-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TPfyaA9XzLcJ7s4rj8bX/erooxyTSk+P38uYlZYtdM7anjLXLJNQ5mPSWZ2q660c FxV9bNWHCyEYFZPgJ+VnIw== 0000912057-00-020758.txt : 20000502 0000912057-00-020758.hdr.sgml : 20000502 ACCESSION NUMBER: 0000912057-00-020758 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20000501 GROUP MEMBERS: GLB BANCORP INC GROUP MEMBERS: RICHARD M OSBORNE TRUST GROUP MEMBERS: TURKEY VULTURE FUND XIII LTD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LNB BANCORP INC CENTRAL INDEX KEY: 0000737210 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 341406303 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-58535 FILM NUMBER: 615907 BUSINESS ADDRESS: STREET 1: 457 BROADWAY CITY: LORAIN STATE: OH ZIP: 44052-1769 BUSINESS PHONE: 4402446000 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TURKEY VULTURE FUND XIII LTD CENTRAL INDEX KEY: 0000935886 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 7001 CENTER STREET CITY: MENTOR STATE: OH ZIP: 44060 BUSINESS PHONE: 2169511111 MAIL ADDRESS: STREET 2: 7001 CENTER ST CITY: MENTOR STATE: OH ZIP: 44060 SC 13D 1 SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT RULE 13D-2(a)(AMENDMENT NO. ) (1) LNB Bancorp, Inc. - ------------------------------------------------------------------------------- (Name of Issuer) Shares of Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 502100-10-0 - -------------------------------------------------------------------------------- (CUSIP Number) Marc C. Krantz, Kohrman Jackson & Krantz P.L.L., 1375 East 9th Street, Cleveland, Ohio 44114, 216-736-7204 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 19, 2000 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box G. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. - -------- (1) The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 1 of 14 Pages SCHEDULE 13D CUSIP NO. 502100-10-0 PAGE 2 OF 14 PAGES - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON TURKEY VULTURE FUND XIII, LTD. - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ X ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC, OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION OHIO - ------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 10,600 BENEFICIALLY ------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH ------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 10,600 WITH ------------------------------------- 10 SHARED DISPOSITIVE POWER - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,600 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) LESS THAN 1% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - ------------------------------------------------------------------------------- SCHEDULE 13D CUSIP NO. 502100-10-0 PAGE 3 OF 14 PAGES - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GLB BANCORP, INC. - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ X ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION OHIO - ------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 129,233 BENEFICIALLY ------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH ------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 129,233 WITH ------------------------------------- 10 SHARED DISPOSITIVE POWER - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 129,233 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.1% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - ------------------------------------------------------------------------------- SCHEDULE 13D CUSIP NO. 502100-10-0 PAGE 4 OF 14 PAGES - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON RICHARD M. OSBORNE TRUST - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ X ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS BK, OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION OHIO - ------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 121,746 BENEFICIALLY ------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH ------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 121,746 WITH ------------------------------------- 10 SHARED DISPOSITIVE POWER - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 121,746 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.9% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - ------------------------------------------------------------------------------- This original Schedule 13D Statement is filed on behalf of Turkey Vulture Fund XIII, Ltd., an Ohio limited liability company (the "Fund"), GLB Bancorp, Inc., an Ohio corporation ("GLB"), and the Richard M. Osborne Trust, an Ohio trust (the "Trust"), for the purpose of reporting certain acquisitions of shares of common stock, par value $1.00 per share, of LNB Bancorp, Inc., an Ohio corporation. Item 1. SECURITY AND ISSUER. This Schedule 13D Statement relates to the shares of common stock, par value $1.00 per share (the "Shares"), of LNB Bancorp, Inc., an Ohio corporation ("LNB"), which has its principal executive offices at 457 Broadway, Lorain, Ohio 44052. Item 2. IDENTITY AND BACKGROUND. (a) The persons filing this Schedule 13D are (i) Turkey Vulture Fund XIII, Ltd., an Ohio limited liability company, (ii) GLB Bancorp, Inc., an Ohio corporation, and (iii) the Richard M. Osborne Trust, an Ohio trust. Richard M. Osborne is the sole manager of the Fund, Vice-Chairman of the Board of Directors of GLB, and sole trustee of the Trust. In accordance with the provisions of General Instruction C to Schedule 13D, information concerning the executive officers and directors of GLB is included on Schedule A hereto and is incorporated herein by reference. Also set forth on Schedule A is the name, address, citizenship and principal business of each corporation in which the occupations of such directors and executive officers are conducted. (b) The address of the Fund, the Trust and Mr. Osborne is 8500 Station Street, Suite 113, Mentor, Ohio 44060. The address of GLB is 7001 Center Street, Mentor, Ohio 44060. (c) The principal business of the Fund is to acquire, hold, sell or otherwise invest in all types of securities and other instruments. GLB is a bank holding company. The Trust was established by Mr. Osborne for estate planning purposes. Mr. Osborne's principal occupation is President and Chairman of the Board of Directors of OsAir, Inc., a property developer and manufacturer of industrial gases for pipeline delivery. OsAir, Inc. is located at 8500 Station Street, Suite 113, Mentor, Ohio 44060. (d) Negative with respect to the Fund, GLB, the Trust, Mr. Osborne and the directors and executive officers listed on Schedule A. (e) Negative with respect to the Fund, GLB, the Trust, Mr. Osborne and the directors and executive officers listed on Schedule A. 5 of 14 Pages (f) The Fund is an Ohio limited liability company, GLB is an Ohio corporation, the Trust is an Ohio trust and Mr. Osborne is a citizen of the United States of America. Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The Shares reported herein as having been acquired by the Fund were acquired for the aggregate purchase price of approximately $1.8 million with a combination of working capital of the Fund and margin debt from First Union Securities, Inc. ("First Union"). Interest on the margin debt is computed at a select rate above the rate banks charge securities brokers ("brokers call money rate") and is subject to change, without notice, if the brokers call money rate changes. To the extent permitted by law, First Union has a lien on certain of the Shares reported herein as having been acquired by the Fund. A copy of the agreement setting forth the terms of the Fund's First Union margin debt is attached hereto as Exhibit 7.1. The Shares reported herein as having been acquired by GLB were acquired for the aggregate purchase price of approximately $3.5 million with GLB's working capital. The Shares reported herein as having been acquired by the Trust were acquired for the aggregate purchase price of approximately $3.3 million with a combination of funds borrowed from Fifth Third Bancorp Bank ("FTB") and margin debt as described above from First Union. The Trust executed a Draw Note on April 24, 2000, in favor of FTB with an 18 month term, bearing interest at the rate of 0.5% less than the Prime Rate. A copy of the Draw Note setting forth the terms of the borrowing arrangement is attached hereto as Exhibit 7.2. Repayment of the borrowed funds is personally guaranteed by Mr. Osborne and further secured by a pledge of 121,000 of the Shares reported herein as having been acquired by the Trust. A copy of the Unlimited Payment Guaranty and Pledge Agreement setting forth the terms of each are attached hereto as Exhibits 7.3 and 7.4, respectively. Item 4. PURPOSE OF TRANSACTION. The Fund, GLB and the Trust purchased the Shares to acquire a minority interest in LNB for the purposes of investment. Mr. Osborne has met with the management of LNB to discuss its business strategies, and Mr. Osborne may, in the future, desire to continue such meetings. The Fund, GLB, the Trust and Mr. Osborne reserve the right to dispose of or acquire additional Shares and will do so depending on market conditions, developments with respect to LNB's business and other relevant factors. 