-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ws3f/mP8NMt33Na7k+brvs2B6Ncp7P9zqIfq37dsf/RwGJGG2xBSUUpHVjUJsgQQ 6kYG2u5f+j+qaAVnY/TMxg== 0000921557-98-000011.txt : 19980518 0000921557-98-000011.hdr.sgml : 19980518 ACCESSION NUMBER: 0000921557-98-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: REPUBLIC BANCORP INC /KY/ CENTRAL INDEX KEY: 0000921557 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 610862051 STATE OF INCORPORATION: KY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-77324 FILM NUMBER: 98625581 BUSINESS ADDRESS: STREET 1: REPUBLIC CORPORATE CENTER STREET 2: 601 WEST MARKET ST CITY: LOUISVILLE STATE: KY ZIP: 40202 BUSINESS PHONE: 5025843600 10-Q 1 REPORT ON FORM 10Q FOR REPUBLIC BANCORP, INC 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). 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 PART I ITEM 1 REPUBLIC BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (dollars in thousands)
March 31, December 31, 1998 1997 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 ============= ==============
See notes to consolidated financial statements. REPUBLIC BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) THREE MONTHS ENDED MARCH 31,1998 AND 1997(in thousands,except per share data)
1998 1997 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 =========== ===========
See notes to consolidated financial statements. REPUBLIC BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (CONT.) THREE MONTHS ENDED MARCH 31,1998 AND 1997(in thousands, except per share data)
1998 1997 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
See accompanying notes to consolidated financial statements. REPUBLIC BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (in thousands, except for per share data)
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 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 ======= ======= ======= ======== ======== ======== ========
See notes to consolidated financial statements. REPUBLIC BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (in thousands)
1998 1997 OPERATING ACTIVITIES: 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 =========== ===========
REPUBLIC BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT.) THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (in thousands)
1998 1997 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 8,299 $ 13,135 =========== =========== Income taxes $ 2,581 $ ============= =========== Transfers from loans to real estate acquired in settlement of loans $ 583 $ 61 =========== ===========
See notes to consolidated financial statements. 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. 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.
3. SECURITIES Available For Sale Securities: March 31, 1998 (in thousands) Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value 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 =========== ======= ======== ==========
Securities To Be Held To Maturity: March 31, 1998 (in thousands) Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value 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 =========== ========= =========== ===========
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.
4. LOANS March 31, 1998 December 31, 1997 -------------- ----------------- (in thousands) 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 =========== ===========
The following table sets forth the changes in the allowance for loan losses:
Three months ended March 31, 1998 1997 (in thousands) 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 ========== =========
Information about Republic's investment in impaired loans is as follows:
March 31, 1998 December 31, 1997 -------------- ----------------- (in thousands) 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 ========= ========
5. INTEREST BEARING DEPOSITS
March 31, 1998 December 31, 1997 -------------- ----------------- (in thousands) 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 =========== ===========
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.
March 31, 1998 December 31, 1997 (dollars in thousands) 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
7. OTHER BORROWED FUNDS
March 31, December 31, 1998 1997 (in thousands) 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 ============ ============
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:
Year (in thousands) 1998 $ 2,827 1999 85,044 2000 1,103 2001 190 2002 2003 90,000 ------------ Total $ 179,164 ============
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. 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:
Three Months Ended March 31, 1998 1997 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 ============ ==========
Three Months Ended March 31, 1998 1997 Earnings Per Share Assuming Dilution 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 ============ ============
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. 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. 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. 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
Three Months Ended March 31, 1998 1997 (in thousands) 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 ========= ========
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. 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.
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: 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% ===== =====
For the purposes of these calculations, non-accruing loans are included in the quarterly average loan amounts outstanding.
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 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) ===== ===== =======
(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. 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. 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 4 - Non-Performing Loans March 31, December 31, (dollars in thousands) 1998 (1) 1997 (1) 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%
(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. 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 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 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%
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. 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. 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:
Votes Votes Votes Non- Nominee For Against Withheld Votes 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
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. 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 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 EX-10 2 LEASE AT 601 WEST MARKET STREET, LOUISVILLE 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 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. 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. 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. 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. 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. 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 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. 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. 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. 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. 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. 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. 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: 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. 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. EX-10 3 LEASE AT 2801 BARDSTOWN ROAD 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: EX-10 4 LEASE AT 661 SOUTH HURSTBOURNE PARKWAY 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 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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:_______________________________ 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. 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. 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. 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:_______________________________ 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:________________________ 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:_________________________ EX-10 5 LEASE AT 9600 BROWNSBORO ROAD 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 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 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 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. 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 EX-11 6 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS Exhibit 11. Statement Regarding Computation of Per Share Earnings See Item 1 Note 9 "Earnings Per Share" for calculations. EX-27 7 FDS --
9 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. 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 21,354 0 29,675 0 134,364 80,103 80,191 783,505 8,234 1,112,576 728,069 110,477 4,631 179,164 0 0 3,615 69,819 1,112,576 19,123 3,416 246 22,785 8,532 12,415 10,370 643 324 1,061 8,565 5,524 5,524 0 5,524 .73 .70 3.92 2,178 17,948 1,809 2,705 8,176 702 117 8,234 8,234 0 0
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