Exhibit 10.1
LEASE AGREEMENT
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THIS LEASE AGREEMENT ("Lease"), made and entered into as of the 29th day of
January, 1999 ("Date of this Lease"), by and between M. REA BROOKINGS and DAVID
F. HERRING, individual residents of the State of Georgia (collectively
"Lessor"), and CHANCELLOR ASSET MANAGEMENT, INC., a Delaware corporation
("Lessee");
W I T N E S S E T H:
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WHEREAS, Lessor owns certain improved real property containing
approximately six (6) acres of land and improvements located at 4382 South
Moreland Avenue (Highway 42), Conley, Clayton County, Georgia which is more
particularly described on Exhibit A attached hereto and made a part hereof by
this reference ("Premises"), on which the business operations of M.R.B., Inc., a
Georgia corporation, are presently conducted;
WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to lease
from Lessor, the Premises on the terms and conditions set forth in this Lease;
NOW, THEREFORE, for and in consideration of the rentals to be paid
hereunder, the mutual covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto do hereby covenant and agree as follows:
ARTICLE I
PREMISES
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SECTION 1.1. PREMISES. Lessor hereby rents and leases to Lessee, and Lessee
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hereby rents and leases from Lessor, the Premises on and subject to the terms
and conditions contained in this Lease. No easement for light, air or view is
included in this Lease of the Premises, and no diminution or shutting off of
light or air or view by any structure which may be now or hereafter erected
shall affect this Lease. This Lease shall create the relationship of landlord
and tenant and shall be a usufruct, and not an estate for years.
SECTION 1.2. CONDITION OF PREMISES. Lessee acknowledges that Lessee has
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examined and inspected the Premises and is fully familiar with the physical
condition, state of repair, expenses for operating the Premises, use or
operation of the Premises and any other facts or matters relating to Lessee's
decision to enter into this Lease. Neither Lessor nor any of Lessor's agents or
other representatives have made any representations or warranties as to any
facts or matters relating to the Premises except as expressly provided in this
Section. Lessee hereby expressly acknowledges and represents that no such
representations or warranties have been made, and Lessee further acknowledges
and represents that based upon its examination and inspection of the Premises,
Lessee agrees to accept the Premises "as-is" in the present condition, subject
to ordinary wear and tear and natural deterioration from and after the Date of
this Lease.
SECTION 1.3. USE OF PREMISES. Lessee acknowledges and agrees that Lessee is
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entering into this Lease for the purpose of Lessee or one or more of its
subsidiaries conducting the below-described business on the Premises and for no
other purposes without the prior written consent of Lessor which shall not be
unreasonably withheld or delayed. Lessor shall have no liability or
responsibility if for any reason the Lessee is prevented from using the
Premises, in whole or in part, for the purposes set forth below, which purposes
Lessor represents and warrants are in compliance with all applicable zoning
laws. Subject to the foregoing, the business to be operated by Lessee on the
Premises is as follows: storage, maintenance, repair, lease, sale or other
disposition of motor vehicle tractors and trailers together with all other
activities and operations arising out of or related thereto.
ARTICLE II
TERM
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SECTION 2.1. TERM. Lessee takes and accepts the Premises from Lessor to have
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and to hold the same for the term described below ("Lease Term"). The Lease
Term and the payment of rent hereunder shall commence at 12:00 midnight, E.T. on
February 1, 1999 ("Commencement Date"). The Lease Term shall terminate at 12:00
midnight E.T. on January 31, 2004 ("Expiration Date"), unless sooner terminated
as herein provided. Lessee shall have the right to enter the Premises as of the
Date of this Lease and shall be entitled to use and possession of the Premises
without any obligation to pay rent for occupancy of the Premises from the Date
of this Lease until the Commencement Date. This Lease shall be effective as of
the Date of this Lease, and Lessor and Lessee shall be governed by, and perform
in accordance with, the terms and conditions contained in this Lease, including,
without limitation, with respect to insurance, utility charges and repair and
maintenance of the Premises.
SECTION 2.2. OPTIONAL TERM. Lessor hereby grants to Lessee the right, at
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Lessee's sole option, to extend the term of this Lease for an additional five
(5) year period from and after the Expiration Date ("Optional Term") on the same
terms and conditions as set forth in this Lease, except as herein expressly
provided to the contrary. During the Optional Term, the annual rent shall be
One Hundred Twenty Thousand and No/100 Dollars ($120,000.00) ("Optional Term
Base Rental"). The Optional Term Base Rental during each twelve (12) month
period of the Optional Term shall be paid in equal monthly installments of Ten
Thousand and No/100 Dollars ($10,000.00) with the first installment being due on
the first day of the first month of the Optional Term and on the first day of
each successive month thereafter during the Optional Term. Lessee shall, if
Lessee desires to exercise such option rights, exercise Lessee's option rights
granted hereunder on or before ninety (90) days prior to the Expiration Date of
this Lease. If Lessee fails to exercise the option within ninety (90) days
prior to the Expiration Date, Lessor, at Lessor's option, may terminate Lessee's
option rights under this Lease.
SECTION 2.3. REMOVAL OF LESSEE'S PERSONAL PROPERTY. Before the termination or
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expiration of this Lease, Lessee shall remove from the Premises all Lessee's
personal property which this Lease allows Lessee to remove and shall peaceably
surrender the Premises and the keys thereto to Lessor in the same condition as
at the beginning of the Lease Term, subject to alterations and additions
subsequently made by Lessee pursuant to the terms of this Lease and subject to
ordinary wear and tear and natural deterioration. Personal property which
Lessee fails to remove from the Premises before the termination of this Lease
shall be considered as abandoned by Lessee and may be disposed of by Lessor in
any manner whatsoever without accounting to Lessee for such property or being
liable in any way to Lessee for such disposition.
SECTION 2.4. HOLDING OVER. In no event shall there be any renewal of this
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Lease by operation of law, and if Lessee remains in possession of the Premises
after the termination of this Lease and without a new Lease executed by Lessor
and Lessee, Lessee shall be deemed to be occupying the Premises as a tenant at
sufferance and agrees to pay Lessor an amount equal to one hundred fifty percent
(150%) of the Base Rental and additional rent provided for in this Lease and
shall otherwise be subject to all the terms and conditions of this Lease insofar
as the same are applicable to a month-to-month tenancy.
