UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1998
OR
Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File Number 33-77324
REPUBLIC BANCORP, INC.
(Exact name of registrant as specified in its charter)
Kentucky 61-086205
(State of other jurisdiction or (I.R.S. Employer Identification No.)
incorporation or organization)
601 West Market Street, Louisville, Kentucky 40202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (502) 584-3600
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X Yes No
The number of shares outstanding of each of the issuer's classes of common stock
as of the latest practicable date: 6,270,531 shares of Class A Common Stock and
1,209,037 shares of Class B Common Stock as of May 13, 1998.
The Exhibit index is on page 28. This filing contains 90 pages (including this
facing sheet).
<PAGE>
REPUBLIC BANCORP, INC.
FORM 10-Q
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements 3-14
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 15-24
Item 3. Quantitative and Qualitative Disclosures about Market Risk 24
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 25
Item 4. Submission of Matters to a Vote of Securities Holders 25
Item 6. Exhibits and Reports on Form 8-K 26
Signatures 27
<PAGE>
PART I
ITEM 1
REPUBLIC BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (dollars in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
<S> <C> <C>
ASSETS:
Cash and cash equivalents:
Cash and due from banks $ 21,354 $ 24,546
Federal funds sold and securities purchased under
agreements to resell 29,675
------------- --------------
Total cash and cash equivalents 51,029 24,546
Securities available for sale 134,364 93,826
Securities to be held to maturity 80,103 98,546
Loans, less allowance for loan losses of
$8,234 (1998) and $8,176 (1997) 783,505 794,939
Mortgage loans held for sale 26,100 9,970
Federal Home Loan Bank stock 10,716 8,124
Accrued interest receivable 9,033 8,803
Premises and equipment, net 13,059 12,774
Other assets 4,667 3,422
------------- --------------
TOTAL $ 1,112,576 $ 1,054,950
============= ==============
LIABILITIES:
Deposits:
Non-interest bearing $ 75,900 $ 65,913
Interest bearing 652,169 665,685
Securities sold under agreements to repurchase and
other short-term borrowings 110,477 111,137
Other borrowed funds 179,164 124,405
Accrued interest payable 10,349 6,233
Guaranteed preferred beneficial interests in
Company's subordinated debentures 6,452 6,452
Other liabilities 4,631 6,739
------------- --------------
Total liabilities 1,039,142 986,564
------------- --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Class A and Class B Common stock, no par value 3,615 3,613
Additional paid-in capital 10,890 10,833
Retained earnings 59,113 53,994
Net unrealized depreciation on securities available
for sale, net of tax (184) (54)
------------- --------------
Total stockholders' equity 73,434 68,386
------------- --------------
TOTAL $ 1,112,576 $ 1,054,950
============= ==============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
REPUBLIC BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31,1998 AND 1997(in thousands,except per share data)
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
INTEREST INCOME:
Loans, including fees $ 19,123 $ 18,815
Securities available for sale 1,725 1,463
Securities to be held to maturity:
Taxable 1,475 1,978
Non-taxable 28 31
FHLB dividends 188 110
Other 246 213
------------ -----------
Total interest income 22,785 22,610
----------- -----------
INTEREST EXPENSE:
Deposits 8,532 9,664
Short-term borrowings 1,216 1,242
Long-term debt 2,667 1,697
----------- -----------
Total interest expense 12,415 12,603
----------- -----------
NET INTEREST INCOME 10,370 10,007
PROVISION FOR LOAN LOSSES 643 1,298
----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 9,727 8,709
----------- -----------
NON-INTEREST INCOME:
Service charges on deposit accounts 753 777
Other service charges and fees 397 310
Bank card services 409
Net gain on available for sale securities 324
Net gain on sale of loans 1,009 281
Net gain on sale of deposits 4,116
Loan servicing income 166 189
Other 147 130
----------- ------------
Total non-interest income 6,912 2,096
----------- -----------
NON-INTEREST EXPENSE:
Salaries and employee benefits 4,076 3,688
Occupancy and equipment 1,862 2,006
Communication and transportation 426 436
Marketing and development 305 363
FDIC deposit insurance 84 53
Supplies 260 242
Other 1,061 1,207
----------- -----------
Total non-interest expense 8,074 7,995
----------- -----------
INCOME BEFORE INCOME TAXES 8,565 2,810
INCOME TAXES 3,041 930
------------- -----------
NET INCOME $ 5,524 $ 1,880
=========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
REPUBLIC BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (CONT.)
THREE MONTHS ENDED MARCH 31,1998 AND 1997(in thousands, except per share data)
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Other comprehensive income (loss), net of tax:
Change in unrealized gain (loss) on securities $ (130) $ (664)
------------- ------------
Comprehensive income $ 5,394 $ 1,216
============= ============
EARNINGS PER SHARE
Class A $ .74 $ .25
Class B $ .73 $ .24
EARNINGS PER SHARE ASSUMING DILUTION
Class A $ .71 $ .24
Class B $ .70 $ .24
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
REPUBLIC BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
(in thousands, except for per share data)
<TABLE>
<CAPTION>
Net Unrealized
Depreciation
Common Stock Additional on Available Total
Class A Class B Paid-In Retained For Sale Stockholders'
Shares Shares Amount Capital Earnings Securities Equity
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1998 6,266 1,209 $ 3,613 $ 10,833 $ 53,994 $ (54) $ 68,386
Exercised options 5 2 57 59
Dividend Declared
Common: Class A ($.055 per share) (345) (345)
Class B ($.05 per share) (60) (60)
Net changes in unrealized depreciation
on securities available for sale (130) (130)
Net Income 5,524 5,524
------- ------- ------- -------- -------- -------- -------
BALANCE, March 31, 1998 6,271 1,209 $ 3,615 $ 10,890 $ 59,113 $ (184) $ 73,434
======= ======= ======= ======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
REPUBLIC BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (in thousands)
<TABLE>
<CAPTION>
1998 1997
OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 5,524 $ 1,880
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation and amortization of premises and equipment 838 1,047
Amortization and accretion of securities 57 135
FHLB stock dividends (188) (97)
Provision for loan losses 643 1,298
Net gain on sale of securities (324)
Net gain on sale of loans (1,009) (281)
Net gain on sale of deposits (4,116)
Proceeds from sale of loans 58,043 24,235
Origination of mortgage loans held for sale (73,164) (22,415)
Changes in assets and liabilities:
Accrued interest receivable (230) 532
Other assets (595) (150)
Accrued interest payable 4,116 1,779
Other liabilities (2,108) 894
------------ -----------
Net cash provided by (used in) operating activities (12,513) 8,857
------------ -----------
INVESTING ACTIVITIES:
Purchases of securities available for sale (81,269)
Purchases of securities to be held to maturity (11,089)
Purchases of Federal Home Loan Bank stock (2,404) (1,000)
Proceeds from maturities of securities to be held to maturity 18,522 53,305
Proceeds from sales of securities available for sale 40,722 9,124
Net (increase) decrease in loans 10,208 (26,470)
Purchases of premises and equipment (2,001) (1,028)
Proceeds from sales of premises and equipment 878
----------- -----------
Net cash provided by (used in) investing activities (15,344) 22,842
----------- -----------
FINANCING ACTIVITIES:
Net increase in deposits 62,151 29,301
Sale of deposits (61,564)
Net decrease in securities sold under agreement to
repurchase and other short-term borrowings (660) (94,183)
Payments on other borrowings (35,241) (42,228)
Proceeds from other borrowings 90,000 47,000
Proceeds from issuance of guaranteed preferred beneficial
interests in Company's subordinated debentures 6,452
Proceeds from common stock options exercised 59
Cash dividends paid (405) (497)
------------ ------------
Net cash provided by (used in) financing activities 54,340 (54,155)
----------- ------------
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 26,483 (22,456)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 24,546 56,671
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 51,029 $ 34,215
=========== ===========
</TABLE>
<PAGE>
REPUBLIC BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT.)
THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (in thousands)
<TABLE>
<CAPTION>
1998 1997
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
<S> <C> <C>
Interest $ 8,299 $ 13,135
=========== ===========
Income taxes $ 2,581 $
============= ===========
Transfers from loans to real estate acquired in
settlement of loans $ 583 $ 61
=========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
REPUBLIC BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1. BASIS OF PRESENTATION (AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES)
Basis of Presentation - The consolidated financial statements include the
accounts of Republic Bancorp, Inc. and its wholly-owned subsidiaries,
collectively "Republic". Republic is a unitary bank holding company whose
primary subsidiary is Republic Bank & Trust Company (Bank). All significant
intercompany balances and transactions have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month period ending March 31,
1998 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto included in Republic's annual report
on Form 10-K for the year ended December 31, 1997.
New Accounting Pronouncements - In June 1997, the FASB issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information". This
standard changes the way public companies report information about operating
segments in annual financial statements and requires that those companies report
selected information about operating segments in interim financial reports. It
also establishes standards for related disclosures about products and services,
geographic areas, and major customers. Operating segments are parts of a company
for which separate information is available which is evaluated by the chief
operating decision maker in deciding how to allocate resources and in evaluating
performance. Required disclosures for operating segments include total segment
revenues, total segment profit or loss, and total segment assets. The standard
also requires disclosures regarding revenues derived from products and services
(or similar groups of products or services), countries in which the company
derives revenue or holds assets, and about major customers, regardless of
whether this information is used in operating decision making. Republic is
required to adopt the disclosure requirements in its 1998 annual report, and in
interim periods in 1999. The 1999 interim period disclosures are required to
include comparable 1998 information.
Comprehensive Income - Republic adopted Statement of Financial Accounting
Standard No. 130, "Reporting Comprehensive Income", effective for the interim
period ended March 31, 1998. This Standard requires reporting of comprehensive
income, defined as changes in equity other than those resulting from investments
by or distributions to stockholders. Net income, plus or minus "other
comprehensive income" results in comprehensive income. The only item of other
comprehensive income applicable to Republic is the change in unrealized gain or
loss on securities available for sale. Comprehensive income is reported on the
statement of income. The period ended March 31, 1997 was restated to meet the
current reporting format.
Earnings Per Share - Earnings per share and earnings per share assuming dilution
are computed under a new accounting standard effective in the quarter ended
December 31, 1997. All prior amounts have been restated to be comparable.
Earnings per share is based on income less preferred stock dividends (and, in
the case of Class B Common stock, less the dividend preference on Class A Common
stock) divided by the weighted average number of shares outstanding during the
period. Earnings per share assuming dilution shows the effect of additional
common shares issuable under stock options, convertible preferred stock and
guaranteed preferred beneficial interests in Republic's subordinated debentures.
All per share amounts have been restated to reflect the stock splits occurring
during the periods presented.
<PAGE>
Reclassifications - Certain amounts have been reclassified in the 1997 financial
statements to conform with the current period classifications. The
reclassifications have no effect on net income or stockholders' equity as
previously reported.
2. CASH & CASH EQUIVALENTS
During 1998, the Bank entered into agreements to purchase securities under
agreements to resell ("reverse repurchase agreements"). At March 31, 1998 these
reverse repurchase agreements totaled $20.0 million. The securities purchased
under these reverse repurchase agreements are government agency securities and
pledged against the Bank's customer repurchase accounts. The fair value of the
pledged securities as of March 31, 1998 was approximately $19.95. The securities
purchased under these agreements are overnight in term and maintained by a third
party safekeeping agent for the benefit of the Bank. The average balance of
securities purchased under reverse repurchase agreements during the first
quarter of 1998 was $7.6 million with a maximum balance outstanding at any month
end of $20.0 million.
<TABLE>
<CAPTION>
3. SECURITIES
Available For Sale Securities:
March 31, 1998
(in thousands)
Gross Gross
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
<S> <C> <C> <C> <C>
U.S. Treasury Securities and U.S.
Government Agencies $ 92,628 $ $ (128) $ 92,500
Mortgage-Backed Securities 42,015 (151) 41,864
----------- ------- ------- ----------
$ 134,643 $ $ (279) $ 134,364
=========== ======= ======== ==========
</TABLE>
<TABLE>
<CAPTION>
Securities To Be Held To Maturity:
March 31, 1998
(in thousands)
Gross Gross
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Fair Value
<S> <C> <C> <C> <C>
U.S. Treasury Securities and U.S.
Government Agencies $ 75,298 $ 170 $ (247) $ 75,221
Obligations of state and political
subdivisions 4,244 194 4,438
Mortgage-backed securities 561 (29) 532
----------- --------- ----------- -----------
Total securities to be held to maturity $ 80,103 $ 364 $ (276) $ 80,191
=========== ========= =========== ===========
</TABLE>
Securities having an amortized cost of $210.0 million and a fair value of $209.7
million at March 31, 1998, were pledged to secure public deposits, securities
sold under agreements to repurchase and for other purposes, as required or
permitted by law. Gross gains on available for sale securities were $324,000 for
quarter ended March 31, 1998.
<PAGE>
<TABLE>
<CAPTION>
4. LOANS
March 31, 1998 December 31, 1997
-------------- -----------------
(in thousands)
<S> <C> <C>
Residential real estate $ 480,820 $ 480,874
Commercial real estate 74,462 76,306
Real estate construction 39,539 37,940
Commercial 22,042 21,552
Consumer 74,016 81,967
Home equity 100,154 102,512
Other 2,657 4,094
----------- -----------
Total loans 793,690 805,245
Less:
Unearned interest income and unamortized
loan fees 1,951 2,130
Allowance for loan losses 8,234 8,176
----------- -----------
Loans, net $ 783,505 $ 794,939
=========== ===========
</TABLE>
The following table sets forth the changes in the allowance for loan losses:
<TABLE>
<CAPTION>
Three months ended March 31,
1998 1997
(in thousands)
<S> <C> <C>
Balance, beginning of period $ 8,176 $ 6,241
Provision charged to income 643 1,298
Charge-offs (702) (1,435)
Recoveries 117 177
---------- ---------
Balance, end of period $ 8,234 $ 6,281
========== =========
</TABLE>
Information about Republic's investment in impaired loans is as follows:
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
-------------- -----------------
(in thousands)
<S> <C> <C>
Gross impaired loans $ 1,640 $ 1,640
Less: Related allowance for loan losses 240 240
--------- ---------
Net impaired loans with related allowances 1,400 1,400
Impaired loans with no related allowances
Total $ 1,400 $ 1,400
========= ========
Average impaired loans outstanding $ 1,640 $ 1,639
========= ========
</TABLE>
<PAGE>
5. INTEREST BEARING DEPOSITS
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
-------------- -----------------
(in thousands)
<S> <C> <C>
Demand (NOW, Super NOW and Money Market): $ 136,710 $ 118,870
Savings 11,178 12,165
Money market certificates of deposit 36,897 41,307
Individual retirement accounts 22,555 30,167
Certificates of deposit, $100,000 and over 65,116 63,045
Other certificates of deposit 332,016 352,478
Brokered deposits 47,697 47,653
----------- -----------
Total interest bearing deposits $ 652,169 $ 665,685
=========== ===========
</TABLE>
6. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND OTHER SHORT-TERM
BORROWINGS
Short-term borrowings consist of short term excess funds from correspondent
banks, repurchase agreements and overnight liabilities to deposit customers
arising from a cash management program offered by Republic. While effectively
deposit equivalents, such arrangements are in the form of repurchase agreements.
The repurchase agreements are treated as financings; accordingly, the securities
involved with the agreements are recorded as assets and are held by a
safekeeping agent and the obligations to repurchase the securities are reflected
as liabilities.
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
(dollars in thousands)
<S> <C> <C>
Average outstanding balance $ 112,625 $ 100,291
Average interest rate 4.32% 4.57%
Maximum outstanding at month end $ 130,754 $ 111,137
End of period $ 110,477 $ 111,137
</TABLE>
7. OTHER BORROWED FUNDS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
(in thousands)
<S> <C> <C>
Federal Home Loan Bank convertible fixed rate
advance (see comment below) $ 30,000
Federal Home Loan Bank variable interest rate advances,
with weighted average interest rate of 5.62% at March 31, 1998,
due through 1999 81,000 $ 116,000
Federal Home Loan Bank fixed interest rate advances, with weighted
average interest rate of 5.84% at March 31, 1998, due through 2003 68,164 8,405
------------ ------------
$ 179,164 $ 124,405
============ ============
</TABLE>
<PAGE>
During the first quarter of 1998, Republic entered into a 5 year convertible
fixed rate advance with the Federal Home Loan Bank (FHLB) for $30 million. The
advance is fixed for 1 year at 5.11%. At the end of the first year, the FHLB has
the right to convert the fixed rate advance on a quarterly basis to a variable
rate advance tied to the 3 month LIBOR index. The advance can be prepaid at any
quarterly date without penalty, but may not be prepaid at any time during the
fixed rate term.
Republic has established a line of credit in the amount of $6.5 million and has
pledged 51% of the Bank's outstanding common stock as collateral for this line
of credit.
The Federal Home Loan Bank advances are collateralized by a blanket pledge of
eligible real estate loans with an unpaid principal balance of greater than 150%
of the outstanding advances. Republic has sufficient collateral to borrow an
additional $116 million from the Federal Home Loan Bank. Republic also has
unsecured lines of credit totaling $16.7 million and secured lines of credit of
$104.7 available through various financial institutions.
During the first quarter of 1998, Republic entered into a 5 year convertible
fixed rate advance with the Federal Home Loan Bank (FHLB) for $30 million. The
advance is fixed for 1 year at 5.11%. At the end of the first year the FHLB has
the right to convert the fixed rate advance on a quarterly basis to a variable
rate advance based on the 3 month LIBOR index. The advance can be prepaid at any
quarterly repricing date without penalty, but may not be prepaid any time during
the fixed rate term.
Aggregate future principal payments on borrowed funds as of March 31, 1998 are
as follows:
<TABLE>
<CAPTION>
Year (in thousands)
<S> <C>
1998 $ 2,827
1999 85,044
2000 1,103
2001 190
2002
2003 90,000
------------
Total $ 179,164
============
</TABLE>
8. GUARANTEED PREFERRED BENEFICIAL INTERESTS
In February 1997, Republic Capital Trust (RCT), a trust subsidiary of Republic
Bancorp, Inc., completed the private placement of 64,520 shares of cumulative
trust preferred securities (Preferred Securities) with a liquidation preference
of $100 per security. Each security can be converted into five shares of Class A
Common Stock at the option of the holder. The proceeds of the offering were
loaned to Republic Bancorp, Inc. in exchange for subordinated debentures
representing the sole assets of the trust with terms that are similar to the
Preferred Securities. Distributions on the securities are payable quarterly at
the annual rate of 8.5% of the liquidation preference and are included in
interest expense in the consolidated financial statements. Republic undertook
the issuance of these securities to enhance its regulatory capital position.
These securities are considered as Tier I capital under current regulatory
guidelines.
The Preferred Securities are subject to mandatory redemption, in whole or in
part, upon repayment of the subordinated debentures at maturity or their earlier
redemption at the liquidation preference. The subordinated debentures are
redeemable prior to the maturity date of April 1, 2027 at the option of Republic
on or after April 1, 2002, or upon the occurrence of specific events, defined
within the trust indenture. Republic has the option to defer distributions on
the subordinated debentures from time to time for a period not to exceed 20
consecutive quarters.
<PAGE>
9. EARNINGS PER SHARE
A reconciliation of the combined Class A and B Common Stock numerators and
denominators of the earnings per share and earnings per share assuming dilution
computations is as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
<S> <C> <C>
Earnings Per Share
Net Income $ 5,524 $ 1,880
Less: Dividends declared on preferred stock (106)
------------ -----------
Net Income available to common shares
outstanding $ 5,524 $ 1,774
============ ==========
Weighted average shares outstanding 7,479 7,222
============ ==========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
Earnings Per Share Assuming Dilution
<S> <C> <C>
Net Income $ 5,524 $ 1,880
Less: Dividends declared on preferred stock (106)
Add: Interest expense, net of tax benefit,
on assumed conversion of guaranteed
preferred beneficial interests in
Republic's subordinated debentures 90
Net Income available to common shareholder
assuming conversion $ 5,614 $ 1,774
============ ============
Weighted average shares outstanding 7,479 7,222
Add dilutive effects of assumed
conversion and exercise:
Convertible guaranteed preferred
beneficial interest in Republic's
subordinated debentures 323
Stock options 147 90
------------ ------------
Weighted average shares and dilutive
potential shares outstanding 7,949 7,312
============ ============
</TABLE>
The difference in earnings per share between the two classes of common
stock result solely from the dividend premium paid to Class A over Class B
Common Stock.
<PAGE>
PART 1
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
GENERAL
Republic, headquartered in Louisville, Kentucky, was incorporated on January 2,
1974. The Bank is a commercial banking and trust corporation organized and
chartered under the laws of the Commonwealth of Kentucky. The Bank is also
headquartered in Louisville, Kentucky and provides banking services through
seventeen banking centers throughout Kentucky. The Bank's activities include the
acceptance of deposits for checking, savings and time deposit accounts, making
secured and unsecured loans, investing in securities and trust services. The
Bank's lending services include the origination of real estate, commercial and
consumer loans. Operating revenues are derived primarily from interest and fees
on domestic real estate, commercial and consumer loans, and from interest on
securities of the United States Government and Agencies, states, and
municipalities. Regulators for Republic include the Federal Deposit Insurance
Corporation (FDIC), Federal Reserve Bank and the Kentucky Department of
Financial Institutions.
DISPOSITION OF ASSETS
During 1997, Republic elected to focus its resources on its North Central and
Central Kentucky markets. Consistent with this new focus, Republic sold its
banking centers in the Western Kentucky cities of Murray, Benton, Paducah, and
Mayfield. The Murray, Benton and Paducah sales were closed in 1997. During the
first quarter of 1998, Republic completed the sale of deposits and fixed assets
at the Mayfield banking center. Republic realized a pre-tax gain of
approximately $4.1 million from the Mayfield banking center sale which was
completed during January, 1998. This sale was comprised of approximately $65.7
million in deposits and certain other fixed assets. Republic retained
substantially all of its Mayfield banking center loan portfolio. The Mayfield
transaction represented the final Western Kentucky banking center sale.
COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 1998 AND DECEMBER 31, 1997
Republic's total assets increased slightly in the first quarter of 1998 from
$1.05 billion at December 31, 1997 to $1.1 billion at March 31, 1998. Overall
loan origination volume has continued to be strong and charge-offs have
continued to moderate. Republic was also able to substantially replace the sold
Mayfield deposits with additional deposit growth from its retail operations.
Cash and cash equivalents. Cash and cash equivalents increased from $24.5
million at December 31, 1997 to $51.0 million at March 31, 1998. This increase
was primarily comprised of funds generated by core retail deposits and other
borrowed funds.
Cash and due from banks decreased $3.2 million, while federal funds sold and
securities purchased under agreements to resell totaled $29.7 million. This
$29.7 million is primarily composed of overnight reverse repurchase agreements
totaling $20.0 million with the remaining balance in overnight fed funds sold.
The overnight reverse repurchase agreements provided the Bank with additional
collateral which can be pledged against short-term borrowings.
Securities available for sale. Securities available for sale increased from
$93.8 million at December 31, 1997 to $134.4 million at March 31, 1998. Republic
elected to invest funds from core retail deposits and maturing securities
previously held to maturity into securities available for sale in order to
provide for more flexibility of administration of the investment portfolio under
changing market conditions.
<PAGE>
Securities to be held to maturity. Securities to be held to maturity decreased
from $98.5 million at December 31, 1997 to $80.1 million at March 31, 1998. The
decrease was due to management's decision to reinvest maturing securities into
securities available for sale. Securities to be held to maturity consists
primarily of U.S. Treasury and U.S. Government Agencies with a range of
maturities, none of which exceed 5.5 years.
