EXHIBIT 10.7
THIS LEASE made and entered into this 31st day of October, 1997, by and
between THOMCO, Inc., a Kentucky Corporation of Louisville, Jefferson County,
Kentucky, Party of the First Part, hereinafter referred to as "Lessor", and
FIRST SECURITY BANK OF LEXINGTON, INC., a Kentucky banking Corporation, with its
principal office at 400 East Main Street Lexington, Kentucky, 40507 Party of the
Second Part, hereinafter referred to as "Lessee";
WITNESSETH THAT:
For and in consideration of the money rental, terms and conditions
hereinafter provided for and set forth, Lessor does hereby lease unto Lessee,
and Lessee does hereby hire from Lessor, the following described property
("Leased Premises") situated in Lexington, Fayette County, Kentucky, to-wit:
Beginning at a point in the easterly property line of Southview
Drive, comer to Southland Subdivision, Unit 1; thence with the line
of Southland Subdivision, Unit 1 S 430 09' E 175 feet to a point:
thence at right angles with said line of Southland Subdivision Unit
1, in a northeasterly direction, 145 feet to a point in the
southwesterly line of a 30 foot private roadway, thence with said
line of said private roadway in a northwesterly direction to the
aforesaid easterly property line of Southview Drive; thence with
said easterly line of Southview Drive in a southwesterly direction
to the point of the beginning known as 2100 Southview Drive (a/k/a
2100 Longview Drive) as shown on the atitached plan which is
incorporated herein, including rights to all parking areas on the
Leased Premises.
1. The initial term of this lease shall be five years, beginning
November 1, 1997. The Lessee shall be entitled to extensions of this lease
consisting of three additional terms of (5) years each. The lease shall be
automatically extended for the next five year term and thereafter, unless the
Lessee has provided the Lessor with Ninety (901 days written notice prior to the
termination of the then existing term of its intent not to extend the lease for
another term. Each five-year term shall be on the same terms and conditions
herein, except for the rental amount which shall be determined as set forth in
Exhibit "A".
2. Lessee shall pay to Lessor as money rental for said premises:
(a) During the initial five (5) years of the term, the rental
shall be at an annual rate of Forty-Five Thousand Five Hundred Dollars ($45,500)
payable, in advance, in twelve (12) equal monthly installments of Thirty-Seven
Hundred Ninety-Two Dollars ($3,792.00) upon the first day of each and every
month of said five years.
(b) During the first five (5) year extension of the term, said
annual money rental shall be increased in accordance with the procedure in the
Increased Rental Adjustments set forth in Exhibit "A", attached hereto and
incorporated herein by reference, and paid in equal monthly installments as
provided for during said first five (5) years.
(c) During the second five (5) year extension of the term,
said annual money rental shall be increased in accordance with the procedure in
the Increased Rental Adjustments set forth in Exhibit "A", attached hereto and
incorporated herein by reference, and paid in equal monthly installments as is
provided for during said first five (5) years.
(d) During the third five (5) year extension of the term, said
annual money rental shall be increased in accordance with the procedure in the
Increased Rental Adjustments set forth in Exhibit "A", attached hereto and
incorporated herein by reference, said paid in equal monthly installments as is
provided for during said first five (5) years.
3. Lessee shall use the Leased Premises for its banking and related
purposes; and shall not assign the lease or sublet the Premises, in whole or in
part, without the written consent of Lessor, which consent shall not be
unreasonably withheld. In any event it shall be a condition of any such
assignment or subleasing that Lessee shall remain personally liable for the full
performance of all the terms and conditions thereof. This restriction on
assignability and continued liability shall not include any assignment to any
bank holding company of which said bank is a wholly-owned subsidiary which
assignment is expressly permitted.