SECTION 2.5. PURCHASE OPTION. Lessor hereby grants to Lessee an option to
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purchase the Premises ("Purchase Option") at any time during the six (6) month
period from and after the Date of this Lease through and including July 31, 1999
("Purchase Option Period") for a purchase price equal to the sum of (i) Three
Hundred Thousand Dollars ($300,000), plus (ii) the total of the three (3)
existing mortgage loans secured by the Premises, but which mortgage loans shall
not exceed Six Hundred Fifty Thousand Dollars ($650,000) in the aggregate. In
the event that the Lessee exercises the Purchase Option prior to the expiration
of the Purchase Option Period, Lessor and Lessee shall enter into a real estate
purchase and sale agreement ("Sale Agreement") containing mutually agreeable
terms and conditions (subject to the purchase price being in an amount as
hereinabove provided), and the closing date shall be within sixty (60) days
following the date on which the Purchase Option was exercised by Lessee. The
Sale Agreement shall provide that the title shall be satisfactory to Lessee in
Lessee's sole discretion. The Sale Agreement shall also provide closing
conditions which are usual and customary in the State of Georgia. In the event
that Lessee does not exercise the Purchase Option, and/or does not consummate
the purchase of the Premises after exercising the Purchase Option for reasons
other than any breach or failure to satisfy one or more closing conditions by
Lessor, then Lessee shall cause to be delivered to each Lessor one-half (1/2) of
the Contingent Shares (as defined in Section 4.6 of the Stock Purchase Agreement
dated as of December 31, 1998 between Lessor and Lessee). The Contingent Shares
shall be delivered to each Lessor, if due, within thirty (30) days after the
expiration of the Purchase Option Period, or more than thirty (30) days after
the failure of Lessee to consummate the purchase of the Premises within the
required time period after Lessee has exercised the Purchase Option, as the case
may be.
ARTICLE III
RENT
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SECTION 3.1. BASE RENTAL. Lessee shall pay to Lessor annual rental ("Base
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Rental") for the Premises in the amount of One Hundred Two Thousand Dollars
($102,000.00) which is due and payable in equal monthly installments of Eight
Thousand Five Hundred Dollars ($8,500.00) on the first day of each and every
calendar month during the Lease Term commencing on February 1, 1999 and
continuing on the first calendar day of each month thereafter until January 1,
2004 on which the final monthly installment of Base Rental for the Lease Term
shall be due and payable.
SECTION 3.2. RENT AND OTHER PAYMENTS. Lessee shall pay to Lessor all Base
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Rental and all other charges due and owing by Lessee under this Lease without
deduction or set off, in legal tender, and at Lessor's address stated in the
Lease or as otherwise directed from time to time by written notice from Lessor.
All installments of rent and all other charges due and owing by Lessee under
this Lease not paid when due shall bear interest at twelve percent (12%) per
annum. Lessee shall pay all sales or other taxes (but not including income
taxes or taxes of a similar nature hereinafter charged to Lessor) levied or
assessed against any rent payment due under this Lease simultaneously with each
required rent payment.
ARTICLE IV
REPAIR AND MAINTENANCE OF PREMISES; UTILITIES; SIGNAGE
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SECTION 4.1. MAINTENANCE AND REPAIRS BY LESSEE. Lessee accepts the Premises in
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"as is, where is" condition without representation or warranty of any kind
whatsoever, including, without limitation, any warranty of habitability or of
fitness for an intended purpose, except with respect to electrical, plumbing,
HVAC and other systems and equipment located in or on the Premises which systems
and equipment shall be in working order as of the Date of this Lease and for a
thirty (30) day period thereafter. Lessor shall not have any responsibility for
maintenance or repairs of such systems and equipment following the expiration of
such thirty (30) day period. From and after the expiration of thirty (30) days
following the Date of this Lease, Lessee shall at its own expense keep the
Premises, including, without limitation, all electrical, plumbing, HVAC and
other systems and equipment located in or on the Premises, in good repair and
tenantable condition and indemnify Lessor against any loss, damage, or expense
arising by reason of any failure of Lessee so to keep the Premises in good
repair, maintenance and tenantable condition or due to any act or neglect of
Lessee, its agents, employees, contractors, invitees, licensees or permitted
assignees or sublessees. Lessee further agrees to maintain and care for the
grounds of the Premises, including mowing of grass, care of shrubs and general
landscaping. Lessee agrees to return the Premises to Lessor at the expiration
or termination of this Lease in as good of condition and repair as when first
received, normal wear and tear excepted. Notwithstanding anything to the
contrary set forth herein, upon reasonable notice from Lessee, Lessor shall be
responsible for maintaining and repairing the roof, the exterior walls and the
foundation of the Premises at Lessor's cost and expense, and shall indemnify
Lessee against any loss, damage or expense arising from Lessor's failure to so
maintain such portions of the Premises. If Lessee fails to perform, or cause to
be performed, such maintenance and repairs, then at the option of Lessor, in
its sole discretion and without any obligation to do so, any such maintenance or
repair may be performed or caused to be performed by Lessor and the cost and
expense thereof charged to Lessee, and Lessee shall pay the amount thereof to
Lessor on demand as additional rent.
SECTION 4.2. ALTERATIONS AND IMPROVEMENTS BY LESSEE. Lessee shall have the
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right to make cosmetic and non-structural tenant improvements to the Premises.
Otherwise, Lessee shall make no alterations or additions of any kind in or to
the Premises without first obtaining Lessor's written consent, which shall not
be unreasonably withheld or delayed. All such work, including additions,
fixtures, and tenant improvements (but excluding moveable office furniture and
equipment and other personal property of Lessee) made or placed in or upon the
Premises by Lessee shall be at Lessee's sole cost and expense and shall be and
become Lessor's property at the termination of this Lease, by lapse of time or
otherwise, all without compensation or payment to Lessee, and shall remain upon
and in the Premises; but said property shall be and remain the Lessee's property
during the Lease Term. Any tenant improvement or alteration shall be
performed in a good and workmanlike manner and shall comply with any and all
governmental building, zoning, sign and other applicable ordinances and
regulations. Lessee shall indemnify and hold harmless Lessor for any violation
of any governmental regulation related to such tenant improvement or alteration.