6 of 14 Pages Pursuant to the instructions for items (a) through (j) of Item 4 of Schedule 13D, neither the Fund, GLB, the Trust nor Mr. Osborne presently has plans or proposals that relate to or would result in any of the following: (i) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving LNB or any of its subsidiaries; (ii) the sale or transfer of a material amount of assets of LNB or any of its subsidiaries; (iii) a change in the present board of directors or management of the issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (iv) a material change in the present capitalization or dividend policy of LNB; (v) a material change in the business or corporate structure of LNB; (vi) a change to the Articles of Incorporation or Code of Regulations of LNB or an impediment to the acquisition of control of LNB by any person; (vii) the delisting from the National Association of Securities Dealers Automated Quotation System of the Shares; (viii) a class of equity securities of LNB becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); or (ix) any action similar to any of those enumerated in (i) through (viii) above. The Fund, GLB, the Trust and Mr. Osborne reserve the right to modify their plans and proposals described in this Item 4. Further, subject to applicable laws and regulations, they may, in the future, formulate plans and proposals that may result in the occurrence of an event set forth in (i) through (ix) above or in Item 4 of Schedule 13D. Item 5. INTEREST IN SECURITIES OF THE ISSUER. (a) According to the most recently available filing with the Securities and Exchange Commission by LNB, there are 4,127,161 Shares outstanding. 7 of 14 Pages The Fund beneficially owns 10,600 Shares, or less than 1% of the outstanding Shares. As sole manager of the Fund, Mr. Osborne may be deemed to beneficially own all such Shares. GLB beneficially owns 129,233 Shares, or approximately 3.1% of the outstanding Shares. None of the directors or executive officers listed on Schedule A own Shares individually. The Trust owns 121,746 Shares, or approximately 2.9% of the outstanding Shares. As sole trustee of the Trust, Mr. Osborne may be deemed to beneficially own all such Shares. Because of Mr. Osborne's position with the Fund, GLB and the Trust, each of them and Mr. Osborne may be deemed to be a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). If such persons are deemed to be a group within the meaning of Section 13(d)(3) of the Exchange Act each may be deemed to beneficially own 261,579 shares, or approximately 6.3% of the outstanding shares. The Fund, GLB, the Trust, and Mr. Osborne disclaim beneficial ownership of the Shares held by other members comprising such group. (b) Mr. Osborne, as sole manager of the Fund, has sole power to vote, or to direct the voting of, and the sole power to dispose or to direct the disposition of, the 10,600 Shares owned by the Fund. GLB has sole power to vote, to direct the voting of, and the sole power to dispose or to direct the disposition of, the 129,233 Shares owned by GLB. Mr. Osborne, as sole trustee of the Trust, has the power to vote, or to direct the voting of, and the sole power to dispose or to direct the disposition of, the 121,746 Shares owned by the Trust. (c) During the past 60 days, the Fund purchased 10,600 Shares in open market transactions as set forth below:
Date Number of Shares Price Per Share ---- ---------------- --------------- 2/24/00 100 $19.19 2/25/00 100 $19.13 2/25/00 1,000 $19.13 3/01/00 3,000 $20.31 3/02/00 2,500 $19.25 3/09/00 200 $18.91 3/17/00 1,000 $19.13 3/21/00 500 $20.13 3/21/00 100 $19.94 3/22/00 1,400 $19.88 3/29/00 700 $19.96
During the past 60 days, neither GLB nor any of the directors or executive officers listed on Schedule A have purchased Shares. 8 of 14 Pages During the past 60 days, the Trust purchased 121,746 Shares in an open market transaction on April 19, 2000. The price per Share was $26.75. (d) Not Applicable. (e) Not Applicable. Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Not Applicable. Item 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 7.1 General Account Agreement Letter to First Union Securities, Inc. (successor-in-interest to Kemper Securities, Inc., predecessor-in-interest to Everen Securities, Inc.) from Turkey Vulture Fund XIII, Ltd. Exhibit 7.2 Draw Note by the Richard M. Osborne Trust, in favor of Fifth Third Bancorp Bank Exhibit 7.3 Unlimited Payment Guaranty of Richard M. Osborne to Fifth Third Bancorp Exhibit 7.4 Pledge Agreement by the Richard M. Osborne Trust to Fifth Third Bancorp Exhibit 7.5 Agreement of Joint Filing 9 of 14 Pages After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: May 1, 2000 TURKEY VULTURE FUND XIII, LTD. By: /s/ Richard M. Osborne --------------------------- Richard M. Osborne, Manager Dated: May 1, 2000 GLB BANCORP, INC. By: /s/ Richard T. Flenner, Jr. ---------------------------------- Richard T. Flenner, Jr., President Dated: May 1, 2000 RICHARD M. OSBORNE TRUST By: /s/ Richard M. Osborne ---------------------------------- Richard M. Osborne, Trustee 10 of 14 Pages Exhibit Index Exhibit 7.1 General Account Agreement Letter to First Union Securities, Inc. (successor-in-interest to Kemper Securities, Inc., predecessor-in-interest to Everen Securities, Inc.) from Turkey Vulture Fund XIII, Ltd. Exhibit 7.2 Draw Note by the Richard M. Osborne Trust, in favor of Fifth Third Bancorp Bank Exhibit 7.3 Unlimited Payment Guaranty of Richard M. Osborne to Fifth Third Bancorp Exhibit 7.4 Pledge Agreement by the Richard M. Osborne Trust to Fifth Third Bancorp Exhibit 7.5 Agreement of Joint Filing 11 of 14 Pages SCHEDULE A Name: James A. Brown (Director) Citizenship: United States Business Address: Classic Chevrolet 6877 Center Street Mentor, OH Principal Occupation: President and owner, Classic Chevrolet Name: James V. Fryan (Director) Citizenship: United States Business Address: GoodTime III 825 East 9th Street Cleveland, OH Principal Occupation: Proprietor, GoodTime III Name: George C. Lott (Director) Citizenship: United States Business Address: 258 South Oval Drive Chardon, OH Principal Occupation: Retired, Executive Vice President, Great Lakes Bank Name: George X. Mechir (Director) Citizenship: United States Business Address: 1255 Croyden Rd. Lyndhurst, OH Principal Occupation: Retired, attorney Name: Jerome T. Osborne, Sr. (Director, Chairman of the Board) Citizenship: United States Business Address: Osborne, Inc. 7954 Reynolds Road Mentor, OH Principal Occupation: President, Osborne, Inc. 12 of 14 Pages Name: Richard M. Osborne (Director, Vice-Chairman of the Board) Citizenship: United States Business Address: OsAir, Inc. 8500 Station Street, Suite 113 Mentor, OH Principal Occupation: Chief Executive Officer and President, OsAir, Inc. Name: Edward R. Pike (Director) Citizenship: United States Business Address: Ed Pike Lincoln-Mercury 9647 Mentor Ave. Mentor, OH Principal Occupation: President, Ed Pike Lincoln-Mercury Name: Thomas J. Smith (Director) Citizenship: United States Business Address: Liberty Self-Stor, Inc. 8500 Station Street, Suite 100 Mentor, OH Principal Occupation: President and Chief Operating Officer, Liberty Self-Stor, Inc. Name: Joseph T. Svete (Director) Citizenship: United States Business Address: Svete, McGee and Carrabine, Co., LPA 100 Parker Court Chardon, OH Principal Occupation: Attorney Name: Thomas E. Wheeler (Director) Citizenship: United States Business Address: Component Repairs Technologies, Inc. 4665 Sherwin Rd. Willoughby, OH Principal Occupation: President, Component Repairs Technologies, Inc. 13 of 14 Pages Name: Richard T. Flenner, Jr. (Director, President and Chief Executive Officer) Citizenship: United States Business Address: GLB Bancorp, Inc. 7001 Center Street Mentor, OH Principal Occupation: President and Chief Executive Officer, GLB Bancorp, Inc. Name: Andrew L. Meinhold (Executive Vice-President and Secretary) Citizenship: United States Business Address: GLB Bancorp, Inc. 7001 Center Street Mentor, OH Principal Occupation: Executive Vice-President, GLB Bancorp, Inc. Name: Cheryl J. Mihitsch (Treasurer) Citizenship: United States Business Address: GLB Bancorp, Inc. 7001 Center Street Mentor, OH Principal Occupation: Treasurer, GLB Bancorp, Inc. 14 of 14 Pages EX-7.1 2 EXHIBIT-7.1 Exhibit 7.1 GENERAL ACCOUNT AGREEMENT To: Kemper Securities, Inc. in account with Kemper Clearing Corp. Gentlemen: In consideration of your accepting one or more accounts of the undersigned, it is agreed as follows: 1. All transactions under this Agreement shall be subject to the constitution, rules, regulations, customs, usages, rulings and interpretations of the exchange or market and its clearing house, if any, where executed, and to all governmental acts and statutes and to rules and regulations made thereunder insofar as applicable. Whenever any act or statute shall be enacted, or any regulation shall be made under any act or statute or any rule or regulation shall be made by any exchange or market of which you are a member, which shall be applicable to and affect in any manner or be inconsistent with any of the provisions hereof, the provisions of this Agreement so affected shall be deemed modified or superseded, as the case may be, by such act, statute, rule or regulation and all other provisions of this Agreement and the provisions as so modified shall in all respects continue and be in full force and effect. 