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.. . . . . . . . . . '. .. '. I. '. . . . ~. ,. ,. '. . '. . '. . . . . . . . . . . . . . . . . . . '. . . . . . . . . . . BERMELLO, AJAMIL & PARTNERS, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2006 AND 2005 NOTE 10. COMMITMENTSAND CONTINGENCIES (CONTINUED) Operating Leases (continued) . In addition, the Company has operating lease agreements primarily involving automobiles and equipment. These leases are non-cancelable and expire at various dates through 2011. The minimum annual rent is subject to annual escalation based on changes in the Consumer Price Index. Future minimum rental payments due under these lease agreements for each of the years subsequent to December 31, 2006 are as follows: 2007 $ 1,780,627 2008 1,615,744 2009 611,992 2010 282,495 2011 106.356 Total $ 4.397.214 The Company subleased office space to one tenant evidenced by a lease agreement executed in April 1998. The sublease expired in 2001 and is currently being rented on a month-to-month basis. Rent expense under all operating leases charged to operations totaled approximately $1,830,000 and $1,593,000 at December 31, 2006 and 2005, respectively. Rent expense is net of sublease rental income of approximately $112,000 and $104,000 for 2006 and 2005, respecti vely. Stockholders' Agreement The Company and its stockholders have entered into an agreement covering, among other things, the purchase of stock by the Company at a specified price in the event of the death of a stockholder. Profit Sharing Plan During 1994, the Company established a 40 I (k) profit sharing plan (the "Plan") covering substantially all employees who have completed one year of service and have reached the age of twenty-one. The Plan allows eligible participants to defer a portion of their current compensation and have these amounts contributed to the Plan on their behalf. -)9-