Lease Agreement Dated August 5, 2005 With Mcmanus Development, LLC

Exhibit 10.32

STATE OF NORTH CAROLINA

LEASE AGREEMENT

COUNTY OF HENDERSON


THIS LEASE AGREEMENT is made and entered into this 5 day of August 200_, by and between McMANUS DEVELOPMENT LLC, hereinafter referred to as LESSOR, and MOUNTAIN 1ST BANK AND TRUST, hereinafter referred to as LESSEE.

In consideration of the mutual covenants herein, the parties agree as follows: 1. PREMISES. Lessor does hereby lease to Lessee, and Lessee does accept as tenant those premises located at 3270 Hendersonville Road, Fletcher, Henderson County, North Carolina, said premises being particularly described on Exhibit A attached hereto and incorporated herein.

2. TERM. The term of this lease shall be for 10 years commencing upon the later of occupancy of the facility or October, 2005, and extending to September 30, 2015. Should the Premises be completed and occupied prior to the commencement date, the Lessee shall pay the Lessor the sum of One Hundred Six and 67/100 Dollars ($106.67) for each day prior to October 1, 2005 that the building is occupied.

3. RENT. Lessee shall pay to Lessor rent in the amount of Three Thousand Two Hundred and no/100 Dollars ($3,200.00) per month which rental amount shall be due and payable on or before the 10th day of each monthly period during the term of this Lease Agreement. Lessee shall pay to Lessor, as additional rent, an amount equal to five percent (5%) of one (1) month' s rent as a late penalty should Lessor not receive the monthly rental payment on or before such 30th day.

4. RENEWAL OPTION. Provided and upon the condition that Lessee shall not then be in default under the terms of this Lease beyond any applicable grace or cure period, Lessee shall have the right to renew this Lease for a total of three (3) additional terms of five (5) years each. Lessee shall give notice in writing to Lessor by certified mail at least thirty (30) days prior to the end of the original term or the current five year renewal term of its intention not to exercise its option to renew this Lease. Otherwise, the Lease shall automatically renew for the next term available. The terms of the lease shall remain in effect during each successive five year renewal term except that monthly rental amounts may be adjusted by the aggregate increase in the Chained Consumer Price Index for all Urban Consumers Index (C-CPI-U as published by the U.S. Bureau of Labor Statistics) experienced since the beginning of the immediately preceding renewal term, or in the case of the original term, since the date of the occupancy of the subject property. After the passage of 5 years, in any event, however, increases in the monthly rental amount for the initial renewal term shall not exceed 118% of the monthly rental amount of the 5 year original term, and increases in monthly rental amounts of the subsequent renewal terms shall not exceed 115% of the immediately preceding renewal term. The parties understand and agree that this paragraph grants Lessee three (3) separate options to renew this Lease Agreement for successive three (3) renewal terms provided the requisite notice is


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given. The parties understand and agree that this paragraph does not grant Lessee one option to renew this Lease Agreement for one twenty-five (25) year period.

5. ALTERATIONS. The Lessor shall construct the subject Premises in accordance with plans and specifications rendered by the Lessee, and the Lessee agrees to participate with the Lessor during the construction period to assure the subject premises will be acceptable for occupancy upon completion of construction. With the prior written consent of Lessor, the Lessee may make alterations, additions, or improvements in and to the Premises during the term of the Lease Agreement. All such alterations, additions, and improvements shall be performed and constructed in a workmanlike manner and shall not weaken or impair the structural strength or lessen the value of, the building on th ...