2. All orders for the purchase or sale of any property are given by the undersigned and executed with the express understanding that an actual purchase or sale is intended and that it is the undersigned's intention and obligation in every case to deliver certificates or commodities to cover any and all of the undersigned's sales and in the case of purchases to receive and pay for certificates or commodities and that the undersigned will do so in compliance with all applicable regulations. 3. Except as herein otherwise expressly provided, no provision of this Agreement may be waived, altered, modified, or amended unless such waiver, alteration, modification or amendment is in writing and signed by a duly authorized officer of your corporation. 4. All monies, securities, commodities or other property which you may at any time be carrying for the undersigned or which may at any time be in your possession for any purpose, including safekeeping, shall be held by you as security for the payment of any liability of the undersigned to you, irrespective of whether or not you have made advances in connection with such securities, commodities or other property, and irrespective of the number of accounts the undersigned may have with you. 5. All securities and commodities or any other property, now or hereafter held by you, or carried by you for the undersigned (either individually or jointly with others) or deposited to secure the same, may be held in your name or that of any nominee, and may from time to time and without notice to the undersigned, be carried Page 7.1-1 in your general loans and may be pledged, re-pledged, hypothecated, or re-hypothecated, or loaned by you to either yourselves as brokers or to others, separately or in common with other securities and commodities or any other property, for the sum due to you from the undersigned or for a greater sum and without retaining in your possession and control for delivery a like amount of similar securities, commodities, or other property. 6. You are authorized to make such advances and to expend such monies as in your opinion may be required in respect of all transactions hereunder. The undersigned agrees to pay customary brokerage and commission charges. Debit balances of the accounts of the undersigned shall be charged with interest in accordance with your usual custom, and with any increases in rates caused by money market conditions, and with such other charges as you may make to cover your facilities and extra services. Credit balances shall not earn interest. It is understood and agreed that the interest charge made to the undersigned's account at the close of one charge period will be compounded, that is, added to the opening balance for the next charge period unless paid, thereby becoming part of the principal amount and bearing like interest. A statement disclosing your credit terms currently applicable to margin transactions is set forth as part of this Agreement, but is subject to change from time to time as set forth therein. 7. All securities, other property and collateral deposited for the protection of the undersigned's collateral and/or margin account may be deposited with the Depository Trust Company or any other recognized clearing corporation or depository trust company, and may be held in street name and used there by you until the undersigned shall demand and become entitled to delivery thereof; you shall have a reasonable time after such a demand for delivery to ship securities, other property or collateral from New York or from any other place where they may be to the place where the same are to be delivered to the undersigned, and shall only be required to deliver securities, other property or collateral of the same kind and character as originally deposited. 8. You shall not be responsible for delays in the transmission of orders due to breakdown or failure of transmission or communication facilities, and you shall not be liable for loss caused directly or indirectly by governmental restrictions, war, strikes, or any other cause or causes beyond your reasonable control or anticipation. 9. All orders given by the undersigned for the purchase or sale of securities or other property, which may be listed on more than one exchange or market, may be executed on any exchange or market selected by you. 10. Whenever in your discretion you consider it necessary for your protection, or in the event that one or more of the undersigned by judicially declared incompetent, or dies, or a petition in bankruptcy or for the appointment of a receiver is filed by or against one or more of the undersigned, or an assignment is made by one or more of the undersigned for the benefit of creditors, or an attachment is levied against one or more of the undersigned's accounts, or the collateral deposited to protect the Page 7.1-2 undersigned's account is determined by you in your absolute and uncontrolled discretion, and regardless of current market quotations, to be inadequate to properly secure the account, then, in any such case, any one of which shall be a default hereunder, you are authorized to close out the account in whole or in part and in connection therewith you may sell any or all the securities and commodities or other property which may be in your possession, or which you may be carrying for the undersigned, or you may buy in any securities, commodities or property of which the account or accounts of the undersigned may be short, or cancel any outstanding orders in order to close out the account or accounts of the undersigned in whole or in part in order to close out any commitment made on behalf of the undersigned. Such sale, purchase or cancellation may be made according to your judgement and may be made, at your discretion, on the exchange or other market where such business is then usually transacted, or at public auction or at private sale without advertising the same and without notice to the undersigned or to the personal representatives of the undersigned, and without prior tender, demand or call of any kind upon the undersigned or upon the personal representative of the undersigned, and you may purchase the whole or any part thereof free from any right of redemption, and the undersigned shall remain liable for any deficiency; it being understood that a prior tender, demand or call of any kind from you, or prior notice from you, of the time and place of such sale or purchase shall not be considered a waiver of your right to sell or buy any securities and/or commodities and/or other property held by you, or owed you by the undersigned, at any time without prior tender, demand, call or notice. All costs and expenses of such transaction(s), including commissions and transfer and stamp taxes, shall be charged to the undersigned. 11. The undersigned understands that you require the maintenance of certain margin levels in said accounts and that you may, in your discretion, periodically increase or decrease such requirements. The undersigned will at all times maintain margins for said accounts in accordance with the then existing maintenance requirements. 12. You may at any time terminate any accounts of the undersigned with you and thereupon all amounts advanced by you and other balances owing, with interest at the current rate, and any and all commissions due under your current rate schedule, shall be immediately due and payable upon demand. The undersigned undertakes, at any time upon your demand, to discharge obligations of the undersigned to you, including obligations with respect to any account guaranteed by the undersigned, or, in the event of a closing of any account of the undersigned in whole or in part by you or the undersigned, and/or a similar closing of any account guaranteed by the undersigned, to pay the deficiency, if any, and the undersigned agrees to reimburse you for any costs or expenses incurred by you in collecting such amounts, including reasonable attorney's fees. No oral agreement or instructions to the contrary shall be recognized. Page 7.1-3 13. All transactions for or in connection with the account of the undersigned shall be deemed to be included in a single account notwithstanding the fact that such transactions may be segregated on your records into separate accounts, either severally or jointly with others; and at any time and from time to time, in your discretion, you may without notice to the undersigned, apply and/or transfer any or all monies, securities, commodities and/or other property of the undersigned interchangeably between any accounts of the undersigned or from any of the undersigned's accounts to any account guaranteed by the undersigned (other than from Regulated Commodity Accounts.) 