Loans. Loans decreased from $794.9 million at December 31, 1997 to $783.5
million at March 31, 1998. The decrease in loans is primarily due to paydowns in
the Bank's unsecured consumer loan portfolio. Consumer loans decreased from
$82.0 million at December 31, 1997 to $74.0 million at March 31, 1998.
Approximately 44.6% of loans in the consumer portfolio are unsecured. The
unsecured consumer portfolio includes the "All Purpose" and "Pre-Approved" loan
programs. Republic's "All Purpose" loans , with total outstandings of $11.9
million at March 31, 1998 and $13.4 million at December 31, 1997, are originated
through Republic's banking centers. "Pre-Approved Loans", with total
outstandings of $21.2 million at March 31, 1998 and $24.9 million at December
31, 1997, were originated through direct mail, targeting customers both in and
outside of Republic's traditional markets. Management plans to continue to allow
the outstanding "All Purpose" and "Pre-Approved" portfolios to reduce in the
near term.
While the residential real estate portfolio remained flat from December 31,
1997, overall loan origination volume remains strong. The majority of Republic's
new fixed rate residential real estate originations are being sold into the
secondary market.
Allowance and Provision for Loan Losses. The allowance for loan losses remained
constant at $8.2 million from December 31, 1997 to March 31, 1998. Republic's
allowance to total loan ratio was 1.04% at March 31, 1998 compared to 1.02% at
December 31, 1997.
The provision for loan losses was $643,000 for the three months ended March 31,
1998, compared to $1.3 million for the three months ended March 31, 1997. Net
charge-offs decreased significantly from first quarter 1997 to first quarter
1998. Republic's unsecured consumer loan portfolio accounted for 85% of total
charge-offs during the first quarter of 1998 and 96% for the first quarter of
1997. Management anticipates that charge-offs in the unsecured loan portfolio
may continue at recent levels in the near future and believes, based on
information presently available, that it has adequately provided for those
losses at March 31, 1998.
<PAGE>
Table 1 below depicts the allowance activity by loan type for the three months
ended March 31, 1998 and 1997.
Table 1 - Summary of Loan Loss Experience
<TABLE>
<CAPTION>
Three Months Ended March 31,
1998 1997
(in thousands)
<S> <C> <C>
Allowance for loan losses:
Balance-beginning of period $ 8,176 $ 6,241
Charge-offs:
Real Estate (19) (22)
Commercial (38)
Consumer (683) (1,375)
--------- --------
Total (702) (1,435)
--------- --------
Recoveries:
Real Estate 3 18
Commercial 4 0
Consumer 110 159
--------- --------
Total 117 177
--------- --------
Net charge-offs (585) (1,258)
Provision for loan losses 643 1,298
--------- --------
Allowance for loan losses:
Balance-end of period $ 8,234 $ 6,281
========= ========
</TABLE>
Mortgage loans held for sale. Mortgage loans held for sale increased from $10.0
million at December 31, 1997 to $26.1 million at March 31, 1998. Republic's
origination of mortgage loans for sale increased from $41 million during the
quarter ended December 31, 1997 to $73 million for the quarter ended March 31,
1998. The increase in origination loan volume was the result of favorable
long-term interest rates and an increase in mortgage loan origination staff.
Republic anticipates that the volume of secondary market originations will
continue in the near term if long-term interest rates remain at current levels.
Also during the first quarter of 1998, Republic securitized approximately $6
million in 15 year fixed rate originations. These securities were subsequently
sold for a modest gain during April of 1998.
Deposits. Total deposits decreased marginally to $728.0 million at March 31,
1998 compared to $731.6 million at December 31, 1997. The decrease in deposits
was primarily the result of the sale of deposits totaling $65.7 million at the
Mayfield banking center. This decrease was offset by solid growth in retail
deposits. Republic's growth in retail deposits was the result of management's
emphasis on funds management. Republic has hired a cash management specialist as
well as designated a senior officer to focus on deposit growth initiatives
during 1998. Management plans to continue its deposit gathering initiatives
through aggressive pricing strategies and new products.
Other borrowed funds. Other borrowed funds increased from $124.4 million at
December 31, 1997 to $179.1 million at March 31, 1998. During the first quarter
of 1998 Republic borrowed $60 million from the FHLB to fund the sale of deposits
in Mayfield.
<PAGE>
RESULTS OF OPERATIONS
Overview. Republic reported net income of $5.5 million, or $.74 per Class A
common share and $.73 per Class B common share, for the first quarter of 1998.
Earnings for the first quarter 1998 produced an annualized return on average
assets of 1.29% and a return on average stockholders' equity of 19.28%, compared
to returns of .69% and 12.64%, respectively, for the comparable period in 1997.
Excluding the one-time gain on sale of deposits, Republic's net income after tax
for the first quarter of 1998 would have been $2.9 million with a return on
average assets of 1.05% and a return on average stockholders' equity of 15.66%.
Net Interest Income. For the first quarter 1998, net interest income increased a
modest $363,000 over the $10.0 million attained during the first quarter of
1997. During the first quarter 1998, average interest-earning assets were $1.1
billion, an increase of $9.9 million over first quarter 1997. The yield on
average interest-earning assets decreased from 8.63% during first quarter of
1997 to 8.62% during first quarter of 1998. As a result of these small changes,
interest income was effectively unchanged. Total average interest bearing
liabilities decreased from $948 million in the first quarter of 1997 to $935
million in the first quarter of 1998. This reduction in interest bearing
liabilities was primarily due to the sale of deposits from Republic's Western
Kentucky banking centers. The cost of average interest-bearing liabilities
decreased slightly from 5.32% during first quarter of 1997 to 5.31% in the first
quarter of 1998.
Overall, the net interest rate spread remained unchanged at 3.31% from the first
quarter of 1997 compared to the first quarter of 1998. The Bank's net interest
margin increased from 3.82% in first quarter 1997 to 3.92% in first quarter
1998. The increase in the net interest margin occurred because of an increase in
average earning assets over the prior year while average interest bearing
liabilities decreased from the prior year. Also as a result of the gains
realized on the sale of assets during 1997 and the first quarter of 1998,
Republic was able to fund a greater portion of interest earning assets through
equity. The changes in average earning assets and average interest bearing
liabilities led to an overall increase in net interest income and the
corresponding increase in the net interest margin percentage.
Tables 2 and 3 provide detailed information as to average balance, interest
income/expense, and rates by major balance sheet category for the three months
ended March 31, 1998 and 1997.
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Average Balance Sheet Rates for March 31, 1998 and 1997 (dollars in
thousands)
1998 1997
---- ----
Average Average Average Average
ASSETS Balance Interest Rate Balance Interest Rate
------- -------- ---- ------- -------- ----
Earning Assets:
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury and U.S. Government
Agency Securities $157,199 $2,307 5.87% $ 233,754 $ 3,366 5.76%
State and Political Subdivision Securities 4,263 92 8.63% 4,520 96 8.50%
Other Investments 10,166 188 7.40% 6,431 111 6.90%
Mortgage-Backed Securities 46,773 721 6.17% 656 9 5.49%
Federal Funds Sold and Securities Purchased
Under Agreements to Resell 24,783 354 5.71% 15,258 213 5.58%
Total Loans and Fees 814,254 19,123 9.39% 786,882 18,815 9.56%
------- ------ ------- ------
Total Earning Assets 1,057,438 22,785 8.62% 1,047,501 22,610 8.63%
--------- ------ --------- ------
Less: Allowance for Loan Losses (8,221) (6,256)
Non-Earning Assets:
Cash and Due From Banks 21,199 24,299
Bank Premises and Equipment, Net 12,795 17,731
Other Assets 12,410 11,892
------ ------
Total Assets $ 1,095,621 $ 1,095,167
=========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Interest Bearing Liabilities:
Transaction Accounts $ 94,303 $ 762 3.23% $ 136,416 $ 1,175 3.45%
Money Market Accounts 79,333 986 4.97% 39,935 468 4.69%
Individual Retirement Accounts 22,739 339 5.96% 36,430 531 5.83%
Certificates of Deposit and Other
Time Deposits 438,325 6,445 5.88% 511,188 7,490 5.86%
Repurchase Agreements and Other
Borrowings 300,799 3,883 5.16% 223,884 2,939 5.25%
------- ----- ------- -----
Total Interest Bearing Liabilities 935,499 12,415 5.31% 947,853 12,603 5.32%
Non-Interest Bearing Liabilities:
Non-Interest Bearing Deposits 72,663 72,189
Other Liabilities 14,157 15,643
Stockholders' Equity 73,302 59,482
------ ------
Total Liabilities and Stockholders'
Equity $ 1,095,621 $ 1,095,167
=========== ===========
Net Interest Income $10,370 $ 10,007
======= ========
Net Interest Spread 3.31% 3.31%
===== =====
Net Interest Margin 3.92% 3.82%
===== =====
</TABLE>
For the purposes of these calculations, non-accruing loans are included in the
quarterly average loan amounts outstanding.
<PAGE>
<TABLE>
<CAPTION>
The following table presents the extent to which changes in interest rates and
changes in the volume of interest earning assets and interest bearing
liabilities have affected Republic's interest income and interest expense during
the periods indicated. Information is provided in each category with respect to
(i) changes attributable to changes in volume (changes in volume multiplied by
prior rate), (ii) changes attributable to changes in rate (changes in rate
multiplied by old volume), and (iii) the net change. The changes attributable to
the combined impact of volume and rate have been allocated proportionately to
the changes due to volume and the changes due to rate.
Table 3 - Volume/Rate Variance Analysis (in thousands)
Three Months Ended March 31, 1998
Compared to
Three Months Ended March 31, 1997
Increase/(Decrease)
due to
Total Net
Change Volume Rate
<S> <C> <C> <C>
Interest Income (1):
U.S. Treasury and Government Agency Securities $ (1,059) $ (1,102) $ 43
State and Political Subdivision Securities (4) (5) 1
Other Investments 77 64 13
Mortgage-Backed Securities 712 633 79
Federal Funds Sold and Securities Purchased Under
Agreements to Resell 141 133 8
Total Loans and Fees (2) 308 654 (346)
--- --- ---
Net Change in Interest Income 175 377 (202)
--- --- ---
Interest Expense:
Interest Bearing Transaction Accounts (413) (363) (50)
Money Market Accounts 518 462 56
Individual Retirement Accounts (192) (200) 8
Certificates of Deposit and Other Time Deposits (1,045) (1,068) 23
Repurchase Agreements and Other Borrowings 944 1,010 (66)
--- ----- ---
Net Change in Interest Expense (188) (159) (29)
--- --- ---
Increase in Net Interest Income $ 363 $ 536 $ (173)
===== ===== =======
</TABLE>
(1) Interest income for loans on non-accrual status have been included in
Interest Income.
(2) The amount of fees in interest on loans was $473,000 and $163,000 for the
years ended March 31, 1998 and 1997, respectively.
<PAGE>
Non-Interest Income. Non-interest income was $6.9 million during first quarter
1998, up from $2.1 million during first quarter of 1997. Excluding the one-time
gain on sale of deposits, non-interest income increased $700,000 to $2.8
million. This increase was principally due to gains recorded on the sale of
investment securities as well as an increase in gain on sale of loans over the
first quarter of 1997. The gain on sale of investment securities resulted from
Republic's realization of an increase in the market value of a portion of the
Bank's available for sale securities due to a lower interest rate environment at
the time of sale. Other service charges and fees increased $87,000 to $397,000
due to increased volume associated with the Republic's participation in a rapid
tax refund joint venture. Revenues generated from this joint venture are
primarily realized only during the tax filing season comprised of the first
quarter and to a lessor extent the second quarter of the year.
Income from mortgage banking, also a component of non-interest income, includes
proceeds from the sale of loans in the secondary market and servicing income.
Gain on sale of loans increased $728,000 in first quarter 1998 from first
quarter 1997. Republic's net gain on sale of loans increased due to continued
strong mortgage loan demand. Loan servicing income declined slightly during
first quarter 1998 compared to the comparable period in 1997. The decrease was
attributable to a decline in the servicing portfolio due to normal payoff
activity and the sale of new loan originations into the secondary market with
servicing released.
Non-Interest Expense. Total non-interest expense increased modestly from $8.0
million in first quarter 1997, compared to $8.1 million for first quarter 1998.
The increase for the three months ended March 31, 1998 was primarily
attributable to costs associated with Republic's banking center expansion
strategies. Excluding the one-time gain on sale of deposits, Republic's
non-interest expense ratio (non-interest expense divided by the sum of net
interest income and non-interest income) was 61% in the first quarter 1998
compared to 66% for the comparable period in 1997.
Republic's staffing level declined to 406 full-time equivalent employees (FTE's)
at March 31, 1998, compared to 439 FTE's at March 31, 1997. The decrease in
staffing was primarily due to the sale of the Western Kentucky banking centers.
While total FTE's decreased, salary and employee benefit expense increased 10.5%
for the first quarter 1998 over first quarter 1997. The increased payroll cost
is primarily attributable to the addition of more highly compensated technical
staff and annual merit increases.
Occupancy and equipment expense decreased from $2.0 million in first quarter
1997 to $1.9 million for the comparable period in 1998. The decrease was
primarily due to the sale of Western Kentucky banking centers.
ASSET QUALITY
Loans, including impaired loans under SFAS 114 and excluding consumer loans, are
placed on non-accrual status when they become past due 90 days or more as to
principal or interest, unless they are adequately secured and in the process of
collection. When loans are placed on non-accrual status, all unpaid accrued
interest is reversed. These loans remain on non-accrual status until the
borrower demonstrates the ability to remain current or the loan is deemed
uncollectible and is charged off. Consumer loans are not placed on non-accrual
status but are reviewed periodically and charged off when they reach 120 days
past due and are deemed uncollectible. At March 31, 1998, Republic had $587,000
in consumer loans 90 days or more past due compared to $497,000 at December 31,
1997.
<PAGE>
Table 4 provides information related to non-performing assets and loans 90 days
or more past-due. Total non-performing assets increased slightly from December
31, 1997 to March 31, 1998.
<TABLE>
<CAPTION>
Table 4 - Non-Performing Loans
March 31, December 31,
(dollars in thousands) 1998 (1) 1997 (1)
<S> <C> <C>
Loans on non-accrual status (2) $ 2,537 $ 2,676
Loans past due 90 days or more 5,084 4,459
--------- ---------
Total non-performing loans 7,621 7,135
Other real estate owned 504 22
--------- ---------
Total non-performing assets $ 8,125 $ 7,167
========= =========
Percentage of non-performing loans to total loans .96% .89%
Percentage of non-performing assets to total loans 1.02% .89%
</TABLE>
(1) The table is exclusive of impaired loans which remained on accrual status.
(2) Interest income that would have been earned and received on non-accrual
loans was not material.
Republic defines impaired loans to be those commercial real estate and
commercial loans greater than $499,999 that management has classified as
doubtful (collection of all amounts due is highly questionable or improbable) or
loss (all or a portion of the loan has been written off or a specific allowance
for loss has been provided). Republic's policy is to charge off all or that
portion of its investment in an impaired loan upon a determination it is
probable the full amount will not be collected. Non-performing loans increased
from $7.1 million at December 31, 1997 to $7.6 million at March 31, 1998.
Non-performing assets increased from $7.2 million at December 31, 1997 to $8.1
million at March 31, 1998. This increase is largely comprised of loans 90 days
or more past due and real estate owned, both of which are primarily secured by
1-4 family residential loans. Management does not consider the increase in
non-performing assets to be material.
LIQUIDITY
Republic's objectives include providing consistent earnings, and preserving an
adequate liquidity position. Asset/liability management control is designed to
ensure safety and soundness, maintain liquidity and regulatory capital
standards, and achieve an acceptable net interest margin. Republic continues to
experience strong loan demand and management continues to monitor interest rate
and liquidity risk while implementing appropriate funding and balance sheet
strategies.
Republic maintains sufficient liquidity in order to fund loan demand and deposit
withdrawals. Liquidity is managed by retaining sufficient liquid assets in the
form of investment securities and core deposits to meet funding requirements.
Additional funding and cash flows can also be realized from paydowns within the
loan portfolio. Republic has also established lines of credit with other
financial institutions, the FHLB and brokerage firms. While Republic utilizes a
variety of funding sources in order to meet its liquidity requirements, the
utilization of FHLB borrowings remains a material component of management's
balance sheet strategies.
<PAGE>
CAPITAL
The Bank intends to maintain a capital position that meets the regulatory
definition, as defined by the FDIC, of a "well capitalized" institution. Table 5
below indicates the capital ratios at March 31, 1998.
<TABLE>
<CAPTION>
Table 5 - Regulatory Capital Ratios
Minimum
Requirement
Minimum To Be Well
Requirement Capitalized
For Capital Under Prompt
Adequacy Corrective
Actual Purposes Action Provisions
Amount Ratio Amount Ratio Amount Ratio
(dollars in thousands)
As of March 31, 1998
<S> <C> <C> <C> <C> <C> <C>
Total Risk Based Capital (to Risk Weighted Assets)
Consolidated $ 88,304 13.03% $ 52,647 8% $ 65,808 10%
Bank only $ 88,128 12.65% $ 52,716 8% $ 65,895 10%
Tier I Capital (to Risk Weighted Assets)
Consolidated $ 80,070 11.82% $ 26,323 4% $ 39,485 6%
Bank only $ 79,894 11.46% $ 23,558 4% $ 39,537 6%
Tier I Leverage Capital (to Average Assets)
Consolidated $ 80,070 7.31% $ 44,725 4% $ 55,906 5%
Bank only $ 79,894 7.29% $ 43,885 4% $ 54,856 5%
</TABLE>
Consolidated capital increased from $68.4 million at December 31, 1997 to $73.4
million at March 31, 1998, a 7.4% increase. The increase was primarily
attributable to the gain on sale of the deposits at the Mayfield banking center,
supported by core earnings. Republic currently exceeds the minimum regulatory
requirements for a well-capitalized institution.
Kentucky banking regulations limit the amount of dividends that may be paid to
Republic by the Bank without prior approval of the Bank's regulatory agency.
Under these regulations, the amount of dividends that may be paid in any
calendar year is limited to the Bank's current year's net income, as defined in
the regulations, combined with the retained net income of the preceding two
years, less any dividends declared during those periods. At March 31, 1998, the
Bank had $13 million of retained earnings available for payment of dividends.
Asset/Liability Management and Market Risk
Asset/liability management control is designed to ensure safety and soundness,
maintain liquidity and regulatory capital standards, and achieve acceptable net
interest income. Management considers interest rate risk to be Republic's most
significant market risk. Interest rate risk is the exposure to adverse changes
in the net interest income as a result of market fluctuations in interest rates.
Management regularly monitors interest rate risk in relation to prospective
market and business conditions. The Bank's Board of Directors sets policy
guidelines establishing maximum limits on the Bank's interest rate risk
exposure. Republic's management monitors and adjusts exposure to interest rate
fluctuations as influenced by the Bank's loan and deposit portfolios.
<PAGE>
Republic uses an earnings simulation model to analyze net interest income
sensitivity. Potential changes in market interest rates and their subsequent
effect on interest income is then evaluated. The model projects the effect of
instantaneous movements in interest rates of both 100 and 200 basis points.
Assumptions based on the historical behavior of Republic's deposit rates and
balances in relation to changes in interest rates are also incorporated into the
model. These assumptions are inherently uncertain and, as a result, the model
cannot precisely measure net interest income or precisely predict the impact of
fluctuations in market interest rates on net interest income. Actual results
will differ from the model's simulated results due to timing, magnitude, and
frequency of interest rate changes as well as changes in market conditions and
the application of various management strategies.
Interest rate risk management focuses on maintaining acceptable net interest
income within Board approved policy limits. Republic's Asset/Liability
Management Committee monitors and manages interest rate risk to maintain an
acceptable level of change to net interest income resulting from market interest
rate changes. Republic's Board approved policy established for interest rate
risk is stated in terms of the change in net interest income given a 100 and 200
basis point immediate and sustained increase or decrease in market interest
rates. The current limits approved by the Board are plus or minus 8% for a 100
basis point change and plus or minus 12% for a 200 basis point movement.
The interest rate sensitivity profile of Republic at any point in time will be
effected by a number of factors. These factors include the mix of interest
sensitive assets and liabilities as well as their relative pricing schedules.
Year 2000
The Bank has continued to actively work toward completion of its Year 2000 goals
and objectives. Republic has remained on its implementation schedule during the
first quarter of 1998 and expects to complete remediation phase activities no
later than year end, 1998. Republic has obtained preliminary representations
from its essential software vendors that their products will be Year 2000
compliant. Management projects that the cost of Year 2000 remediation will be in
a range of $1.2 million to $1.8 million, the majority of which will be
capitalized over a three year period. Year 2000 expenses are subject to change
and could vary from current estimates if the final requirements for Year 2000
readiness exceed management's expectations.
New Accounting Pronouncement
See discussion in Note 1 to financial statements.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information for this item is incorporated by reference to the
Asset/Liability Management and Market Risks section of Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations.
<PAGE>
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
On or about January 9, 1998, Republic issued 5,000 shares of Class A
common stock to a certain employee upon the exercise of stock options which had
been granted that employee under a compensatory stock option plan. The aggregate
exercise price paid for the shares issued upon exercise of the option was
$11.94. (The exemption from registration relied on by Republic was Section 4 (2)
of the Securities Act of 1933. The purchaser was a key employee who had access
to material information concerning Republic.)
Item 4. Submission of Matters to a Vote of Securities Holders.
A regularly scheduled annual meeting of the stockholders of Republic
was held on January 12, 1998. Proxies were solicited by Republic's Board of
Directors for matters to be voted on at the annual meeting. The following items
were voted upon and approved at the annual meeting:
Setting the Number of Directors: A proposal to set the number of
directors for the Board of Directors of the Corporation at nine (9) was approved
by a vote of the majority of the shares of the Corporation's common stock
represented at the meeting; 14,688,972 votes were cast in favor of the proposal;
0 shares were voted against; 0 shares were withheld; and 0 shares abstained.
Election of Directors: At the annual meeting, shareholders voted upon
the election of directors. All nominees were elected by vote of the
shareholders. Holders of 5,127,780 shares, representing 12,745,616 votes of the
common stock were present in person at the meeting and 1,943,356 votes were
represented by proxy for a total of 14,688,972, equaling 80% of the total
outstanding common stock. The voting results for each nominee were as follows:
<TABLE>
<CAPTION>
Votes Votes Votes Non-
Nominee For Against Withheld Votes
<S> <C> <C> <C> <C>
A. Wallace Grafton, Jr. 14,688,972 0 0 0
Samuel G. Swope 14,688,972 0 0 0
Larry M. Hayes 14,688,972 0 0 0
D. Harry Jones 14,688,972 0 0 0
E. William Petter, Jr. 14,688,972 0 0 0
R. Wayne Stratton 14,688,972 0 0 0
A. Scott Trager 14,688,972 0 0 0
Bernard M. Trager 14,688,972 0 0 0
Steven E. Trager 14,688,972 0 0 0
</TABLE>
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
A. The exhibits required by Item 601 of Regulation S-K are attached to
and listed in the Exhibit Index on page 28.
B. Reports on Form 8-K: Republic Bancorp, Inc. fourth quarter, 1997.
During the first quarter of 1998, Republic filed an amendment to the report on
Form 8-K, dated November 7, 1997, to report, under Item 2 of that form, the
Murray, Benton, Paducah, and Mayfield, Kentucky, branch sale transactions and to
file, under Item 7 of that form, pro forma financial statements reflecting the
sale transactions.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Republic Bancorp, Inc.