4. Lessee, at its expense, may:
(a) make such alterations to the interior of the building upon
the Leased Premises as may be reasonably necessary for its banking business-,
provided, that no such alterations shall in any way affect the structural
integrity of the building;
(b) erect and maintain on the Leased Premises signs reasonably
necessary for its banking and related business;
(c) install such fixtures and equipment as may be necessary
for the conduct of banking and related business;
(d) all mechanical equipment including, without limitation,
heating and air conditioning units, shall be repaired and maintained by Lessee
at its expense; unless such mechanical equipment is determined to be
unrepairable as provided in section 4(e) herein;
(e) said repairs and maintenance shall be executed by a
mechanical contractor acceptable to both Lessor and Lessee. The units shall be
serviced no less than twice per year and all filters shall be changed by Lessee
no less than four times per year and Lessee shall be responsible for maintaining
the record of all such servicing. Should the designated mechanical contractor
declare a piece of equipment unrepairable and in need of replacement the Lessor
shall fund the cost of the replacement provided that all acts of Lessee taken
pursuant to this paragraph shall comply with all applicable building, zoning and
other regulations and codes:
Upon the termination of this lease, Lessee, if it has complied with all
of its obligations under this lease, may remove said signs, fixtures and
equipment, and upon request of Lessor, shall at its expense, remove all or any
part of same, and shall restore the Leased Premises to the condition which same
were in prior to the installation or making of any such signs, fixtures,
equipment or alterations, ordinary wear and tear excepted.
5. Lessee shall, at its expense:
(a) Keep the Leased Premises and all improvements thereon in
good and sightly condition and perform all routine maintenance and repairs
thereon except: roof, gutters, downspouts, exterior paint, blacktop and relining
of blacktopped areas, structural portions of the building and exterior surfaces
of the building, interior repair and maintenance of items not considered routine
maintenance (including, but not limited to, burst water pipes or major
electrical problems) which are not the result of Lessee's negligence, all of
which shall be the responsibility and expense of the Lessor. Lessee specifically
agrees to be responsible for ice and snow removal and plate glass doors and all
windows.
(b) Cut the grass and install, maintain and replace, as
necessary, all planting upon the demised premises.
(c) Pay all utilities and landfill user fees for the Leased
Premises as a result of its occupancy under this lease.
(d) During the term of this lease or any extension or
extensions thereof, pay all real estate ad valorem taxes levied against the
Leased Premises and any improvements and personalty thereon.
(e) (1) Casualty Insurance. Lessor shall carry a policy of
fire and extended coverage insurance from a company acceptable to both Lessor
and Lessee which insures the Building, including the Leased Premises, against
loss or damages by fire or other casualty provided, however, that Lessor shall
not be responsible for, and shall not be obligated to insure against, any loss
of or damage to any personal property or trade fixtures of Lessee or any
additional improvements which Lessee may construct on the Leased Premises.
Lessor shall pay all of the yearly premiums due upon said policy, and Lessee
shall reimburse Lessor for the yearly premiums. Lessor waives all rights of
subrogation under any such coverage. Any such policies shall provide that they
may not be canceled or otherwise terminated on less than thirty (30) days prior
written notice to Lessee. Lessor shall furnish Lessee with a copy of all
Certificates of insurance evidencing such coverage.
(e) (2) Lessee's Insurance. Lessee, in order to enable it to
meet its obligation to insure against the liabilities specified in this Lease,
shall at all times during the term of this Lease carry, at its own expense, for
the protection of Lessee and Lessor, as their interests may appear, one or more
policies of general public liability and property damage insurance, issued by
one or more insurance companies acceptable to Lessor (such acceptance not to be
unreasonably withheld), with the following minimum coverages:
A. Workers Compensation - - Minimum statutory amount
B. Comprehensive General - - Not less than $1,000,000
Liability Insurance Combined single limit for
including Blanket both bodily injury and
Contractual Liability property damage
Broad Form Property
Damage, Personal Injury,
Fire Damage
Such insurance policy or policies shall name Lessor as an additional insured,
as its interest may appear, and shall provide that they may not be canceled or
otherwise terminated on less than thirty (30) days prior written notice to
Lessor. Lessee shall furnish Lessor with a copy of all Certificates of insurance
evidencing such coverages.
