EXHIBIT 10.8
GROUND LEASE
THIS LEASE made and entered into this 23rd day of February, 2000, by and between
CHERRYWOOD DEVELOPMENT, LLC, a Kentucky limited liability company, whose mailing
address is 2560 Richmond Road, Lexington, Kentucky 40502 (the "Lessor"), and
FIRST SECURITY BANK OF LEXINGTON, a Kentucky banking corporation, whose mailing
address is 400 East Main Street, Lexington, Kentucky 40507 (the "Lessee").
W I T N E S S E T H:
Lessor and Lessee, for and in consideration of the keeping by the parties of
their respective obligations hereinafter contained agree as follows:
Article I
Leased Premises
Section 1.01. Leased Premises. Upon the terms and conditions hereinafter set
forth, and in consideration of the payment of rents and the performance by
Lessee of the covenants and agreements, to be kept and performed by Lessee,
Lessor does lease, let, and demise to Lessee and Lessee hereby leases from
Lessor, the property situated, lying and being at ________________________,
Lexington, Kentucky, being more particularly described as Lot No. 4 (consisting
of 0.59 acres of land), as shown on the Final Recorded Plat of the Atkins
Property, Unit 2-B, of record in Plat Cabinet ___, Slide ___, in the Fayette
County Clerk's Office, together with certain easements for the benefit of the
premises, all as described on Exhibit "A" attached hereto and incorporated
herein by reference, and all other rights, privileges, easements and
appurtenances belonging to or in any way pertaining to the premises
(collectively, the "Leased Premises").
Article II
Term; Options to Renew
Section 2.01. Initial Term. The initial term of this Lease shall commence on
the 1st day of April, 2000, or the sixtieth (60th) day following the recording
of a "Subdivision Plat" described in Section 18.01(c) below, whichever shall
occur last, and shall continue for a term of five (5) years thereafter, unless
terminated sooner as provided below ("Initial Term"). Lessor and Lessee, upon
written request of the other, shall execute a written addendum to this Lease
setting forth the commencement date of the Initial Term.
Section 2.02. Option to Renew. Provided that Lessee is not in default under the
terms of the Lease, Lessee shall have the option to renew the term of this Lease
for five (5) consecutive renewals terms of five (5) years each ("Renewal Term"),
under the same terms and conditions as the initial term, except for rent as
provided for in Article III below. Lessee shall exercise such option to renew by
giving Lessor written notice not later than sixty (60) days prior to the
expiration of the initial term, or the then-current renewal term, as the case
may be.
Article III
Annual Rent
Section 3.01. Annual Rent. During the term of this Lease (including the Initial
Term and any Renewal Term), Lessee shall pay to Lessor, at the Lessor's address
given above, or at such other places as the Lessor may from time to time
designate in writing, annual rent as set forth below, in equal monthly
installments, in advance, commencing on the 1st day of the first lease year, as
follows:
Lease Years Annual Rent Monthly Rent
1 $55,000.00 $ 4,583.33*1
2 $60,000.00 $ 5,000.00
3-5 $68,000.00 $ 5,666.67
6-10 $74,800.00 $ 6,233.33
11-15 $82,280.00 $ 6,856.67
16-20 $90,508.00 $ 7,542.33
21-25 $99,558.80 $ 8,296.57
26-30 $109,514.68 $ 9,126.22
*1 Notwithstanding the above, Lessee shall pay to Lessor rent for the first
three (3) months of the first lease year, in the manner provided above, in
monthly installments of Two Thousand Two Hundred Ninety One and 67/100
($2,291.67) Dollars, rather than Four Thousand Five Hundred Eighty Three and
33/100 ($4,583.33) Dollars.
Section 3.02. Past Due Rent. If Lessee shall fail to pay any monthly
installment of rent, within ten (10) days of its due date, such unpaid
installment shall be subject to a penalty equal to five (5%) percent of
the delinquent rental installment plus interest at the rate of eighteen
(18%) percent per annum on the amount of the unpaid rental installment
from the date it becomes delinquent until the date it is paid in full.
Section 3.03. Costs Paid by Lessee. It is the intention and purpose of
both Lessor and Lessee to create by this instrument a lease of the kind
commonly referred to as a "Carefree Lease" or "Triple Net Lease", and
accordingly, Lessee agrees to bear, pay for, and discharge not only such
items as specifically agreed by the provisions of this Lease, but also all
costs, charges, and expenses of every kind and nature to accomplish the
purpose and objective of creating a "Carefree Lease" or "Triple Net
Lease".