SECTION 4.3. DISCHARGE OF LIENS. Lessee shall discharge of record by bond or
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otherwise within ten (10) days following the date whereupon Lessee learns of the
filing of any mechanic's or similar lien filed against the Premises for work or
materials claimed to have been furnished at Lessee's instance to or for the
benefit of Lessee and/or the Premises. If Lessee shall fail to cause such lien
or claim of lien to be so discharged or bonded within such period, in addition
to any other right or remedy it may have, Lessor may, but shall not be obligated
to, discharge the same by paying the amount claimed to be due or by procuring
the discharge of such lien or claim by deposit in court or bonding, and, in any
such event, Lessor shall be entitled, if Lessor so elects, to compel the
prosecution of any action for the foreclosure of such lien or claim by the lien
or claimant and to pay the amount of the judgment, if any, in favor of the lien
or, with interest, costs and allowances. Lessee shall pay as additional rent,
on demand from time to time, any sum or sums so paid by Lessor and all costs and
expenses incurred by Lessor, including, but not limited to, attorneys' fees and
expenses in prosecuting such discharge or in defending any such action.
Notwithstanding the foregoing, Lessee shall be entitled to dispute any such
liens against the Premises so long as Lessee secures it obligations by posting a
security bond or other security reasonably acceptable to Lessor.
SECTION 4.4. REPORTS OF DEFECTS. Lessee shall report to Lessor in writing any
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damage to or defective condition in or about the Premises known to Lessee as
soon as reasonably possible after Lessee obtains actual knowledge thereof.
SECTION 4.5. SERVICES AND UTILITIES. Lessee shall pay for all water, gas,
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electricity, fuel and other utilities consumed or used by Lessee on or in
connection with the Premises and shall be responsible for making all security
deposits required in order to obtain such utilities. Lessee shall also be
responsible for providing all cleaning and janitorial service and all other
services necessary or helpful to use or occupy the Premises. Lessee agrees that
Lessor shall have no obligation to provide or pay for any such utilities or any
such services.
SECTION 4.6. SIGNAGE. From and after the Date of this Lease, Lessee shall be
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entitled to use all signage located on the Premises for the advertisement of
Lessee's business operated on the Premises. Lessee shall be obligated to pay
all costs and expenses in connection with use of the signage, including, without
limitation, all costs and expenses for maintenance and repairs to such signage.
ARTICLE V
DAMAGE
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SECTION 5.1. DAMAGE AND DESTRUCTION.
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(a) If the Premises are rendered partially or wholly unfit for occupancy
by fire, the elements, acts of God or other casualty, and if such damage cannot,
in Lessor's reasonable judgment, be materially restored within one hundred
twenty (120) days after the date of such damage, then either Lessor or Lessee
may terminate this Lease as of the date of such fire or other casualty, and the
Lease Term shall end on such date as if that date had been originally fixed in
this Lease for the expiration of the Lease Term. Lessor shall indicate whether
the Premises may be materially restored by written notice to Lessee within
thirty (30) days of such fire or other casualty. If Lessor determines the
Premises may be materially restored, neither party shall have the right to
terminate this Lease. If Lessor fails to give such notice with respect to
whether the Premises may be materially restored or if Lessor's notice indicates
that the Premises may not be so materially restored, either party shall have the
right to terminate this Lease as provided in this Section; provided, however,
this right to terminate shall cease if not exercised within sixty (60) days of
the date of such damage. For purposes hereof, the Premises shall be deemed
"materially restored" if they are in such condition as would not prevent or
materially interfere with Lessee's use of the Premises for the purpose for which
it was being used at the time of such fire or other casualty.
(b) If this Lease is not terminated pursuant to subparagraph (a) above,
Lessor shall proceed with all due diligence to repair and restore the Premises
(except that Lessor may elect not to rebuild, and thus terminate this Lease, if
such damage occurs during the last year of the Lease Term exclusive of any
option which is unexercised at the date of such damage). In the event that
Lessor shall fail to complete such repairs and material restoration within one
hundred twenty (120) days after the date of such damage, Lessee may, at its
option and as its sole remedy, terminate this Lease by delivering written notice
to Lessor, whereupon the Lease shall end on the date of such notice as if the
date of such notice were the Expiration Date hereunder; provided, however, that
if construction is delayed because of changes, deletions, or additions in
construction requested by Lessee, or because of strikes, lockouts, casualties,
acts of God, war, material or labor shortages, governmental regulation or
control, or other causes beyond the reasonable control of Lessor, the period for
restoration, repair, or rebuilding shall be extended for the amount of time
Lessor is so delayed; provided further, however, that such construction shall be
completed in any event within one hundred eighty (180) days after the date of
such damage. In no event shall Lessor be required to rebuild, repair, or
replace any part of the partitions, fixtures, additions, or other property and
improvements which may have been placed in or about the Premises by Lessee.
(c) In the event of any damage or destruction to the Premises and if the
Premises is unfit for occupancy in whole or in part following such damage, the
rent otherwise payable during the period in which the Premises is unfit for
occupancy shall abate in proportion to the number of square feet of Rentable
Area of the heated improvements located on the Premises rendered unusable by
such damage; provided, however, that no such abatement shall be made hereunder
if such damage or destruction was caused by or through the act or neglect of
Lessee, its officers, directors, partners, agents, employees, independent
contractors, invitees, licensees or permitted assignees.
(d) In the event of any damage or destruction to the Premises, Lessee
shall, upon notice from Lessor, remove forthwith, at its sole cost and expense,
such all or part of the property belonging to Lessee (other than partitions,
fixtures, additions, and similar improvements) from such portion or all of the
Premises as Lessor shall request, and Lessee hereby indemnifies and holds Lessor
harmless from any loss, liability, costs, and expenses, including attorneys'
fees and expenses, arising out of any claim of damage or injury as a result of
any alleged failure properly to secure the Premises prior to such removal.
(e) Notwithstanding anything herein to the contrary, in the event the
holder of any indebtedness secured by a mortgage, deed to secure debt or other
security instrument covering the Premises requires that any insurance proceeds
be paid to it, then Lessor shall have the right to terminate this Lease by
giving written notice to Lessee after written notice of such requirement is
received by Lessor, whereupon the Lease shall end on the date of such damage as
if the date of such damage was the Expiration Date hereunder.
(f) If any such casualty stated in this Section occurs, Lessor shall not
be liable to Lessee for inconvenience, annoyance, loss of profits, expenses, or
for any repair, modification, arranging, or rearranging of any portion of the
Premises or any part or all of the Premises or for termination of this Lease as
provided hereunder. In addition, if any such casualty stated in this Section
occurs, Lessor shall not be liable to Lessee for any personal or other property
of Lessee located, or anyone claiming through Lessee, on the Premises at the
time of such casualty.