6. Other Lessee Obligations
(a) Should Lessee terminate this lease, Lessor may upon
written request of Lessor, made by certified mail, return receipt requested, at
least thirty (30) days prior to the termination of this lease, or the lease as
extended, that Lessee, at its expense, completely remove the vault, including,
without limitation, all walls and any elevated floor thereof, in such manner as
not to in any way reasonably interfere with the future use or usability of said
building, and shall perform any repairs to the building necessitated by, such
removal to the reasonable satisfaction of Lessor ordinary wear and tear
excepted, all to be completed not later than 30 days following the termination
date of this lease or any extended term hereof, but Lessee shall not be required
to perform any removal or restoration to a condition which did not exist at the
time this lease was executed and shall be restored to a condition reasonably
similar to that shown in photographs attached hereto as Exhibit B. All Lessee's
personalty, including the vault door and the vent and safety deposit boxes shall
be, and remain the property of Lessee, and may be removed by it upon any such
termination of this lease, provided Lessee has performed all of its obligations
hereunder.
(b) Lessee shall indemnify and hold Lessor harmless from any
and all claims of any kind and type, not due to the acts or negligence of
Lessor, or its agents, servants or employees, arising out of, or in any way
connected with, the use or occupancy by Lessee of the Leased Premises, together
with all costs, fees and expenses which may be reasonably incurred by Lessor as
a result thereof.
(c) Lessee will not permit any labor or materialman's lien or
any other kind or type of hen or claim, arising out of or in any manner
connected with Lessee's use or occupancy of the Leased Premises, to be asserted
against the Leased Premises or any improvements thereon; and should any such hen
or claim, be so asserted, Lessee shall satisfy and effect the discharge and
removal of same as expeditiously as possible; Provided, however, that should
Lessee, in good faith desire to contest any such hen or claim it may do so,
provided that all proper steps to so contest same are promptly initiated and
prosecuted to conclusion by Lessee; and that the provisions of this subparagraph
shall in no way be so construed to reduce or affect Lessee's obligations to
Lessor under this lease.
(d) Lessee will not permit the unreasonable obstruction of any
public streets, sidewalks or entry ways adjacent to the Leased Premises nor any
lawful rights of ingress or egress which may exist by operation of law and for
which Lessee has actual notice.
(e) If requested by Lessor, by certified mail, return
requested, at least thirty (30) days prior to the termination of this lease, or
the lease as extended, Lessee, at its expense, shall remove the drive-in islands
and black-top area to a level with the adjoining black-top to be completed not
later than 30 days following the termination date of this lease, or any extended
term hereof, but shall not be required to perform any removal or restoration to
a condition which did not exist at the time this lease was executed.
7.1 Casualty
(a) In the event the Leased Premises is damaged by fire,
explosion or any other casualty which cannot be restored by Lessor to its
original condition within ninety (90) days from the date of such casualty, or if
the Leased Premises are totally destroyed by such casualty, then both the Lessee
and the Lessor have the right to terminate this Lease upon written notice to the
other party within thirty (30) days of the date of such casualty.
(b) If neither party elects to so terminate, Lessor shall,
within forty-five (45) days of the date of the casualty, commence actual
construction and restoration of the Leased Premises to its original condition
and proceed with due diligence until completed. Any changes in the restoration
required by Lessee which increases the cost of the restoration shall be paid for
by the Lessee. During such restoration, Lessor shall keep the parking areas free
and clear of debris and materials and vehicles.