Article IV
Payment of Taxes
Section 4.01. Payment of Taxes. During the Initial Term and any Renewal
Term, Lessee shall pay directly to the taxing authorities, and discharge
as they become due, all ad valorem property taxes, and other assessments
attributable to the Leased Premises; however, any ad valorem property
taxes or other assessments for a tax year in which the Lease is effective
for less than a full tax year shall be pro-rated between Lessor and Lessee
as of the date of commencement of this Lease or the date of termination of
this Lease. Lessee shall have the right, at its own expense, to challenge
any tax or assessment; however, such challenge will not relieve the
Lessee's obligation hereunder, if any, to pay such taxes promptly when
due.
Article V
Release/Subrogation/Insurance
Section 5.01. Lessee's Release. Lessor, its agents, employees and servants
shall not be liable, and Lessee waives all claims for damage to property
and business sustained during the term of this Lease by Lessee occurring
in or about Leased Premises, resulting from the negligence of Lessee or
arising out of the operation of Lessee's business on the Leased Premises
and Lessee agrees, subject to the paragraph hereof captioned
"Subrogation", to hold Lessor harmless from all claims.
Section 5.02. Lessor's Release. Lessee, its agents, employees and servants
shall not be liable, and Lessor waives all claims for damage to property
and business sustained during the term of this Lease by Lessor occurring
in or about Leased Premises, resulting from the negligence of Lessor, and
Lessor agrees, subject to the paragraph hereof captioned "Subrogation", to
hold Lessee harmless from all claims.
Section 5.03. Liability Insurance. During the Lease Term, Lessee shall
cause to be written a policy or policies of insurance in the form
generally known as general public liability insurance. The policies shall
insure Lessee against all claims and demands made by any person or persons
for injuries received in connection with the operation and maintenance of
the premises, improvements, and buildings located on the Leased Premises
and for any other risk insured against by such policies. Each class of
policies shall be written with limits of not less than One Million and
No/100 ($1,000,000) Dollars per occurrence and Two Million and No/100
($2,000,000) Dollars aggregate. All such policies shall name Lessee and
Lessor (and any mortgagee of Lessor, provided Lessor advises Lessee in
writing as to the name and address of any such mortgagee), as their
respective interests may appear, as the insured persons. Lessee shall
promptly deliver the original or a duplicate original of each policy or
policies to Lessor as soon as they are written, together with adequate
evidence of the fact that the premiums are paid.
Section 5.04. Property Insurance. During the Lease Term, Lessee will keep
insured any and all buildings and improvements upon the Leased Premises
against all loss or damage by fire and windstorm, together with "all risk"
coverage. The amount of insurance shall be for the full insurable value
thereof, subject to usual and customary deductibles. Such insurance
policy(ies) shall name Lessor (and any mortgagee of Lessor, provided
Lessor advised Lessee in writing as to the name and address of any such
mortgagee) as an additional insured.
Section 5.05. Copies of Insurance Policies. Lessee shall deliver to Lessor
copies of all such policies along with the receipted bills evidencing
payment of the premiums for them. Such policies shall provide that Lessor
shall be given thirty (30) days written notice prior to cancellation of
any policy.
Section 5.06. Limitations of Liability. Neither Lessor nor Lessee shall be
liable to the other or anyone claiming by, through or under Lessor or
Lessee, including an insurance carrier or carriers, for any damage to
premises, property or business caused by any peril which is covered by
standard "all risk" insurance or for which either party may be reimbursed
as a result of insurance coverage affecting any loss suffered by it. All
of the insurance policies required hereunder pertaining to the Leased
Premises shall contain an endorsement by the respective insurance carriers
waiving any and all rights of subrogation against Lessor and Lessee, and
Lessor and Lessee will each deliver to the other evidence of such
endorsement prior to the commencement of this Lease.
Article VI
Improvements, Repairs, and Alterations
Section 6.01. Improvements. During the term of this Lease, Lessee shall
have the right, at Lessee's cost and expense, to construct on any part or
all of the Leased Premises, at any time, and from time to time, such
buildings, parking areas, driveways, and other similar and dissimilar
improvements, as Lessee, from time to time determines, provided that (a)
Lessee has obtained Lessor's prior written approval of such intended
improvements and exterior landscaping (which such approval shall not be
unreasonably withheld), and (b) such improvements shall be in compliance
with all applicable building codes and ordinances, including, without
limiting the generality of the foregoing, a banking facility, with a three
(3) lane drive-thru window. Notwithstanding the above, any building
constructed upon the Leased Premises shall be of a "Colonial Williamsburg"
design, or other similar period design.
Section 6.02. Repairs. During the term of this Lease, Lessee shall, at
Lessee's cost and expense, keep and maintain or cause to be kept and
maintained in repair and good condition (ordinary wear and tear and damage
by fire or other casualty and taking by eminent domain excepted), all
buildings and other improvements constructed on the Leased Premises, and
shall use all reasonable precaution to prevent waste, damage or injury.