(g) Notwithstanding anything contained in this Lease to the contrary, if
the insurance proceeds paid in connection with such damage or destruction to the
Premises are insufficient, in Lessor's sole discretion, to pay for the repair
and restoration of the Premises, Lessor shall be entitled to terminate this
Lease as of the date of such fire or other casualty, and the Lease Term shall
end on such date as if that date had been originally fixed in this Lease for the
expiration of the Lease Term.
ARTICLE VI
CONDEMNATION
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SECTION 6.1. CONDEMNATION. If all or any substantial part of the Premises
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should be taken for any public or quasi-public use under governmental law,
ordinance, or regulation, or by right of eminent domain, or by private purchase
in lieu thereof, and the taking would prevent or materially and adversely
interfere with the use of the Premises for the purpose for which it is leased to
Lessee, this Lease shall terminate effective when the physical taking shall
occur in the same manner as if the date of such taking were the Expiration Date
hereunder. If part of the Premises is taken for any public or quasi-public use
under any governmental law, ordinance, or regulation, or by right of eminent
domain, or by private purchase in lieu thereof, and this Lease is not terminated
as provided hereinabove, this Lease shall not terminate but the rent payable
hereunder during the unexpired portion of this Lease shall be reduced to such
extent, if any, as may be fair and reasonable under all of the circumstances,
and Lessor shall undertake to restore the Premises to a condition suitable for
Lessee's use, as near to the condition thereof immediately prior to such taking
as is reasonably feasible under all the circumstances. Notwithstanding the
foregoing, if the cost to restore the Premises to a condition suitable for
Lessee's use as aforesaid will, in Lessor's sole discretion, exceed the
condemnation award or payment, Lessor shall be entitled to terminate this Lease
as of the date of such condemnation, and the Lease Term shall end on such date
as if that date had been originally fixed in this Lease for the expiration of
the Lease Term.
SECTION 6.2. CONDEMNATION AWARD. Lessee shall not share in any condemnation
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award or payment in lieu thereof or in any award for damages resulting from any
grade change of adjacent streets, the same being hereby assigned to Lessor by
Lessee; provided, however, that Lessee may separately claim and receive from the
condemning authority, if legally payable, compensation for Lessee's removal and
relocation costs, any fixtures or property of Lessee taken and for Lessee's loss
of business and/or business interruption.
ARTICLE VII
LESSOR'S RIGHT TO ENTER PREMISES
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SECTION 7.1. ACCESS. Lessor and its officers, agents, employees and
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contractors shall have the right to enter the Premises at such times as Lessor
deems reasonably necessary to inspect the Premises to make repairs, additions,
alterations, and improvements to the Premises for which Lessor is responsible
under this Lease. Lessor shall also be allowed to take into and through the
Premises any and all needed materials that may be required to make such repairs,
additions, alterations, and improvements. During such time as work is being
carried on in or about the Premises, provided such work is carried out in a
manner so as not to interfere unreasonably with the conduct of Lessee's business
therein, the rent provided herein shall not abate, and Lessee waives any claim
and cause of action against Lessor for damages by reason of loss or interruption
to Lessee's business and profits therefrom because of the prosecution of any
such work or any part thereof. In addition, Lessor and its officers, agents,
employees, and contractors shall have the right to enter the Premises during
normal business hours, upon reasonable advance notice, without undue
interference with the conduct of Lessee's business therein, to inspect and
examine the Premises and to exhibit the Premises to prospective purchasers or
tenants. In the event of emergency, or if otherwise necessary to prevent injury
to persons or damage to property, such
entry to the Premises may be made by force without any liability whatsoever on
the part of Lessor for damage resulting from such forcible entry.
ARTICLE VIII
INSURANCE; LIABILITY; INDEMNIFICATION; TAXES
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SECTION 8.1. INSURANCE. During the Lease Term, Lessee shall purchase and
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maintain, at Lessee's cost and expense, fire and extended coverage insurance
insuring the interest of Lessor and any lenders or mortgagees of the Premises
together with any and all furniture, fixtures, equipment, supplies and other
property owned, leased, held or possessed by Lessor and contained therein, such
insurance coverage to be in an amount equal to the full replacement cost of the
interests of Lessor and any such lenders and mortgagees. From and after the
Date of this Lease and during the Lease Term, Lessee shall purchase and
maintain, at Lessee's cost and expense, fire and extended coverage insurance
insuring Lessee's interest in its improvements to the Premises and any and all
furniture, fixtures, equipment, supplies and other property owned, leased, held
or possessed by it and contained therein, such insurance coverage to be in an
amount equal to the full replacement cost of Lessee's said interest. Lessee
shall provide to Lessor the policy or a certified copy thereof which insures
such interest. All insurance coverages required to be obtained by Lessee shall
be obtained from insurers approved by Lessor, such approval not to be
unreasonably withheld or delayed.
SECTION 8.2. WAIVER OF SUBROGATION. Lessee shall cause each liability
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insurance policy together with each insurance policy carried by Lessee insuring
the Premises as well as the contents thereof against loss by fire or any other
casualty, to be written in such a manner as to provide that the insurer waives
all right of recovery by way of subrogation against Lessor in connection with
any loss or damage covered by the policy.
SECTION 8.3. INDEMNITY OF LESSOR. Lessee indemnifies and shall hold Lessor
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harmless from and defend Lessor against any and all claims, demands, loss,
liability, damages, costs and expenses, including, without limitation,
attorneys' fees and expenses, for any personal injury or deal to any person and
for damage to any property whatsoever, arising out of or relating to this Lease
or the use or occupancy of the Premises, except for any of the foregoing arising
from Lessor's willful misconduct or negligence.
SECTION 8.4. LIABILITY OF LESSOR. Lessor shall not be liable to Lessee or to
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any person, firm, corporation or other business association claiming by, through
or under Lessee for failure to furnish or for delay in furnishing any service
provided for in this Lease, and no such failure or delay by Lessor shall be an
actual or constructive eviction of Lessee; nor, except as expressly provided
herein, shall any such failure or delay operate to relieve Lessee from the
prompt and punctual performance of each and all of the covenants to be performed
herein by Lessee; nor for any latent defects in the Premises; nor for defects in
the cooling, heating, electric, water, elevator or other apparatus or systems or
for water discharged from sprinkler systems, if any, on the Premises; nor for
the theft, mysterious disappearance or loss of any property of Lessee from the
Premises.