(c) If neither party has elected to terminate and Lessor for
any reason fails to commence the actual construction and restoration within
forty-five (45) days after the date of written notice from Lessee of the
casualty, or commences within such time period but fails to complete the actual
construction and restoration within forty-five(45) days after such commencement,
then Lessee shall have the right, but not the obligation, to: (1) perform the
restoration at the sole cost and expense of Lessor in which event the insurance
proceeds shall be either paid to Lessee from any escrow or otherwise reimbursed
by Lessor to Lessee, and in addition thereto, Lessor shall reimburse Lessee for
any cost or expense incurred in excess of the insurance proceeds to complete the
restoration and if Lessor fails to promptly reimburse Lessee then Lessee shall
be entitled to exercise the remedies set forth in this Lease; (2) seek specific
performance to require Lessor to commence and diligently complete their
restoration; (3) terminate this Lease upon thirty (30) days written notice to
Lessor without waiving Lessee's right to damages for Lessor's failure to
perform. The rights granted herein shall be in furtherance, and not in
limitation, of all other rights of Lessee under the Lease or at law or in
equity; or (d) in the event the Leased Premises are damaged in excess of fifty
percent (50%) of replacement cost (excluding excavation and foundation) during
the last two (2) years of the Term of the Lease, Lessor or Lessee may elect to
terminate this Lease upon written notice to the other within thirty (30) days of
the date of the casualty; provided, however, if Lessor notifies Lessee that it
intends to terminate this Lease under this Section, but Lessee does not desire
to do so and elects to exercise an unexercised option to renew this lease by
giving Written notice to Lessor of such election within such thirty (30) day
period, then Lessor shall have no right to terminate this Lease under this
Section and shall promptly commence and diligently complete the restoration.
(d) If the casualty, repairing, or rebuilding shall render the
Leased Premises untenantable, or in a condition which renders the Leased
Premises inaccessible by Lessee's customers, in whole or in part, then a
proportionate abatement of the rent shall be allowed from the date when the
damage occurred until the date Lessor completes its work, said proportion to be
computed on the basis of the relation which the gross square foot area of the
space rendered untenantable bears to the floor space of the Leased Premises. If
Lessor is required or elects to repair the Leased Premises as herein provided,
Lessee shall replace its stock in trade, fixtures, furniture, furnishings, floor
coverings and equipment.
7.2 Damage. Lessee agrees that Lessor and its building manager and their
officers and employees shall not be liable to Lessee for any damages to or loss
of personal property located in the Lea-zed Premises or for injuries to persons
unless such damages, loss, or injury is the result of the negligence or willful
act of Lessor, its building manager, or employees, contractors, invitees or
agents.
8.1 Should Lessee fail to obtain and pay for any insurance or taxes provided
for herein or to perform any of its other obligations hereunder, Lessor, at its
option, may pay for same or perform any such other obligations, and any sums so
expended by Lessor shall bear interest at the rate of two percent (2%) in excess
of the prime rate as reported from time to time in the Wall Street Journal from
the date of such payment, shall forthwith be due by Les ' see to Lessor and may
be collected by Lessor in the same manner as is provided for herein and by the
statutes of the State of Kentucky for the collection of rental. This paragraph,
and the exercise of, or the failure of Lessor to exercise, the option retained
by it herein, at any time or times, shall in no way affect the rights of Lessor
under any other provisions of this lease or under any applicable law or laws.
8.2 Should (a) Lessee be in arrears in the payment of any installment of rental
provided for herein for a period of thirty (30) days, or (b) should Lessee be in
default of the payment or performance of any of its other obligations hereunder
and so remain in default for a period of sixty (60) days after written notice
from Lessor of such default, then Lessor, at its option, may terminate this
lease and enter upon the premises after proper judicial process without waiving
any other rights which it may have for the recovery of rent, enforcement of such
other obligations or covenants, or repossession of the premises, together with
any damages occasioned by any such breach or default for sixty days within the
meaning of this paragraph unless the default to be remedied is one which, by the
nature thereof, would require more than sixty days to correct, and Lessee shall
in good faith commence such correction upon the receipt of said notice and
proceed thereafter to correct same as expeditiously as possible.
9. Lessor's Default. Lessor shall be in default of this Lease if Lessor fails
to perform any material obligation, term or condition of this Lease, for more
than 60 days after receipt of the wTitten notice of default (such notice to be
sent to Lessor by certified mail, return receipt requested), unless such default
or failure to perform renders the Leased Premises untenantable or inaccessible
to Lessee's customers or employees, in which case the period of time to remedy
su ch default or failure to perform shall be 30 days after receipt of written
notice.