(Registrant)
Principal Executive Officer:
Date: 05/15/98 /s/ Steven E. Trager
---------------- -----------------------------------
Steven E. Trager
Chief Executive Officer
Principal Financial Officer:
Date: 05/15/98 /s/ Mark A. Vogt
---------------- -----------------------------------
Mark A. Vogt
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
10.10 Lease at 601 West Market Street, Louisville 29
10.11 Lease at 2801 Bardstown Road, Louisville 46
10.12 Lease at 661 South Hurstbourne Parkway, Louisville 52
10.13 Lease at 9600 Brownsboro Road, Louisville 77
11 Statement Regarding Computation of Per Share Earnings 89
27 Financial Data Schedule 90
EXHIBIT 10.10
Lease at 601 West Martket Street, Louisville
REPUBLIC CORPORATE CENTER
LOUISVILLE, KENTUCKY
INDEX TO LEASE
Article Page
I. Premises 1
II. Term 2
III. Rent and Operating Expenses 2
IV. Use 2
V. Services to be Provided 3
VI. Maintenance and Repair; Alterations 3
VII. Access 4
VII. Damage or Destruction 4
IX. Indemnity 5
X. Insolvency, Etc. 5
XI. Remedies 6
XII. Insurance 6
XIII. Liens 8
XIV. Assignment; Subletting; Mortgaging 8
XV. Estoppel Certificate 9
XVI. Taxes 9
XVII. Priority of Lease 10
INDEX TO LEASE
Article Page
XVIII. Fixtures and Personal Property; 10
Surrender
XIX. Hold over Tenancy 11
XX. Waiver of Subrogation 11
XXI. Notices 12
XXII. Rights Reserved by Landlord 12
XXIII. Condemnation 12
XXIV. Miscellaneous Provisions 13
Rev. 12/92
<PAGE>
OFFICE LEASE
THIS LEASE, dated this 1st day of April, 1995, is between Bernard and
Jean Trager hereinafter referred to as "Landlord" and Republic Bank & Trust
Company, hereinafter referred to as the "Tenant". As parties hereto, Landlord
and Tenant agree:
ARTICLE I. PREMISES
SECTION 1. Tenant leases from Landlord and Landlord leases to Tenant
the following described premises (hereinafter called the "Premises"):
Being approximately 8,000 square feet of rentable office space
located in Republic Corporate Center (hereinafter called "the Building") located
at the northwest corner of Sixth and Market Street in Louisville, Kentucky.
SECTION 2. The Premises shall be provided in "as is" condition. Tenant
acknowledges he has examined the Premises, knows the condition of the Premises,
and accepts the Premises in the condition as currently existing. Any remodeling
construction and/or redecorating within the Premises shall be performed to the
complete and absolute satisfaction of Landlord. The Landlord's written approval
shall be obtained by Tenant prior to commencement of any and all improvements
and the construction of improvements shall be supervised and approved by
Landlord on a continuous basis.
SECTION 3. This lease confers no rights with respect to the Building
other than tenancy of the Premises and the non-exclusive license to use, during
such tenancy, the following facilities provided by Landlord: (i) toilet
facilities on the floor which the Premises are located (and such other toilet
facilities located elsewhere in the Building as may be designated by Landlord
for the general use of tenants); and (ii) the public entrances to, and main
floor lobby in, the Building; (iii) the passenger elevators serving the
Building.
<PAGE>
ARTICLE II. TERM
Landlord leases the Premises to Tenant, and Tenant hires and takes the
Premises from Landlord, for a term of five (5) Lease Years commencing on the
first day of April, 1995 (the "Lease Commencement Date") and expiring at
midnight on the last day of the sixtieth month thereafter unless sooner
terminated pursuant to the terms hereof. "Lease Year" shall mean a year period
beginning on the first day of a month, which is the first calendar month of the
term of the Lease and ending on the day before the anniversary of the first day
of such year.
ARTICLE III. RENT
SECTION 1. Tenant shall pay to Landlord, at Landlord's office in the
Building or at such place as Landlord may from time to time designate, as rental
for the Premises, the sum of Twelve thousand six hundred sixty-six dollars and
sixty-seven cents ($12,666.67) per month (the "Rent"). Rent shall be payable in
advance on the first day of each calendar month during the Lease Term.
SECTION 2. In the event that the Rent, or any other sum payable by
Tenant to Landlord under this lease, shall not be received (paid) within ten
(10) days of the due date thereof, Landlord may, at its option, add a monthly
service charge, at a rate which shall be the greater of $25.00 or 1% for each
month or fraction thereof from such rent due date during which such Rent or
other sum remains unpaid. Further, in the event that any check which has been
remitted to Landlord by Tenant for payment of the Rent, or any other sum payable
under this Lease, shall not be honored upon its presentation for payment, then
the monthly service charge shall be similarly imposed on said amount from the
due date until paid. Acceptance by the Landlord for such service charge shall
not be deemed to be a waiver by Landlord of any default nor shall it restrict
the remedies otherwise available to Landlord hereunder.
ARTICLE IV. USE
The Premises are to be used only for the purpose of conducting therein
Banking operations and any and all related services and for no other business or
purpose without the prior written consent of Landlord. Tenant shall not do or
permit to be done in or about the Premises anything which is illegal or
unlawful; or which is of a hazardous or dangerous nature; or which will increase
the rate(s) of insurance upon the Building. Tenant shall (and shall cause its
employees to) observe the rules and regulations set forth in Exhibit B attached
hereto and made a part hereof, as the same may be amended by Landlord from time
to time, and Tenant shall comply with all governmental laws and ordinances and
all regulations applicable to the use and occupancy of the Building.
Notwithstanding anything to the contrary contained in the Lease, Tenant shall
not conduct or cause or permit to be conducted in the Building any business
which is (i) substantially competitive to Republic Bank & Trust Company, or (ii)
any banking and/or trust business whatsoever; such prohibitions being
enforceable jointly and severally by Landlord or successor thereto.
<PAGE>
ARTICLE V. SERVICES TO BE PROVIDED
Landlord shall furnish reasonable amounts of heat, air conditioning,
water, elevator service and janitor service (collectively "Services") to the
Premises during the times and in the manner that Landlord determines appropriate
for the furnishing of such services in the Building, all such services being
subject to energy availability or Energy Consumption Regulations which may be
hereafter promulgated. It is expressly agreed that should any local, state or
federal governmental body, agency or public utility restrict or reduce the
amount of fuel or energy which may be utilized to provide the utilities and
services as specified above, then such restriction or reduction, and the
reduction in utilities and services which may result therefrom, shall in no way
create or constitute a default on the part of the Landlord, and there shall be
no reduction or abatement in the Rent or any other sum payable by Tenant
thereunder. Further, Landlord shall not be liable for any injury, damage,
inconvenience, or otherwise which may arise or result should the furnishing of
any such services by interrupted or prevented by fire, accident, strike, riot,
act of God, the making of necessary repairs or improvements, or any other cause
beyond the reasonable control or prevention of Landlord, nor, subject only to
the provisions of Article X of this Lease, shall the Rent payable by Tenant
hereunder abate.
ARTICLE VI. MAINTENANCE AND REPAIR; ALTERATIONS
SECTION 1. Landlord shall keep and maintain the roof, foundations,
floor slab, and all structural walls (including windows and plate glass),
gutters and downspouts of the Premises in good order and repair. Landlord shall
keep or cause to be kept in good repair all common areas of the Building and
appurtenant areas, including lighting systems; drainage systems; mechanical,
plumbing, and electrical systems; heat and air conditioning units; ductwork,
lines, pipes, and conduits serving the Premises; and parking areas and
driveways. Any maintenance, repairs or replacements to any of the foregoing made
necessary by any acts or omissions of the Tenant, its agents or employees, shall
be paid for by Tenant and Tenant shall reimburse Landlord on demand for the cost
of repairing any damage to the Premises or the Building caused by Tenant or its
agents or employees. In the event, after reasonable notice tof the Premises in
good repair and in a clean and attractive condition. Tenant's obligation to
maintain, repair and replace includes, but is not limited to, all the interior
of the Premises. In the event Tenant fails to comply with the requirements of
this Section, Landlord may effect such maintenance and repair and the cost
thereof, with interest at the rate of 8.5% per annum, shall be payable
immediately to Landlord as additional rent. In the event the applicable Statute
of the Commonwealth of Kentucky at any time shall allow for a higher rate of
interest under an instrument in writing, then such higher rate shall apply and
be payable. If Tenant is a corporation, then the interest rate to be so payable
hereunder shall be at the rate of 12% per annum.
<PAGE>
SECTION 3. Tenant shall not make any alterations, additions or
improvements to the Premises without first obtaining Landlord's prior written
consent. In connection with any such request for Landlord's consent to such
alterations, additions or improvements to the Premises, Landlord may retain the
services of an architect and/or engineer; and the reasonable costs for the
services of such architect and/or engineer shall be reimbursed to Landlord by
Tenant. Landlord may make any repairs for the preservation, safety or
improvement of the Premises or the Building. All alterations, and improvements
made by Tenant shall become the property of Landlord upon making thereof and
shall be surrendered to landlord upon the expiration of this Lease.
ARTICLE VII. ACCESS
Landlord and its agents shall have the right to enter into and upon the
Premises at all reasonable times with reasonable notice for the purpose of
inspecting, cleaning, repairing, altering or improving the Premises or the
Building with the exception of an emergency situation. Landlord shall have the
right to show the Premises to prospective tenants during the ninety (90) day
period prior to the expiration of the term of this Lease and shall have the
right at all reasonable times to show the Premises to prospective purchasers of
and lenders upon the Building. Any damage or loss caused to the Premises and/or
to the Tenant by any use of or access to the Premises by Landlord shall be
repaired by Landlord at Landlord's expense.
ARTICLE VIII. DAMAGE OR DESTRUCTION
SECTION 1. If the Premises is damaged or destroyed, in whole or in
substantial part, and Section 2 does not apply, then Landlord may elect to
terminate this Lease as of the date of the damage or destruction by notice given
to Tenant in writing not more than twenty (20) days following the date of damage
or destruction. If Landlord does not elect to terminate, Landlord shall, at
Landlord's expense, proceed to restore the property to substantially the same
form, condition and quality as prior to the damage or destruction. If Landlord
elects to rebuild and repair, Landlord shall proceed as soon as reasonably
possible and thereafter shall proceed without interruption and be completed
within one hundred-eighty (180) days after notice has been given of Landlord's
intent to rebuild and repair, except for work stoppages on account of labor
disputes and matters not under the control of the Landlord. During such period
of repair or restoration, the Rent shall be abated in the same proportion as the
untenantable portion of the Premises bears to the entire Premises identified in
Section 1 of Article I of the Lease.
SECTION 2. If the Premises is damaged or destroyed, (i) to the extent
that more than fifty percent (50%) of the Building is damaged or destroyed, or
(ii) to the extent that more than fifty percent (50%) of the Premises is damaged
or destroyed, then in such event, Tenant may elect to terminate this Lease as of
the date of the damage or destruction by notice given to Landlord in writing not
more than twenty (20) days following the date of damage or destruction.
<PAGE>
SECTION 3. Notwithstanding anything contained in this Article to the
contrary, Landlord shall not be required to repair, replace, restore, or rebuild
any property which Tenant shall be entitled to remove from the Premises under
the provisions of this Lease; it being agreed that Tenant shall bear the entire
risk of loss, damage or destruction of such property while it is in the
Building.
SECTION 4. If either party elects to terminate the Lease, Tenant shall
be entitled to reimbursement for any prepaid rent or other amounts paid by
Tenant and attributable to the unused term of the Lease.
ARTICLE IX. INDEMNITY
Tenant shall indemnify and hold Landlord harmless from all loss,
damage, liability or expense resulting from an injury to or death of any person
or any loss of or damage to any property caused by or resulting from any act or
omission of Tenant or any officer, agent, employee, guest, invitee or visitor of
Tenant in or about the Premises or the Building, but the foregoing provision
shall not be construed to make Tenant responsible for injuries to third parties
caused by the negligence of Landlord or any agent or employee of landlord. The
Landlord shall remain responsible for any injury to, or death of any person or
any loss of or damage to property sustained by any person whatsoever which may
be caused by the Building or any equipment or appurtenances thereto or thereof
being or becoming defective or out of repair. Landlord shall be and remain
liable for the negligent acts or omissions of Landlord, its agents and
employees.
ARTICLE X. INSOLVENCY, ETC.
If leasehold interest of Tenant be levied upon under execution or be
attached, or if any voluntary or involuntary petition or similar pleading under
any Act of Congress relating to bankruptcy shall be filed by or against Tenant
or a majority of Tenant's shareholders, or if any voluntary proceedings in any
court or tribunal shall be instituted by or against Tenant or the majority of
its shareholders to declare Tenant or the majority of its shareholders insolvent
or unable to pay debts of Tenant or the majority of its shareholders, or if
Tenant makes an assignment for the benefit of creditors, or if a receiver be
appointed for any property of Tenant, or if Tenant shall default in payment of
any other debt or obligation to Landlord, then in such event Landlord may, if
Landlord so elects and with or without notice of such election and with or
without any demand whatsoever, forthwith terminate this Lease upon notice to
Tenant, and upon such termination all rights of Tenant hereunder shall thereupon
cease and Tenant shall surrender possession and vacate the Premises immediately.
<PAGE>
ARTICLE XI. REMEDIES
SECTION 1. If at any time Tenant shall (a) fail to remedy any default
in the payment of any sum due under this Lease for ten (10) days after notice;
(b) fail to remedy any default with respect to any other of these provisions,
covenants or conditions of this Lease to be kept or performed by Tenant, within
thirty (30) days after notice (or, in the event the default is of such a nature
that it cannot be remedied within said thirty (30) day period, then such
additional time as may be necessary for Tenant to cure such default, within the
thirty (30) day period and thereafter diligently prosecutes the same to
completion); or (c) vacate or abandon the Premises, or fail to conduct its
business therein, for a period of five (5) consecutive business days, and then
fail to reoccupy and reestablish the conduct of business in the Premises within
ten (10) days following the date of written notice from Landlord of such
failure; then Landlord shall have all such rights and remedies as are provided
by law in respect of such default, including, at Landlord's election, the right
to terminate this Lease, and all Tenant's rights hereunder shall be terminated.
The liability of Tenant for the Rent, and other payments provided for
herein shall not be extinguished for the balance of this Lease, and Tenant shall
make good to Landlord any deficiency arising from such reletting of the
Premises, plus the costs and expenses of renovating, altering and reletting the
Premises, and including attorneys' fees or brokers' fees incident to Landlord's
reentry or reletting. Tenant shall pay any such deficiency each month, as the
amount thereof is ascertained by Landlord, or, at Landlord's option, Landlord
may recover, in addition to any other sums, the amount at the time of judgement
by which the unpaid Rent, and other payments for the balance of the term, after
judgement, exceeds the amount thereof which Tenant proves could be reasonably
avoided, discounted at the rate of 7%. In reletting the Premises, Landlord may
grant rent concessions and Tenant shall not be credited therefor. Nothing herein
shall be deemed to affect the right of Landlord to recover for indemnification
under Article X herein arising prior to the termination of this Lease.
SECTION 2. Landlord shall in no event be in default in the performance
of any of its obligations in this Lease contained unless and until Landlord
shall have failed to perform such obligation within thirty (30) days, or such
additional time as is reasonably required to correct any such default after
notice by Tenant to Landlord properly specifying wherein Landlord has failed of
perform any such obligation.
ARTICLE XII. INSURANCE
SECTION 1. Tenant covenants and agrees that from and after the date of
delivery of the Premises from Landlord to Tenant and at all times during
possession thereof, Tenant will procure and maintain in full force and effect,
at its sole cost and expense, the following types of insurance, in the minimum
amounts specified below:
A. Public Liability and Property Damage. Personal injury liability,
bodily injury liability and property damage insurance in a single limit of not
less than One Million Dollars ($1,000,000), of which insurance shall insure the
performance by
<PAGE>
Tenant of the indemnity agreement as to liability for injury
to or death of persons and injury or damage to property as provided in Article X
hereof. All of such insurance shall be primary and noncontributing with any
insurance which may be carried by Landlord. The adequacy of the coverage
afforded by said liability and property damage insurance shall be subject to
review by Landlord from time to time, and Landlord retains the right to increase
or decrease said limits at such times.
B. Tenant Improvements. Insurance covering all of the lease-hold
improvements, (excepting only the structural components of the Building and
demising partitions), and Tenant's trade fixtures, and personal property from
time to time in and/or upon the Premises, in an amount of not less than the full
replacement cost thereof without deduction for depreciation, providing
protection against any peril included within the classification "Fire and
Extended Coverage", together with insurance against sprinkler damage, vandalism
and malicious mischief. Any policy proceeds shall be used for the repair or
replacement of the property damaged or destroyed unless this Lease shall cease
and terminate under the applicable provisions herein. If the Premises shall not
be repaired or restored following damage or destruction in accordance with other
provisions herein, Landlord shall received from such insurance proceeds and
amount equal to the replacement cost of the Tenant's leasehold improvements.
C. Business Interruption. Business interruption insurance with
sufficient coverage to provide for payment of rent and other fixed costs during
any interruption of Tenant's business by reason of fire or other similar cause.
SECTION 2. All policies shall be for the mutual and joint benefit and
protection of Landlord and Tenant, with Landlord being named as an additional
insured. Certificates of such policies shall be delivered to Landlord within ten
(10) days after delivery of possession of the Premises to Tenant and thereafter
within thirty (30) days prior to the expiration of the term of each such policy.
All public liability and property damage policies shall contain a provision that
Landlord, although named as an insured, shall nevertheless be entitled to
recovery under said policies for any loss occasioned to it, its servants,
agents, and employees by reason of the acts, omissions and/or negligence of
Tenant. As often as any such policy shall expire or terminate, renewal or
additional policies shall be procured and maintained by Tenant in like manner
and to like extent. All policies of insurance must contain a provision that the
company writing said policy will give to Landlord thirty (30) days' notice, in
writing, in advance of any cancellation or lapse, or the effective date of any
reduction in the amounts of insurance. All public liability, property damage and
other casualty policies shall be written as primary policies, not contributing
with and not in excess of coverage which Landlord may carry. Landlord may, from
time to time, request Tenant to provide Landlord with a certified copy of all
insurance coverage carried by Tenant.
<PAGE>
SECTION 3. Tenant agrees to pay to Landlord forthwith upon demand the
amount of any increase in premiums for insurance against loss by fire that may
be charged during the term of this Lease on the amount of insurance maintained
in force by Landlord on the Building, of which the Premises are a part,
resulting from Tenant doing any act in or about said Premises which does so
increase the insurance rates, whether or not Landlord shall have consented to
such act on the part of Tenant. If Tenant installs upon the Premises any
electrical equipment which constitutes an overload on the electrical lines of
the Premises, Tenant shall at its own expense make whatever changes are
necessary to comply with the requirements of the insurance underwriters any
governmental authority having jurisdiction thereover, but nothing herein
contained shall be deemed to constitute Landlord's consent to such overloading.
ARTICLE XIII. LIENS
Tenant shall keep the Premises free and clear of, and shall indemnify
Landlord against all mechanics' liens and other liens on account of work done
for or materials , supplies and equipment furnished to Tenant by persons
claiming under it for maintenance, repairs and alterations. Tenant shall
reimburse Landlord for all costs and attorneys' fees incurred by Landlord in
investigating, defending or clearing such lien to be cleared within thirty (30)
days of filing of same unless Tenant shall have provided security acceptable to
landlord against any loss to Landlord on account thereof. As a condition to
Landlord's consent pursuant to Article VII, Landlord may require Tenant to
provide Landlord with reasonable payment and performance bonds of those persons
contracted by Tenant to perform work on or in the Premises that could be the
subject of such a lien in order to protect the Premises, the Landlord, and any
mortgagee from and against liens of mechanics and materialmen performing work in
or providing services and equipment to the Premises.
ARTICLE XIV. ASSIGNMENT; SUBLETTING; MORTGAGING
SECTION 1. Tenant shall not voluntarily, involuntarily or by operation
of law assign, transfer, mortgage or otherwise encumber all or any part of
Tenant's interest in this Lease, or sublet the Premises or any part thereof,
without first obtaining in each and every instance Landlord's prior written
consent. Subject to the foregoing, Tenant shall not assign, transfer or sublet
the Premises, or any part thereof, at a rent to Assignee, Transferee or
Sublessee, greater than $ per square foot. Any transfer of this Lease by merger,
consolidation, or liquidation, or any change in the ownership of, or power to
vote the majority of its outstanding voting stock resulting in a change in
ownership of more than 50% of the total issued and outstanding shares of Tenant
shall constitute an assignment for the purposes of the paragraph. If consent is
once given by Landlord to any such assignment or subletting, such consent shall
not operate as a waiver of the necessity for obtaining Landlord's consent to any
subsequent assignment or subletting. Any legal costs incurred by Landlord
related to such assignment or subletting shall be paid by Tenant to Landlord
upon demand. Tenant shall provide Landlord with executed copies of any
Assignment. Transfer or Sublease Agreement entered into as provided herein.
<PAGE>
ARTICLE XV. ESTOPPEL CERTIFICATE
Tenant shall at any time and from time to time execute, acknowledge and
deliver to Landlord a statement in writing certifying: (a) that this Lease is
unmodified and in full force and effect (or if there has been any modification
hereof that the same is in full force and effect as modified and stating the
nature of the modification or modifications); (b) that to the best of its
knowledge Landlord is not in default under this Lease (or if any such default
exists the specific nature and extent thereof); and (c) the date to which rent
and other charges have been paid in advance, if any.
ARTICLE XVI. TAXES
SECTION 1. Tenant shall pay before delinquency any and all taxes and
assessments, and license, sales, business, occupation or other taxes, fees or
charges levied, assessed or imposed upon its business operations in the
Premises.
SECTION 2. Tenant shall pay before delinquency any and all taxes and
assessments levied, assessed or imposed upon its trade fixtures, leasehold
improvements, merchandise and other personal property in, on, or upon the
Premises.
SECTION 3. In the event any taxes, fees or charges referred to in the
preceding Section 1 and/or Section 2 shall be assessed, levied or imposed upon
or in connection with the business or property of Landlord, such assessment,
taxes, fees or charges shall be paid by Tenant to Landlord promptly upon
Landlord's request for such payment.
SECTION 4. Landlord shall pay before delinquency any and all costs and
expenses of every kind and nature for real estate ad valorem taxes, and/or fees,
assessments, charges or payments in lieu thereof, to the Commonwealth of
Kentucky, and/or any political subdivision thereof, including, without
limitation, Jefferson County, and/or any city, municipality, agency or special
district, the Jefferson County School Board, Louisville Water Company, and/or
the Louisville and Jefferson County Metropolitan Sewer District, whether general
or special assessments, including, but not limited to, sewer rents, rates and
charges; drainage fees; water charges; taxes based upon the receipt of rent; and
any other federal, state or local government charge, general, special, ordinary
or extra--ordinary (but not including income or franchise taxes or any other
taxes imposed upon or measured by Landlord's net income or profits, unless the
same is imposed in lieu of real estate taxes), which may now or hereafter be
levied or assessed against the Building or the land on which the Building and
appurtenant parking areas and driveways are located. If at any time during the
term of this Lease the method of taxation then prevailing shall be altered so
that any new tax, assessment, levy, imposition or charge shall be imposed upon
Landlord in place or partly in place of any such taxes and shall be measured by
or be based in whole or in part upon the Building or the rents or other income
therefrom, then all such new taxes, assessments, levies, imposition or charge
shall be imposed upon Landlord in place or partly in place of any such taxes and
shall be measured by or be based in whole or in part upon the Building or the
rents or other income therefrom, then all such new taxes, assessments, levies,
impositions or charges or part thereof, to the extent that they are measured or
based, shall be included in the definition of Landlord's costs and expenses
within the meaning of this subparagraph. Tenant shall only be directly
responsible for taxes, if any, on its personal property and on the value of its
special leasehold improvements exclusive of standard building improvements.