SECTION 8.5. LIMITATION OF LIABILITY. Lessor's obligations and liability with
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respect to this Lease shall be limited solely to Lessor's interest in the
Premises, as such interest is constituted from time to time, and neither Lessor
nor any officer, director or shareholder shall have any personal liability
whatsoever with respect to this Lease.
SECTION 8.6. TAXES. Lessee shall pay to Lessor all real estate ad valorem
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property and other taxes levied or assessed against the Premises which become
due during the Lease Term, and any extension thereof. In addition, Lessee shall
pay all taxes becoming due with respect to the conduct by Lessee of its business
on the Premises, to any personal property owned by Lessee or otherwise owed by
Lessee.
ARTICLE IX
LAWS, ORDINANCES AND REQUIREMENTS
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SECTION 9.1. COMPLIANCE WITH LAWS. Lessee shall comply, at its own expense,
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with all statutes, regulations, rules, ordinances, and orders of any
governmental body, department, or agency thereof which apply to or result from
Lessee's use or occupancy of the Premises.
SECTION 9.2. BUILDING ALTERATIONS. If any governmental authority requires all
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or any part of the Premises to be repaired, altered, removed, constructed,
reconstructed or improved and Lessor, rather than Lessee, has the obligation
under this Lease to perform such required work, Lessee's obligations under this
Lease will not be affected, and Lessee waives all claims for injury, damage or
abatement of rent because of such repair, alteration, removal, construction,
reconstruction, or improvement, or lack thereof; provided, however, that if such
action by Lessor shall render the Premises partially or wholly unfit for
occupancy and if, in Lessor's reasonable estimation, it cannot complete such
acts within one hundred twenty (120) days, then at the option of Lessor to be
exercised by giving written notice to Lessee within sixty (60) days following
the date of notice to Lessor by such governmental authority, this Lease shall
terminate on the date of such election, and Lessee shall promptly surrender the
Premises to Lessor. If Lessor shall elect not to terminate this Lease as
provided above, Lessor and Lessee shall have the same respective rights and
obligations as provided above in Section 5.1, and the provisions of Section
5.1(g) shall apply regardless of whether or not Lessor elects to terminate this
Lease.
ARTICLE X
ASSIGNMENT AND SUBLETTING
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SECTION 10.1. ASSIGNMENT AND SUBLETTING.
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(a) Lessee shall not (i) assign, convey, mortgage, pledge, encumber, or
otherwise transfer (whether voluntarily, by operation of law or otherwise) this
Lease or any interest under it; (ii) allow any lien to attach to the Premises,
to the Lease or any interest therein; or (iii) sublet the Premises or any part
thereof; or (iv) permit the use or occupancy of the Premises or any part thereof
by anyone other than Lessee or any subsidiaries of Lessee, without Lessor's
prior written consent which shall not be unreasonably withheld or delayed. Any
attempt to consummate any of the foregoing without Lessor's prior written
consent shall be void.
(b) Lessee agrees to pay to Lessor, on demand, reasonable legal costs and
credit reference costs actually paid to third parties by Lessor in connection
with any request by Lessee for Lessor to consent to any assignment or subletting
by Lessee.
(c) Any transfer after the date hereof, whether to one or more persons or
entities and whether at one or more different times, of a controlling interest
in Lessee (regardless whether Lessee is a corporation, partnership or other
entity), whether voluntarily, by operation of law or otherwise, shall be deemed
an assignment of this Lease within the meaning of this Section.
SECTION 10.2. RENT COLLECTION. If with the prior written consent of Lessor
----------------
this Lease is assigned or the Premises or any part thereof is sublet or occupied
by anybody other than Lessee, Lessor may, after default by Lessee, collect rent
directly from the assignee, subtenant or occupant and apply the net amount
collected to the Base Rental and additional rent herein reserved, but no such
assignment, subletting, occupancy or collection shall be deemed: (i) a waiver of
any of Lessee's covenants contained in this Lease; (ii) the acceptance by Lessor
of the assignee, subtenant or occupant as Lessee; or (iii) a release of Lessee
from performance by Lessee of its covenants under this Lease.
SECTION 10.3. LEASE OBLIGATIONS OF ASSIGNEE OR SUB-LESSEE. Each assignee,
-----------------------------------------------
sub-lessee or other transferee approved by Lessor shall assume and shall be
deemed to have assumed this Lease and shall remain jointly and severally liable
with Lessee for the payment of all rent provided under any assignment or
sublease and for the due performance during the term of this Lease of all terms
and conditions contained in this Lease applicable to Lessee (except relating to
the amount of rent under the assignment or sublease which shall be governed by
this said assignment or sublease). Lessee agrees that Lessee shall not assign
or sublease any part of the Premises unless pursuant to a written assignment or
sublease in a form mutually agreeable to Lessor and Lessee.
ARTICLE XI
DEFAULT
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SECTION 11.1. DEFAULT AND REMEDIES.
----------------------
(a) The occurrence of any of the following shall constitute events of
default:
(i) The rent (including any additional rent) and any other sum of
money payable under this Lease is not paid when due and such failure continues
for a period of twenty (20) days after the date such sum is due;
(ii) The Premises are deserted or vacated even though the Lessee
continues to pay the stipulated monthly rent;
(iii) Lessee's interest in the Lease or the Premises shall be
subjected to any attachment, levy or sale pursuant to any order or decree
entered against Lessee in any legal proceeding and such order or decree shall
not be vacated within fifteen (15) days of entry thereof, provided that Lessee
shall be entitled to dispute any such attachment, levy or sale so long as Lessee
provides Lessor with a security bond or other security reasonably acceptable to
Lessor; or
(iv) Lessee breaches or fails to comply with any term, provisions,
condition or covenant of this Lease (other than the payment of rent).
(b) Upon the occurrence of an event of default and if the event of default
described above in subparagraph (a) is not cured after written notice from
Lessor of such default (i) within ten (10) days after written notice is given if
the action required by Lessee involves the payment of money
or (ii) within thirty (30) days after written notice is given if the action
required by Lessee is other than the payment of money, Lessor shall have the
option to do and perform any one or more of the following in addition to, and
not in limitation of, any other remedy or right permitted it by law or in equity
or by this Lease:
(i) Lessor, with or without terminating this Lease, may immediately
or at any time thereafter reenter the Premises and correct or repair any
condition which shall constitute a failure on Lessee's part to keep, observe,
perform, satisfy or abide by any term, condition, covenant, agreement or
obligation of this Lease or of any notice given Lessee by Lessor pursuant to the
terms of this Lease, and Lessee shall fully reimburse and compensate Lessor for
reasonable expenses on demand.