10. 1 Condemnation . If the Leased Premises or any par-t thereof shall be
acquired by any authority having power of eminent domain, whether directly
pursuant to such power or under threat of use of such power, Lessee may
terminate this Lease at any time after the date when notice of condemnation is
first given to either the Lessor or the Lessee by the acquiring authority. All
proceeds and damages resulting from such acquisition shall belong to and be the
property of Lessor except such proceeds and damages which are attributable to
the value of Lessee's leasehold improvements. Lessee shall have no claim against
Lessor by reason of such acquisition or termination, and shall not have any
claim or right to any portion or damages paid to Lessor as result of such
acquisition except as provided in this Lease. Provided, that Lessee shall have
its right to claim and recover from such acquiring authority, but not from
Lessor, such compensation as may be separately awarded or recoverable by Lessee
in its own right on account of any and all damages to Lessee's business by
reason of such acquisition, business interruption or displacement.
10.2 Payment to Lessee. Notwithstanding the foregoing, if this Lease shall
terminate pursuant to Section 10. 1 above, Lessor agrees to pay Lessee an amount
calculated as follows:
(1) Lessor shall pay Lessee that portion of the condemnation proceeds
attributable to the "value of Lessee's leasehold improvements", and
(2) Lessor shall be entitled to receive and retain as its own property
the remaining condemnation proceeds.
To determine the value of Lessee's leasehold improvements, Lessor and Lessee
shall each select a real estate appraiser who is a duly qualified member of the
American Institute of Real Estate Appraisers (or of comparable qualification)
and such appraisers shall determine the fair market value of the property
(including the Leased Premises) so condemned or taken, which appraisal is
referred to herein as "land and improvements appraisal." Such appraiser shall
then determine the fair market value of the improvements (other than trade
fixtures and personal property which Lessee may remove from the Leased Premises)
Lessee has made to the Leased Premises, which appraisal is referred to herein as
"Lessee's improvements appraisal." If the two appraisers so appointed cannot
agree, they shall select a third appraiser similarly qualified, and the decision
of the majority shall constitute the decision of the appraisers.
10.3 Rent Abatement. Upon any such condemnation or taking referred to herein if
the Lease continues in force as to any part of the Leased Premises, the Lessee's
rent shall be diminished by an amount proportionate to the part of the Leased
Premises which may be so condemned or taken. Lessor shall, at its expense,
proceed with reasonable diligence to repair, alter, and restore the remaining
part of the Leased Premises to its former condition to the extent that the same
may be feasible.
11. Except as Provided in this lease, this lease may not be terminated by
Lessee, by any action of its own; and no surrender of the Leased Premises prior
to the termination of the lease shall be a valid termination thereof unless
accepted in writing by Lessor.
12. Lessor hereby covenants that subject to any rights arising from paragraph
6(d) above, it will (a) keep Lessee in peaceable possession of the Leased
Premises throughout the term hereof, (including but not limited to , the
prevention and discharge of any claims or hens arising from Lessor's use,
occupancy or ownership of the Leased Premises), in accordance with the
provisions hereof, so long as Lessee shall pay the money rental provided for and
shall perform all of its covenants, conditions and obligations hereunder; (b)
maintain, repair and keep in a safe condition the portion of the Leased Premises
referred to in paragraph 5(a) as being the Lessor's responsibility, and (c) be
responsible for remedying any toxic, hazardous or environmentally harmful
condition which existed on the Leased Premises as of the date this lease was
executed. Upon the termination of this lease, for any reason, Lessee shall
return the leased premises, including said building and other improvements
thereon, to Lessor in the condition which same were when received by Lessee,
ordinary wear and tear and Acts of God excepted; except that Lessee shall not be
required to return the Leased Premises to a condition which did not exist at the
time this lease was executed; provided, however, that the provisions of this
paragraph shall in no way alter, change or modify any of the other obligations
or liabilities of Lessee under this lease. Lessor shall not be obligated to
police any parking or traffic areas provided on the Leased Premises, or to see
that same is used only by Lessee's customers or personnel.