ARTICLE XVII. PRIORITY OF LEASE
This Lease shall, unless Landlord otherwise elects, be subordinate to
any and all mortgages and other security instruments now existing, or which may
hereafter be made covering the Building and/or the real property underlying the
same or any portion or portions thereof, and for the full amount of all advances
made or to be made thereunder (without regard to the time or character of such
advances), together with interest thereon, and subject of all the terms and
provisions thereof and to any renewals, extensions, modifications and
consolidations thereof; and Tenant covenants within ten days of demand to make,
execute, acknowledge and deliver upon request any and all documents or
instruments demanded by Landlord which are or may be necessary or proper for
more fully and certainly assuring the subordination of this Lease to any such
mortgages or other security instruments, provided, however, that any person or
persons purchasing or otherwise acquiring any interest at any sale and/or other
proceedings under such mortgages or other security instruments may elect to
continue this Lease in full force and effect in the same manner, and with like
effect, as if such person or persons had been named as Landlord herein, and in
the event of such election, this Lease shall continue in full force and effect
as aforesaid, and Tenant hereby shall continue in full force and effect as
aforesaid, and Tenant hereby attorns and agrees to attorn to such person or
persons. Tenant hereby irrevocably appoints Landlord the attorney-in-fact of
Tenant, to execute and deliver any document provided for herein, for and in the
name of Tenant.
ARTICLE XVIII. FIXTURES AND PERSONAL PROPERTY; SURRENDER
SECTION 1. Upon the termination of this Lease, Tenant shall surrender
to Landlord the Premises (including, without limitation, all non-moveable
leasehold improvements) in good condition and repair reasonable wear, tear and
damage by casualty not caused by Tenant or its agents or employees excepted. All
improvements, additions, and fixtures made or installed from time-to-time by
Landlord to, in, upon, or about the Premises, including, but not limited to, all
lighting fixtures, shall be the property of Landlord and upon any such
termination, shall be surrendered to Landlord by Tenant without any injury,
damage or disturbance thereto or payment thereof.
SECTION 2. All fixtures, furniture, movable partitions, machinery,
equipment and other personal property installed or placed in said Premises at
the cost of or by Tenant shall at all times remain, be considered and treated as
the personal property of Tenant and in no sense part of the real estate, and
Tenant shall have the right at any time during the term of this Lease and any
extension thereof, or within a period of ten (10) days after any termination
hereof to remove the same or any part thereof from said Premises, provided,
however, that upon the removal of any such personal property, Tenant agrees to
restore the area from which the same has been removed to substantially the same
condition as it was prior to the installation thereof and to the extent
necessary to keep Premises in a leasable and usable condition for future
tenants. If Tenant fails to remove any such personal property, Landlord may at
Landlord's option retain all or any of such property and title thereto shall
thereupon vest in Landlord, Landlord may remove from the Premises and dispose of
in any manner all or any of such property, in which latter event Tenant shall,
upon demand, pay to Landlord the actual expense of such removal and disposition,
and the cost of repair of any and all damage to the Premises resulting from or
caused by such removal.
ARTICLE XIX. HOLD OVER TENANCY
If Tenant shall, without execution of a new Lease or written extension,
and with consent of Landlord, hold over after the expiration of the terms of
this Lease, such tenancy shall be a month-to-month tenancy, which may be
terminated as provided by law. During such tenancy, Tenant shall pay to Landlord
the greater of (a) the rental rate then being quoted by Landlord for comparable
space in the Building; or (b) the Rent pursuant to Article III. During such
tenancy, Tenant shall be bound by all of the terms, covenants, and conditions as
herein specified, as far as applicable; provided, however that if Tenant fails
to surrender the Premises upon the termination of this Lease, in addition to any
other liabilities to Landlord arising therefrom Tenant shall indemnify and hold
Landlord harmless from loss or liability resulting from such failure, including
any claims made by any succeeding Tenant founded on such failure.
ARTICLE XX. WAIVER OF SUBROGATION
Landlord and Tenant each releases and relieves the other and on behalf
of its insurer(s) waives its entire right of recovery against the other for loss
or damage arising out of or incident to the perils of fire, explosion, or any
other perils generally described in the "extended coverage" insurance
endorsements used in Louisville which occur in, on or about the Building and/or
the Premises, whether due to the negligence of such other party, its agents or
employees, or otherwise.
<PAGE>
ARTICLE XXI. NOTICES
Wherever in this Lease it shall be required or permitted that notice,
approval, advice, consent or demand be given or served by either party to this
Lease to or on the other, such notice or demand shall be given or served and
shall not be deemed to have been duly given or served unless in writing and
forwarded by certified or registered mail, addressed as follows:
To Landlord: Bernard Trager
Republic Corporate Center
Louisville, Kentucky 40202-2700
Attention: Mr. Bernard Trager
To Tenant: At the Premises
Either party may change such address by written notice by certified or
registered mail to the other.
ARTICLE XXII. RIGHTS RESERVED BY LANDLORD
SECTION 1. Landlord shall have the sole and exclusive right to
designate (and from time to time, in its discretion, re-designate) the name,
address, number and/or designation of the Building.
ARTICLE XXIII. CONDEMNATION
In the event that during the term of this Lease the Premises as
identified in Article I, Section 1 hereof, or any part thereof, or the use or
possession thereof, is taken in condemnation proceedings or by any right of
eminent domain or for any public or quasi-public use, this Lease and the term
hereby granted shall terminate and expire on the date when possession shall be
taken by the condemnor, and rent and all other charges payable hereunder shall
be apportioned and paid in full up to that date and all prepaid unearned rent
and all other charges payable and paid in full up to that date and all prepaid
unearned rent and all other charges payable hereunder shall forthwith be repaid
by Landlord to Tenant, and Tenant shall not be liable to Landlord for rent or
any other charges payable hereunder, damage, or otherwise, for, or by reason of
any matter or thing occurring thereafter. Tenant hereby waives any and all
rights in, or to any condemnation awards. In the event that during the term of
this Lease a material amount of the parking area or a material amount of the use
or possession thereof is taken in condemnation proceedings or by any right of
eminent domain or for any public or quasi-public use and no alternative parking
is provided, the term of this Lease shall at the option of Tenant cease and
terminate from the date of title vesting in such proceeding.
<PAGE>
ARTICLE XXIV. MISCELLANEOUS PROVISIONS
SECTION 1. The term "Landlord" as used in this Lease, so far as
covenants or obligations on the part of Landlord are concerned, shall be limited
to mean and include only the owner or co-owners, at the time in question, of the
Premises, and in the event of any transfer or transfers of the title to the
Premises, Landlord herein named (and in case of any subsequent transfers or
conveyances, the then grantor) shall be automatically freed and relieved from
and after the date of such transfer or conveyance of all liability as respects
the performance or any covenants or obligations on the part of Landlord
contained in this Lease thereafter to be performed.
SECTION 2. The captions of Articles of this Lease are for convenience
only and shall not be considered or referred to in resolving questions of
interpretation or construction.
SECTION 3. The terms "Landlord and Tenant", wherever used herein shall
be applicable to one or more persons, as the case may be, and the singular shall
include the plural, and the neuter shall include the masculine and feminine, and
if there be more than one, the obligations hereof shall be joint and several.
SECTION 4. The word "person" and the word "persons" wherever used in
this Lease shall both include individuals, partnerships, firms, associations,
and corporations of any other form of business entity.
SECTION 5. The various rights, options, elections, powers, and remedies
contained in this Lease shall be construed as cumulative and no one of them
shall be exclusive of any of the others, or of any other legal or equitable
remedy which either party might otherwise have in the event of breach or default
in the terms thereof, and the exercise of one right or remedy by such party
shall not impair its right to any other right or remedy until all obligations
upon the other party have been fully performed.
SECTION 6. Time is of essence with respect to the performance of each
of the covenants and agreements under this Lease.
SECTION 7. Each and all of the provisions of this Lease shall be
binding upon and inure to the benefit of the parties hereto and, except as set
forth in Section 1 of this Article and as otherwise specifically provided
elsewhere in this Lease, their respective heirs, executors, administrators,
successors, and assigns, subject at all times, nevertheless, to all agreements
and restrictions contained elsewhere in this Lease with respect to the
assignment, transfer, encumbering or sub-letting of all or any part of Tenant's
interest in this Lease.
SECTION 8. This Lease shall be interpreted in accordance with the law
of the Commonwealth of Kentucky.
<PAGE>
SECTION 9. No waiver of any default by Tenant hereunder shall be
implied from any omission by Landlord to take any action on account of such
default if such default persists or is repeated, and no express waiver shall
affect any default other than the default specified in the express waiver, and
that only for the time and to the extent therein stated. The acceptance by
Landlord of rent with knowledge of the breach of any of the covenants of this
Lease by Tenant shall not be deemed a waiver of any such breach. One or more
waivers of any breach of any covenant, term or condition of this Lease shall not
be construed as a waiver of any subsequent breach of the same covenants, term of
condition. The consent or approval by Landlord to or of any act by Tenant
requiring Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent or approval to or of any subsequent similar acts
by Tenant.
SECTION 10. If Tenant shall default in the performance of any covenant
on its part to be performed by virtue of any provisions of this Lease, Landlord
may, after any notice and the expiration of any period with respect thereto as
required pursuant to the applicable provisions of this Lease, perform the same
for the account of Tenant. If Landlord, at any time, is compelled to pay or
elects to pay any sum of money or do any acts which would require the payment of
any sum of money by reason of the failure of Tenant, after any notice and the
expiration of any period with respect thereto, as required pursuant to the
applicable provisions of the Lease, to comply with any provisions of this Lease,
the sum or sums so paid by Landlord with all interest, costs and damages, shall
be deemed to be additional rental hereunder and shall be due from Tenant to
Landlord on the first day of the month following the incurring of such
respective expenses, except as otherwise herein specifically provided.
SECTION 11. If Tenant or Landlord shall bring any action for any relief
against the other, declaratory or otherwise, arising out of this Lease,
including any suit by Landlord for the recovery of rent, additional rent or
other payments hereunder or possession of the Premises, the losing party shall
pay the prevailing party a reasonable sum for attorneys' fees in such suit, at
trial and on appeal, and such attorneys' fees shall be deemed to have accrued on
the commencement of such action.
SECTION 12. This Lease contains all covenants and agreements between
Landlord and Tenant relating in any manner to the rental, use and occupancy of
the Premises and Tenant's licensed use of the Building and other matters set
forth in this Lease. No prior agreement or understanding pertaining to the same
shall be valid or of any force or effect, and the covenants and agreements of
this Lease cannot be altered, changed, modified or added to except in writing
signed by Landlord and Tenant. No representation, inducement, understanding or
anything of any nature whatsoever made, stated or represented on Landlord's
behalf, either orally or in writing (except this Lease) has induced Tenant to
enter into this Lease.
SECTION 13. Any provision or provisions of this Lease which shall prove
to be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof, and the remaining provisions hereof shall nevertheless
remain in full force and effect.
<PAGE>
SECTION 14. Except with respect to those conditions, covenants and
agreements of this Lease which by their nature could only be applicable after
the commencement of, during or throughout the term of this Lease, all of the
other conditions, covenants and agreements of this Lease shall be deemed to be
effective as of the date of execution of this Lease.
SECTION 15. Landlord and Tenant each represents and warrants to the
other that it has not engaged any broker, finder or other person who would be
entitled to any commission or fee in respect of the negotiation, execution or
delivery of this Lease, and shall indemnify each other against loss, cost,
liability, or expense incurred by either as a result of any claim asserted by
any such broker, finder or other person on the basis on any arrangements or
agreements made or alleged to have been made by or on behalf of either Landlord
or Tenant, as the case may be, in breach of the foregoing warranty.
SECTION 16. Any and all consents and approvals of Landlord required by
or referred to in the Lease shall not be unreasonably withheld.
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed and
delivered as of the day and year first above written.
Bernard Trager Jean Trager
ATTEST: REPUBLIC BANK & TRUST COMPANY
BY:
<PAGE>
EXHIBIT B
RULES AND REGULATIONS
1. No advertisement, sign, lettering, notice or device shall be placed in or
upon the Premises or the Building, including any windows, walls and exterior
doors, except such as may be approved in writing by Landlord.
2. Lettering upon the doors as required by Tenant shall be made by the sign
company designated by Landlord, but the cost shall be paid by Tenant. The
directories of the Building will be provided exclusively for the display of the
name and location of Tenant and its designated representative only, and Landlord
reserves the right to exclude any other names therefrom.
3. No additional locks shall be placed upon any doors of the Premises, and
Tenant agrees not to have any duplicate keys made without the consent of
Landlord. If more than two keys for any door lock are desired, such additional
keys shall be paid for by Tenant. Upon termination of this Lease, Tenant shall
surrender all keys.
4. No furniture, freight, supplies not carried by hand or equipment of any kind
shall be brought into or removed from the Building without the consent of
Landlord. Landlord shall have the right to limit the weight and size and to
designate the position of all safes and other heavy property brought into the
Building. Such furniture, freight, equipment, safes and other heavy property
shall be moved in or out of the Building only at the times and in the manner
permitted by Landlord. Landlord will not be responsible for loss of or damage to
any of the items above referred to, and all damage done to the Premises or the
Building by moving or maintaining any of such items shall be repaired at the
expense of Tenant. Any merchandise not capable of being carried by hand shall
utilize hand trucks equipped with rubber tires and rubber side guards.
5. The entrances, corridors, stairways and elevators shall not be obstructed by
Tenant, or used for any other purpose than ingress or egress to and from
Premises. Tenant shall not bring into or keep any animal within the Building, or
any bicycle or other type of vehicle.
6. Tenant shall not disturb other occupants of the Building by making an undue
or unseemly noise, or otherwise. Tenant shall not, without Landlord's prior
written consent, install or operate in or on Premises any machine or machinery
causing noise or vibration perceptible outside the Premises, electric heater,
stove or machinery or any kind or carry on any mechanical business thereon, or
keep or use thereon oils, burning fluids, camphene, kerosene, naphtha, gasoline,
or other coustible materials. No explosives shall be brought into the Building.
<PAGE>
7. Tenant shall not mark, drive nails, screw or drill into woodwork or plaster,
paint or in any way deface the Building or any part thereof, or the Premises or
any part thereof, or fixtures therein. The expense of remedying any breakage,
damage or stoppage resulting from a violation of this rule shall be borne by
Tenant.
8. If Tenant installs upon the Premises any electrical equipment which
constitutes an overload on the electrical line serving the Premises or the
Building, Tenant shall make all necessary changes to reduce such overload, or at
the option of Landlord, eliminate such equipment as Landlord deems necessary to
reduce the electrical capacity required to serve the Premises.
9. Canvassing, soliciting, and peddling in the Building is prohibited and Tenant
shall cooperate to prevent such activity.
10. The requirements of Tenant will be attended to only upon application at the
Landlord's office in the Building. Building employees shall not perform any work
or do anything outside of the regular duties, except on issuance of special
instructions from the office of the Building. If the Building employees are made
available for the assistance of Tenant, Landlord shall be paid for their
services by Tenant at reasonable hourly rates. No Building employee will admit
any person (Tenant or otherwise) to any office without specific instructions
from the office of the Building.
11. Landlord reserves the right to close and keep locked all entrance and exit
doors of the Building on Sundays, legal holidays, and between the hours of 7:00
p.m. of any day and 7:00 a.m. of the following day, and during such further
hours as Landlord may deem advisable for the adequate protection of the Building
and the property of the tenants. Tenant shall have 24-hour access to the
Premises.
EXHIBIT 10.11
Lease at 2801 Bardstown Road
LEASE
THIS LEASE is entered into on August 1, 1982 between
JAYTEE PROPERTIES
P. O. BOX 600
SHELBYVILLE, KY 40065
"Landlord"
and
REPUBLIC BANK & TRUST COMPANY
2801 BARDSTOWN ROAD
LOUISVILLE, KY 40205
"Tenant"
WITNESSETH:
In consideration of the mutual convenants hereinafter contained, and
each act performed hereunder by either of the parties, Landlord and Tenant agree
as follows:
ARTICLE I
EXHIBITS ATTACHED AND MEMORANDUM OF LEASE
Section 1.01. Exhibits. The following exhibits are attached to and
made a part of this Lease:
(1) Exhibit A. Specimen Memorandum of Lease.
(2) Exhibit B. Legal Description of the Demised Premises.
(3) Exhibit C. Diagram.
Section 1.02. Memorandum of Lease. Landlord and Tenant agree not to
place this lease of record, but to execute, acknowledge and record a memorandum
of lease containing the names of Landlord and Tenant, the specific legal
description of the Demised Premises, the Original Term, and the renewal option.
Such memorandum of lease shall be substantially in the form of Exhibit A
attached hereto and by reference made a part hereof. Landlord shall have the
memorandum of lease recorded and supply the recorded copy to Tenant.
ARTICLE II
DEMISED PREMISES
Section 2.01. Demised Premises. Landlord hereby lets and demises to
Tenant, and Tenant hereby leases from Landlord the real property known as and
located at 2805 and 2807 Bardstown Road, Louisville, Kentucky, together with the
improvements located thereon, consisting of a two story brick building and
appurtenances.
ARTICLE III
TERM AND RENEWALS
Section 3.01. Original Term. The "Original Term" of this lease shall be
for a period of sixteen (16) years beginning on August 1, 1982 and ending on
July 31, 1998.
Section 3.02. Renewals. Landlord grants to Tenant an option to extend
the Original Term for an additional term of ten (10) years on the same terms and
conditions as herein set forth. This lease shall be automatically renewed unless
Tenant notifies Landlord in writing three months prior to the expiration of such
Lease that the Tenant will not exercise his option to extend the Lease.
Section 3.03. Demised Term. The Original Term and any additional
terms of this lease resulting from the exercise of the option granted in Section
3.02 are collectively referred to in this lease as the "Demised Term."
Section 3.04. Holding Over. In the event Tenant remains in possession
of the Demised Premises after the expiration of the Demised Term and without the
execution of a new lease, it shall be deemed to be occupying the Demised
Premises as a tenant from month to month, subject to all conditions, provisions
and obligations of this lease insofar as the same are applicable to a
month-to-month tenancy.
ARTICLE IV
RENT
Section 4.01. Rent. The Tenant shall pay as rent for the Demised
Premises the sum of $24,996 annually, payable $2,083 per month for each and
every month during the first three years of this Lease. Rentals shall be
adjusted upward (but not downward) at the end of each three year segment of the
demised term at such amount as the parties may agree upon as properly reflective
of prevailing increases in rentals generally. In the event of a failure of
agreement, the parties will submit the question of fair rental to a member of
the Louisville Board of Realtors jointly acceptable to the parties, whose
decision will be binding upon both Landlord and Tenant. All payments shall be
paid in advance without demand on the first day of each month at the office of
the Landlord or at such place designated by Landlord. If the commencement of the
Lease term does not coincide with the first day of a calendar month, the monthly
rental payment for the first and last months of the term shall be paid in a
prorated amount which shall be computed on the number of days the Tenant
occupies the premises during the months in question.
Section 4.02. Real Estate Taxes. Tenant shall reimburse Landlord for
real property ad valorem taxes levied on the Demised Premises which are paid by
Landlord during the Demised Term. The reimbursement provided for in this section
shall be paid within thirty (30) days after delivery to Tenant of a receipt
showing such payment by Landlord. The amount of Tenant's liability for said Real
Estate Taxes shall be determined by multiplying the total bill by a fraction,
the numerator of which is 1800 and the denominator of which is the total square
feet in the building of which the Demised Premises are a part.
(A) Tenant shall have the right at its own expense to challenge any tax
or assessment; such challenge will not, however, relieve Tenant's obligation to
pay such taxes promptly when due. If such challenge results in a reduction of
taxes or assessments, Tenant shall be entitled to a refund of its proportionate
part of such reduction within 14 days of the date such refund amount is received
by Landlord. If the challenge results in reduction of a bill prior to payment of
Landlord, Tenant shall not be entitled to a refund, but shall have its bill
appropriately reduced.
(B) If this lease expires or terminates before a tax or assessment bill
is rendered for the year in which such expiration or termination occurs, Tenant
shall pay to Landlord on January 1 of such year of expiration or termination the
proportionate amount of the anticipated tax for the entire calendar year. The
said proportional amount shall be computed as a fraction, the numerator of which
shall be the number of months of the lease term within the last calendar year
and the denominator of which shall be 12.
ARTICLE V
USE OF DEMISED PREMISES
Section 5.01. Use. The Demised Premises may be used by Tenant for the
operation of a bank and trust company, and for other financial and related
services. Tenant shall not use or allow the Demised Premises to be used for any
purpose other than as specified herein and shall not use nor permit the Demised
Premises to be used for any unlawful, disreputable or immoral purpose or in any
way that will injure the reputation of the Demised Premises.
ARTICLE VI
UTILITY SERVICES
Section 6.01. Payment by Tenant. Payment for all utilities used upon or
in connection with the office space leased by Tenant will be paid by the Tenant
in an amount due according to the separate meters which have been installed to
register consumption for said office space. Such utilities include water, gas
and electricity.
Tenant will reimburse Landlord for the Tenant's share of any bills for
trash collection within 30 days after notice of such bill is received by the
Tenant.
ARTICLE VII
MAINTENANCE
Section 7.01. Landlord's Responsibilities. Landlord shall make
replacements within the interior and exterior of the Demised Premises and keep
and maintain same in good condition and repair. If Landlord refuses or neglects
to commence or complete repairs promptly or adequately, Tenant may, but shall
not be required to do so, make or complete said repairs and deduct the cost
thereof from the next rental payment. Landlord shall comply with the directions
of proper public officers as to the maintenance of the Demised Premises and
shall comply with all health and police regulations applicable to or affecting
the Demised Premises. Tenant shall deliver the Demised Premises to Landlord in
good condition at the end of the Demised Term, excepting ordinary wear and tear
and damage by fire or casualty.
ARTICLE VIII
ALTERATIONS
Section 8.01. Alterations by Tenant. Any remodeling, alterations and
additions to the Demised Premises which Tenant may deem necessary during the
Demised Term shall be made at Tenant's expense, and Landlord hereby consents
thereto. Major structural changes to the Demised Premises shall be made only
with Landlord's written consent. Except as otherwise provided in Section 9.01,
or unless otherwise specifically provided in writing, any such alteration or
addition shall remain in the Demised Premises upon the expiration or termination
of this Lease, free of any claim by Tenant. Tenant shall furnish evidence to
Landlord that all claims for labor and materials furnished for such remodeling,
alteration or addition have been paid or provided for. Should Tenant fail to pay
for such labor or materials, Landlord may pay such amount and add the cost
thereof to the rental provided for herein.
ARTICLE XI
TRADE FIXTURES
Section 9.01. Tenant's Equipment. All fixtures, equipment and other
personal property placed in or upon the Demised Premises by Tenant shall remain
property of Tenant, and Tenant shall have the right to remove such property at
any time. Landlord shall execute or cause any mortgagee of Landlord to execute
in recordable form any waivers as tenant may request as to said fixtures,
equipment and other personal property.