Section 6.03. Alterations. During the term of this Lease, Lessee may, at
Lessee's option and expense, at any time and from time to time, make such
alterations, changes, replacements, improvements and additions in and to
the Leased Premises, and the buildings and improvements thereon, as it may
deem desirable, including the demolition of any building(s) and
improvement(s) and/or structure(s) that now or hereafter may be situated
or erected on the Leased Premises, provided that Lessee first obtains
Lessor's written consent (which such consent shall not be unreasonably
withheld).
Section 6.04. No Duty to Construct. Nothing contained in this Lease shall
impose an affirmative duty upon Lessee to construct any improvement on the
Leased Premises at any time, or, if and when Lessee elects to construct an
improvement, to replace or rebuild such improvement or to require the
continued existence of such improvement; however (a) if Lessee fails to
construct a banking facility and open said facility for business within
three(3) years of the date of this Lease, or (b) if after a casualty loss,
Lessee fails to rebuild such facility and reopen same within one (1) year
of said casualty loss or such other mutually reasonable time period needed
for Lessee to obtain all building approvals and/or insurance proceeds,
then Lessor, at Lessor's election, shall have the right to terminate this
Lease upon ninety (90) days prior written notice to Lessee. To the extent
Lessor and Lessee cannot agree on a reasonable time period in excess of
one year for Lessee to rebuild and reopen the banking facility after a
casualty loss, Lessor and Lessee agree to submit the issue to binding
arbitration.
Section 6.05. Title to Improvements. During the term of this Lease, Lessee
shall at all times have title to the buildings and other improvements
which Lessee constructs on or under the Leased Premises. Except as set
forth below, upon the expiration, termination or forfeiture of this Lease
by any cause whatsoever, title to the buildings and other improvements
located on the Leased Premises (excluding Lessee's personal property,
equipment and trade fixtures, as more particularly described in Section
17.01 and Section 17.02 below) shall automatically vest in Lessor.
Notwithstanding the above, within ninety (90) days prior to the date of
expiration of the initial term, or the then-current renewal term, as the
case may be, Lessee may elect to remove from the Leased Premises the
building and other improvements, restoring the Leased Premises to the same
condition as required by Lessor under Section 18.01(e) below. If Lessee
makes such an election, then Lessee shall give Lessor written notice of
the election on or before the ninetieth (90th) day preceding the aforesaid
expiration date, and shall cause to remove the building and other
improvements on or before the aforesaid expiration date.
Article VII
Use of Leased Premises
Section 7.01. Use of Leased Premises. The Leased Premises may be used for
a banking facility, with a three (3) lane drive-thru window, and related
uses. Any other use of the Leased Premises shall require Lessor's prior
written consent (which such consent shall not be unreasonably withheld,
provided that Lessor may refuse to consent to a use which would cause a
conflict with any other leases Lessor may have for other property
adjoining the Leased Premises).
Article VIII
Utilities
Section 8.01. Utilities. During the term of this Lease, payment of all
utilities used upon or in connection with the Leased Premises shall be
paid by Lessee directly to the provider of such utility services.
Article IX
Mechanics' Liens
Section 9.01. Mechanics' Liens. Lessee shall not subject Lessor's
interest in the Leased Premises to any mechanics' or materialmen's
liens or other lien of any kind, except to the extent that the creation of
such lien or liens is specifically authorized by a provision in this
Lease. Lessor shall have the right to post the Leased Premises with
notices of non-responsibility for Lessee's improvements.
Section 9.02. Discharge of Liens. Lessee shall not allow a lien or claim
of any kind to be filed or claimed against Lessor's interest in the Leased
Premises during the continuance of this Lease. If such lien is claimed or
filed, Lessee shall notify Lessor as soon as it has knowledge of such lien
and, if and when Lessor gives written notice to Lessee requiring removal
of the lien from the Leased Premises, Lessee shall cause the Leased
Premises to be released from the claim within thirty (30) days after
receipt of such notice from Lessor. Lessee will cause such release either
by paying to the court the amount necessary to relieve and release the
Leased Premises from the claim, or in any other manner which, as a matter
of law, will result, within the thirty (30) day period, in releasing
Lessor and its title from the claim. In no event will Lessee permit the
loss of the Leased Premises through lien foreclosure or otherwise.
Article X
Default, Cumulative Remedies and Governing Law
Section 10.01. Default by Lessee. Except as provided for in Section 10.02,
if Lessee defaults in the payment of a monthly installment of rent, and
fails to cure same within ten (10) days of Lessor's written notice
thereof, or if Lessee fails to perform any other covenant or condition of
this Lease, and fails to cure same within thirty (30) days of Lessor's
written notice thereof, Lessor may declare this Lease terminated. In such
an event, Lessor may re-enter upon any part of the premises and the
building or buildings and improvements situated on it, either with or
without process of law, Lessee waiving any demand for possession of the
premises and all buildings and improvements situated thereon.