13.1 Bankruptcy Clause
"In the event that the bank is closed or is taken over by the banking
authority of the State of Kentucky or other bank supervisory authority, at the
option of the receiver or other legal representative of the bank, the maximum
claim of the lessor for damages or indemnity for injury resulting from the
rejection or abandonment of the unexpired lease shall in no event be in an
amount exceeding the rent reserved by the lease, without acceleration, for 't-be
year next succeeding the date of the surrender of the premises to the landlord
or the date of re-entry of the landlord, whichever first occurs, whether before
or after the closing of the bank, plus an amount equal to the unpaid rent
accrued, without acceleration, up to such date."
13.2 Default Clause
"In the event that Lessee commits an act of default as defined in this
lease, the Lessor will promptly notify the Department of Financial Institutions
and the Division of Bank Supervision of the Federal Deposit Insurance
Corporation of such default and, further, the Lessor will allow either bank
supervisory authority the right to rectify said default."
14. Any repairs or other work to be performed by Lessee upon the termination of
this lease, or any extended term hereof, for which any time is not specifically
provided for in other paragraphs of this lease, shall be performed and completed
as expeditiously as possible, to the reasonable satisfaction of Lessor, but in
no event later than 30 days following the termination date of this lease, or any
extended term hereof.
15. Lessor, or its agent, shall have the right to enter upon the Leased
Premises at any and all reasonable times, and with reasonable notice, without
interrupting normal business of the Lessee, for the purpose of inspecting same
and determining whether or not the provisions of this lease are being complied
with.
16. All notices or demand provided for, which may be given or made, under the
provisions of this lease shall be addressed and sent, by registered mail, to the
parties at the following addresses, which may from time to time be changed by
either party giving to the other written notice of such change:
To Lessor: To Lessee:
---------- ----------
Tyler Thomas Attn: Chief Executive Officer
THOMCO INC. First Security Bank of Lexington
P.O. Box 7746 2100 Southview Drive
Louisville, KY 40257-0746 Lexington, Kentucky 40503
Phone: (502) 897-9932 Copy to: Chief Executive Officer
First Security Bank of Lexington
400 East Main Street
Lexington, Kentucky 40507
The money rental provided for herein shall also be paid by Lessee to Lessor at
the above address.
17. Should Lessor, at any time during the term of this lease or any renewals
thereof, desire to sell the Leased Premises, Lessee shall be offered the
property first and allowed thirty (30) days to negotiate a sale. Lessor shall
establish a bona fide selling price for the Leased Premises, and Lessee and
Lessor will negotiate in good faith in an attempt to consummate a sale and
purchase. if a sale contract is not successfully concluded in this thirty day
period, Lessor is then free to market the property to others.
18. Lessor reserves the right to sell the leased Premises subject to this
lease; to mortgage the Leased Premises and the right to assign any and all
rentals accruing under this lease, as security for, or for the payment of any
mortgage indebtedness, which it might incur on said Leased Premises; provided
that this paragraph shall not be construed as subordinating this lease to the
lien of any such mortgage; and Lessee agrees to accept and honor any such
assignment if the new Lessor agrees to be obligated to Lessee under the terms of
this Lease.
19. Upon the commencement of this lease, Lessor shall have the heating, cooling
and plumbing equipment inspected and in good working order.
20. Lessor agrees to provide Lessee a cash fit-up allowance of $10,780.00. Said
monies are to be paid by Lessor to Lessee upon completion of work which shall be
the responsibility of the Lessee. After completion of all work, the Leased
Premises shall meet all State and local codes and ADA code for existing
buildings.
21 Lessor represents the following as of the date of execution of this lease:
(a) The Leased Premises meet all requirements of the Americans With
Disabilities Act, as amended;
(b) To Lessor's best knowledge, no toxic, hazardous or environmentally
harmful materials or substances are, or have been used, stored, discharged,
dispersed, released, treated, generated or disposed of, in or on the leased
premises and that the Leased Premises are free from asbestos or asbestos
containing materials; and there are no underground storage tanks or
polychiorinated biphenyls in or on the Leased Premises; and there is no claims,
investigation, order, agreement, litigation or settlement of any kind (including
those proposed, anticipated, threatened or in existence) with respect to the
Leased Premises.