ARTICLE X
INSURANCE
Section 10.01. Fire and Extended Coverage. Tenant shall carry during
the Demised Term fire and extended coverage insurance on the building
constituting a part of the Demised Premises for not less than eighty percent
(80%) of its insurable value on a reproduction cost basis. Tenant shall provide
Landlord with certificates of insurance showing that all insurance is effective,
payable to Landlord and Tenant (as their respective interests appear) and not
cancelable without ten (10) days' prior written notice to Landlord. Landlord and
Tenant hereby waive and relinquish any and all rights which either might have
against the other arising out of damage to the Demised Premises or any property
therein, resulting from fire or casualty normally covered by standard fire and
extended coverage insurance, whether or not such damage is caused by any alleged
negligence of either Landlord or Tenant, their employees, customers, invitees or
licensees. Landlord and Tenant agree that the fire and extended coverage
insurance policy or policies shall include a waiver of subrogation endorsement
recognizing the release of liability of Landlord and Tenant as set forth herein.
Section 10.02. Public Liability Coverage. Tenant shall, commencing on
the date it commences occupancy of the Demised Premises, and thereafter
continually during the Demised Term, carry public liability insurance with
respect to the Demised coinsureds. Such insurance policy shall have limits of
liability of not less than $500,000 single limit and $500,000 for damage to
property. Tenant shall furnish Landlord with certificates of insurance showing
that such insurance is in force and not cancelable without ten (10) days' prior
written notice to Landlord. On or before one hundred twenty (120) days prior to
the expiration of the first three (3) lease years during the Demised Term,
Landlord may give written notice to Tenant requiring that the limits of
liability set forth in this Section 10.02 be increased for the renewal period of
three (3) lease years to an amount comparable to the then standard limits of
liability contained in public liability insurance policies for commercial leases
in Kentucky. If Landlord and Tenant are unable to agree on the amount of the
increase in the liability for the renewal period, such increase shall be
determined by the majority decision of three arbiters, one of whom shall be
appointed by Landlord, one by Tenant and the third by the other two arbiters, or
if they are unable to agree on a third arbiter, by the senior Federal District
Court Judge for the Western District of Kentucky. The fees and expenses of any
arbiters shall be borne equally by Landlord and Tenant. Pending final
determination of the amount of such increase, Tenant shall continue to carry
public liability insurance in an amount not less than the amount required during
the original lease term. However, within sixty (60) days after the amount of
such increase, if any, is finally determined, Tenant shall carry public
liability insurance as provided herein in an amount not less than the amounts so
determined.
Section 10.03. Waiver of Subrogation. Each party hereto waives any and
every claim which arises or may arise in its favor and against the other party
hereto during the term of this Lease or any renewal or extension thereof for any
and all loss of, or damage to, any of its property located within or upon, or
constituting a part of, or damage to, any of its property located within or upon
the premises leased to Tenant hereunder, which loss or damage is covered by
valid and collectible fire and extended coverage insurance policies, to the
extent that such loss or damage is recoverable under said insurance policies.
Said mutual waivers shall be in addition to, and not in limitation or derogation
of any other waiver or damage to property of the parties hereto. Inasmuch as the
above mutual waivers will preclude the assignment of any aforesaid claim by way
of subrogation (or otherwise) to any insurance company (or to any other person),
each party hereto hereby agrees immediately to give to each insurance company
which has issued to it policies of fire and extended coverage insurance, written
notice of the terms of said mutual waivers, and to have said insurance policies
properly endorsed, with a copy of said endorsement to be furnished by either the
Landlord or the insurance company to the Tenant, to prevent the invalidation of
said insurance coverages by reason of said waivers.
ARTICLE XI
DEFAULT AND REMEDIES
Section 11.01. Default. In event of any failure of Tenant to pay any
rent due hereunder within ten (10) days after the same shall be due, or any
failure to perform any other of the terms or conditions of this Lease to be
observed or performed by Tenant for more than thirty (30) days after notice of
such default shall have been given to Tenant, or it Tenant shall falsify any
report, statement or information required to be furnished to Landlord pursuant
to the terms of this Lease, or if Tenant or any guarantor of the Lease shall
become bankrupt or insolvent or file any debtor proceedings to take or have
taken against Tenant or any guarantor of this Lease in any court pursuant to any
statute either of the United States or of any state a petition in bankruptcy or
insolvency or for reorganization of for the appointment of a receiver or trustee
of all or a portion of Tenant's or any such guarantor's property, or if Tenant
or any such guarantor makes an assignment for the benefit of creditors or
petitions or enters into an arrangement, or if Tenant shall abandon said
premises or suffer this Lease to be taken under any writ of execution, then
Landlord, in addition to other rights and remedies it may have, may terminate
this Lease or may immediately re-enter the Demised Premises and remove all
persons and property therefrom, and such property may be removed and stored in a
public warehouse or elsewhere at the cost and for the account of Tenant, all
under the applicable legal procedures and within due process under the law. If
Landlord re-enters and relets the Demised Premises without terminating this
Lease, Landlord shall receive all rent therefrom but Tenant shall remain Liable
for all amounts due under this Lease less the proceeds of reletting, if any,
after deducting therefrom the expenses or re-entering the Demised Premises and
of any repairs and alterations necessary to prepare the Demised Premises for
reletting.
Section 11.02. Default in Performance of Covenants. In the event
Landlord shall be in default on any of its covenants contained herein and such
default continues for fifteen (15) days after the service of written notice
pursuant to Section 16.01 of the existence of such default and Landlord is not
diligently pursuing the cure of such default at the end of said fifteen (15) day
period, Tenant may perform any covenant of Landlord as to which Landlord is in
default, and Tenant shall have the right to deduct from the rental provided for
herein its costs and expenses paid out and expended.
ARTICLE XII
DAMAGE
Section 12.01. Damage to the Demised Premises. If at any time during
the Demised Term, the building which constitutes a part of the Demised Premises
shall be damaged or destroyed, said building promptly shall be repaired or
rebuilt or restored by Landlord to the condition as good as the same was
immediately prior to such damage or destruction but in accordance with plans and
specifications mutually agreed upon by Landlord and Tenant. The work of
restoration or rebuilding shall be in full compliance with all laws and
regulations and governmental ordinances applicable thereto. During any such
period that the damage or destruction is such as to render the use of the
building constituting a part of the Demised Premises impractical or impossible
in the reasonable opinion of Tenant, the rents herein provided shall abate. In
the event such building shall be used by Tenant for the operation of business,
rents shall be paid in proportion to the amount and value of the building
available for use so that there will be a fair apportionment of rent. If the
building constitutes a part of the Demised Premises shall be totally destroyed
during the last year of the Original Term or during the renewal term, then and
in that event either Landlord or Tenant may terminate this lease as of the date
of such damage or destruction by thirty (30) days' written notice to the other;
provided, however, if within thirty (30) days after receipt by Tenant of any
such notice from Landlord, Tenant shall give notice of its intention to exercise
any option to renew for the renewal term, this lease shall not terminate,
notwithstanding any notice of termination which may have been previously given
by Landlord to Tenant and Landlord shall rebuild and restore the building as
aforesaid.
ARTICLE XIII
CONDEMNATION
Section 13.03. Condemnation. If, during the Lease Term, any part of the
Demised Premises is condemned or taken by eminent domain, or if any street or
entrance providing access to the Demised Premises is permanently closed or
blocked, and the Demised Premises is thereby rendered unsuitable or inadequate
for the continuation of Tenant's normal full-scale business operations thereon,
then at the option of Tenant this Lease shall terminate as of the date of such
occurrence. If this Lease is so terminated, the award made by the condemning
authority shall be distributed according to the law of Kentucky. If such
occurrence does not render the Demised Premises unsuitable or inadequate for
such purposes, this Lease shall remain in force and effect, but rentals
hereunder shall thereafter be reduced in proportion to the decreased utility of
the remaining portion of the Demised Premises, and the distribution of the award
made by the condemning authority shall be governed by Kentucky Law.
ARTICLE XIV
INSPECTION AND ACCESS
Section 14.01. Inspection and Access. Landlord or its agents may at any
reasonable time inspect the Demised Premises and make such repairs to the
building of which the Demised Premises are a part as Landlord deems necessary
for its preservation. Any repairs made by Landlord because of Tenant's breach of
covenant to repair or maintain shall be at Tenant's expense. Landlord shall
further have the right to install and maintain in the Demised Premises all
water, drain, gas, heating pipes and fixtures, electrical wiring, and all other
appliances necessary for the operation of the balance of the building of which
the Demised Premises are a part, provided that such installation and maintenance
does not materially interfere with Tenant's use or reduce the attractiveness of
the Demised Premises. Landlord shall have access to the Demised Premises at all
reasonable times and in case of emergency at any time for the purpose of
inspecting such facilities or of making such repairs or changes thereto as
Landlord deems necessary. Tenant shall not install any equipment which will
exceed the capacity of the utility facilities for the Demised Premises, and any
equipment necessary to increase utility capacity shall be installed at Tenant's
expense. Landlord shall have access during the last twelve (12) months of the
term of this Lease for the purpose of exhibiting the Demised Premises, and
Landlord shall have the right to place signs in or on the Demised Premises
advertising the same for lease ninety (90) days prior to the end of the initial
term or extension term, if not further extended.
ARTICLE XV
ASSIGNMENT, SUBLEASE, OR LICENSE
Section 15.01. Assignment, Sublease, or License. Tenant may not assign
or sublease the premises, or any right or privilege connected therewith, or
allow any other person to occupy the premises or any part thereof without first
obtaining the written consent of Landlord.
ARTICLE XVI
NOTICE
Section 16.01. Notices and Payments. All notices, consents, waivers,
releases, certifications, statements, requests, payments, and other
communications of any kind hereunder shall be in writing and shall be addressed
and sent to the parties at their addresses shown in the caption of this Lease,
subject to thirty (30) days' notice of change. Such communications shall be
effective when deposited in United States Mail, postage prepaid, unless
otherwise agreed or provided herein.
ARTICLE XVII
SIGNS
Section 17.01. Signs. Tenant may erect, maintain, permit and remove
such signs on or about the Demised Premises at its discretion without the
consent of the Landlord.
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
Section 18.01. Time of Essence. Time shall be deemed of the essence
in all matters pertaining to this Lease.
Section 18.02. Convenant of Title. Landlord covenants, represents and
warrants that it has full right and power to execute and perform its obligations
under this lease and to grant the estate demised herein and that Tenant, on
payment of the rent herein reserved and performance of the covenants and
agreements herein contained, shall peaceable and quietly have, hold and enjoy
the Demised Premises during the Demised Term without molestration or hindrance
by any person, and if at any time during the Demised Term, the title of Landlord
shall fail or it shall be discovered that its title does not enable Landlord to
grant the term hereby demised, or action is taken by governmental authority
which prevents Tenant from using the Demised Premises for the use contemplated
by it, Tenant shall have the option at Landlord's expense to correct or contest
such defect or action, or to annul and void this lease with full reservation of
its rights to damages, if any, against Landlord.
Section 18.03. Waiver. No waiver of any condition or covenant of this
Lease by either party shall be deemed to imply or constitute a further waiver of
the same or any other condition or covenant of this Lease.
Section 18.04. Relationship of Parties. Nothing herein contained shall
be deemed or construed by the parties hereto, nor by any third party, as
creating the relationship of principal and agent, or of partnership, or of joint
venture, between the parties hereto, it being agreed that neither the method of
computation of rents nor any other provisions named herein, nor any acts of the
parties herein, shall be deemed to create any relationship between the parties
hereto other than the relationship of Landlord and Tenant.
Section 18.05. Construction. Whenever a word appears herein in its
singular form, such work shall include the plural; and the neuter gender shall
include the masculine and feminine genders. This Lease shall be construed
without reference of titles of Articles, Sections or Clauses, which are inserted
for reference only.
Section 18.06. Successors. This Lease shall ensure to the benefit of
and be binding upon the parties hereto, their respective heirs, personal
representatives, successors and assigns.
Section 18.07. Consent. Whenever it is necessary under the terms of
the Lease for either party to obtain the consent or approval of the other party,
such consent or approval shall not be unreasonably withheld.
Section 18.08. Indemnification. Landlord covenants at all times to
save the Tenant harmless from all loss, cost or damages which may occur or be
claimed with respect to any person or persons, corporation, property or chattels
on or about the Leased Premises, or to the property itself resulting from the
negligent acts of Landlord, its servants and agents.
Section 18.09. Entirety, Severability, and Law. This Lease shall
constitute the entire agreement between the parties and shall not be modified in
any manner except by written instrument executed by the parties. The invalidity
or unperformability of any provision hereof shall not affect or impair any other
provision hereof. Each term and provision hereof shall be performed and enforced
to the fullest extent permitted by and in accordance with Kentucky law.
Section 18.10. Law of Kentucky. This Lease shall be governed by the
laws of the state of Kentucky.
This lease shall supersede any prior lease on this property.
To indicate their understanding of and consent to the foregoing terms,
the parties have executed this Lease on the date first above written.
LANDLORD
JAYTEE PROPERTIES
BY:
JEAN S. TRAGER
TENANT
REPUBLIC BANK & TRUST COMPANY
BY:
ITS:
EXHIBIT 10.12
Lease at 661 South Hurstbourne Parkway, Louisville
REPUBLIC BANK PLACE
LOUISVILLE, KENTUCKY
INDEX TO LEASE
Article Page
I. Premises 1
II. Term 2
III. Rent and Operating Expenses 2
IV. Use 2
V. Possession 3
VI. Services to be Provided 3
VII. Maintenance and Repair; Alterations 3
VIII. Access 4
IX. Damage or Destruction 4
X. Indemnity 5
XI. Insolvency, Etc. 5
XII. Remedies 6
XIII. Insurance 6
XIV. Liens 8
XV. Assignment; Subletting; Mortgaging 8
XVI. Estoppel Certificate 9
XVII. Taxes 9
XVIII. Priority of Lease 10
INDEX TO LEASE
Article Page
XIX. Fixtures and Personal Property; 10
Surrender
XX. Hold over Tenancy 11
XXI. Waiver of Subrogation 11
XXII. Notices 12
XXIII. Rights Reserved by Landlord 12
XXIV. Condemnation 12
XXV. Miscellaneous Provisions 13
Rev. 3/93
<PAGE>
OFFICE LEASE
THIS LEASE, dated this 3rd day of February, 1993, is between Jaytee
Properties, a Kentucky general partnership, hereinafter referred to as
"Landlord" and Republic Bank & Trust Company, hereinafter referred to as the
"Tenant". As parties hereto, Landlord and Tenant agree:
ARTICLE I. PREMISES
SECTION 1. Tenant leases from Landlord and Landlord leases to Tenant
the following described premises (hereinafter called the "Premises"):
Being approximately 7,000 square feet of rentable office space
located on the first and second floors in Republic Bank Place
(hereinafter called "the Building") located at Hurstbourne
Parkway and Stone Creek Parkway in Jefferson County, Kentucky.
Tenant's retail banking operation shall be limited to 5,000
square feet on the first floor as such space is the only
location available for purposes other than office use.
SECTION 2. The Premises shall be provided in "as is" condition with the
exception of the base construction to be performed by Landlord as described in
Exhibit A attached hereto. Tenant acknowledges he has examined the Premises,
knows the condition of the Premises, and accepts the Premises in the condition
as currently existing. Any remodeling construction and/or redecorating within
the Premises shall be performed to the complete and absolute satisfaction of
Landlord. The Landlord's written approval shall be obtained by Tenant prior to
commencement of any and all improvements and the construction of improvements
shall be supervised and approved by Landlord on a continuous basis.
SECTION 3. This lease confers no rights with respect to the Building
other than tenancy of the Premises and the non-exclusive license to use, during
such tenancy, the following facilities provided by Landlord: (i) toilet
facilities on the floor which the Premises are located (and such other toilet
facilities located elsewhere in the Building as may be designated by Landlord
for the general use of tenants); and (ii) the public entrances to, and main
floor lobby in, the Building; (iii) the passenger elevators serving the
Building; (iv) the areas adjacent to the Building dedicated from time to time
for parking purposes by Landlord for the parking of motor vehicles; and (v) the
roadways and passageways adjacent to the Building for passage by motor vehicle
and on foot, as said roadways and passageways may respectively be dedicated by
Landlord; provided, however, that Tenant shall have the exclusive right to
fifteen (15) dedicated parking spaces in front of the Building.
<PAGE>
ARTICLE II. TERM
Landlord leases the Premises to Tenant, and Tenant hires and takes the
Premises from Landlord, for a term of five (5) Lease Years commencing on the
first day of July, 1993, or, upon actual possession no later than sixty days
from Landlord's delivery of the Premises to the Tenant for construction of
Tenant's improvements, whichever occurs later (the "Lease Commencement Date")
and expiring at midnight on the last day of the sixtieth month thereafter unless
sooner terminated pursuant to the terms hereof. "Lease Year" shall mean a year
period beginning on the first day of a month, which is the first calendar month
of the term of the Lease and ending on the day before the anniversary of the
first day of such year.
ARTICLE III. RENT
SECTION 1. Tenant shall pay to Landlord, at Landlord's office in the
Building or at such place as Landlord may from time to time designate, as rental
for the Premises, the sum of Eleven Thousand Eighty-three Dollars and
Thirty-three cents ($11,083.33) per month (the "Rent"). Rent shall be payable in
advance on the first day of each calendar month during the first five Lease
Years.
SECTION 2. In the event that the Rent, or any other sum payable by
Tenant to Landlord under this lease, shall not be received (paid) within ten
(10) days of the due date thereof, Landlord may, at its option, add a monthly
service charge, at a rate which shall be the greater of $25.00 or 1% for each
month or fraction thereof from such rent due date during which such Rent or
other sum remains unpaid. Further, in the event that any check which has been
remitted to Landlord by Tenant for payment of the Rent, or any other sum payable
under this Lease, shall not be honored upon its presentation for payment, then
the monthly service charge shall be similarly imposed on said amount from the
due date until paid. Acceptance by the Landlord for such service charge shall
not be deemed to be a waiver by Landlord of any default nor shall it restrict
the remedies otherwise available to Landlord hereunder.
ARTICLE IV. USE
The Premises are to be used only for the purpose of conducting therein
the operation of a Bank and any and all related services and for no other
business or purpose without the prior written consent of Landlord. Tenant shall
not do or permit to be done in or about the Premises anything which is illegal
or unlawful; or which is of a hazardous or dangerous nature; or which will
increase the rate(s) of insurance upon the Building. Tenant shall (and shall
cause its employees to) observe the rules and regulations set forth in Exhibit B
attached hereto and made a part hereof, as the same may be amended by Landlord
from time to time, and Tenant shall comply with all governmental laws and
ordinances and all regulations applicable to the use and occupancy of the
Building.
<PAGE>
ARTICLE V. POSSESSION
If Landlord permits Tenant to enter into possession of the Premises
prior to the Lease Commencement Date, all of the terms and conditions of this
Lease shall apply during such prior period. Tenant's taking of possession of the
Premises are in good and tenantable condition and acceptable for Tenant's use
thereof as provided in this Lease. Barring any natural disaster or other act of
God, if Landlord is unable to deliver possession of the premises by November 1,
1993, then in such event, Tenant shall have the option for a period of sixty
(60) days thereafter to terminate the lease upon written notice to Landlord. In
the event Tenant exercises such option to cancel the Lease, neither party shall
have any liability to the other. In the event a natural disaster or act of God
delays possession past November 1, 1993, Tenant shall have the option of
postponing possession and the Lease Commencement Date to no later than January
1, 1994.
ARTICLE VI. SERVICES TO BE PROVIDED
Landlord shall furnish reasonable amounts of heat, air conditioning,
water, elevator service and janitor service (collectively "Services") to the
Premises during the times and in the manner that Landlord determines appropriate
for the furnishing of such services in the Building, all such services being
subject to energy availability or Energy Consumption Regulations which may be
hereafter promulgated. It is expressly agreed that should any local, state or
federal governmental body, agency or public utility restrict or reduce the
amount of fuel or energy which may be utilized to provide the utilities and
services as specified above, then such restriction or reduction, and the
reduction in utilities and services which may result therefrom, shall in no way
create or constitute a default on the part of the Landlord, and there shall be
no reduction or abatement in the Rent or any other sum payable by Tenant
thereunder. Further, Landlord shall not be liable for any injury, damage,
inconvenience, or otherwise which may arise or result should the furnishing of
any such services by interrupted or prevented by fire, accident, strike, riot,
act of God, the making of necessary repairs or improvements, or any other cause
beyond the reasonable control or prevention of Landlord, nor, subject only to
the provisions of Article X of this Lease, shall the Rent payable by Tenant
hereunder abate.
<PAGE>
ARTICLE VII. MAINTENANCE AND REPAIR; ALTERATIONS
SECTION 1. Landlord shall keep and maintain the roof, foundations,
floor slab, and all structural walls (including windows and plate glass),
gutters and downspouts of the Premises in good order and repair. Landlord shall
keep or cause to be kept in good repair all common areas of the Building and
appurtenant areas, including lighting systems; drainage systems; mechanical,
plumbing, and electrical systems; heat and air conditioning units; ductwork,
lines, pipes, and conduits serving the Premises; and parking areas and
driveways. Any maintenance, repairs or replacements to any of the foregoing made
necessary by any acts or omissions of the Tenant, its agents or employees, shall
be paid for by Tenant and Tenant shall reimburse Landlord on demand for the cost
of repairing any damage to the Premises or the Building caused by Tenant or its
agents or employees. In the event, after reasonable notice to Landlord, Landlord
fails to make any repairs as hereinbefore provided, then Tenant shall have the
right to make these repairs and deduct the cost thereof from any future rental
payments.
SECTION 2. All maintenance, repairs, or replacements relating to the
premises that are not the obligation of Landlord as set forth in Section 1
above, shall be the obligation of Tenant and shall be made by Tenant at Tenant's
sole cost and expense. Tenant shall maintain, at its expense, the interior of
the Premises in good repair and in a clean and attractive condition. Tenant's
obligation to maintain, repair and replace includes, but is not limited to, all
the interior of the Premises. In the event Tenant fails to comply with the
requirements of this Section, Landlord may effect such maintenance and repair
and the cost thereof, with interest at the rate of 8.5% per annum, shall be
payable immediately to Landlord as additional rent. In the event the applicable
Statute of the Commonwealth of Kentucky at any time shall allow for a higher
rate of interest under an instrument in writing, then such higher rate shall
apply and be payable. If Tenant is a corporation, then the interest rate to be
so payable hereunder shall be at the rate of 12% per annum.
SECTION 3. Tenant shall not make any alterations, additions or
improvements to the Premises without first obtaining Landlord's prior written
consent. In connection with any such request for Landlord's consent to such
alterations, additions or improvements to the Premises, Landlord may retain the
services of an architect and/or engineer; and the reasonable costs for the
services of such architect and/or engineer shall be reimbursed to Landlord by
Tenant. Landlord may make any repairs for the preservation, safety or
improvement of the Premises or the Building. All alterations, and improvements
made by Tenant shall become the property of Landlord upon making thereof and
shall be surrendered to landlord upon the expiration of this Lease.
<PAGE>
ARTICLE VIII. ACCESS
Landlord and its agents shall have the right to enter into and upon the
Premises at all reasonable times with reasonable notice for the purpose of
inspecting, cleaning, repairing, altering or improving the Premises or the
Building with the exception of an emergency situation. Landlord shall have the
right to show the Premises to prospective tenants during the ninety (90) day
period prior to the expiration of the term of this Lease and shall have the
right at all reasonable times to show the Premises to prospective purchasers of
and lenders upon the Building. Any damage or loss caused to the Premises and/or
to the Tenant by any use of or access to the Premises by Landlord shall be
repaired by Landlord at Landlord's expense.