Section 10.02. Restriction on Termination. Notwithstanding any other
provisions contained in this Lease, in the event the Lessee is closed or
taken over by the banking authority of the State of Kentucky, or other
bank supervisory authority, the Lessor 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 Lessor 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 next year
succeeding the date of the surrender of the Leased Premises to the Lessor,
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 10.03. Default by Lessor. If Lessor fails to perform any other
covenant or condition of this Lease, and fails to cure same within thirty
(30) days of Lessee's written notice thereof, Lessee may declare this
Lease terminated.
Section 10.04. Remedies. In addition to the remedies set forth in Section
10.01 and Section 10.02 above, Lessor and Lessee shall have all rights and
remedies which the laws of the State of Kentucky assure to them; and all
such rights and remedies shall be cumulative; that is, Lessor or Lessee
may pursue all rights that the law and this Lease afford to them, in
whatever order they may desire and the law permits without being compelled
to resort to any one remedy in advance of any other.
Section 10.05. Costs of Enforcement. If, at any time, either party is
required to enforce this Lease or to defend any action arising out of the
facts connected with or caused by reason of this Lease or occupancy of the
Leased Premises, the party seeking enforcement or defending an action, if
successful, shall be entitled to payment by the other party of all court
costs and reasonable attorneys' fees incurred or expended in conducting
the defense or in enforcing the terms of this Lease. Such amounts may be
offset against rent, in the case of Lessee, or in the case of Lessor,
collected as though it was rent then maturing and coming due.
Section 10.06. Governing Law. All of the rights and remedies of
the parties shall be governed by the provisions of this instrument
and by the laws of the State of Kentucky.
Article XI
Lessor's Representations/Warranties/Covenants
Section 11.01. Lessor's Representations. Lessor represents,
warrants and covenants that:
(a) Lessor is lawfully seized of the Leased Premises and no
other party has any right or option thereto or in connection
therewith;
(b) Lessor has full right and power to enter into this Lease
with respect to the Leased Premises;
(c) The Leased Premises are free from all encumbrances except those set
out in Exhibit "B" attached hereto and incorporated herein;
(d) There are no restrictions or stipulations or planning or zoning
ordinances, laws, regulations or restrictions now in effect with
respect to the Leased Premises that would prevent the construction
and operation of a banking facility with a three (3) lane drive-thru
window;
(e) To the best of Lessor's knowledge, there are no environmental
defects at, on or under the Leased Premises, and Lessor will provide
Lessee with copies of all environmental studies it has obtained on
the Leased Premises;
(f) There are no pending or, to the best knowledge of Lessor,
threatened condemnation proceedings or actions affecting
the Leased Premises;
(g) There are no pending or, to the best knowledge of Lessor, threatened
actions or legal proceedings affecting the Leased Premises or
Lessor's interest therein;
(h) There are no unpaid special assessments for sewer, sidewalk, water,
paving, electrical or power improvements or other capital
expenditures or improvements, matured or unmatured;
(i) Lessor is not aware of any facts or circumstances which
would materially adversely affect the use or value of the
Leased Premises;
(j) Lessor, to the best of Lessor's knowledge, knows of no reason why
the ground would not be suitable for construction of a banking
facility with a three (3) lane drive-thru window;
(k) Lessor is not obligated on any contract, lease or other agreement,
written or oral, with respect to the ownership, use, operation or
maintenance of the Leased Premises, other than contracts, leases and
agreements which have been disclosed to Lessee in writing;
(l) The Leased Premises has access through the private street system
constructed by Lessor as show on Exhibit "A", which private street
system provides a valid means of ingress and egress to and from the
Leased Premises, sufficient for Lessee's proposed use;
(m) The Leased Premises has direct legal access to all utilities at or
within the boundaries of the Leased Premises of sufficient capacity
and type for Lessee's proposed use; and
(n) Lessee's use of the Leased Premises as a banking facility with a
three (3) lane drive-thru window does not violate any use clause or
exclusivity clause in any agreement to which Lessor is a party.
Section 11.02. Survival. All such representations, warranties and
covenants set forth above shall survive the date of execution of
this Lease.
Article XII
Assignment and Subletting
Section 12.01. Assignment and Subletting. Lessee may, at any time, assign
this Lease or sublet all or any portion of the Leased Premises with the
consent of Lessor, which shall not be unreasonably withheld; provided,
however, that no such assignment or subletting shall operate to release
Lessee from its liability under this Lease. Lessee shall provide Lessor
with notice of any such assignment or subletting.