14. When placing with you any sell order for short account, the undersigned will designate it as such and hereby authorizes you to mark such order as being "short", and when placing with you any order for long account, will designate it as such and hereby authorizes you to mark such order as being "long". Any sell order which the undersigned shall designate as being for long account as above provided, is for securities then owned by the undersigned and, if such securities are not then deliverable by you from any account of the undersigned, the placing of such an order shall constitute a representation by the undersigned that he will deliver them forthwith. Further, in case of the sale of any security, commodity or other property by you at the direction of the undersigned and your inability to deliver the same to the purchaser by reason of failure of the undersigned to supply you therewith in deliverable form subject to no restrictions on transfer, then and in such event the undersigned authorizes you, in your discretion to borrow or buy in any security, commodity, or other property necessary to make delivery thereof, and the undersigned hereby agrees to be responsible for any loss which you may sustain thereby and any premiums which you may be required to pay thereon, and for any loss which you may sustain by reason of your inability to borrow or as a result of your buy in of such security, commodity or other property sold. 15. In all transactions between you and the undersigned, the undersigned understands that you are acting as the brokers of the undersigned, except when you disclose to the undersigned by your formal confirmation or otherwise in writing that you are acting, with respect to a particular transaction, as dealers for your own account or as broker for some other person. You may employ sub-brokers or other agents, as your agents or as agents of the undersigned, in connection with the execution of any order or the consummation of any other transaction hereunder, and you shall be responsible only for reasonable care in their selection. 16. Reports of the execution of orders and statements of the accounts of the undersigned shall be conclusive if not objected to in writing at once. 17. Communications may be sent to the undersigned at the address of the undersigned indicated on the last page of this Agreement or at such other address as the undersigned may hereafter give you in writing, and all communications so sent, whether by mail, telegraph, messenger or otherwise, shall be deemed given to the undersigned personally, whether actually received or not. Page 7.1-4 18. The provisions of this Agreement shall in all respects be construed according to, and the rights and liabilities of the parties hereto shall in all respects be governed by the laws of the State of Illinois. 19. The provisions of this Agreement shall be continuous and shall cover individually and collectively all accounts which the undersigned may open or reopen with you and shall enure to the benefit of yourselves, your successors and assigns and shall be binding upon the undersigned, and/or the estate, executors, administrators and assigns of the undersigned. 20. Any order given to you by the undersigned shall be binding upon the undersigned and his personal representative until you have actual notice of his death and notice thereof shall not in any way affect your rights under this Agreement to take any action which you could have taken if the undersigned had not died. 21. You shall not be liable for refusing to obey any orders given by or for the undersigned with respect to an account(s) which has or have been the subject of attachment or sequestration in any legal proceeding against the undersigned, and you shall be under no obligation to contest the validity of any such attachment or sequestration. 22. The undersigned agrees to indemnify and to hold you harmless from any loss, damage or liability arising out of any transaction in which you act, directly or indirectly as agent of the undersigned, absent any willful or grossly negligent conduct. 23. Should any valid federal or state law or final determination of any administrative agency or court of competent jurisdiction affect any provision of this Agreement, the provision or provisions so affected shall be automatically conformed to the law or determination and otherwise this Agreement shall continue in full force and effect. 24. The undersigned understands in connection with this Agreement an investigation may be made whereby information is obtained through personal interviews with neighbors, friends or others with whom he is acquainted. This inquiry includes information as to his character, general reputation, personal characteristics and mode of living. The undersigned has the right to make a written request within a reasonable period of time for a complete and accurate disclosure of additional information concerning the nature and scope of this investigation. 25. Arbitration Disclosures Arbitration is final and binding on all parties. The parties are waiving their right to seek remedies in court, including the right to jury trial. Pre-arbitration discovery is generally more limited than and different from court proceedings. Page 7.1-5 The arbitrator's award is not required to include factual findings or legal reasoning and any party's right to appeal or seek modification of rulings by the arbitrators is strictly limited. The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. It is agreed that any claim, dispute or controversy between us or involving any affiliate of Kemper Securities, Inc. shall be submitted to arbitration conducted under (i) the provisions of the Constitution and Rules of the Board of Governors of the New York Stock Exchange, Incorporated as to any matter, or (ii) with respect to transactions effected on any other stock exchanges, under the arbitration rules of such stock exchange, or (iii) pursuant to the code of Arbitration procedures of the National Association of Securities Dealers, Incorporated, as the undersigned may elect. The award of the arbitrators will be final and judgement upon the award rendered may be entered in any court, state or federal, having jurisdiction. Copies of such arbitration rules may be obtained from Kemper Securities, Inc., or any such organization. Arbitration must be commenced by service upon the other party of a written demand for arbitration or a written notice of intention to arbitrate, therein electing the arbitration tribunal. In the event the undersigned does not much such election within five (5) days of such demand notice, then the undersigned authorizes you to do so on behalf of the undersigned. Credit Terms in Margin Transactions A finance charge is made by Kemper Clearing Corp. ("KCC") for extensions of credit to its customers for the purposes of enabling them to purchase, carry or trade in any security. These finance charges are described in KCC's monthly statements as "interest". The following is a statement concerning the method of computation of total finance charges on credit extended to customers. A. The annual rate of the interest charged on net debit balances is computed at a select rate above the brokers call money rate. The brokers call money rate is the rate banks charge securities brokers. A higher charge may be levied against an account depending on various factors such as the evaluation of the commission income generated by the account, the service required for the account, etc. B. Interest charges will be calculated monthly on the adjusted debit balance in an account using a 360 day year basis. Interest charged is calculated on a settlement date basis. C. Interest rates will be changed without notice to the customer in accordance with changes in the brokers call money rate. Interest is charged monthly, just prior to the statement date. Page 7.1-6 D. The daily net balance is determined by combining the daily closing statement balances in all general (margin) accounts with any free credit balance in cash accounts. E. Any mark-to-the-market as a result of a short position, i.e. any credit that appears in a statement due to short sales (including short sales against the box) will be used to reduce any debit balance. Since KCC must borrow the same security in order to deliver it to the buying broker, this credit is not available to the customer. Therefore, on a daily basis, the market value of a short sale is debited against the margin balance in order to arrive at the adjusted debit balance for interest purposes. The daily closing price is used to determine any appreciation or depreciation of a security sold short which will, in turn, adjust the daily net balance. This practice is known as "marking-to-the-market". F. The amount of interest charges is based on the following formula: ADJUSTED DEBIT BALANCE RATE NUMBER OF DAYS ---------------------- ---- -------------- 1 X 100 X 360 G. An interest charge (as described in A.) will be charged on all prepayments resulting from proceeds of sales which are paid to the customer prior to settlement date of the trade for which negotiable securities have been received. H. To the extent permitted by applicable law, all securities in all accounts are collateral for any debit balances in account with KCC. A lien is created by these debits to secure the amount of money owed KCC. In accordance with the terms of the General Account Agreement which is signed below, securities in accounts can be sold to reduce or liquidate entirely any debit balances in accounts. The customer may be required to deposit additional collateral in accordance with the rules and regulations of the appropriate regulatory bodies and internal requirements. KCC reserves the right to require additional collateral at any time it is deemed desirable. I. The net debit balance in an account may be paid in full at any time, thereby avoiding further interest charges. J. The undersigned has read the foregoing in its entirety before signing. Questions about interest charges should be directed to the Investment Broker. Page 7.1-7 BY SIGNING THIS AGREEMENT, I ACKNOWLEDGE THAT MY SECURITIES MAY BE LOANED TO YOU OR LOANED OUT TO OTHERS TO THE EXTENT PERMITTED BY APPLICABLE LAWS AND REGULATIONS. THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE SET FORTH IN PARAGRAPH 25 ABOVE. BY MY SIGNATURE BELOW, I