(ii) Lessor, with or without terminating this Lease, may immediately
demand in writing that Lessee vacate the Premises and thereupon Lessee shall
vacate the Premises and remove therefrom all property thereon belonging to or
placed on the Premises by, at the direction of or with consent of Lessee within
ten (10) days of receipt by Lessee of such notice from Lessor, whereupon Lessor
shall have the right to reenter and take possession of the Premises. Any such
demand, reentry and taking possession of the Premises by Lessor shall not of
itself constitute an acceptance by Lessor of a surrender of this Lease or of the
Premises by Lessee and shall not of itself constitute a termination of this
Lease by Lessor.
(iii) Lessor, with or without terminating this Lease, may immediately
or at any time thereafter reenter the Premises and remove therefrom Lessee and
all property belonging to or
placed on the Premises by, at the direction of or with consent of Lessee. Any
such reentry and removal by Lessor shall not of itself constitute an acceptance
by Lessor of a surrender of this Lease or of the Premises by Lessee and shall
not of itself constitute a termination of this Lease by Lessor.
(iv) Lessor, with or without terminating this Lease, may immediately
or at any time thereafter relet the Premises or any part thereof for such time
or times, at such rental or rentals and upon such other terms, provisions and
conditions as Lessor in its sole discretion may deem advisable. Lessor may make
any alterations or repairs to the Premises which it may deem necessary or proper
to facilitate such reletting, and Lessee shall pay all reasonable costs of such
reletting, not to exceed the total aggregate rent due for the remainder of the
Lease Term, including, but not limited to, the cost of any such alterations and
repairs to the Premises, attorney's fees and brokerage commissions. If this
Lease shall not have been terminated, Lessee shall continue to pay all rent and
all other charges due under this Lease up to and including the date of beginning
of payment of rent by any subsequent tenant of part or all of the Premises, and
thereafter Lessee shall pay monthly during the remainder of the term of this
Lease the difference, if any, between the rent and other charges collected from
any such subsequent tenant or tenants and the rent and other charges reserved in
this Lease, but Lessee shall not be entitled to receive any excess of any such
rents collected from such subsequent tenant or tenants over the rents reserved
herein.
(v) Lessor may immediately, or at any time thereafter, terminate this
Lease, and this Lease shall be deemed to have been terminated upon receipt by
Lessee of written notice of such termination. Upon such termination, Lessor
shall recover from Lessee all reasonable damages Lessor may suffer by reason of
such termination including, without limitation: unamortized sums expended by
Lessor for construction of Finish Work; all arrearages in rentals, costs,
charges, additional rentals and reimbursements; the cost (including court costs
and attorney's fees) of recovering possession of the Premises; and the cost of
any alteration of or repair to the Premises
which is necessary or proper to prepare the same for reletting. In addition
thereto, Lessor shall have and recover from Lessee an amount equal to the
excess, if any, of the total amount of all rents and other charges to be paid by
Lessee for the remainder of the term of this Lease over the then reasonable
rental value of the Premises for the remainder of the term of this Lease which
amount shall be discounted to present value.
(c) If Lessor reenters the Premises or terminates this Lease pursuant to
any of the provisions of this Lease, Lessee hereby waives all claims for damages
which may be caused by such reentry or termination by Lessor. Lessee shall and
does hereby indemnify and hold Lessor harmless from any loss, costs (including
court costs and attorney's fees) or damages suffered by Lessor by reason of such
reentry or termination. No such reentry or termination shall be considered or
construed to be a forcible entry.
(d) No course of dealing between Lessor and Lessee or any failure or delay
on the part of Lessor in exercising any rights of Lessor under this Section or
under any other provisions of this Lease shall operate as a waiver of any rights
of Lessor hereunder or under any other provisions of this Lease, nor shall any
waiver of a default on one occasion operate as a waiver of any subsequent
default or of any other default. No express waiver shall affect any condition,
covenant, rule or regulation other than the one specified in such waiver and
that one only for the time and in the manner specifically stated.
(e) The exercise by Lessor of any one or more of the rights and remedies
provided in this Lease shall not prevent the subsequent exercise by Lessor of
any one or more of the other rights
and remedies herein provided. All remedies provided for in this Lease are
cumulative and may, at the election of Lessor, be exercised alternatively,
successively or in any other manner and are in addition to any other rights
provided for or allowed by law or in equity.
SECTION 11.2. LATE PAYMENTS. Lessee shall pay, as a late charge in the event
--------------
any installment of rent, additional rent or other charge to be paid by Lessee
hereunder is not paid within ten (10) days of the date when due, the greater of
$100.00 or an amount equal to five percent (5%) of the amount due. Should
Lessee make a partial payment of past due amounts, the amount of such partial
payment shall be applied first to reduce all accrued and unpaid late charges,
beginning with the late charge which is most past due, and then to reduce all
other past due amounts, beginning with the amount which is most past due.
SECTION 11.3. ATTORNEY'S FEES. If any rent or other debt owing by Lessee to
----------------
Lessor hereunder is collected by or through an attorney-at-law, Lessee agrees to
pay an additional amount equal to the attorneys' fees and expenses reasonably
and actually incurred by Lessor in collecting such rent or other debt owing by
Lessee to Lessor.
SECTION 11.4. WAIVER OF HOMESTEAD. Lessee hereby waives and renounces all
---------------------
homestead or exemption rights which Lessee may have under or by virtue of the
Constitution and laws of the United States, the State of Georgia and any other
State as against any debt or sum Lessee may owe Lessor under this Lease and
hereby transfers, conveys and assigns to Lessor all homestead or exemption
rights which may be allowed or set apart to Lessee, including such as may be
set apart in any bankruptcy proceeding, to pay any debt or sum owing by Lessee
to Lessor hereunder.
ARTICLE XII
INSOLVENCY OR BANKRUPTCY
------------------------
SECTION 12.1. The appointment of a receiver to take possession of all or
substantially all of the assets of Lessee or an assignment of Lessee for the
benefit of creditors, or any action taken or suffered by Lessee under any
insolvency, bankruptcy or reorganization act shall, at Lessor's option,
constitute a material breach of this Lease by Lessee. Upon the happening of any
such event or at any time thereafter, this Lease shall terminate five (5) days
after written notice of termination from Lessor to Lessee. In no event shall
this Lease be assigned or assignable by operation of law or by voluntary or
involuntary bankruptcy proceedings or otherwise and in no event shall this Lease
or any rights or privileges hereunder be an asset of Lessee under any
bankruptcy, insolvency or reorganization proceedings.
