereof. If Lessee fails, neglects or refuses to exercise this option
within the time prescribed therefore for any reason, then and in that event this
option shall lapse and cease to be of any legal effect.
The purchase price for the option if exercised at the end of the lease or
any extension or renewal thereof shall be the appraisal value of the Premises as
determined by an independent appraiser agreeable to both parties. If the
parties cannot agree upon a single independent appraiser, then the purchase
price shall be the appraised value as determined by three appraisers (or the
average
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thereof), one of which is selected by Lessor, one by Lessee and the third
appraiser selected by the first two appraisers so selected.
In the event of the exercise of either option as provided in this Section
of this Lease, Lessor will convey at closing the property to Lessee by warranty
deed free and clear of all encumbrances except the taxes and assessments which
under this Lease are to be paid by Lessee. Nothing herein, however, will be
construed to prevent, prior to consummation of the sale, Lessor's placing such
mortgages or deeds of trust on the property as it may see fit. The Lessor will
protect and defend Lessee and the property against foreclosure or loss because
of any encumbrances created by or through the Lessor. The purchase price will
be completed by conveyance of the property and payment of the purchase price
within 90 days from the deadline for notice of intent to exercise the option
hereunder. Notwithstanding the giving of notice of intent to exercise the
option hereunder, Lessee shall remain obligated to pay rent to Lessor and to
otherwise perform all of its obligations under the Lease until the closing on
the purchase occurs and the purchase price is paid to Lessor.
29. Right of First Refusal
----------------------
Notwithstanding the foregoing, if at any time during the term of this Lease
or any extension or renewal thereof Lessor shall receive a bona fide offer to
purchase the Premises and Lessor, in its sole discretion, intends to accept said
offer, then Lessee shall have the first right of refusal to purchase the
Premises for the price and on the same terms and conditions contained in the
bona fide offer.
If Lessor receives a bona fide request that it intends to accept, it shall
first give written notice to Lessee of the offer to purchase and its intention
to accept said offer. Such notice shall include the name and address of the
prospective purchaser, the purchase price and the terms and conditions of
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such desired sale. Upon receipt of said notice, Lessee shall have the exclusive
right for a period of sixty (60) days thereafter to offer to purchase the
Premises for the price and on the same terms and conditions contained in the
bona fide offer. If the Lessee fails to exercise its right of first refusal
within the said sixty (60) days, then Lessor may proceed to sell and transfer
the Premises to the proposed purchaser identified in the notice for the price
and on the same terms and conditions contained in the bona fide offer.
The right of first refusal in this Section 29 and the options to purchase
in Section 28 are mutually exclusive rights granted in the alternative. If the
Premises are sold and transferred as provided in this Section 29 to other than
Lessee, then the options granted in Section 28 above shall terminate and become
void and of no further effect.
30. Memorandum of Lease
-------------------
The parties shall cooperate in executing a Memorandum of Lease which shall
be recorded in the XxXxxx County Recorder's Office.
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IN WITNESS WHEREOF, Lessor and Lessee have hereunto caused this Lease to be
executed by their authorized representatives on the day and year above written.
LESSOR: GRIDLEY ENTERPRISES, INC.,
an Illinois Corporation
By: _________________________
Its President
ATTEST:
By: _________________________
Its Secretary
LESSEE: ILLINOIS PCS, L.L.C.,
an Illinois Limited Liability Company
By:_________________________
Its Manager
ATTEST:_________________________
By:_________________________
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