ACKNOWLEDGE THAT I HAVE READ AND AGREE TO BE BOUND BY ALL THE TERMS AND CONDITIONS OF THIS AGREEMENT AND THAT I HAVE RECEIVED A COPY OF THIS AGREEMENT. /s/ Richard M. Osborne - ------------------------------------ ------------------------------------- Dated Signature /s/ E. Tammy Daye /s/ Richard M. Osborne - ------------------------------------ ------------------------------------- Witness Signature Turkey Vulture Fund XIII Ltd. WYO7-7905-7985 - ------------------------------------ ------------------------------------- Account Name Branch I. D. & Account Number - -------------------------------------------------------------------------------- Home Address /s/ David Van Duesen - -------------------- -------------- ------------------------------------- Investment Broker's Signature Page 7.1-8 EX-7.2 3 EXHIBIT-7.2 Exhibit 7.2 FIFTH THIRD BANCORP BANK OHIO AFFILIATES Note: Retain Customer Copy for your records. DRAW NOTE OFFICER No #0434 NOTE No $3,000,000.00 April 24, 2000 -------------- (Effective Date) Cleveland, Ohio On or before the Due Date below, the undersigned, a (check one) / / corporation / / partnership /X/ trust / / limited liability company, for value received, and if more than one, jointly and severally, promise to pay to the order of Fifth Third Bank, Northeastern Ohio, 1404 East Ninth Street, Cleveland, Ohio 44114 (hereinafter referred to as "Bank"), the sum of Three Million and no/100 Dollars (hereinafter referred to as the "Borrowing") plus interest as provided herein, less such amounts as shall have been repaid in accordance with this note. The outstanding balance of this note will appear on a supplemental bank record and is not necessarily the face amount of this note. Such record shall be conclusive as to the balance due of this note at any time. The principal sum outstanding shall bear interest per annum at the rate of 1/2% LESS than the "Prime Rate" (the rate announced by the Bank from time to time) on the above Effective Date. In the event of a change in said Prime Rate, the rate of this note shall be changed immediately to that rate which shall be greater than the new Prime Rate by the amount stated in this clause. Interest shall be computed based on a year of 360 days and charged for the actual number of days elapsed. Prior to the Due Date, Bank may (but is not obligated to) lend to the undersigned such amounts as may from time to time be requested by the undersigned provided that (a) the principal amount borrowed shall not at any time exceed the Borrowing (b) no Event of Default as defined herein shall exist, and (c) amounts advanced and repaid may not be reborrowed hereunder. Interest shall be due and payable: / / At maturity on the Due Date set forth below; /X/ On the day of each X Month / / Quarter beginning May 30, 2000. Principal shall be due and payable on the Due Date set forth below: To secure repayment of this note and all modifications, extensions and renewals thereof', and all other Obligations (as herein defined) of the undersigned to Bank, the undersigned grants Bank a security interest in all of the undersigned's, now owned or hereafter acquired interests in all property in which Bank is at any time, granted a lien for any Obligation, and all property in possession of Bank including, without limitation, money, securities, instruments, documents, letters of credit, chattel paper, or other property delivered to Bank in transit, for safekeeping, or for collection or exchange for other property, all distributions, dividends, warrants, securities and other rights in addition to such property, all rights to payment from and claims against Bank and all proceeds thereof, and all real and personal property described below ("Collateral") . The undersigned agrees to immediately deliver such additional dividends, warrants, securities or other property or rights thereto to Bank immediately upon receipt as additional Collateral and until delivery to hold same in trust for Bank. The undersigned agrees that the Bank may, at any time, call for additional Collateral satisfactory to it. All documents executed in connection with this note and all collateral, including without limitation the following, further secure the Obligations: Page 7.2-1 The Obligations secured by the Collateral (herein, "Obligations") shall include this note and each and every liability of the undersigned jointly or severally to Bank and all affiliates of Fifth Third Bancorp however created, direct or contingent, due or to become due, whether now existing or hereafter arising, participated in whole or in part, created by trust agreement, lease, overdraft, agreement, or otherwise, in any manner by the undersigned. The undersigned also grants Bank a security interest in all of the Collateral as agent for all affiliates of Fifth Third Bancorp for all Obligations of the undersigned to such affiliates. Said security interest shall not be enforced to the extent prohibited by the Truth in Lending Act as implemented by Federal Reserve Regulation Z. If this note is a renewal, in whole or in part, of a previous Obligation, file acceptance by Bank of this note Shall not effectuate a payment but rather a continuation of the previous Obligation. Bank may charge and the undersigned agrees to pay, on the above Effective Date, a note processing fee in an amount determined by Bank. Events of Default: This note, and all other Obligations of the undersigned to Bank, shall be and become immediately due and payable at the option of the Bank, without any demand or notice whatsoever, upon the occurrence of any of the following described events, each of which shall constitute any Event of Default: 1) Any failure to make any payment when due of the principal or interest on this note, the occurrence of any event of default as therein defined on any other Obligations of the undersigned, or a default in the obligations under any security documents. 2) The death or dissolution of the undersigned of any endorser or guarantor, or if the undersigned is a partnership, the death or dissolution of a general partner. 3) Any failure to submit to Bank current financial information upon request. 4) The creation of any lien (except a lien to Bank) or the issuance of any attachment against or seizure of any of the property of, or the entry of a judgment against, file undersigned. 5) In the judgment of Bank, any adverse change occurs in the ability of the undersigned to repay the Obligations, or the Bank deems itself insecure. 6) An assignment for the benefit of the creditors of, or the commencement of any bankruptcy, receivership, insolvency, reorganization, or liquidation proceedings by or against the undersigned or any endorser or guarantor hereof. 7) The institution of any garnishment proceedings by attachment, levy or otherwise, against any Collateral, deposit balance maintained or any property deposited with the Bank by the undersigned or any endorser or guarantor hereof. 8) Bank has called for additional security and the undersigned has not furnished satisfactory additional security on demand. Upon the occurrence of an Event of Default herein described Bank may, at its option cease making advances hereunder, declare this note and all other Obligations of the undersigned to be fully due and payable in their aggregate amount together with accrued interest plus any applicable prepayment premiums, fees, and charges. In addition to any other remedy permitted by law, the Bank may at any time, without notice, apply the Collateral to this note or such other Obligations, whether due or not, and Bank may, at its option, proceed to enforce and protect its rights by an action at law or in equity or by any other appropriate proceedings. Notwithstanding any other legal or equitable rights of Bank, Bank, in the Event of Default, is (a) hereby irrevocably appointed and constituted attorney in fact, with full power of substitution, to exercise all rights of ownership with respect to Collateral including, but not limited to, the right to collect all income or other Page 7.2-2 distributions arising therefrom and to exercise all voting rights connected with the Collateral; and (b) is hereby given full power to collect, sell, assign, transfer and deliver all of said Collateral or any part thereof, or any substitutes therefor, or any additions thereto, through any private or public sale without either demand or notice to the undersigned, or any advertisement, the same being hereby expressly waived, at which sale Bank is authorized to purchase said property or any part thereof, free from any right of redemption on the part of the undersigned, which is hereby expressly waived and released. In case of sale for any cause, after deducting all costs and expenses of every kind, Bank may apply, as it shall deem proper, the residue of the proceeds of such sale toward the payment of any one or more or all of the Obligations of the undersigned, whether due or not due, to Bank; after such application and the return of any surplus, the undersigned agrees to be and remains liable to Bank for any and every deficiency after application as aforesaid upon this and any other Obligation. The undersigned shall pay all costs of collection incurred by Bank, including its attorney's fees, if this note is referred to an attorney for collection, whether or not payment is Obtained before entry of judgment which costs and fees are Obligations secured by the Collateral. If any payment