ARTICLE XIII
NO WAIVER OF RIGHTS
-------------------
SECTION 13.1. No failure or delay of Lessor or Lessee to exercise any right or
power given it herein or to insist upon strict compliance by the other party
with any obligation imposed on it herein and no custom or practice of either
party hereto at variance with any term hereof shall constitute a waiver or a
modification of the terms hereof by Lessor or Lessee or any right it has herein
to demand strict compliance with the terms hereof by the other party. No person
has or shall have any authority to waive any provision of this Lease unless such
waiver is expressly
made in writing and signed by the waiving party or by an authorized officer or
agent of the waiving party.
ARTICLE XIV
BROKER AND COMMISSION
---------------------
SECTION 14.1. All negotiations relating to the procurement of this Lease and of
the Premises have been carried on by and between Lessor and Lessee without the
intervention of any broker, agent or other intermediary. Lessor and Lessee each
represent and warrant to the other that there are and there will be no broker's,
agent's or other intermediary's fees or commissions payable as a result of this
transaction, and that they have not dealt with any broker, agent or other
intermediary who might, because of such dealings, have a claim for a fee,
commission or other compensation. Lessor hereby agrees to indemnify, hold
harmless, defend and protect Lessee from and against any and all claims,
demands, damages, lawsuits and costs incurred because of claims for commissions,
compensation, expense or charge of whatever nature by any broker, agent or other
intermediary, based upon any dealing with Lessor. Lessee hereby agrees to
indemnify, hold harmless, defend and protect Lessor from and against any and
all claims, demands, damages, lawsuits and costs incurred because of claims for
commissions, compensation, expense or charge of whatever nature by any broker,
agent or other intermediary based upon any dealing with Lessee.
ARTICLE XV
ADDRESSES AND NOTICES
---------------------
SECTION 15.1. NOTICES. All notices, requests, demands or other communications
-------
required or permitted to be given hereunder shall be in writing and shall be
addressed and delivered by hand or by certified mail, return receipt requested,
or by commercial overnight courier, by hand delivery by reputable courier, to
each party at the addresses set forth below. Any such notice, request, demand
or other communication shall be considered given or delivered, as the case may
be, on the date of receipt. Rejection or other refusal to accept or inability
to deliver because of changed address of which proper notice was not given shall
be deemed to be receipt of the notice, request, demand or other communication.
By giving prior written notice thereof, any party may from time to time and at
any time change its address for notices hereunder. Legal counsel for the
respective parties may send to the other party any notices, requests, demands or
other communications required or permitted to be given hereunder by such party.
Lessor's Addresses for Notices:
---------------------------------
M. Rea Brookings
1285 Iris Lake Road
McDonough, Georgia 30252
David F. Herring
707 Lexington Avenue
Jonesboro, Georgia 30236
With copy to:
--------------
Frank L. Wilson, III
Wilson Brock & Irby, LLC
Suite 700, Overlook I
2849 Paces Ferry Road
Atlanta, GA 30339
Lessee's Address for Notices:
-------------------------------
Chancellor Asset Management, Inc.
c/o Chancellor Corporation
210 South Street, 10th Floor
Boston, MA 02111
Attention: Peter J. Mullen, Clerk
With copy to:
--------------
Victor J. Paci, Esq.
Bingham Dana, LLP
150 Federal Street
Boston, MA 02110
ARTICLE XVI
SUBORDINATION
-------------
SECTION 16.1. SUBORDINATION.
-------------
(a) Except as provided in subsection (c) below with respect to mortgage
subordination, this Lease and all rights of Lessee hereunder are and shall be
subject and subordinate to the lien of each mortgage, deed to secure debt, deed
of trust or other instrument in the nature thereof which may now affect Lessor's
fee title to the Premises and to any other instrument encumbering the fee title
of the Premises and to any modifications, renewals, consolidations, extensions
or replacements thereof that this Lease shall not be terminated by any such
holder of a security instrument or by operation of law.
(b) In confirmation of the subordination pursuant to subsection (a),
Lessee shall, upon demand and at any time or times, execute, acknowledge and
deliver to Lessor or the holder of any such mortgage, deed to secure debt, deed
of trust or other instrument, without expense, any and all instruments that may
be requested by Lessor or such holder to evidence the subordination of this
Lease and all rights hereunder to the lien of any such mortgage, deed to secure
debt, deed of trust or other instrument, and each such renewal, modification,
consolidation, replacement and extension thereof. If Lessee shall fail at any
time, within ten (10) days following the giving of a written request therefor,
to execute, acknowledge and deliver any such instrument, Lessor or such holder,
in addition to any other remedies available to it in consequence thereof, may
execute, acknowledge and deliver the same as the attorney-in-fact of Lessee and
in Lessee's name, place and stead, and Lessee hereby irrevocably makes,
constitutes and appoints Lessor or such holder, and their respective successors
and assigns, such attorney-in-fact for that purpose.
(c) Lessee shall, upon demand and at any time or times, execute,
acknowledge and deliver to Lessor or to the holder of any mortgage, deed to
secure debt, deed of trust or other instrument affecting or encumbering the fee
title of the Premises, without expense, any and all instruments that may be
necessary to make this Lease superior to the lien of any such mortgage, deed to
secure debt, deed of trust or other instrument, and each renewal, modification,
consolidation, replacement and extension thereof. If Lessee shall fail at any
time, within ten (10) days following the giving of a written request therefor,
to execute, acknowledge and deliver any such instrument, Lessor or such holder,
in addition to any other remedies available to it in consequence thereof, may
execute, acknowledge and deliver the same as the attorney-in-fact of Lessee and
in Lessee's name, place and stead, and Lessee hereby irrevocably makes,
constitutes and appoints Lessor or such holder, and their respective successors
and assigns, such attorney-in-fact for that purpose.
SECTION 16.2. ATTORNMENT. If the holder of any mortgage, deed to secure debt,
----------
deed of trust or other instrument affecting or encumbering the fee title of the
Premises shall hereafter succeed to the rights of Lessor under this Lease or
the lessor under the Lease, whether through possession or foreclosure action or
otherwise, Lessee shall, at the option of such holder, attorn to and recognize
such successor as Lessee's landlord under this Lease and shall promptly execute
and deliver any instrument that may be necessary to evidence such attornment.