Article XIII
Condemnation
Section 13.01. Eminent Domain. If, during the term of this Lease, all or
any portion of the Leased Premises, or the improvements constructed
thereon, is taken, appropriated or condemned by reason of eminent domain,
Lessor and Lessee shall divide the proceeds and awards in the condemnation
proceedings, abate the rent, and make other adjustments in a just and
equitable manner under the circumstances. If Lessor and Lessee cannot
agree on a just and equitable division, annual abatement of rent, or other
adjustments within thirty (30) days after the award has been made, the
disputed matters shall, by appropriate proceedings, be submitted to a
court having jurisdiction of the subject matter for its decision and
determination. If legal title to the entire premises is wholly taken by
condemnation (or if the amount taken prevents the use of the remainder
left following condemnation for Lessee's purposes, as determined in
Lessee's reasonable judgment), the Lease shall be terminated as of the
date of the taking.
Section 13.02. Apportionment. Although title to the building and other
improvements placed by Lessee upon the Leased Premises will pass to Lessor
upon the expiration of the term of this Lease, for purpose of
condemnation, the fact that Lessee created the improvements on the Leased
Premises shall be taken into account. The deprivation of Lessee's use of
the improvements shall, together with the remaining term of the Lease, be
an item of damage in determining Lessee's portion of the condemnation
award. It is the general intent of this Article that, upon condemnation,
the parties shall share in their awards to the extent that their
respective interests are depreciated, damaged, or destroyed by the
exercise of the right of eminent domain. If the condemnation is total, the
condemnation award shall be allocated so that the then value of the Leased
Premises, as if it were unimproved property, is allocated to Lessor, and
the then value of the improvements thereon is allocated between Lessor and
Lessee after giving due consideration to the number of years remaining in
the term of this Lease and the condition of the improvements at the time
of condemnation. Specifically, if a condemnation award is granted within
the Initial Term or the first renewal term of this Lease, the Lessee shall
be entitled to one hundred (100%) percent of the award as it pertains to
the building and other improvements so constructed. If a condemnation
award is granted within either the second (2nd) or third (3rd) renewal
terms, the Lessee shall be entitled to fifty (50%) percent of the award as
it pertains to the building.
Article XIV
Environmental Matters
Section 14.01. Lessee's Covenant. Lessee covenants with Lessor that Lessee
will not unlawfully generate, store or dispose of any Hazardous Substances
(as defined below)on the Leased Premises. Lessee agrees to indemnify and
hold Lessor harmless from any and all costs, expenses, damages or
liabilities incurred by or imposed upon Lessor, directly or indirectly,
arising out of or attributable to (a) the use, generation, storage,
release, threatened release, discharge, disposal (on or off the Leased
Premises) or presence on, under or about the Leased Premises of any
Hazardous Substances relating to the operations of the Lessee or occupants
on the Leased Premises after the commencement of this Lease; and (b) any
release or threatened release of Hazardous Substances which are located
in, at or under the Leased Premises after the commencement of the Lease.
Lessee agrees that such indemnity shall include the continued migration of
any Hazardous Substance which occurs because of any existing Hazardous
Substance release after the commencement of the Lease.
Section 14.02. Lessor's Representation and Warranties. To Lessor's best
knowledge and belief, no toxic or hazardous substances or wastes,
pollutants or contaminants (including, without limitation, asbestos, urea
formaldehyde, the group of organic compounds known as polychlorinated
biphenyls, petroleum products including gasoline, fuel oil, crude oil and
various constituents of such products, and any hazardous substances as
defined in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), 42 U.S.C. ss. 9601-9657, as amended) or
any similar state or local laws relating to any such substances, wastes,
pollutants or contaminants (collectively "Hazardous Substances") have been
generated, treated, stored, released or disposed of, or otherwise placed,
deposited in or located on the Leased Premises by Lessor or, to Lessor's
best knowledge after diligent investigation, by any other owners or
occupants of the Leased Premises.
Section 14.03. Indemnification of Lessee. Lessor agrees to indemnify and
hold Lessee harmless from any and all costs, expenses, damages or
liabilities incurred by or imposed upon Lessee directly or indirectly,
arising out of or attributable to (a) the use, generation, storage,
release, threatened release, discharge, disposal (on or off the Leased
Premises) or presence on, under or about the Leased Premises of any
Hazardous Substances relating to the operations of the Lessor or owners or
occupants on the Leased Premises at the commencement of this Lease or
prior to such commencement; and (b) any release or threatened release of
Hazardous Substances which are located in, at or under the Leased Premises
as of the commencement of the Lease. Lessor agrees that such indemnity
shall include the continued migration of any Hazardous Substance which
occurs because of any existing Hazardous Substance release. Lessor's
obligation to indemnify and hold Lessee harmless hereunder shall survive
expiration or termination of the Lease. The disclosure to or acquisition
of knowledge by Lessee prior to termination of the Lease of the current or
past existence of Hazardous Substances on the Leased Premises or of
possible claims or liability relating thereto, shall not modify, limit,
waive or diminish the liability of Lessor under this paragraph.