is not paid when due (whether by acceleration or otherwise) or within 10 days thereafter, undersigned agrees to pay to Bank a late payment fee as provided for in any loan agreement or 5% of the payment amount whichever is greater with a minimum fee of $20.00. After an Event of Default, the undersigned agrees to pay to Bank a fixed charge of $25.00, or the undersigned agrees that Bank may, without notice, increase the above stated interest rate by 6%, whichever is greater. Under no circumstances shall said interest rate be raised to a rate which shall be in excess of the maximum rate of interest allowable under the state and/or federal usury laws in force at the time of such change. The undersigned may prepay all or part of this note, which prepaid amounts shall be applied to the amounts due in reverse order of their due dates. Upon such prepayments, including involuntary prepayment by acceleration, (be undersigned shall pay a premium of 2% of the maximum principal amount permitted under this note. Partial prepayments shall not excuse any subsequent payment due. ENTIRE AGREEMENT: The undersigned agrees that there are no conditions or understandings which are not expressed in this note and the documents referred to herein. WAIVER: No failure on the part of the Bank to exercise any of its rights hereunder shall be deemed a waiver of any such rights or of' any default. Demand, presentment, protest, notice of dishonor, notice of protest and notice of default are hereby waived. Each of the undersigned, including but not limited to all co-makers and accommodation makers of this note, hereby waives all suretyship defenses including but not limited to all defenses based upon impairment of collateral and all suretyship defenses described in Section 3-605 of the Uniform Commercial Code, as revised in 1990 (the "UCC:) Such waiver is entered to the full extent permitted by Section 3-605(i) of the UCC. JURY WAIVER: THE UNDERSIGNED AND ANY ENDORSER OR GUARANTOR HEREOF WAIVE THE RIGHT TO A TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY. The declaration of invalidity of any provision of this note shall not effect any part of the remainder of the provisions. Page 7.2-3 /X/ This note is supplemented by the terms and conditions of Commitment Letter dated APRIL 24, 2000 between the undersigned and Bank. DATE DUE: SEPTEMBER 30, 2001 RICHARD M OSBORNE TRUST U /A DATED ADDRESS: 8500 STATION STREET, SUITE 113 JANUARY 13, 1995 MENTOR, OHIO 44060 By: /s/ Richard M. Osborne, Trustee Richard M. Osborne, Trustee Page 7.2-4 EX-7.3 4 EXHIBIT-7.3 Exhibit 7.3 A FIFTH THIRD BANCORP BANK OHIO AFFILIATES Cleveland, Ohio April 24, 2000 UNLIMITED PAYMENT GUARANTY -------------------------- RICHARD M. OSBORNE located at___________________________________________________ (hereinafter called "Guarantor"), jointly and severally if more than one, agree(s) to guarantee the payment of all monies due or which may hereafter become due to Fifth Third Bank, Northeastern Ohio, 1404 E. Ninth Street, Cleveland, Ohio 44114 and all affiliates of Fifth Third Bancorp (hereinafter collectively called "Bank") by RICHARD M. OSBORNE TRUST U/A DATED JANUARY 13, 1995 located at 8500 STATION STREET, SUITE 113, LAKE COUNTY, MENTOR, OHIO 44060 (hereinafter called "Borrower"). 1. GUARANTY: In consideration of an extension of a loan, credit or other financial accommodation given pursuant to a note or notes, or given pursuant to any extensions or renewals thereof, or pursuant to any other agreements to extend credit of any kind or nature to Borrower, Guarantor guarantees the prompt payment when due of all indebtedness and liabilities of Borrower of every kind, nature, and character including principal and interest and all renewals, extensions, and modifications thereof (hereinafter collectively called "Obligation") now existing or which hereafter may be incurred by Borrower to Bank. The liability of Guarantor hereunder shall be unconditional, notwithstanding the unenforceability or invalidity of any Obligation of Borrower and shall survive the adjudication in bankruptcy of Borrower, any compromise of any Obligation of Borrower to Bank by any order of any federal bankruptcy court or any other court of competent jurisdiction. In the event of the payment of any Obligation of Borrower owing to Bank and any subsequent order by a federal bankruptcy court or any other court of competent jurisdiction that such payment was fraudulent, preferential, invalid or void for any reason requiring the repayment by Bank of the sum so paid to Bank to any bankruptcy trustee, receiver, or other duly appointed representative of Borrower for the benefit of Borrower or its creditors, Guarantor shall immediately pay to Bank such Obligation. 2. LIMITATION BY GUARANTOR: Upon Guarantor's written request to Bank, this payment guaranty shall terminate as to any future new Obligation of Borrower arising after ninety (90) calendar days subsequent to the date of Bank's written acknowledgment to Guarantor of receipt of the request. Guarantor shall remain liable for the guaranty of payment in accordance with the terms hereof of any Obligation arising on or before ninety (90) calendar days subsequent to the date of Bank's written acknowledgment including any Obligation arising before said date but renewed, extended or modified after said date. 3. RELEASE OF GUARANTOR: Without affecting the liability of any of the undersigned not released, Bank may, without notice to the undersigned, release and discharge from liability to it any of the undersigned if there be more than one, or any other guarantor of, or surety for, the payment of any Obligation of Borrower to Bank. 4. WAIVER OF NOTICE: Guarantor hereby waives notice of any change in the Obligation, including without limitation renewals, extensions or modifications of any Obligation of Borrower and hereby waives presentment, demand, protest, notice of non-payment and notice of dishonor. No delay on the part of Bank in exercising its rights hereunder shall operate as a waiver of guaranty by Guarantor or operate as a release of Guarantor's obligations hereunder. Guarantor agrees that Bank may accept, surrender, or exchange collateral or security, if any, without notice to Guarantor. Guarantor consents to any impairment Page 7.3-1 of collateral, including without limitation release of the collateral to a third party or failure to perfect any security interest. 5. WAIVER OF IMPAIRMENT OF COLLATERAL: No Guarantor shall be released or discharged, either in whole or in part, by Bank's failure or delay to perfect or continue the perfection of any security interest in any property which secures the obligations of the Borrower or any of the Guarantors to Bank, or to protect the property covered by such security interest. 6. SURETYSHIP DEFENSES: Each Guarantor hereby waives all suretyship defenses, including but not limited to, all defenses set forth in Section 3-605 of the Uniform Commercial Code, as revised in 1990 (the "UCC") Such waiver is entered to the full extent permitted by Section 3-605 (i) of the UCC. 7. MISCELLANEOUS PROVISIONS: a) All rights of Bank shall inure to the benefit of its successors and assigns and all obligations of' Guarantor shall bind the heirs, executors, administrators, successors and assigns of Guarantor, and if there be more than one Guarantor, their obligations shall be joint and several. b) Guarantor shall promptly notify Bank in writing of any change in mailing address. c) Guarantor agrees that expenses and reasonable attorney fees incurred by Bank as the result of Guarantor's breach of any of the terms and conditions of this Unlimited Payment Guaranty shall be paid by Guarantor to Bank. d) Within 90 days after the end of each calendar year and from time to time, as reasonably requested by Bank, Guarantor agrees to deliver to Bank updated financial statements of Guarantor in form and substance reasonably satisfactory to Bank. e) This Guaranty contains the entire agreement of the parties and no oral agreement whatsoever, whether made contemporaneously herewith or hereafter, shall amend, modify or otherwise affect the terms of this Guaranty unless in writing and signed by the Bank. f) This Unlimited Payment Guaranty shall be construed in accordance with the laws of the State of Ohio. Any provision hereof which may prove unenforceable shall not affect the enforceability of the remainder of the provisions hereof. g) Guarantor hereby irrevocably waives all legal and equitable rights to recover from the Borrower any sums paid by the Guarantor under the terms of this Guaranty, including without limitation all rights of subrogation and all other rights that would result in Guarantor being deemed a creditor of Borrower under the federal Bankruptcy Code or any other law. h) Each Guarantor agrees that the state and federal courts in the county and state where the Bank's principal place of business is located or any other Court in which Bank initiates proceedings will have exclusive jurisdiction over all matters arising out of this Guaranty. i) EACH GUARANTOR AND BANK WAIVE, THE RIGHT TO TRIAL BY JURY FOR ANY MATTERS ARISING IN CONNECTION WITH THIS GUARANTY OR THE, TRANSACTIONS RELATED THERETO. j) Each and every Guarantor hereunder authorizes any attorney of record to appear for them in any court of record in the State of Ohio, after the Obligation becomes due and payable, whether by its terms or upon default, waive the