ARTICLE IX. DAMAGE OR DESTRUCTION
SECTION 1. If the Premises is damaged or destroyed, in whole or in
substantial part, and Section 2 does not apply, then Landlord may elect to
terminate this Lease as of the date of the damage or destruction by notice given
to Tenant in writing not more than twenty (20) days following the date of damage
or destruction. If Landlord does not elect to terminate, Landlord shall, at
Landlord's expense, proceed to restore the property to substantially the same
form, condition and quality as prior to the damage or destruction. If Landlord
elects to rebuild and repair, Landlord shall proceed as soon as reasonably
possible and thereafter shall proceed without interruption and be completed
within one hundred-eighty (180) days after notice has been given of Landlord's
intent to rebuild and repair, except for work stoppages on account of labor
disputes and matters not under the control of the Landlord. During such period
of repair or restoration, the Rent shall be abated in the same proportion as the
untenantable portion of the Premises bears to the entire Premises identified in
Section 1 of Article I of the Lease.
SECTION 2. If the Premises is damaged or destroyed, (i) to the extent
that more than fifty percent (50%) of the Building is damaged or destroyed, or
(ii) to the extent that more than fifty percent (50%) of the Premises is damaged
or destroyed, then in such event, Tenant may elect to terminate this Lease as of
the date of the damage or destruction by notice given to Landlord in writing not
more than twenty (20) days following the date of damage or destruction.
SECTION 3. Notwithstanding anything contained in this Article to the
contrary, Landlord shall not be required to repair, replace, restore, or rebuild
any property which Tenant shall be entitled to remove from the Premises under
the provisions of this Lease; it being agreed that Tenant shall bear the entire
risk of loss, damage or destruction of such property while it is in the
Building.
SECTION 4. If either party elects to terminate the Lease, Tenant shall
be entitled to reimbursement for any prepaid rent or other amounts paid by
Tenant and attributable to the unused term of the Lease.
<PAGE>
ARTICLE X. INDEMNITY
Tenant shall indemnify and hold Landlord harmless from all loss,
damage, liability or expense resulting from an injury to or death of any person
or any loss of or damage to any property caused by or resulting from any act or
omission of Tenant or any officer, agent, employee, guest, invitee or visitor of
Tenant in or about the Premises or the Building, but the foregoing provision
shall not be construed to make Tenant responsible for injuries to third parties
caused by the negligence of Landlord or any agent or employee of landlord. The
Landlord shall remain responsible for any injury to, or death of any person or
any loss of or damage to property sustained by any person whatsoever which may
be caused by the Building or any equipment or appurtenances thereto or thereof
being or becoming defective or out of repair. Landlord shall be and remain
liable for the negligent acts or omissions of Landlord, its agents and
employees.
ARTICLE XI. REMEDIES
SECTION 1. If at any time Tenant shall (a) fail to remedy any default
in the payment of any sum due under this Lease for ten (10) days after notice;
(b) fail to remedy any default with respect to any other of these provisions,
covenants or conditions of this Lease to be kept or performed by Tenant, within
thirty (30) days after notice (or, in the event the default is of such a nature
that it cannot be remedied within said thirty (30) day period, then such
additional time as may be necessary for Tenant to cure such default, within the
thirty (30) day period and thereafter diligently prosecutes the same to
completion); or (c) vacate or abandon the Premises, or fail to conduct its
business therein, for a period of five (5) consecutive business days, and then
fail to reoccupy and reestablish the conduct of business in the Premises within
ten (10) days following the date of written notice from Landlord of such
failure; then Landlord shall have all such rights and remedies as are provided
by law in respect of such default, including, at Landlord's election, the right
to terminate this Lease, and all Tenant's rights hereunder shall be terminated.
The liability of Tenant for the Rent, and other payments provided for
herein shall not be extinguished for the balance of this Lease, and Tenant shall
make good to Landlord any deficiency arising from such reletting of the
Premises, plus the costs and expenses of renovating, altering and reletting the
Premises, and including attorneys' fees or brokers' fees incident to Landlord's
reentry or reletting. Tenant shall pay any such deficiency each month, as the
amount thereof is ascertained by Landlord, or, at Landlord's option, Landlord
may recover, in addition to any other sums, the amount at the time of judgement
by which the unpaid Rent, and other payments for the balance of the term, after
judgement, exceeds the amount thereof which Tenant proves could be reasonably
avoided, discounted at the rate of 7%. In reletting the Premises, Landlord may
grant rent concessions and Tenant shall not be credited therefor. Nothing herein
shall be deemed to affect the right of Landlord to recover for indemnification
under Article X herein arising prior to the termination of this Lease.
<PAGE>
SECTION 2. Landlord shall in no event be in default in the performance
of any of its obligations in this Lease contained unless and until Landlord
shall have failed to perform such obligation within thirty (30) days, or such
additional time as is reasonably required to correct any such default after
notice by Tenant to Landlord properly specifying wherein Landlord has failed of
perform any such obligation.
ARTICLE XII. INSURANCE
SECTION 1. Tenant covenants and agrees that from and after the date of
delivery of the Premises from Landlord to Tenant and at all times during
possession thereof, Tenant will procure and maintain in full force and effect,
at its sole cost and expense, the following types of insurance, in the minimum
amounts specified below:
A. Public Liability and Property Damage. Personal injury liability, bodily
injury liability and property damage insurance in a single limit of not less
than One Million Dollars ($1,000,000), of which insurance shall insure the
performance by Tenant of the indemnity agreement as to liability for injury to
or death of persons and injury or damage to property as provided in Article X
hereof. All of such insurance shall be primary and noncontributing with any
insurance which may be carried by Landlord. The adequacy of the coverage
afforded by said liability and property damage insurance shall be subject to
review by Landlord from time to time, and Landlord retains the right to increase
or decrease said limits at such times.
B. Tenant Improvements. Insurance covering all of the lease-hold improvements,
(excepting only the structural components of the Building and demising
partitions), and Tenant's trade fixtures, and personal property from time to
time in and/or upon the Premises, in an amount of not less than the full
replacement cost thereof without deduction for depreciation, providing
protection against any peril included within the classification "Fire and
Extended Coverage", together with insurance against sprinkler damage, vandalism
and malicious mischief. Any policy proceeds shall be used for the repair or
replacement of the property damaged or destroyed unless this Lease shall cease
and terminate under the applicable provisions herein. If the Premises shall not
be repaired or restored following damage or destruction in accordance with other
provisions herein, Landlord shall received from such insurance proceeds and
amount equal to the replacement cost of the Tenant's leasehold improvements.
C. Business Interruption. Business interruption insurance with sufficient
coverage to provide for payment of rent and other fixed costs during any
interruption of Tenant's business by reason of fire or other similar cause.
<PAGE>
SECTION 2. All policies shall be for the mutual and joint
benefit and protection of Landlord and Tenant, with Landlord being named as an
additional insured. Certificates of such policies shall be delivered to Landlord
within ten (10) days after delivery of possession of the Premises to Tenant and
thereafter within thirty (30) days prior to the expiration of the term of each
such policy. All public liability and property damage policies shall contain a
provision that Landlord, although named as an insured, shall nevertheless be
entitled to recovery under said policies for any loss occasioned to it, its
servants, agents, and employees by reason of the acts, omissions and/or
negligence of Tenant. As often as any such policy shall expire or terminate,
renewal or additional policies shall be procured and maintained by Tenant in
like manner and to like extent. All policies of insurance must contain a
provision that the company writing said policy will give to Landlord thirty (30)
days' notice, in writing, in advance of any cancellation or lapse, or the
effective date of any reduction in the amounts of insurance. All public
liability, property damage and other casualty policies shall be written as
primary policies, not contributing with and not in excess of coverage which
Landlord may carry. Landlord may, from time to time, request Tenant to provide
Landlord with a certified copy of all insurance coverage carried by Tenant.
SECTION 3. Tenant agrees to pay to Landlord forthwith upon demand the
amount of any increase in premiums for insurance against loss by fire that may
be charged during the term of this Lease on the amount of insurance maintained
in force by Landlord on the Building, of which the Premises are a part,
resulting from Tenant doing any act in or about said Premises which does so
increase the insurance rates, whether or not Landlord shall have consented to
such act on the part of Tenant. If Tenant installs upon the Premises any
electrical equipment which constitutes an overload on the electrical lines of
the Premises, Tenant shall at its own expense make whatever changes are
necessary to comply with the requirements of the insurance underwriters any
governmental authority having jurisdiction thereover, but nothing herein
contained shall be deemed to constitute Landlord's consent to such overloading.
<PAGE>
ARTICLE XIII. LIENS
Tenant shall keep the Premises free and clear of, and shall indemnify
Landlord against all mechanics' liens and other liens on account of work done
for or materials , supplies and equipment furnished to Tenant by persons
claiming under it for maintenance, repairs and alterations. Tenant shall
reimburse Landlord for all costs and attorneys' fees incurred by Landlord in
investigating, defending or clearing such lien to be cleared within thirty (30)
days of filing of same unless Tenant shall have provided security acceptable to
landlord against any loss to Landlord on account thereof. As a condition to
Landlord's consent pursuant to Article VII, Landlord may require Tenant to
provide Landlord with reasonable payment and performance bonds of those persons
contracted by Tenant to perform work on or in the Premises that could be the
subject of such a lien in order to protect the Premises, the Landlord, and any
mortgagee from and against liens of mechanics and materialmen performing work in
or providing services and equipment to the Premises.
ARTICLE XIV. ASSIGNMENT; SUBLETTING; MORTGAGING
SECTION 1. Tenant shall not voluntarily, involuntarily or by operation
of law assign, transfer, mortgage or otherwise encumber all or any part of
Tenant's interest in this Lease, or sublet the Premises or any part thereof,
without first obtaining in each and every instance Landlord's prior written
consent. Subject to the foregoing, Tenant shall not assign, transfer or sublet
the Premises, or any part thereof, at a rent to Assignee, Transferee or
Sublessee, greater than $19 per square foot. Any transfer of this Lease by
merger, consolidation, or liquidation, or any change in the ownership of, or
power to vote the majority of its outstanding voting stock resulting in a change
in ownership of more than 50% of the total issued and outstanding shares of
Tenant shall constitute an assignment for the purposes of the paragraph. If
consent is once given by Landlord to any such assignment or subletting, such
consent shall not operate as a waiver of the necessity for obtaining Landlord's
consent to any subsequent assignment or subletting. Any legal costs incurred by
Landlord related to such assignment or subletting shall be paid by Tenant to
Landlord upon demand. Tenant shall provide Landlord with executed copies of any
Assignment. Transfer or Sublease Agreement entered into as provided herein.
ARTICLE XV. ESTOPPEL CERTIFICATE
Tenant shall at any time and from time to time execute, acknowledge and
deliver to Landlord a statement in writing certifying: (a) that this Lease is
unmodified and in full force and effect (or if there has been any modification
hereof that the same is in full force and effect as modified and stating the
nature of the modification or modifications); (b) that to the best of its
knowledge Landlord is not in default under this Lease (or if any such default
exists the specific nature and extent thereof); and (c) the date to which rent
and other charges have been paid in advance, if any.
<PAGE>
ARTICLE XVI. TAXES
SECTION 1. Tenant shall pay before delinquency any and all taxes and
assessments, and license, sales, business, occupation or other taxes, fees or
charges levied, assessed or imposed upon its business operations in the
Premises.
SECTION 2. Tenant shall pay before delinquency any and all taxes and
assessments levied, assessed or imposed upon its trade fixtures, leasehold
improvements, merchandise and other personal property in, on, or upon the
Premises.
SECTION 3. In the event any taxes, fees or charges referred to in the
preceding Section 1 and/or Section 2 shall be assessed, levied or imposed upon
or in connection with the business or property of Landlord, such assessment,
taxes, fees or charges shall be paid by Tenant to Landlord promptly upon
Landlord's request for such payment.
SECTION 4. Landlord shall pay before delinquency any and all costs and
expenses of every kind and nature for real estate ad valorem taxes, and/or fees,
assessments, charges or payments in lieu thereof, to the Commonwealth of
Kentucky, and/or any political subdivision thereof, including, without
limitation, Jefferson County, and/or any city, municipality, agency or special
district, the Jefferson County School Board, Louisville Water Company, and/or
the Louisville and Jefferson County Metropolitan Sewer District, whether general
or special assessments, including, but not limited to, sewer rents, rates and
charges; drainage fees; water charges; taxes based upon the receipt of rent; and
any other federal, state or local government charge, general, special, ordinary
or extra--ordinary (but not including income or franchise taxes or any other
taxes imposed upon or measured by Landlord's net income or profits, unless the
same is imposed in lieu of real estate taxes), which may now or hereafter be
levied or assessed against the Building or the land on which the Building and
appurtenant parking areas and driveways are located. If at any time during the
term of this Lease the method of taxation then prevailing shall be altered so
that any new tax, assessment, levy, imposition or charge shall be imposed upon
Landlord in place or partly in place of any such taxes and shall be measured by
or be based in whole or in part upon the Building or the rents or other income
therefrom, then all such new taxes, assessments, levies, imposition or charge
shall be imposed upon Landlord in place or partly in place of any such taxes and
shall be measured by or be based in whole or in part upon the Building or the
rents or other income therefrom, then all such new taxes, assessments, levies,
impositions or charges or part thereof, to the extent that they are measured or
based, shall be included in the definition of Landlord's costs and expenses
within the meaning of this subparagraph. Tenant shall only be directly
responsible for taxes, if any, on its personal property and on the value of its
special leasehold improvements exclusive of standard building improvements.
<PAGE>
ARTICLE XVII. PRIORITY OF LEASE
This Lease shall, unless Landlord otherwise elects, be subordinate to
any and all mortgages and other security instruments now existing, or which may
hereafter be made covering the Building and/or the real property underlying the
same or any portion or portions thereof, and for the full amount of all advances
made or to be made thereunder (without regard to the time or character of such
advances), together with interest thereon, and subject of all the terms and
provisions thereof and to any renewals, extensions, modifications and
consolidations thereof; and Tenant covenants within ten days of demand to make,
execute, acknowledge and deliver upon request any and all documents or
instruments demanded by Landlord which are or may be necessary or proper for
more fully and certainly assuring the subordination of this Lease to any such
mortgages or other security instruments, provided, however, that any person or
persons purchasing or otherwise acquiring any interest at any sale and/or other
proceedings under such mortgages or other security instruments may elect to
continue this Lease in full force and effect in the same manner, and with like
effect, as if such person or persons had been named as Landlord herein, and in
the event of such election, this Lease shall continue in full force and effect
as aforesaid, and Tenant hereby shall continue in full force and effect as
aforesaid, and Tenant hereby attorns and agrees to attorn to such person or
persons. Tenant hereby irrevocably appoints Landlord the attorney-in-fact of
Tenant, to execute and deliver any document provided for herein, for and in the
name of Tenant.
ARTICLE XVIII. FIXTURES AND PERSONAL PROPERTY; SURRENDER
SECTION 1. Upon the termination of this Lease, Tenant shall surrender
to Landlord the Premises (including, without limitation, all non-moveable
leasehold improvements) in good condition and repair reasonable wear, tear and
damage by casualty not caused by Tenant or its agents or employees excepted. All
improvements, additions, and fixtures made or installed from time-to-time by
Landlord to, in, upon, or about the Premises, including, but not limited to, all
lighting fixtures, shall be the property of Landlord and upon any such
termination, shall be surrendered to Landlord by Tenant without any injury,
damage or disturbance thereto or payment thereof.
SECTION 2. All fixtures, furniture, movable partitions, machinery,
equipment and other personal property installed or placed in said Premises at
the cost of or by Tenant shall at all times remain, be considered and treated as
the personal property of Tenant and in no sense part of the real estate, and
Tenant shall have the right at any time during the term of this Lease and any
extension thereof, or within a period of ten (10) days after any termination
hereof to remove the same or any part thereof from said Premises, provided,
however, that upon the removal of any such personal property, Tenant agrees to
restore the area from which the same has been removed to substantially the same
condition as it was prior to the installation thereof and to the extent
necessary to keep Premises in a leasable and usable condition for future
tenants. If Tenant fails to remove any
<PAGE>
such personal property, Landlord may at Landlord's option retain all or any of
such property and title thereto shall thereupon vest in Landlord, Landlord may
remove from the Premises and dispose of in any manner all or any of such
property, in which latter event Tenant shall, upon demand, pay to Landlord the
actual expense of such removal and disposition, and the cost of repair of any
and all damage to the Premises resulting from or caused by such removal.
ARTICLE XIX. HOLD OVER TENANCY
If Tenant shall, without execution of a new Lease or written extension,
and with consent of Landlord, hold over after the expiration of the terms of
this Lease, such tenancy shall be a month-to-month tenancy, which may be
terminated as provided by law. During such tenancy, Tenant shall pay to Landlord
the greater of (a) the rental rate then being quoted by Landlord for comparable
space in the Building; or (b) the Rent pursuant to Article III. During such
tenancy, Tenant shall be bound by all of the terms, covenants, and conditions as
herein specified, as far as applicable; provided, however that if Tenant fails
to surrender the Premises upon the termination of this Lease, in addition to any
other liabilities to Landlord arising therefrom Tenant shall indemnify and hold
Landlord harmless from loss or liability resulting from such failure, including
any claims made by any succeeding Tenant founded on such failure.
ARTICLE XX. WAIVER OF SUBROGATION
Landlord and Tenant each releases and relieves the other and on behalf
of its insurer(s) waives its entire right of recovery against the other for loss
or damage arising out of or incident to the perils of fire, explosion, or any
other perils generally described in the "extended coverage" insurance
endorsements used in Louisville which occur in, on or about the Building and/or
the Premises, whether due to the negligence of such other party, its agents or
employees, or otherwise.
ARTICLE XXI. NOTICES
Wherever in this Lease it shall be required or permitted that notice,
approval, advice, consent or demand be given or served by either party to this
Lease to or on the other, such notice or demand shall be given or served and
shall not be deemed to have been duly given or served unless in writing and
forwarded by certified or registered mail, addressed as follows:
To Landlord: Jaytee Properties
Republic Corporate Center
Louisville, Kentucky 40202-2700
Attention: Mr. Bernard Trager
To Tenant: At the Premises
Either party may change such address by written notice by certified or
registered mail to the other.
<PAGE>
ARTICLE XXII. RIGHTS RESERVED BY LANDLORD
SECTION 1. Landlord shall have the sole and exclusive right to
designate (and from time to time, in its discretion, re-designate) the name,
address, number and/or designation of the Building.
ARTICLE XXIII. CONDEMNATION
In the event that during the term of this Lease the Premises as
identified in Article I, Section 1 hereof, or any part thereof, or the use or
possession thereof, is taken in condemnation proceedings or by any right of
eminent domain or for any public or quasi-public use, this Lease and the term
hereby granted shall terminate and expire on the date when possession shall be
taken by the condemnor, and rent and all other charges payable hereunder shall
be apportioned and paid in full up to that date and all prepaid unearned rent
and all other charges payable and paid in full up to that date and all prepaid
unearned rent and all other charges payable hereunder shall forthwith be repaid
by Landlord to Tenant, and Tenant shall not be liable to Landlord for rent or
any other charges payable hereunder, damage, or otherwise, for, or by reason of
any matter or thing occurring thereafter. Tenant hereby waives any and all
rights in, or to any condemnation awards. In the event that during the term of
this Lease a material amount of the parking area or a material amount of the use
or possession thereof is taken in condemnation proceedings or by any right of
eminent domain or for any public or quasi-public use and no alternative parking
is provided, the term of this Lease shall at the option of Tenant cease and
terminate from the date of title vesting in such proceeding.
ARTICLE XXIV. MISCELLANEOUS PROVISIONS
SECTION 1. The term "Landlord" as used in this Lease, so far as
covenants or obligations on the part of Landlord are concerned, shall be limited
to mean and include only the owner or co-owners, at the time in question, of the
Premises, and in the event of any transfer or transfers of the title to the
Premises, Landlord herein named (and in case of any subsequent transfers or
conveyances, the then grantor) shall be automatically freed and relieved from
and after the date of such transfer or conveyance of all liability as respects
the performance or any covenants or obligations on the part of Landlord
contained in this Lease thereafter to be performed.
SECTION 2. The captions of Articles of this Lease are for convenience
only and shall not be considered or referred to in resolving questions of
interpretation or construction.
SECTION 3. The terms "Landlord and Tenant", wherever used herein shall
be applicable to one or more persons, as the case may be, and the singular shall
include the plural, and the neuter shall include the masculine and feminine, and
if there be more than one, the obligations hereof shall be joint and several.
<PAGE>
SECTION 4. The word "person" and the word "persons" wherever used in
this Lease shall both include individuals, partnerships, firms, associations,
and corporations of any other form of business entity.
SECTION 5. The various rights, options, elections, powers, and remedies
contained in this Lease shall be construed as cumulative and no one of them
shall be exclusive of any of the others, or of any other legal or equitable
remedy which either party might otherwise have in the event of breach or default
in the terms thereof, and the exercise of one right or remedy by such party
shall not impair its right to any other right or remedy until all obligations
upon the other party have been fully performed.
SECTION 6. Time is of essence with respect to the performance of each
of the covenants and agreements under this Lease.
SECTION 7. Each and all of the provisions of this Lease shall be
binding upon and inure to the benefit of the parties hereto and, except as set
forth in Section 1 of this Article and as otherwise specifically provided
elsewhere in this Lease, their respective heirs, executors, administrators,
successors, and assigns, subject at all times, nevertheless, to all agreements
and restrictions contained elsewhere in this Lease with respect to the
assignment, transfer, encumbering or sub-letting of all or any part of Tenant's
interest in this Lease.
SECTION 8. This Lease shall be interpreted in accordance with the law
of the Commonwealth of Kentucky.
<PAGE>
SECTION 9. No waiver of any default by Tenant hereunder shall be
implied from any omission by Landlord to take any action on account of such
default if such default persists or is repeated, and no express waiver shall
affect any default other than the default specified in the express waiver, and
that only for the time and to the extent therein stated. The acceptance by
Landlord of rent with knowledge of the breach of any of the covenants of this
Lease by Tenant shall not be deemed a waiver of any such breach. One or more
waivers of any breach of any covenant, term or condition of this Lease shall not
be construed as a waiver of any subsequent breach of the same covenants, term of
condition. The consent or approval by Landlord to or of any act by Tenant
requiring Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent or approval to or of any subsequent similar acts
by Tenant.
SECTION 10. If Tenant shall default in the performance of any covenant
on its part to be performed by virtue of any provisions of this Lease, Landlord
may, after any notice and the expiration of any period with respect thereto as
required pursuant to the applicable provisions of this Lease, perform the same
for the account of Tenant. If Landlord, at any time, is compelled to pay or
elects to pay any sum of money or do any acts which would require the payment of
any sum of money by reason of the failure of Tenant, after any notice and the
expiration of any period with respect thereto, as required pursuant to the
applicable provisions of the Lease, to comply with any provisions of this Lease,
the sum or sums so paid by Landlord with all interest, costs and damages, shall
be deemed to be additional rental hereunder and shall be due from Tenant to
Landlord on the
<PAGE>
first day of the month following the incurring of such respective expenses,
except as otherwise herein specifically provided.
SECTION 11. If Tenant or Landlord shall bring any action for any relief
against the other, declaratory or otherwise, arising out of this Lease,
including any suit by Landlord for the recovery of rent, additional rent or
other payments hereunder or possession of the Premises, the losing party shall
pay the prevailing party a reasonable sum for attorneys' fees in such suit, at
trial and on appeal, and such attorneys' fees shall be deemed to have accrued on
the commencement of such action.