Lessee hereby irrevocably appoints Lessor or such holder the attorney-in-fact of
Lessee to execute and deliver such instrument on behalf of Lessee should Lessee
refuse and fail to do so within ten (10) days after Lessor or such holder shall
have given notice to Lessee requesting the execution and delivery of such
instrument. Upon such attornment, this Lease shall continue in full force and
effect as a direct Lease between such successor landlord and Lessee, subject to
all of the terms conditions of this Lease.
ARTICLE XVII
ESTOPPEL CERTIFICATE
--------------------
SECTION 17.1. At any time and from time to time, Lessee, within fifteen (15)
days after written request, shall execute, acknowledge and deliver to Lessor a
certificate evidencing whether or not (i) this Lease is in full force and
effect; (ii) this Lease has been modified or amended in any way; (iii) there are
any existing defaults on the part of Lessor hereunder to the knowledge of Lessee
and specifying the nature of such defaults, if any; (iv) the date to which rent,
and other amounts due hereunder, if any, have been paid; and (v) any other
information reasonably requested by Lessor for inclusion therein. Each
certificate delivered pursuant to this Section may be relied upon by any
prospective purchaser or transferee of Lessor's interest hereunder or of any
part of Lessor's property or by any mortgagee of Lessor's interest hereunder or
of any part of Lessor's property or by an assignee of any such mortgagee.
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
------------------------
SECTION 18.1. SEVERABILITY. If during the term of this Lease or any extension
------------
hereof any clause or provision of this Lease is or becomes illegal, invalid or
unenforceable because of present or future laws or any rule or regulation of any
governmental body or entity, the intention of the parties hereto is that the
remaining parts of this Lease shall not be affected thereby, unless such
invalidity is, in the sole determination of Lessor, essential to the rights of
both parties, in which event Lessor has the right to terminate this Lease on
written notice to Lessee.
SECTION 18.2. CAPTIONS. All captions, headings, articles, sections,
--------
subsections and other reference captions are solely for the purpose of
facilitating reference to this Agreement and shall not supplement, limit or
otherwise vary the text of this Lease in any respect. All references to
particular sections, paragraphs and subparagraphs by number refer to the text of
the section, paragraph and subparagraph so numbered in this Agreement.
SECTION 18.3. SUCCESSORS AND ASSIGNS. The words "Lessor" and "Lessee" as used
----------------------
herein shall include the respective contracting party, whether singular or
plural, and whether an individual, masculine or feminine, or a partnership,
joint venture, business association or corporation. The provisions of this
Lease shall inure to the benefit of and be binding upon Lessor and Lessee and
their respective successors, heirs, legal representatives and permitted assigns.
SECTION 18.4. GEORGIA LAW. The laws of the State of Georgia shall govern the
------------
interpretation, validity, performance and enforcement of this Lease.
SECTION 18.5. TIME OF THE ESSENCE. Time is of the essence of this Lease;
----------------------
provided, however, that failure of Lessor to provide Lessee with any
notification regarding charges provided for hereunder, within the time periods
prescribed in this Lease, shall not relieve Lessee of its obligation to make
such contributions. Unless specifically provided otherwise, all references to
terms of days, months or years shall be construed as references to calendar
days, calendar months or calendar years respectively.
SECTION 18.6. COUNTERPARTS. This Lease may be executed in any number of
------------
counterparts, each of which shall be deemed an original and any of which shall
be deemed to be complete in itself and may be introduced into evidence or used
for any purpose without the production of the other counterparts.
SECTION 18.7. FORCE MAJEURE. Except as otherwise expressly provided in this
--------------
Lease Agreement, Lessor shall be excused for the period of any delay and shall
not be deemed to be in default with respect to the performance of any of the
terms conditions of this Lease when prevented from so doing by a cause or causes
beyond Lessor's control, which shall include, without limitation, all labor
disputes, governmental regulations or controls, fire or other casualty,
inability to obtain any material or services, acts of God or any other cause not
within the reasonable control of the Lessor.
SECTION 18.8. AUTHORIZED SIGNATORY. If Lessee signs as a corporation, each of
--------------------
the persons (of which there must be at least two) executing this Lease on behalf
of Lessee does hereby warrant and covenant that Lessee is a duly authorized and
existing corporation, that Lessee has and is qualified to do business in
Georgia, that the corporation has full right and authority to enter into this
Lease, that each and both of the persons executing this Lease on behalf of the
corporation are authorized to do so, and that such execution is fully binding on
the corporation.
SECTION 18.9. NO RECORDATION OF LEASE. This Lease is not in recordable form,
------------------------
and Lessee agrees not to record or permit the recording of this Lease; provided,
however, that Lessee shall be entitled to record a Memorandum of Lease in a form
approved by Lessor, such approval not to be unreasonably withheld or delayed.
SECTION 18.10. ENTIRE AGREEMENT. This Lease supersedes all prior discussions
-----------------
and agreements between Lessor and Lessee with respect to the Lease of the
Premises. This Lease contains the sole and entire understanding and agreement
between Lessor and Lessee with respect to the Lease of the Premises, and all
promises, inducements, offers, solicitations, agreements, representations and
warranties heretofore made between the parties, if any, whether written or oral,
are merged into this Lease and shall have no binding legal effect. This Lease
shall not be modified or amended in any respect except by written instrument
executed by or on behalf of Lessor and Lessee in the same manner as this Lease
is executed.
SECTION 18.11. EXHIBITS. The content of each and every exhibit which is
--------
referenced in this Lease as being attached hereto is incorporated into this
Lease as fully as if set forth in the body hereof.
[Remainder of Page Intentionally Blank/Signatures on Following Page]
IN WITNESS WHEREOF, the parties hereto have signed and sealed this Lease
Agreement as of the Date of this Lease.
LESSOR:
/s/ M. Rea Brookings (SEAL)
------------------------------
M. REA BROOKINGS
/s/ David F. Herring (SEAL)
------------------------------
DAVID F. HERRING
LESSEE:CHANCELLOR ASSET
MANAGEMENT, INC., a
Delaware corporation
By: /s/ Franklyn E. Churchill
------------------------------
Title: President
------------------------------
[CORPORATE SEAL]
EXHIBIT A
---------
(Legal Description for Premises)