(c) The Leased Premises are subject to a B- 1 zone and that Lessee is,
and shall be, entitled to use all of the sign types and sizes available to the
leased premises under the B- I zone. Lessor agrees to cooperate in any effort by
Lessee to obtain variances, conditional uses, administrative appeals and other
zoning related matters (except a re-zoning) for the leased premises.
(d) The Leased Premises are fully served by all utilities and public
ways.
22. For real estate commissions that are to be paid by the Lessor, see
Exhibit C.
23. Failure of Lessor to exercise any rights which it may have hereunder, at
any time or times, shall not affect their right to exercise same at any
subsequent time or times.
24. Should either Lessor or Lessee desire to place this lease of public record,
same shall be done by the recording or a short memorandum hereof; and each of
said parties agree that it will execute such a memorandum lease in proper form
for recording, if requested to do so by the other. The costs of the memorandum
lease and recording thereof shall be borne by the requesting party.
25. The provisions of this lease shall be binding upon the parties hereto and
their respective heirs, personal representatives, successors and assigns.
IN WITNESS WHEREOF, Lessor has hereunto set their hands, and Lessee has
hereunto caused its corporate name to be subscribed by its proper officers
thereunto duly authorized; this the day and year first above written.
THOMCO, INC. ("Lessor")
By:/s/ Tyler Thomas
Title: President THOMCO INC.
Date: October 31, 1997
FIRST SECURITY BANK OF LEXINGTON, INC.
("Lessee")
By:/s/ Julian E. Beard
Title: Chairman and President
Date: October 31, 1997
ATTEST:
- - ------------------------------
EXHIBIT A
INCREASED RENTAL ADJUSTMENTS
The minimum rent shall be subject to adjustment for increases in the Consumer
Price Index for all Urban Consumers (CPI-U), U.S. City Average, 1982-84+100
hereinafter called CPI, as released by the Southeastern Regional Office of the
Bureau of Labor Statistics in Atlanta, Georgia.
Using this information, the rental figure of the Urban Consumer Price Index as
of the third month prior to the first month of the original lease shall be
inserted. This figure would represent the denominator and the numerator would
be the rental figure of the Urban Consumer Price as of the third month prior to
the first month of the new lease terms. This ratio multiplied by the original
lease amount will become the new yearly rent which will then be divided into
twelve monthly payments. However, at no time is the rent to be lower than the
original rental figure.
FORMULA:
New Index Figure
Old Index Figure X Original Rental Figure - New Rental Figure
By way of example the following hypothetical calculation is provided:
If the monthly Original Rental Figure in September of 1992 was $3,335 and the
Old Index Figure was 141.8 and the New Index Figure was 161.2 then the monthly
New Rental Figure is $3,792.
161.2 X $3,335 = $3,792
-----
141.8
EXHIBIT B
[PHOTOGRAPHS]
EXHIBIT C
REAL ESTATE COMMISSIONS
Lessor agrees that certain real estate commissions are and could be due Paul
Semonin Realtors and Sam Bennett/Sam Bennett Realtor. These two will share any
6% commissions 50/50 for 3% each and hereinafter will be referred to as
"Brokers". Said commission to be paid by Lessor.
1. Lessor agrees to pay Brokers six percent (6%) of any option monies.
Lessor will pay them as the option payments are received.
2. Should there ever be a sale of this property from Lessor to Lessee or
any agent or representative of Lessee, the Lessor shall pay the above-stated
real estate companies a sales commission of six percent (6%) of the sale price.
3. Lessor agrees to pay Brokers a one time leasing fee of six percent (6%)
of the total rents to be collected over the initial five (5) year lease term.
This fee is due and payable upon full execution of the lease and payment of
first month's rent. This total amount would be $3,792 X 60 months = $227,520 X
6% = $13,651.20. In the event that any of the option monies are converted into
rent, this amount will be so credited.