SECTION 12. This Lease contains all covenants and agreements between
Landlord and Tenant relating in any manner to the rental, use and occupancy of
the Premises and Tenant's licensed use of the Building and other matters set
forth in this Lease. No prior agreement or understanding pertaining to the same
shall be valid or of any force or effect, and the covenants and agreements of
this Lease cannot be altered, changed, modified or added to except in writing
signed by Landlord and Tenant. No representation, inducement, understanding or
anything of any nature whatsoever made, stated or represented on Landlord's
behalf, either orally or in writing (except this Lease) has induced Tenant to
enter into this Lease.
SECTION 13. Any provision or provisions of this Lease which shall prove
to be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof, and the remaining provisions hereof shall nevertheless
remain in full force and effect.
<PAGE>
SECTION 14. Except with respect to those conditions, covenants and
agreements of this Lease which by their nature could only be applicable after
the commencement of, during or throughout the term of this Lease, all of the
other conditions, covenants and agreements of this Lease shall be deemed to be
effective as of the date of execution of this Lease.
SECTION 15. Landlord and Tenant each represents and warrants to the
other that it has not engaged any broker, finder or other person who would be
entitled to any commission or fee in respect of the negotiation, execution or
delivery of this Lease, and shall indemnify each other against loss, cost,
liability, or expense incurred by either as a result of any claim asserted by
any such broker, finder or other person on the basis on any arrangements or
agreements made or alleged to have been made by or on behalf of either Landlord
or Tenant, as the case may be, in breach of the foregoing warranty.
SECTION 16. Any and all consents and approvals of Landlord required by
or referred to in the Lease shall not be unreasonably withheld.
SECTION 17. Tenant shall provide Landlord with certified copies of its
quarterly call reports along with copies of Republic Bancorp's annual audited
consolidated financial statements.
SECTION 18. Tenant shall have the exclusive right to erect an
independent sign on Hurstbourne Parkway displaying the time and temperature. No
other tenant shall be given such right of signage with the exception of the
identification of all other tenants on a conforming tombstone sign.
<PAGE>
SECTION 19. Notwithstanding any other provisions contained in this
lease, in the event the Tenant is closed or taken over by the banking authority
of the State of Kentucky, or other bank supervisory authority, the Landlord may
terminate the lease only with the concurrence of such banking authority or other
bank supervisory authority, and any such authority shall in any event have the
election either to continue or to terminate the lease: Provided, that in the
event this lease is terminated, the maximum claim of Landlord for damages or
indemnity for injury resulting from the rejection or abandonment of the
unexpired term of the lease shall in no event be in an amount exceeding the rent
reserved by the lease, without acceleration, for the year next succeeding the
date of the surrender of the premises to the Landlord, or the date of re-entry
of the Lessor, 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.
SECTION 20. Tenant shall have three options to renew this lease for
additional five year periods at a rent adjustment proportionate with the
increase in the Consumer Price Index, all urban consumers over each preceding
term; but the increase shall be no less than $3 per square foot for any given
option term. Tenant shall notify Landlord of Tenant's intent to exercise such
option within 90 days of the expiration of the preceding term.
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed and
delivered as of the day and year first above written.
ATTEST: JAYTEE PROPERTIES
BY: ___________________________ BY:_______________________________
ATTEST: REPUBLIC BANK & TRUST COMPANY
BY:___________________________ BY:_______________________________
<PAGE>
EXHIBIT A
Landlord shall provide to following base construction for the Premises:
1. Concrete Floor
2. Two equipped bathrooms with exterior doors.
3. No interior demising walls.
4. Concealed sprinkler heads.
Electrical specifications provided by Landlord:
1. Six-gallon electric water heater.
2. 200 amp service.
3. RJ 21 telephone outlet.
4. Connection to standard HVAC.
All additional work to be provided by Tenant and approved and supervised by
Landlord prior to installation.
<PAGE>
EXHIBIT B
RULES AND REGULATIONS
1. No advertisement, sign, lettering, notice or device shall be placed in
or upon the Premises or the Building, including any windows, walls and
exterior doors, except such as may be approved in writing by Landlord.
2. Lettering upon the doors as required by Tenant shall be made by the
sign company designated by Landlord, but the cost shall be paid by
Tenant. The directories of the Building will be provided exclusively
for the display of the name and location of Tenant and its designated
representative only, and Landlord reserves the right to exclude any
other names therefrom.
3. No additional locks shall be placed upon any doors of the Premises, and
Tenant agrees not to have any duplicate keys made without the consent
of Landlord. If more than two keys for any door lock are desired, such
additional keys shall be paid for by Tenant. Upon termination of this
Lease, Tenant shall surrender all keys.
4. No furniture, freight, supplies not carried by hand or equipment of any
kind shall be brought into or removed from the Building without
the consent of Landlord. Landlord shall have the right to limit the
weight and size and to designate the position of all safes and other
heavy property brought into the Building. Such furniture, freight,
equipment, safes and other heavy property shall be moved in or out of
the Building only at the times and in the manner permitted by
Landlord. Landlord will not be responsible for loss of or damage to
any of the items above referred to, and all damage done to the
Premises or the Building by moving or maintaining any of such items
shall be repaired at the expense of Tenant. Any merchandise not
capable of being carried by hand shall utilize hand trucks equipped
with rubber tires and rubber side guards.
5. The entrances, corridors, stairways and elevators shall not be
obstructed by Tenant, or used for any other purpose than ingress or
egress to and from Premises. Tenant shall not bring into or keep any
animal within the Building, or any bicycle or other type of vehicle.
6. Tenant shall not disturb other occupants of the Building by making an
undue or unseemly noise, or otherwise. Tenant shall not, without
Landlord's prior written consent, install or operate in or on Premises
any machine or machinery causing noise or vibration perceptible outside
the Premises, electric heater, stove or machinery or any kind or carry
on any mechanical business thereon, or keep or use thereon oils,
burning fluids, camphene, kerosene, naphtha, gasoline, or other
coustible materials. No explosives shall be brought into the Building.
<PAGE>
7. Tenant shall not mark, drive nails, screw or drill into woodwork or
plaster, paint or in any way deface the Building or any part thereof,
or the Premises or any part thereof, or fixtures therein. The expense
of remedying any breakage, damage or stoppage resulting from a
violation of this rule shall be borne by Tenant.
8. If Tenant installs upon the Premises any electrical equipment which
constitutes an overload on the electrical line serving the Premises or
the Building, Tenant shall make all necessary changes to reduce such
overload, or at the option of Landlord, eliminate such equipment as
Landlord deems necessary to reduce the electrical capacity required to
serve the Premises.
9. Canvassing, soliciting, and peddling in the Building is prohibited and
Tenant shall cooperate to prevent such activity.
10. The requirements of Tenant will be attended to only upon application at
the Landlord's office in the Building. Building employees shall not
perform any work or do anything outside of the regular duties, except
on issuance of special instructions from the office of the Building. If
the Building employees are made available for the assistance of Tenant,
Landlord shall be paid for their services by Tenant at reasonable
hourly rates. No Building employee will admit any person (Tenant or
otherwise) to any office without specific instructions from the office
of the Building.
11. Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building on Sundays, legal holidays, and between the
hours of 7:00 p.m. of any day and 7:00 a.m. of the following day, and
during such further hours as Landlord may deem advisable for the
adequate protection of the Building and the property of the tenants.
Tenant shall have 24-hour access to the Premises.
<PAGE>
AMENDMENT TO LEASE
This Amendment, dated August 31, 1993, is made to the lease dated February 3,
1993, between Jaytee Properties and Republic Bank & Trust Company.
Article III, Section 1 is hereby amended to read as follows:
Section 1. Tenant shall pay to Landlord, at Landlord's office in the Building or
at such place as landlord may from time to time designate, as rental for the
Premises, the sum of Seven Thousand Eighty Three Dollars and Thirty Three Cents
($7,083.33) per month (the "Rent). Rent shall be payable in advance on the first
day of each calendar month during the first five Lease Years.
JAYTEE PROPERTIES
BY:_______________________________
REPUBLIC BANK & TRUST COMPANY
BY:_______________________________
<PAGE>
Second
Amendment to Lease
This Second Amendment to Lease dated this 16th day of February, 1996 shall
amend the terms of a lease dated February 3, 1993 ("Lease") by and between
Jaytee Properties ("Landlord") and Republic Bank & Trust Company ("Tenant") and
all other amendments to said lease.
Landlord and Tenant agree that the following terms of the Lease shall be amended
specifically adding 1,200 square feet of first floor space to the leased
Premises at $17 per square foot.
ARTICLE I. PREMISES
SECTION 1. Tenant leases from Landlord and Landlord leases to Tenant the
following additional premises (hereinafter called the "Premises"):
Being approximately 1,200 square feet of rentable office space located
on the first floor in the Republic Bank Building (hereinafter called
"the Building") located at Hurstbourne parkway and Stone Creek Parkway
in Jefferson County, Kentucky (see Exhibit A).
Article III is amended to read as follows:
ARTICLE III. Tenant shall pay to Landlord, at Landlord's office in the Building
or at such place as Landlord may from time to time designate, as rental for the
Premises, the sum of $16,116.66 (the "Rent"). The revised rent to include the
additional premises shall be payable in advance on the first day of each
calendar month beginning March 1, 1996 for the remaining term of the lease.
The terms and provisions of lease and prior amendments thereto, shall continue
in full force and effect except as modified therein.
JAYTEE PROPERTIES
By:________________________
REPUBLIC BANK & TRUST COMPANY
BY:________________________
<PAGE>
Third Amendment to Lease
This Amendment to Lease dated this 21st day of January, 1998 shall amend the
terms of a lease dated February 3, 1993 ("Lease") by and between Jaytee
Properties ("Landlord") and Republic Bank & Trust Company ("Tenant") and any
other amendments to such lease.
Landlord and Tenant agree that the following terms of the Lease shall be amended
specifically adding 7,000 square feet of space to the leased Premises.
ARTICLE I. PREMISES
SECTION 1. Tenant leases from Landlord and Landlord leases to Tenant the
following additional premises (hereinafter called the "Premises"):
Being 21,200 square feet of office space located on the lower level,
first floor and second floor in the
Republic Bank Building (hereinafter called "the Building") located at
Hurstbourne Parkway and Stone Creek Parkway in Jefferson County,
Kentucky.
ARTICLE II. TERM
This amendment shall extend the term of he Lease for another 5 years to 6/31/03
ARTICLE III. RENT AND OPERATING EXPENSES
SECTION 1. Tenant shall pay to Landlord, at Landlord's office in the Building or
at such place as Landlord may from time to time designate, as monthly rental for
the Premises, $23,116.66 through 10/31/98 and $24,866.66 thereafter for the
remaining term of the Lease.
JAYTEE PROPERTIES
By:_________________________
REPUBLIC BANK & TRUST COMPANY
By:_________________________
EXHIBIT 10.13
Lease at 9600 Brownsboro Road, Louisville
U.S. 22 LAND LEASE
JEFFERSON COUNTY, KENTUCKY
INDEX TO LAND LEASE
Article Page
I. Premises 1
II. Term 1
III. Rent 2
IV. Use 2
V. Possession 2
VI. Improvements 3
VII. Access 3
VIII. Damage or Destruction 3
IX. Indemnity 4
X. Insolvency, Etc. 4
XI. Remedies 5
XII. Insurance 5
XIII. Liens 7
XIV. Assignment; Subletting; Mortgaging 7
XV. Estoppel Certificate 7
XVI. Taxes 8
XVII. Priority of Lease 9
<PAGE>
INDEX TO LEASE
Article Page
XVIII. Fixtures and Personal Property;
Surrender 9
XIX. Hold Over Tenancy 10
XX. Waiver of Subrogation 10
XXI. Notices 10
XXII. Rights Reserved by Landlord 11
XXIII. Condemnation 11
XXIV. Miscellaneous Provisions 11
<PAGE>
LAND LEASE
THIS LEASE, dated this 17th day of November, 1997, is between Jaytee
Properties, a Kentucky partnership, hereinafter referred to as Landlord and
Republic Bank & Trust Company, hereinafter referred to as the Tenant. As parties
hereto, Landlord and Tenant agree:
ARTICLE I. PREMISES
SECTION 1. Tenant leases from Landlord and Landlord leases to Tenant
the following described real property (hereinafter called the Premises ):
Being a portion of certain real estate located at 9600
Brownsboro Road in Jefferson County, Kentucky.
Landlord contemplates erecting improvements on the portion of real
estate located at 9600 Brownsboro Road that is not subject to this lease. The
remaining portion of said property, the Premises, shall be suitable for the
temporary installation of a modular banking unit.
SECTION 2. The Premises shall be provided in as is condition. Tenant
acknowledges he has examined the Premises, knows the condition of the Premises,
and accepts the Premises in the condition as currently existing. Any
construction and/or installation of infrostructure upon the Premises shall be
performed to the complete and absolute satisfaction of Landlord. The Landlord's
written approval shall be obtained by Tenant prior to commencement of any and
all improvements and the construction of improvements, if any, shall be
supervised and approved by Landlord on a continuous basis. Tenant shall be
permitted to place a modular unit on the Premises. Notwithstanding the
foregoing, Landlord shall within ten (10) days of its receipt of any plans
either (i) give its approval, or (ii) give its disapproval of said plans for
improvements together with reasons for its disapproval. In any event, if
Landlord does not respond within said ten (10) day period, Landlord shall be
deemed to approve said submitted plans by Tenant for improvements.
SECTION 3. This lease confers no rights to Tenant with respect to the
contemplated construction by Landlord other than tenancy of the Premises and the
non-exclusive license to use, during such tenancy, the Premises, including the
areas adjacent to the contemplated construction by Landlord dedicated from time
to time for parking purposes by Landlord for the parking of motor vehicles
subject to the limitations mentioned herein; and the roadways and passageways
adjacent to the contemplated construction by Landlord for passage by motor
vehicle and on foot, as said roadways and passageways may respectively be
dedicated by Landlord.
ARTICLE II. TERM
Landlord leases the Premises to Tenant, and Tenant hires and takes the
Premises from Landlord, for a term commencing on the 17th day of November, 1997,
(the Lease Commencement Date ) and expiring at midnight (12:00 a.m.) on the 31st
day of March, 1999 unless sooner terminated pursuant to the terms hereof.
ARTICLE III. RENT
SECTION 1. Tenant shall pay to Landlord, at Landlord's office or at
such place as Landlord may from time to time designate, as rental for the
Premises, the sum of five thousand dollars ($5,000) per month (the Rent ). Rent
shall be payable in advance on the first day of each calendar month during the
Lease period.
SECTION 2. In the event that the Rent, or any other sum payable by
Tenant to Landlord under this lease, shall not be received (paid) within ten
(10) days of the due date thereof, Landlord may, at its option, add a monthly
service charge, at a rate which shall be the greater of $25.00 or 1% for each
month or fraction thereof from such rent due date during which such Rent or
other sum remains unpaid. Further, in the event that any check which has been
remitted to Landlord by Tenant for payment of the Rent, or any other sum payable
under this Lease, shall not be honored upon its presentation for payment, then
the monthly service charge shall be similarly imposed on said amount from the
due date until paid. Acceptance by the Landlord of such service charge shall not
be deemed to be a waiver by Landlord of any default nor shall it restrict the
remedies otherwise available to Landlord hereunder.
ARTICLE IV. USE
The Premises are to be used only for the purpose of conducting full
service banking and related office functions and for no other business or
purpose without the prior written consent of Landlord. Tenant shall not do or
permit to be done in or about the Premises anything which is illegal or
unlawful; or which is of a hazardous or dangerous nature; or which will increase
the rate(s) of insurance upon the Premises. Tenant shall comply with all
governmental laws and ordinances and all regulations applicable to the use and
occupancy of the Premises. Notwithstanding the foregoing sentence, Landlord
hereby warrants and represents to Tenant that the Premises are currently in
compliance with all applicable governmental laws, ordinances and regulations
applicable to the use and occupancy of the Premises, and that Tenant shall not
be responsible to bring the Premises into compliance if said Premises are not
currently in compliance with said governmental laws and ordinances, but rather
Landlord shall be responsible, at its expense, to so do.
ARTICLE V. POSSESSION
If Landlord permits Tenant to enter into possession of the Premises
prior to the Lease Commencement Date, all of the terms and conditions of this
Lease shall apply during such prior period. Tenant's taking of possession of the
Premises are in good and tenantable condition and acceptable for Tenant's use
thereof as provided in this Lease. Landlord shall deliver possession of the
Premises by November 17, 1997. It is expressly agreed that should any local,
state or federal governmental body, agency or public utility restrict or reduce
the amount of fuel or energy which may be utilized to provide the utilities and
services as specified above, then such restriction or reduction, and the
reduction in utilities and services which may result therefrom, shall in no way
create or constitute a default on the part of the Landlord, and there shall be
no reduction or abatement in the Rent or any other sum payable by Tenant
thereunder. Further, Landlord shall not be liable for any injury, damage,
inconvenience, or otherwise which may arise or result should the furnishing of
any such services by interrupted or prevented by fire, accident, strike, riot,
act of God, the making of necessary repairs or improvements, or any other cause
beyond the reasonable control or prevention of Landlord, nor, subject only to
the provisions of Article IX of this Lease, shall the Rent payable by Tenant
hereunder abate.
ARTICLE VI. IMPROVEMENTS
Tenant shall not make any improvements to the Premises without first
obtaining Landlord's prior written consent. In connection with any such request
for Landlord's consent to such improvements to the Premises, Landlord may retain
the services of an architect and/or engineer; and the reasonable costs for the
services of such architect and/or engineer (such costs not to exceed $1,000
without the specific approval of the Tenant, such approval not to be
unreasonably withheld) shall be reimbursed to Landlord by Tenant.
Notwithstanding the provisions of this Article VI, in the event any improvements
are minor Landlord shall notify Tenant of its disapproval within forty eight
(48) hours of Tenant's notification thereof without expense to Tenant. Landlord
may make any repairs for the preservation, safety or improvement of the
Premises. All alterations, and improvements made by Tenant shall become the
property of Landlord upon making thereof and shall be surrendered to landlord
upon the expiration of this Lease. At Tenant's expense, Tenant shall have the
right, but not the obligation, to make additional improvements to the Premises
with Landlord's consent. Upon termination or expiration of the Lease, Tenant
shall have the right to remove all personal property and trade fixtures so long
as removal of same does not cause damage to the Premises.
ARTICLE VII. ACCESS
Landlord and its agents shall have the right to enter into and upon the
Premises at all reasonable times with reasonable notice for the purpose of
inspecting, cleaning, repairing, altering or improving the Premises with the
exception of an emergency situation. Any damage or loss caused to the Premises
and/or to the Tenant by any use of or access to the Premises by Landlord shall
be repaired by Landlord at Landlord's expense.
ARTICLE VIII. DAMAGE OR DESTRUCTION
SECTION 1. If the Premises is damaged or destroyed, in whole or in
substantial part, and Section 2 does not apply, then Landlord may elect to
terminate this Lease as of the date of the damage or destruction by notice given
to Tenant in writing not more than twenty (20) days following the date of damage
or destruction. If Landlord does not elect to terminate, Landlord shall, at
Landlord's expense, proceed to restore the Premises to substantially the same
form, condition and quality as prior to the damage or destruction. During any
such period of repair or restoration, the Rent shall be abated in the same
proportion as the untenantable portion of the Premises bears to the entire
Premises identified in Section 1 of Article I of the Lease.
SECTION 2. If the Premises is damaged or destroyed, (i) to the extent
that more than fifty percent (50%) of the Premises is damaged or destroyed, then
in such event, Tenant may elect to terminate this Lease as of the date of the
damage or destruction by notice given to Landlord in writing not more than
twenty (20) days following the date of damage or destruction.
SECTION 3. Notwithstanding anything contained in this Article to the
contrary, Landlord shall not be required to repair, replace, restore, or rebuild
any property which Tenant shall be entitled to remove from the Premises under
the provisions of this Lease; it being agreed that Tenant shall bear the entire
risk of loss, damage or destruction of such property.
SECTION 4. If both parties elect to terminate the Lease under the
provisions of this Article VIII, Tenant shall be entitled to reimbursement for
any prepaid rent or other amounts paid by Tenant and attributable to the unused
term of the Lease.
ARTICLE IX. INDEMNITY
Tenant shall indemnify and hold Landlord harmless from all loss,
damage, liability or expense resulting from an injury to or death of any person
or any loss of or damage to any property caused by or resulting from any
negligent act or omission of Tenant or any officer, agent, employee, guest,
invitee or visitor of Tenant in or about the Premises, but the foregoing
provision shall not be construed to make Tenant responsible for injuries to
third parties caused by the negligence of Landlord or any agent, offices, guest,
invitee, visitor or employee of landlord. The Landlord shall remain responsible
for any injury to, or death of any person or any loss of or damage to property
sustained by any person whatsoever which may be caused by the Premises. Landlord
shall be and remain liable for the negligent acts or omissions of Landlord, its
agents, offices, guests, invitees, visitors and employees.
ARTICLE X. INSOLVENCY, ETC.
If leasehold interest of Tenant be levied upon under execution or be
attached, or if any voluntary or involuntary petition or similar pleading under
any Act of Congress relating to bankruptcy shall be filed by or against Tenant
or a majority of Tenant's shareholders, or if any voluntary proceedings in any
court or tribunal shall be instituted by or against Tenant or the majority of
its shareholders to declare Tenant or the majority of its shareholders insolvent
or unable to pay debts of Tenant or the majority of its shareholders, or if
Tenant makes an assignment for the benefit of creditors, or if a receiver be
appointed for any property of Tenant, which filing, proceeding, assignment or
appointment is not dismissed or canceled within sixty (60) days after the
institution of same, or if Tenant shall default in payment of any other debt or
obligation to Landlord within ten (10) days of Tenant's receipt of written
notice from Landlord, then in such event Landlord may, if Landlord so elects and
with or without notice of such election and with or without any demand
whatsoever, forthwith terminate this Lease upon notice to Tenant, and upon such
termination all rights of Tenant hereunder shall thereupon cease and Tenant
shall surrender possession and vacate the Premises immediately.
ARTICLE XI. REMEDIES
SECTION 1. If at any time Tenant shall (a) fail to remedy any default
in the payment of any sum due under this Lease for ten (10) days after notice;
(b) fail to remedy any default with respect to any other of these provisions,
covenants or conditions of this Lease to be kept or performed by Tenant, within
thirty (30) days after notice (or, in the event the default is of such a nature
that it cannot be remedied within said thirty (30) day period, then such
additional time as may be necessary for Tenant to cure such default, within the
thirty (30) day period and thereafter diligently prosecutes the same to
completion); or (c) vacate or abandon the Premises, or fail to conduct its
business therein without continuing to make rental payments hereunder, for a
period of five (5) consecutive business days, and then fail to reoccupy and
reestablish the conduct of business in the Premises within ten (10) days
following the date of written notice from Landlord of such failure; then
Landlord shall have all such rights and remedies as are provided by law in
respect of such default, including, at Landlord's election, the right to
terminate this Lease, and all Tenant's rights hereunder shall be terminated.
The liability of Tenant for the Rent, and other payments provided for
herein shall not be extinguished for the balance of this Lease, and Tenant shall
make good to Landlord any deficiency arising from such reletting of the
Premises, plus the costs and expenses of renovating, altering and reletting the
Premises, and including attorneys' fees or brokers' fees incident to Landlord's
reletting. Tenant shall pay any such deficiency each month, as the amount
thereof is ascertained by Landlord, or, at Landlord's option, Landlord may
recover, in addition to any other sums, the amount at the time of judgement by
which the unpaid Rent, and other payments for the balance of the term, after
judgement, exceeds the amount thereof which Tenant proves could be reasonably
avoided, discounted at the rate of 7%. In reletting the Premises, Landlord may
grant rent concessions and Tenant shall not be credited therefor. Nothing herein
shall be deemed to affect the right of Landlord to recover for indemnification
arising prior to the termination of this Lease.