issuance and service of process, and release all errors, and confess a judgment against them in favor of the Bank or any holder of the Obligation, for the principal amount of the Obligation plus interest as provided for; together with court costs and attorney's fees. Stay of execution and all exemptions are hereby waived. Each Guarantor also agrees that the attorney acting for Guarantor as set forth in this paragraph may be compensated by Bank for such services, and Guarantor waives any conflict of interest caused by such representation and compensation arrangement. If the Obligation is referred to an attorney for collection and the payment is obtained without the entry of a judgment, the Guarantor shall pay to the Bank or holder of the Obligation its attorney's fees. This warrant of attorney to confess judgement shall be construed under the laws of the state of Ohio. Page 7.3-2 WARNING: BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKE, N AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WIT THE AGREEMENT, OR ANY OTHER CAUSE. Accepted by: RICHARD M. OSBORNE , Individually FIFTH THIRD BANK, NORTHEASTERN 0HIO /s/ Richard M. Osborne ---------------------- By: /s/ David T. Merkel Guarantor(s) ------------------- David T. Merkel Vice President ADDRESS OF GUARANTOR(S) Page 7.3-3 EX-7.4 5 EXHIBIT 7.4 Exhibit 7.4 PLEDGE AGREEMENT ---------------- This PLEDGE AGREEMENT ("Agreement") is made this 24 day of April, 2000 by and between FIFTH THIRD BANK, NORTHEASTERN OHIO, an Ohio banking corporation ("Pledgee") and RICHARD M. OSBORNE TRUST U/A DATED JANUARY 13, 1995 (the "Pledgor"), Richard M. Osborne, Trustee. W I T N E S S E T H : WHEREAS, Pledgee has agreed to extend credit to Pledgor by virtue of a Draw Note, dated April 24, 2000, in the principal amount of $3,000,000, executed by Pledgor and made payable to Pledgee (the "Note"); WHEREAS, Richard M. Osborne (the "Guarantor") has executed and delivered to Pledgee an Unlimited Payment Guaranty, dated April 24, 2000 (the "Guaranty"), guarantying the indebtedness of Pledgor owed to Pledgee; WHEREAS, the Pledgor has agreed to secure the repayment of all liabilities, obligations and indebtedness of the Pledgor as evidenced by the Note and the Guaranty, by pledging to Pledgee as collateral for the Note and Guaranty, the Pledgor's interest in the cash and securities held in the Account as described below and maintained with Fifth Third Securities, Inc. (the "Broker"); NOW THEREFORE, in consideration of the foregoing premises, Pledgor and Pledgee agree as follows: 1. DEFINITIONS. "Obligation(s)" means all loans, advances, indebtedness, liabilities and obligations of Pledgor and Guarantor owed to each of Pledgee and the affiliates of Fifth Third Bancorp of every kind and description whether now existing or hereafter arising including without limitation, those owed by Pledgor or Guarantor to others and acquired by Pledgee or any affiliate of Fifth Third Bancorp, by purchase, assignment or otherwise, and whether direct or indirect, primary or as guarantor or surety, absolute or contingent, liquidated or unliquidated, matured or unmatured, whether or not secured by additional collateral, and including without limitation all liabilities, obligations and indebtedness arising under this Agreement, the Note, the Guaranty and the other loan documents, all obligations to perform or forbear from performing acts, all amounts represented by letters of credit now or hereafter issued by Pledgee for the benefit of or at the request of Pledgor or Guarantor, and all expenses and attorneys' fees incurred by Pledgee and any affiliate of Fifth Third Bancorp under this Agreement or any other document or instrument related to any of the foregoing. 2. PLEDGE. Pledgor pledges, mortgages, assigns, transfers, delivers, deposits, sets over and confirms as a first priority security interest to Pledgee and its successors and assigns all of Pledgor's right, title and interest in and to the Securities, Investment Properties and Financial Assets listed on Exhibit A attached hereto, as may be amended from time to time, and held in Account No. _________________ (the "Account") maintained by Broker, and all income, dividends and other distributions thereon and the proceeds thereof (collectively, the "Interest"), as collateral security for payment and performance by the Pledgor and Guarantor of the Obligations. Upon acquisition of any such additional Interest, Pledgor agrees to deliver to Pledgee, all documents evidencing the Interest and any additional documentation requested by Pledgee to perfect and protect Pledgee's interest therein. As used herein, "Securities", "Investment Properties" and "Financial Assets" shall have the meanings attributed thereto in the current version of the Uniform Commercial Code as adopted in the State of Pledgee's principal place of business. 3. MINIMUM FAIR MARKET VALUE. The Pledgor hereby agrees that the fair market value of the Interest on the date hereof is and at all times during the term of the Note, will be at least $6,000,000 (the "Minimum Value"). If at any time the fair market value of the Interest falls below the Minimum Value, Pledgor agrees to remit Page 7.4-1 to Pledgee cash, in an amount, or readily marketable securities, acceptable to Pledgee, of a value necessary to bring the fair market value of the Interest up to the Minimum Value. 4. REPRESENTATIONS AND WARRANTIES. Pledgor represents and warrants to Pledgee that: (a) Pledgor is the sole holder of record and sole beneficial owner of the Interest, free and clear of any security interest, pledge, or other lien or encumbrance (collectively, "Lien"); (b) Pledgor has the right and requisite authority to pledge, mortgage, assign, transfer, deliver, deposit, set over and confirm the Interest to Pledgee as provided herein; and (c) Pledgor has obtained all necessary consents, approvals, authorizations or orders of any person, corporation, partnership, trust, governmental entity, or other entity required for the execution and delivery of this Agreement or the delivery of the Interest to Pledgee as provided herein. The representations and warranties set forth in this Section 4 shall survive the execution and delivery of this Agreement. 5. DISTRIBUTIONS. Pledgor and Pledgee hereby agree as follows: (a) All cash distributions and any and all distributions of other property paid on or with respect to the Interest (collectively, "Distributions") shall be subject to the lien and security interest of this Agreement. (b) Prior to the occurrence of a default or an Event of Default under any of the Obligations and so long as the Interest will continue to meet the requirements of Section 3 hereof, Distributions in the form of cash may be paid to and retained by Pledgor. After the occurrence of a default or an Event of Default under any of the Obligations, all such cash Distributions and all other Distributions will be remain in the Account or will be paid to the Pledgee pursuant to the provisions hereof. (c) In the event that Pledgor receives any Distribution or any cash Distribution in violation of the provisions of Sections 5(a) & (b) Pledgor shall promptly notify Pledgee thereof, will hold such Distribution in trust for the benefit of Pledgee and, if requested by Pledgee, shall immediately deliver such Distribution in the form received by Pledgor. In the event that the Distribution is in the form of a check or other instrument, Pledgor shall provide Pledgee with all necessary endorsements thereon. 6. COVENANTS. Pledgor covenants and agrees that until payment in full of all of the Obligations: (a) Without the prior written consent of Pledgee, Pledgor will not attempt to or further sell, assign, transfer, mortgage, pledge or otherwise further encumber any of Pledgor's right in or to the Interest or any unpaid Distributions or grant a Lien therein to any other party; and (b) Pledgor will, at Pledgor's expense, obtain, execute, acknowledge and deliver all such instruments and take all such action necessary (or as Pledgee may from time to time request) in order to ensure Pledgee shall have and retain the benefits of the first priority lien and security interest in the Interest. Page 7.4-2 7. REMEDIES. (a) Pledgee is hereby authorized and empowered, at its election, to transfer and register in its name or in the name of its nominee the whole or any part of the Interest, to exercise the voting rights with respect thereto, to collect and receive all Distributions made thereon, to sell in one or more sales after 7 days' notice (which notice Pledgor hereby agrees is commercially reasonable) but without any previous notice or advertisement, the whole or any part of the Interest and to otherwise act with respect to the Interest as though Pledgee was the outright owner thereof, Pledgor hereby irrevocably constituting and appointing Pledgee as the proxy and attorney-in-fact of Pledgor; provided, however, the Pledgee shall not have any duty to exercise any such right or to preserve the same and shall not be liable for any failure to do so or for any delay in doing so. Any sale may be either for cash or upon credit or for future delivery at such price as Pledgee may deem fair, and Pledgee may be the purchaser of the whole or any part of the Interest so sold and hold the same thereafter in its own right free from any claim of the Pledgor or any right of redemption. Each sale shall be made to the highest bidder, but Pledgee