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<br />. <br /> <br />. <br /> <br />e <br /> <br />CUBELLIS BUSINESS TRUST <br /> <br />NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br /> <br />Note 10 - Common Stock <br /> <br />On July I. :W05. the Trust admitted three new shareholders. In exchange for 1,100 shan;s of the <br />Trust's common stock. each new shareholder made a cash payment of $3.906 and issued to the <br />Trust a note receivank in the amount of 535.154. The notes receivable bear interest at the prime <br />rate (S.25(Yu at December 31, 20(6) and require annual principal payments of $7.(l31 each July 1 <br />through 20 I O. Interest for the year ended December 31, 2006 includes $3.823 related to these <br />notes receivable. !)uring 2006. SI 05,462 has been repaid on these notes. <br /> <br />In 2005. the I'rust granted certain employees stock grants in the amount of $25.000 each. The <br />grants vest ratabl)' over a three year period expiring in 2008. If the employees temlinate their <br />employment with the Company prior to the full vesting of the grants. the grants \vill be forkited <br />in their entirety. No options have been exen:ised in 2006 or 2005. <br /> <br />In June 2006. the Trust issued 5,856 of the Trust's common stock to an existing shareholder for <br />$61.73 per share. totaling 5361.525. On July 1.2006, the Trust admitted nine new shareholders. <br />In exchange fi)r 4.630 shares of the Trust's common stock. each new shareholder made a cash <br />pay ment of $65.05 per share. totaling $301.1 S2. <br /> <br />Note 11 - Operating Leases <br /> <br />The Company leases office space in various locations which expire through 2014. The leases <br />call lor base rent. based on escalating schedules. plus operating expenses and taxes. <br /> <br />ApproximatL' future minimum rental payments under these leases arc as 1()IIows: <br /> <br />2007 $ 1.434,000 <br />200S 1.235.000 <br />200t) 1.121.000 <br />2009 1.150.000 <br />20]0 1.038.000 <br />Therealier 2.923.00Q <br /> $ 8} 9Q I ,aop <br /> <br />Rent expense charged to operations Il)r the years ended December J I. 2006 and 2005 was <br />S I. 7() 7,435 and 51.014.322 respectively. <br /> <br />At December 31. 2006 the Company had a standby letter of credit in the amount of $176.500 in <br />lieu of rental deposits lix t\\U of its Buston locations. <br /> <br />IJ <br />