SECTION 2. Landlord shall in no event be in default in the performance
of any of its obligations in this Lease contained unless and until Landlord
shall have failed to perform such obligation within thirty (30) days, or such
additional time as is reasonably required to correct any such default after
notice by Tenant to Landlord properly specifying wherein Landlord has failed to
perform any such obligation.
ARTICLE XII. INSURANCE
SECTION 1. Tenant covenants and agrees that from and after the date of
delivery of the Premises from Landlord to Tenant and at all times during
possession thereof, Tenant will procure and maintain in full force and effect,
at its sole cost and expense, the following types of insurance, in the minimum
amounts specified below:
A. Public Liability and Property Damage. Personal injury liability, bodily
injury liability and property damage insurance in a single limit of not less
than One Million Dollars ($1,000,000), of which insurance shall insure the
performance by Tenant of the indemnity agreement as to liability for injury to
or death of persons and injury or damage to property as provided in Article X
hereof. All of such insurance shall be primary and noncontributing with any
insurance which may be carried by Landlord. The adequacy of the coverage
afforded by said liability and property damage insurance shall be subject to
review by Landlord from time to time, and Landlord retains the reasonable right
to increase or decrease said limits at such times.
B. Tenant Improvements Insurance covering all of the lease-hold improvements,
and Tenant's trade fixtures, and personal property from time to time in and/or
upon the Premises, in an amount of not less than the full replacement cost
thereof without deduction for depreciation, providing protection against any
peril included within the classification "Fire and Extended Coverage", together
with insurance against sprinkler damage, vandalism and malicious mischief. Any
policy proceeds shall be used for the repair or replacement of the property
damaged or destroyed unless this Lease shall cease and terminate under the
applicable provisions herein. If the Premises shall not be repaired or restored
following damage or destruction in accordance with other provisions herein,
Landlord shall received from such insurance proceeds and amount equal to the
replacement cost of the Tenant's leasehold improvements.
C. Business Interruption. Business interruption insurance with sufficient
coverage to provide for payment of rent and other fixed costs during any
interruption of Tenant's business by reason of fire or other similar cause.
SECTION 2. All policies shall be for the mutual and joint benefit and
protection of Landlord and Tenant, with Landlord being named as an additional
insured. Certificates of such policies shall be delivered to Landlord within ten
(10) days after delivery of possession of the Premises to Tenant and thereafter
within thirty (30) days prior to the expiration of the term of each such policy.
All public liability and property damage policies shall contain a provision that
Landlord, although named as an insured, shall nevertheless be entitled to
recovery under said policies for any loss occasioned to it, its servants,
agents, and employees by reason of the acts, omissions and/or negligence of
Tenant. As often as any such policy shall expire or terminate, renewal or
additional policies shall be procured and maintained by Tenant in like manner
and to like extent. All policies of insurance must contain a provision that the
company writing said policy will give to Landlord thirty (30) days' notice, in
writing, in advance of any cancellation or lapse, or the effective date of any
reduction in the amounts of insurance. All public liability, property damage and
other casualty policies shall be written as primary policies, not contributing
with and not in excess of coverage which Landlord may carry. Landlord may, from
time to time, request Tenant to provide Landlord with a certified copy of all
insurance coverage carried by Tenant.
SECTION 3. Tenant agrees to pay to Landlord forthwith upon demand the
amount of any increase in premiums for insurance against loss by fire that may
be charged during the term of this Lease on the amount of insurance maintained
in force by Landlord on the Building, of which the Premises are a part,
resulting from Tenant doing any act in or about said Premises which does so
increase the insurance rates, whether or not Landlord shall have consented to
such act on the part of Tenant. If Tenant installs upon the Premises any
electrical equipment on the Building, Landlord shall provide Tenant within
thirty (30) days' prior notice of such belief and the specific activity
involved, and Tenant shall be entitled to cease or otherwise cure any such
activity within such period and thereby avoid any charge for any such increase;
provided, however, that Tenant shall not be required to comply with any
requirement which is not a valid legal requirement.
ARTICLE XIII. LIENS
Tenant shall keep the Premises free and clear of, and shall indemnify
Landlord against all mechanics' liens and other liens on account of work done
for or materials , supplies and equipment furnished to Tenant by persons
claiming under it for maintenance, repairs and alterations. Tenant shall
reimburse Landlord for all reasonable costs and attorneys' fees incurred by
Landlord in investigating, defending or clearing such lien to be cleared within
thirty (30) days of filing of same unless Tenant shall have provided security
acceptable to landlord against any loss to Landlord on account thereof. As a
condition to Landlord's consent Landlord may require Tenant to provide Landlord
with reasonable payment and performance bonds of those persons contracted by
Tenant to perform work on or in the Premises that could be the subject of such a
lien in order to protect the Premises, the Landlord, and any mortgagee from and
against liens of mechanics and materialmen performing work in or providing
services and equipment to the Premises.
ARTICLE XIV. ASSIGNMENT; SUBLETTING; MORTGAGING
Tenant shall not voluntarily, involuntarily or by operation of law
assign, transfer, mortgage or otherwise encumber all or any part of Tenant's
interest in this Lease, or sublet the Premises or any part thereof, without
first obtaining in each and every instance Landlord's prior written consent. Any
transfer of this Lease by merger, consolidation, or liquidation, or any change
in the ownership of, or power to vote the majority of its outstanding voting
stock resulting in a change in ownership of more than 50% of the total issued
and outstanding shares of Tenant shall constitute an assignment for the purposes
of the paragraph. If consent is once given by Landlord to any such assignment or
subletting, such consent shall not operate as a waiver of the necessity for
obtaining Landlord's consent to any subsequent assignment or subletting. Any
legal costs incurred by Landlord related to such assignment or subletting shall
be paid by Tenant to Landlord upon demand. Tenant shall provide Landlord with
executed copies of any Assignment. Transfer or Sublease Agreement entered into
as provided herein. Notwithstanding the provisions of this Article, Tenant shall
have the right to assign its interest in this lease, or enter into a sublease of
all or a portion of the Premises, without the prior consent of the Landlord, if
such assignment or sublease is made to a corporation under common control with
Tenant or to a subsidiary or successor to Tenant by merger or by change of name
so long as the letter of credit guaranteeing payment of Rent remains in effect.
ARTICLE XV. ESTOPPEL CERTIFICATE
Tenant shall at any time and from time to time execute, acknowledge and
deliver to Landlord a statement in writing, if true to the best of Tenant's
knowledge, certifying: (a) that this Lease is unmodified and in full force and
effect (or if there has been any modification hereof that the same is in full
force and effect as modified and stating the nature of the modification or
modifications); (b) that to the best of its knowledge Landlord is not in default
under this Lease (or if any such default exists the
specific nature and extent thereof); and (c) the date to which rent and other
charges have been paid in advance, if any.
ARTICLE XVI. TAXES
SECTION 1. Tenant shall pay before delinquency any and all taxes and
assessments, and license, sales, business, occupation or other taxes, fees or
charges levied, assessed or imposed upon its business operations on the
Premises.
SECTION 2. Tenant shall pay before delinquency any and all taxes and
assessments levied, assessed or imposed upon its trade fixtures, leasehold
improvements, merchandise and other personal property in, on, or upon the
Premises.
SECTION 3. In the event any taxes, fees or charges referred to in the
preceding Section 1 and/or Section 2 shall be assessed, levied or imposed upon
or in connection with the business or property of Landlord, such assessment,
taxes, fees or charges shall be paid by Tenant to Landlord promptly upon
Landlord's request for such payment.
SECTION 4. Landlord shall pay before delinquency any and all costs and
expenses of every kind and nature for real estate ad valorem taxes, and/or fees,
assessments, charges or payments in lieu thereof, to the Commonwealth of
Kentucky, and/or any political subdivision thereof, including, without
limitation, Jefferson County, and/or any city, municipality, agency or special
district, the Jefferson County School Board, Louisville Water Company, and/or
the Louisville and Jefferson County Metropolitan Sewer District, whether general
or special assessments, including, but not limited to, sewer rents, rates and
charges; drainage fees; water charges; taxes based upon the receipt of rent; and
any other federal, state or local government charge, general, special, ordinary
or extra ordinary (but not including income or franchise taxes or any other
taxes imposed upon or measured by Landlord's net income or profits, unless the
same is imposed in lieu of real estate taxes), which may now or hereafter be
levied or assessed against the Premises. If at any time during the term of this
Lease the method of taxation then prevailing shall be altered so that any new
tax, assessment, levy, imposition or charge shall be imposed upon Landlord in
place or partly in place of any such taxes and shall be measured by or be based
in whole or in part upon the Tenant s structure or property or the rents or
other income therefrom, then all such new taxes, assessments, levies, imposition
or charge shall be imposed upon Landlord in place or partly in place of any such
taxes and shall be measured by or be based in whole or in part upon the Tenant s
structure or property or the rents or other income therefrom, then all such new
taxes, assessments, levies, impositions or charges or part thereof, to the
extent that they are measured or based, shall be included in the definition of
Landlord's costs and expenses within the meaning of this subparagraph. Tenant
shall only be directly responsible for taxes, if any, on its personal property
and on the value of its special leasehold improvements.
ARTICLE XVII. PRIORITY OF LEASE
This Lease shall, unless Landlord otherwise elects, be subordinate to
any and all mortgages and other security instruments now existing, or which may
hereafter be made covering the Premises or any portion or portions thereof, and
for the full amount of all advances made or to be made thereunder (without
regard to the time or character of such advances), together with interest
thereon, and subject of all the terms and provisions thereof and to any
renewals, extensions, modifications and consolidations thereof, except the
Landlord and any such mortgagee or security instrument holder hereby agree that
Tenant's rights under this Lease shall not be disturbed absent a default
hereunder and Tenant covenants within thirty (30) days of demand to make,
execute, acknowledge and deliver upon request any and all documents or
instruments reasonably demanded by Landlord which are or may be necessary or
proper for more fully and certainly assuring the subordination of this Lease to
any such mortgages or other security instruments as long as said mortgagee or
security instrument holder agrees in writing not to disturb the rights of Tenant
under this Lease absent a default hereunder, and, provided, however, that any
person or persons purchasing or otherwise acquiring any interest at any sale
and/or other proceedings under such mortgages or other security instruments
shall continue this Lease in full force and effect in the same manner, and with
like effect, as if such person or persons had been named as Landlord herein, and
this Lease shall continue in full force and effect as aforesaid, and Tenant
hereby shall continue in full force and effect as aforesaid, and Tenant hereby
attorns and agrees to attorn to such person or persons so long as said person or
persons agrees not to disturb the rights of Tenant under this Lease absent a
default hereunder.
ARTICLE XVIII. FIXTURES AND PERSONAL PROPERTY; SURRENDER
SECTION 1. Upon the termination of this Lease, Tenant shall surrender
to Landlord the Premises (including, without limitation, all non-moveable
leasehold improvements) in good condition and repair reasonable wear, tear and
damage by casualty not caused by Tenant or its agents or employees excepted. All
improvements, additions, and fixtures installed in such a manner that removal of
same will cause damage to the Premises, made or installed from time-to-time by
Landlord to, in, upon, or about the Premises, shall be the property of Landlord
and upon any such termination, shall be surrendered to Landlord by Tenant
without any injury, damage or disturbance thereto or payment thereof.
SECTION 2. All fixtures, furniture, movable partitions, machinery,
equipment and other personal property installed or placed in said Premises at
the cost of or by Tenant shall at all times remain, be considered and treated as
the personal property of Tenant and in no sense part of the real estate, and
Tenant shall have the right at any time during the term of this Lease and any
extension thereof, or within a period of ten (10) days after any termination
hereof to remove the same or any part thereof from said Premises, provided,
however, that upon the removal of any such personal property, Tenant agrees to
restore the area from which the same has been removed to substantially the same
condition as it was prior to the installation thereof and to the extent
necessary to keep Premises in a leasable and usable condition for future
tenants. If Tenant fails to remove any such personal property, Landlord may at
Landlord's option retain all or any of such property and title thereto shall
thereupon vest in Landlord, Landlord may remove from the Premises and dispose of
in any manner all or any of such property, in which latter event Tenant shall,
upon demand, pay to Landlord the reasonable actual expense of such removal and
disposition, and the cost of repair of any and all damage to the Premises
resulting from or caused by such removal.
ARTICLE XIX. HOLD OVER TENANCY
If Tenant shall, without execution of a new Lease or written extension,
and with consent of Landlord, hold over after the expiration of the terms of
this Lease, such tenancy shall be a month-to-month tenancy, which may be
terminated as provided by law. During such tenancy, Tenant shall pay to Landlord
an amount equal to 150% of the Rent. During such tenancy, Tenant shall be bound
by all of the terms, covenants, and conditions as herein specified, as far as
applicable; provided, however that if Tenant fails to surrender the Premises
upon the termination of this Lease, in addition to any other liabilities to
Landlord arising therefrom Tenant shall indemnify and hold Landlord harmless
from reasonable, consequential and foreseeable loss or liability resulting from
such failure, including any claims made by any succeeding Tenant founded on such
failure.
ARTICLE XX. WAIVER OF SUBROGATION
Landlord and Tenant each releases and relieves the other and on behalf
of its insurer(s) waives its entire right of recovery against the other for loss
or damage arising out of or incident to the perils of fire, explosion, or any
other perils generally described in the "extended coverage" insurance
endorsements used in Louisville which occur in, on or about the Premises,
whether due to the negligence of such other party, its agents or employees, or
otherwise.
ARTICLE XXI. NOTICES
Wherever in this Lease it shall be required or permitted that notice,
approval, advice, consent or demand be given or served by either party to this
Lease to or on the other, such notice or demand shall be given or served and
shall not be deemed to have been duly given or served unless in writing and
forwarded by certified or registered mail, addressed as follows:
To Landlord: Jaytee Properties
Republic Corporate Center
601 W Market St.
Louisville, Kentucky 40202-2700
Attention: Mr. Steve Trager
To Tenant: Republic Corporate Center
601 W Market St.
Louisville, Kentucky 40202-2700
Attention: Mr. Bill Petter
Either party may change such address by written notice by certified or
registered mail to the other. Notice shall be deemed given when received or
refused by the recipient.
ARTICLE XXII. RIGHTS RESERVED BY LANDLORD
Landlord shall have the sole and exclusive right to designate (and from
time to time, in its discretion, re-designate) the name, address, number and/or
designation of the Premises.
ARTICLE XXIII. CONDEMNATION
In the event that during the term of this Lease the Premises as
identified in Article I, Section 1 hereof, or any part thereof, or the use or
possession thereof, is taken in condemnation proceedings or by any right of
eminent domain or for any public or quasi-public use, this Lease and the term
hereby granted shall terminate and expire on the date when possession shall be
taken by the condemnor, and rent and all other charges payable hereunder shall
be apportioned and paid in full up to that date and all prepaid unearned rent
and all other charges payable and paid in full up to that date and all prepaid
unearned rent and all other charges payable hereunder shall forthwith be repaid
by Landlord to Tenant, and Tenant shall not be liable to Landlord for rent or
any other charges payable hereunder, damage, or otherwise, for, or by reason of
any matter or thing occurring thereafter. In the event of any condemnation
affecting the Premises, Landlord shall be entitled to receive its entire award
without deduction for any interest of Tenant in the Premises, but Tenant shall
have the right to make a separate claim against the condemning authority for,
and to receive therefor, (i) any moving expenses incurred by Tenant as a result
of such condemnation; (ii) any costs incurred or paid by Tenant in connection
with any alterations or improvements made by Tenant to the Premises; (iii) the
value of any of Tenant's property taken; (iv) Tenant's loss of business income;
and (v) any other separate claim which Tenant may hereafter be permitted to make
under applicable law; provided, however, that such other separate claims shall
not reduce or adversely affect the amount of Landlord's award. In the event that
during the term of this Lease a material amount of the parking area or a
material amount of the use or possession thereof is taken in condemnation
proceedings or by any right of eminent domain or for any public or quasi-public
use and insufficient alternative parking is provided, the term of this Lease
shall at the option of Tenant cease and terminate from the date of title vesting
in such proceeding.
ARTICLE XXIV. MISCELLANEOUS PROVISIONS
SECTION 1. The term "Landlord" as used in this Lease, so far as
covenants or obligations on the part of Landlord are concerned, shall be limited
to mean and include only the owner or co-owners, at the time in question, of the
Premises, and in the event of any transfer or transfers of the title to the
Premises, Landlord herein named (and in case of any subsequent transfers or
conveyances, the then grantor) shall be automatically freed and relieved from
and after the date of such transfer or conveyance of all liability as respects
the performance or any covenants or obligations on the part of Landlord
contained in this Lease thereafter to be performed except for any payments of
rents or other monies
previously paid to Landlord unless the successor agrees in writing to assume
said monies maintenions hereof shall be joint and several.
SECTION 2. The word "person" and the word "persons" wherever used in
this Lease shall both include individuals, partnerships, firms, associations,
and corporations of any other form of business entity.
SECTION 3. The various rights, options, elections, powers, and remedies
contained in this Lease shall be construed as cumulative and no one of them
shall be exclusive of any of the others, or of any other legal or equitable
remedy which either party might otherwise have in the event of breach or default
in the terms thereof, and the exercise of one right or remedy by such party
shall not impair its right to any other right or remedy until all obligations
upon the other party have been fully performed.
SECTION 4. Time is of essence with respect to the performance of each
of the covenants and agreements under this Lease.
SECTION 5. Each and all of the provisions of this Lease shall be
binding upon and inure to the benefit of the parties hereto and, except as set
forth in Section 1 of this Article and as otherwise specifically provided
elsewhere in this Lease, their respective heirs, executors, administrators,
successors, and assigns, subject at all times, nevertheless, to all agreements
and restrictions contained elsewhere in this Lease with respect to the
assignment, transfer, encumbering or sub-letting of all or any part of Tenant's
interest in this Lease.
SECTION 6. This Lease shall be interpreted in accordance with the law
of the Commonwealth of Kentucky.
SECTION 7. No waiver of any default by Tenant hereunder shall be
implied from any omission by Landlord to take any action on account of such
default if such default persists or is repeated, and no express waiver shall
affect any default other than the default specified in the express waiver, and
that only for the time and to the extent therein stated. The acceptance by
Landlord of rent with knowledge of the breach of any of the covenants of this
Lease by Tenant shall not be deemed a waiver of any such breach. One or more
waivers of any breach of any covenant, term or condition of this Lease shall not
be construed as a waiver of any subsequent breach of the same covenants, term of
condition. The consent or approval by Landlord to or of any act by Tenant
requiring Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent or approval to or of any subsequent similar acts
by Tenant.
SECTION 8. If Tenant shall default in the performance of any covenant
on its part to be performed by virtue of any provisions of this Lease, Landlord
may, after any notice and the expiration of any period with respect thereto as
required pursuant to the applicable provisions of this Lease, perform the same
for the account of Tenant. If Landlord, at any time, is compelled to pay or
elects to pay any sum of money or do any acts which would require the payment of
any sum of money by reason of the failure of Tenant, after any notice and the
expiration of any period with respect thereto, as required pursuant to the
applicable provisions of the Lease, to comply with any provisions of this Lease,
the sum or sums so paid by Landlord with all interest, costs and damages, shall
be deemed to be additional rental hereunder
<PAGE>
and shall be due from Tenant to Landlord on the first day of the month following
the incurring of such respective expenses, except as otherwise herein
specifically provided.
SECTION 9. If Tenant or Landlord shall bring any action for any relief
against the other, declaratory or otherwise, arising out of this Lease,
including any suit by Landlord for the recovery of rent, additional rent or
other payments hereunder or possession of the Premises, the losing party shall
pay the prevailing party a reasonable sum for actually incurred attorneys' fees
in such suit, at trial and on appeal, and such attorneys' fees shall be deemed
to have accrued on the commencement of such action.
SECTION 10. This Lease contains all covenants and agreements between
Landlord and Tenant relating in any manner to the rental, use and occupancy of
the Premises and other matters set forth in this Lease. No prior agreement or
understanding pertaining to the same shall be valid or of any force or effect,
and the covenants and agreements of this Lease cannot be altered, changed,
modified or added to except in writing signed by Landlord and Tenant. No
representation, inducement, understanding or anything of any nature whatsoever
made, stated or represented on Landlord's behalf, either orally or in writing
(except this Lease) has induced Tenant to enter into this Lease.
SECTION 11. Any provision or provisions of this Lease which shall prove
to be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof, and the remaining provisions hereof shall nevertheless
remain in full force and effect.
SECTION 12. Except with respect to those conditions, covenants and
agreements of this Lease which by their nature could only be applicable after
the commencement of, during or throughout the term of this Lease, all of the
other conditions, covenants and agreements of this Lease shall be deemed to be
effective as of the date of execution of this Lease.
SECTION 13. Landlord and Tenant each represents and warrants to the
other that it has not engaged any broker, finder or other person who would be
entitled to any commission or fee in respect of the negotiation, execution or
delivery of this Lease and shall indemnify each other against loss, cost,
liability, or expense incurred by either as a result of any claim asserted by
any such broker, finder or other person on the basis on any arrangements or
agreements made or alleged to have been made by or on behalf of either Landlord
or Tenant, as the case may be, in breach of the foregoing warranty.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed and
delivered as of the day and year first above written.
ATTEST: JAYTEE PROPERTIES (LANDLORD)
BY: STEVE TRAGER
ATTEST: REPUBLIC BANK & TRUST COMPANY (TENANT)
BY: BILL PETTER
Exhibit 11.
Statement Regarding Computation of Per Share Earnings
See Item 1 Note 9 "Earnings Per Share" for calculations.
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<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet, the consolidated statement of income and bank
records and is qualified in its entirety by reference to such report on
Form 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 21,354
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 29,675
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 134,364
<INVESTMENTS-CARRYING> 80,103
<INVESTMENTS-MARKET> 80,191
<LOANS> 783,505
<ALLOWANCE> 8,234
<TOTAL-ASSETS> 1,112,576
<DEPOSITS> 728,069
<SHORT-TERM> 110,477
<LIABILITIES-OTHER> 4,631
<LONG-TERM> 179,164
0
0
<COMMON> 3,615
<OTHER-SE> 69,819
<TOTAL-LIABILITIES-AND-EQUITY> 1,112,576
<INTEREST-LOAN> 19,123
<INTEREST-INVEST> 3,416
<INTEREST-OTHER> 246
<INTEREST-TOTAL> 22,785
<INTEREST-DEPOSIT> 8,532
<INTEREST-EXPENSE> 12,415
<INTEREST-INCOME-NET> 10,370
<LOAN-LOSSES> 643
<SECURITIES-GAINS> 324
<EXPENSE-OTHER> 1,061
<INCOME-PRETAX> 8,565
<INCOME-PRE-EXTRAORDINARY> 5,524
<EXTRAORDINARY> 5,524
<CHANGES> 0
<NET-INCOME> 5,524
<EPS-PRIMARY> .73
<EPS-DILUTED> .70
<YIELD-ACTUAL> 3.92
<LOANS-NON> 2,178
<LOANS-PAST> 17,948
<LOANS-TROUBLED> 1,809
<LOANS-PROBLEM> 2,705
<ALLOWANCE-OPEN> 8,176
<CHARGE-OFFS> 702
<RECOVERIES> 117
<ALLOWANCE-CLOSE> 8,234
<ALLOWANCE-DOMESTIC> 8,234
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