Article XV
Subordination
Section 15.01. Subordination. This Lease shall be subordinate to any
mortgage or mortgages which may be placed upon the Leased Premises
subsequently, but only if the mortgagee under any such mortgage shall
covenant in writing that Lessee's leasehold interest under this Lease
shall not be foreclosed or otherwise disturbed in any action brought under
such mortgage if at the time of the bringing of an action to foreclose the
Lessee is not in default in the payment of rent or in the performance of
any other material obligation under this Lease, with due allowance to be
given for the payment of any past due rent or for the correction of any
other default by the Lessee within the period of any notice given or
required to be given by the terms of this Lease.
Article XVI
Quiet Enjoyment
Section 16.01. Quiet Enjoyment. So long as Lessee keeps and performs all
of its covenants and conditions under this Lease, it shall have quiet,
undisturbed, and continued possession of the premises, free from all
claims against Lessor and all persons claiming under, by, or through
Lessor.
Article XVII
Personal Property
Section 17.01. Personal Property. In the event that Lessee constructs
improvements on the Leased Premises, it is possible that certain
furniture, fixtures and equipment to be installed by the Lessee in the
Leased Premises are or may be either leased by the Lessee or purchased by
the Lessee from a lessor or conditional seller, otherwise hypothecated to
a "Third Party". Therefore, all of such furniture, fixtures and equipment
installed by the Lessee in the Leased Premises shall at all times be and
remain personal property, regardless of the method in which the property
of the Lessee and/or such "Third Party" is attached or fixed to the Leased
Premises. The Lessor specifically agrees that its rights, if any in such
furniture, fixtures and equipment shall at all times be subject and
subordinate to the rights of any such "Third Party", it being specifically
agreed by the Lessor that any such "Third Party" shall have the right to
remove the furniture, fixtures or equipment from the Leased Premises in
the event of the default of the Lessee in complying with any agreement
relating to such furniture, fixtures and equipment. Lessee shall repair
any material damage caused to the Leased Premises by any such removal at
its expense. Lessor shall execute any additional waivers, consents or
other documents reasonably required by Lessee or any such "Third Party" to
effectuate the terms of this paragraph.
Section 17.02. Bank Specific Systems and Equipment. Lessee shall have the
right to remove all "bank specific systems and equipment" installed in or
upon the Leased Premises, and used in the operation of the Leased Premises
as a banking facility, including, but not limited to, night deposit box
facilities, automated teller machines, safety deposit boxes, vault doors,
teller deposit boxes, and drive-thru equipment and air tubes.
Article XVIII
Execution of Lease
Section 18.01. Execution of Lease. Lessor and Lessee are hereby
executing this Lease, subject to Lessee's ability to obtain the
following:
(a) Written approval from Department of Financial Institutions,
Commonwealth of Kentucky, and Federal Deposit Insurance Corporation,
approving (i) Lessee's application for the establishment and
operation of a branch bank, (ii) Lessee's operation of a branch bank
upon the Leased Premises, and (iii) Lessee's entry into this Lease,
upon the terms and conditions set forth herein;
(b) Final approval of the Board of Directors of Lessee approving Lessee's
entry into this Lease upon the terms and conditions set forth herein;
(c) A copy of the recorded subdivision plat creating the Leased Premises
("Subdivision Plat"), which plat shall be in substantial conformity
with Exhibit "A";
(d) All necessary zoning and building permits, including signage permits,
and all other government agency approvals necessary for (i) the
construction of a banking facility with a three (3) lane drive-thru
window, (ii) the creation of not less than two (2) proper curb cuts
permitting ingress and egress to and from Walden Drive to the Leased
Premises, and the natural flow of vehicular traffic on the Leased
Premises, and (iii) the displacement of surface water collected upon
the Leased Premises into a retention basin to be constructed by
Lessor, on Lessor's remaining property, as shown in yellow on Exhibit
"A" to this Lease;
(e) Evidence that Lessor, in compliance with all applicable ordinances,
regulations and codes, has completed the development of the
subdivision known as Adkins Property, Unit 2-B, Lexington, Kentucky
("Subdivision"), but not limited to (i) the completion of the
Subdivision's private street system as shown on the Subdivision Plat,
including all entries from Tates Creek Road, (ii) the installation of
all underground utilities (water, gas, electric, sanitary sewer, and
storm sewer) services for the Subdivision, and has brought same to
the boundary of Leased Premises, with all such services to be of
sufficient capacity to permit Lessee to operate upon the Premises the
proposed banking facility, (iii) the construction the retention basin
on Lessor's remaining property, as shown in yellow on Exhibit "A" to
this Lease, and constructed all ancillary drainage swells and/or
lines necessary to permit the natural flow of service water from the
boundary of the Leased Premises to said retention easement, and (iv)
final grade of the Leased Premises, leaving said premises in a
condition suitable for site development.