may reject any bid at such sale which, in its sole discretion, it shall deem inadequate. Demands of performance, except as otherwise herein specifically provided for, notices of sale, advertisements and the presence of property at sale are hereby waived and any sale hereunder may be conducted by an auctioneer or by any officer or agent of Pledgee. (b) If, at the original time or times appointed for the sale of the whole or any part of the Interest, the highest bid, if there be but one sale, shall be inadequate to discharge in full all the Obligations, or if the Interest be offered for sale in lots, if at any of such sales, the highest bid for the lot offered for sale would indicate to Pledgee, in its discretion, the likelihood that the proceeds of the sales of all of the Interest will be insufficient to discharge all the Obligations, the Pledgee may, on one or more occasions, postpone any of said sales by public announcement at the time of sale or the time of previous postponement of sale, and no other notice of such postponement or postponements of sale need be given, any other notice being hereby waived; provided, however, that any sale or sales made after such postponement shall be after 7 days' notice to Pledgor. (c) In the event of any sale(s) hereunder, Pledgee shall, after deducting all costs or expenses of every kind (including, to the full extent permitted by law, attorney's fees and disbursements) for care, safekeeping, collection, sale, delivery or otherwise, apply the residue of the proceeds of the sale(s) to the payment or reduction, either in whole or in part, of the Obligations returning the surplus, if any, to Pledgor. (d) Pledgor agrees that he will not at any time plead, claim or take the benefit of any appraisal, valuation, stay, extension, moratorium or redemption law now or hereafter in force in order to prevent or delay the enforcement of this Agreement, or the absolute sale or transfer to Pledgee of the whole or any part of the Interest or the possession thereof by any purchaser at any sale hereunder, and Pledgor waives the benefit of all such laws. Pledgor agreed that he will not interfere with any right, power and remedy of Pledgee provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by Pledgee of any one or more of such rights, powers or remedies. No failure or delay on the part of Pledgee to exercise any such rights, power or remedy and no notice or demand which may be given to or made upon Pledgor by Pledgee with respect to any such remedies shall operate as a waiver hereof, or limit or impair Pledgee's right to take any action or to exercise any power or remedy hereunder, without notice or demand, or prejudice its rights as against Pledgor in any respect. 8. WAIVER. No delay on Pledgee's part in exercising any power of sale, lien, option or other right hereunder, and no notice or demand which may be given to or made upon Pledgor by Pledgee with respect to any power of sale, lien, option or other right hereunder, shall constitute a waiver thereof, or limit or impair Pledgee's right to take any action or to exercise any power of sale, lien option, or any other right hereunder without notice or Page 7.4-3 demand, or prejudice Pledgee's rights as against Pledgor in any respect. In addition, no action taken by Pledgee hereunder shall in any way impair or limit Pledgee's right to exercise any or all rights or remedies Pledgee may otherwise have against Pledgor with respect to any Obligations. This Agreement shall not, in any manner, be construed as a compromise of any Obligations except to the extent that a Distribution is applied to reduce the Obligations and then only to the extent and in the amount of such Distribution actually received by Pledgee. This is an absolute, unconditional and continuing pledge and will remain in full force and effect until the Obligations have been fully paid to the Pledgee. This pledge will extend to and cover renewals of the Obligations and any number of extensions of time for payment thereof and will not be affected by any surrender, exchange, acceptance or release by the Pledgee of any other pledge or any security held by it for any of the Obligations. Notice of acceptance of this pledge, notice of extensions of credit to the Pledgor from time to time, notice of default, diligence, presentment, protest, demand for payment, notice of demand or protest, and any defense based upon a failure of Pledgee to comply with the notice requirements of the applicable version of Uniform Commercial Code Section 9-504 are hereby waived. Pledgee, at any time and from time to time, without the consent of Pledgor, may change the manner, place or terms of payment of or interest rates on, or change or extend the time of payment of, or renew or alter, any of the Obligations, without impairing or releasing the liabilities of Pledgor hereunder. Pledgee in its sole discretion may determine the reasonableness of the period which may elapse prior to the making of demand for any payment upon Pledgor, and it need not pursue any of its remedies against any other party before having recourse against Pledgor under this pledge. 9. INDEMNIFICATION. Pledgor agrees to indemnify and hold Pledgee harmless from and against any taxes, liabilities, claims and damages, including reasonable attorney's fees and disbursements, and other expenses incurred or arising by reason of the taking or the failure to take action by Pledgee, in good faith, under this Agreement and in respect of any transactions effected in connection with this Agreement, including without limitation, any taxes payable in connection with the delivery or registration of the Interest as provided herein. The obligations of Pledgor under this Section shall survive the termination of this Agreement. 10. CANCELLATION. Upon payment in full and termination of the Obligations, Pledgee shall cancel its rights in the Interest under this Agreement and agrees to execute any documentation necessary to that end. No such cancellation shall be effective unless in writing. 11. MISCELLANEOUS. This Agreement shall be binding upon Pledgor and Pledgor's heirs, administrators, successors and assigns, and shall inure to the benefit of, and be enforceable by, the Pledgee and its successors, transferees and assigns. None of the terms or provisions of this Agreement may be waived, altered, modified or amended except in writing duly signed for and on behalf of the Pledgee and the Pledgor. 12. NOTICES. Any notices under or pursuant to this Agreement shall be deemed duly sent when delivered by hand or when mailed by registered or certified mail, return receipt requested, addressed as follows: (a) If to Pledgee, at: Fifth Third Bank 1404 East Ninth Street Cleveland, Ohio 44114 Attention: David T. Merkel (b) If to Pledgor, at: Page 7.4-4 c/o Richard M. Osborne, Trustee 8500 Station Square, Suite 113 Mentor, Ohio 44060 Any party may change such address by sending notice of the change to the other parties. 13. COUNTERPARTS. This Agreement may be executed in any number of counterparts, which shall, collectively and separately, constitute one agreement. 14. GOVERNING LAW; JURISDICTION. All acts and transactions hereunder and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the domestic laws of the state of Ohio. Pledgor agrees that the state and federal courts in Cuyahoga County, Ohio or any other court in which Pledgee initiates proceedings have exclusive jurisdiction over all matters arising out of this Agreement, and that service of process in any such proceeding shall be effective if mailed to Pledgor at his address described in the Notices section of this Agreement. PLEDGEE AND PLEDGOR HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. Page 7.4-5 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the 24th day of April, 2000. PLEDGOR: RICHARD M. OSBORNE TRUST U/A DATED JANUARY 13, 1995 By: /s/ Richard M. Osborne, Trustee -------------------------------------------- Richard M. Osborne, Trustee PLEDGEE: FIFTH THIRD BANK, NORTHEASTERN OHIO By: /s/ David T. Merkel -------------------------------------------- Its: Vice President -------------------------------------------- Page 7.4-6 EXHIBIT A LIST OF SECURITIES HELD IN THE ACCOUNT -------------------------------------- 121,000 SHARES OF COMMON STOCK OF Lorain National Bank 501,306 shares of common stock of Pacific Gateway Properties, Inc. Page 7.4-7 EX-7.5 6 EXHIBIT 7.5 Exhibit 7.5 AGREEMENT OF JOINT FILING Pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned persons hereby agree to file with the Securities and Exchange Commission, the Statement on Schedule 13D (the "Statement") to which this Agreement is attached as an exhibit, and agree that such Statement, as so filed, is filed on behalf of each of them. This Agreement may be executed in counterparts, each of which when so executed shall be deemed to be an original, and all of which together shall be deemed to constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned have executed this Agreement. Dated: May 1, 2000 TURKEY VULTURE FUND XIII, LTD. By: /s/ RICHARD M. OSBORNE ---------------------------------- Richard M. Osborne, Manager GLB BANCORP, INC. By: /s/ RICHARD T. FLENNER, JR. ---------------------------------- Richard T. Flenner, Jr., President RICHARD M. OSBORNE TRUST By: /s/ RICHARD M. OSBORNE ---------------------------------- Richard M. Osborne, Trustee Page 7.5-1 -----END PRIVACY-ENHANCED MESSAGE-----