Lessee agrees to use its best efforts to obtain the approvals set
forth in subparagraphs (a), (b) and (d) above.
Section 18.02. Lessee's Right to Cancel Lease. Lessee shall have the
right to terminate this Lease, without further obligations to Lessor,
if Lessee, within ninety (90) days of the date of execution of this
Lease, has been unable to obtain all of the necessary approvals set
forth in Section 18.01 above, to Lessee's reasonable satisfaction. If
Lessee is unable to obtain all of the necessary approvals referred to
in Section 18.01 above, within said period, and same be as a result
of the failure of Lessor to complete the development of the
subdivision and to record the Subdivision Plat, then Lessee may
extend said period for an additional period ending the sixtieth
(60th) day following the recording of the Subdivision Plat. Upon the
expiration of the ninety (90) day period (or as the case may be, the
extended period), Lessee shall give written notice to Lessor advising
Lessor of Lessee's intent to cancel this Lease. Failure to provide
Lessor with such notice shall constitute Lessee's waiver of the right
to terminate this Lease.
ARTICLE XIX
FIRST RIGHT OF REFUSAL
Section 19.01. First Right of Refusal. If Lessor receives from a
third party a bona fide offer to purchase the Leased Premises, before
Lessor may accept such an offer, Lessor must first give written
notice to Lessee of said offer. Lessee shall have thirty (30) days
from the date of receipt of said offer, to provide Lessor with
written acceptance of the offer, upon the same terms and conditions
as set forth therein (but in addition thereto, such sale shall
include all rights of Lessor in and to this Lease). If Lessee accepts
said offer, closing shall take place within sixty (60) days from the
date of acceptance. Lessee may elect to assign Lessee's rights to
purchase the Leased Premises to the parent of the Lessee, a
subsidiary of the Lessee, or other entity wholly owned by Lessee or
its parent. If Lessee fails to accept said offer within the thirty
(30) days provided herein, Lessor may proceed to sell to said third
party in accordance with the terms of the offer. If Lessor has not
consummated a sale within one hundred eighty (180) days after the
expiration of Lessee's option rights hereunder, the restrictions and
options herein provided shall be restored and shall continue in full
force and effect, and so long as these restrictions and options
remain in effect the Lessor shall not thereafter sell or transfer the
Leased Premises without first giving the Lessee notice as herein
provided and otherwise complying with the foregoing provisions.
ARTICLE XX
Miscellaneous
Section 20.01. Force Majeure. If Lessor or Lessee is delayed,
hindered, or prevented from performing any act required hereunder by
reason of strikes, lockouts, labor troubles, inability to procure
materials, failure of power, restrictive government laws or
regulations, riots, insurrection, the act, failure to act or default
of the other party, war, or other reason beyond its control, then
performance of the act shall be excused for the period of the delay.
In that event, the period for the performance of the act shall be
extended for a period equivalent to the period of the delay.
Section 20.02. Estoppel Certificates. Lessor or Lessee shall, without
charge, at any time and from time to time hereafter, within fifteen
(15) days after the others' written request of the other, certify by
instrument duly executed and acknowledged to any mortgagee or
purchaser or proposed mortgagee or proposed purchaser, or any other
person, firm, or corporation specified in the request as to:
(a) Whether this Lease has been supplemented or amended,
and, if so, the substance and manner of the supplement
or amendment;
(b) The validity and force and effect of this Lease, in
accordance with its tenor as then constituted;
(c) The existence of any default thereunder;
(d) The existence of all offsets, counterclaims, or
defenses thereto on the part of the other party;
(e) The commencement and expiration dates of the term
of this Lease; and
(f) All other matters that may reasonably be so requested.
Any such certificate may be relied upon by the party who requested it
ad any other person, firm, or corporation to whom it may be exhibited
or delivered, and the contents of the certificate shall be binding on
the party executing it.
Section 20.03. Short Form of Lease. Lessor or Lessee shall, at any
time, at the other's request, promptly execute duplicate originals of
an instrument, in recordable form, which shall constitute a short
form of lease. This will set forth a description of the Leased
Premises, the term of this Lease, and any other portion thereof,
except for the rental provisions, requested by either party.
Section 20.04. No Personal Recourse. No personal liability
shall attach to any of Lessee's present or future shareholders,
officers, or directors, for any obligation hereunder or in
connection herewith.
Section 20.05. Income Tax Deductions and Credits. Only Lessee may
take deductions and credits on its tax returns for the buildings,
structures, improvements, changes, alterations, repairs, additions,
and installations, and for their depreciation or cost recovery.
Section 20.06. Covenants Running with Land; Binding Effect. All
covenants, conditions, and obligations contained herein or implied by
law are covenants running with the land and shall attach and bind and
inure to the benefit of Lessor and Lessee and their respective heirs,
legal representatives, successors, and assigns, except as otherwise
provided herein.
Section 20.07. Non-waiver. No waiver of a breach of any covenant in
this Lease shall be construed to be a waiver of any succeeding breach
of the same covenant. No delay or failure by either party to exercise
any right under this Lease, and no partial or single exercise of that
right, shall constitute a waiver of that or any other right, unless
otherwise expressly provided herein.
Section 20.08. Holding Over. If Lessee shall remain in possession of
the Leased Premises after the expiration or other termination of this
Lease, Lessee shall be deemed a tenant of the Leased Premises from
month to month and subject to all the terms and provisions of this
Lease, except only as to the term of this Lease.
Section 20.09. Written Modifications. No modification, release,
discharge, or waiver of any provision hereof shall be of any force,
effect, or value unless signed in writing by the party foregoing its
rights, or such party's duly authorized agent or attorney.
Section 20.10. Entire Agreement. This instrument contains the entire
agreement between the parties hereto as of this date. The execution
hereof has not been induced by either party by representations,
promises, or understandings not expressed herein. There are no
collateral agreements, stipulations, promises, or undertakings
whatsoever upon the respective parties in any way touching the
subject matter of this instrument which are not expressly contained
in it.
Section 20.11. Notices. All notices between the parties in connection
with this Lease shall be in accordance with its terms. Notice shall
be given by registered or certified mail, deposited in the United
States mails with postage prepaid. The notices shall be addressed as
follows:
For Lessor:
Cherrywood Development, LLC
3399 Tates Creek Road
Lexington, Kentucky 40502
With a copy to:
Mr. Phil Greer
P.O. Box 54465
Lexington, Kentucky 40555-4465
For Lessee:
First Security Bank of Lexington
Attn: Julian Beard, President
400 East Main Street
Lexington, Kentucky 40507
With a copy to:
Fleming, Horstmeyer & Fleming
Attn: Kermin E. Fleming
200 West Vine Street
Suite 700
Lexington, Kentucky 40507
Either party may change the place for giving notice by written notice
in the manner set forth in this Section.
Section 20.12. Liability Continued. All references to Lessor and
Lessee mean the persons who, from time to time, occupy the positions,
respectively, of Lessor and Lessee. However, this shall not be
construed as relieving a person of any liability incurred by reason
of or in connection with it having been Lessor or Lessee at one time.
Section 20.13. Real Estate Broker. Lessor and Lessee, each to the
other, acknowledge that they have not utilized the services of a real
estate broker licensed under the laws of the State of Kentucky in
connection with this transaction. Lessor and Lessee agree to hold the
other harmless from any and all claims from any such real estate
broker, agent, realtor or others, asserting a claim for such a
commission through said party.
Section 20.14. Headings. Headings in this Lease are for
convenience and reference only and shall not be used to
interpret or construe its provisions.
Section 20.15. Time of Essence. Time is expressly declared
to be of the essence of this Lease.
Section 20.16. Exhibits. Attached hereto are certain
exhibits, all of which are hereby incorporated herein as an
integral part of this Lease.
IN WITNESS WHEREOF, Lessor and Lessee have hereunto set their hands
and seals, the day and year above written.
LESSOR:
CHERRYWOOD DEVELOPMENT, LLC,
a Kentucky limited liability company
BY: RML Construction, RLLP
Kentucky registered limited liability
partnership, Member
BY: /s/ D.Ray, Ball, Jr.
D. RAY BALL. JR., Merging Member
BY: /s/ Phil G. Greer
PHIL G. GREER, Member
BY: /s/ Frank Sadler
FRANK SADLER, Member
LESSEE:
FIRST SECURITY BANK OF LEXINGTON,
a Kentucky banking corporation
BY:/s/ Julian E. Beard
JULIAN BEARD, President
STATE OF KENTUCKY
COUNTY OF FAYETTE
The foregoing instrument was subscribed, sworn to, and acknowledged before me
on this the 24th day of February, 2000, by D. Ray Ball, Jr., as Merging Member
of RML Construction RLLP, a Kentucky reported limited liability partnership, on
behalf of said partnership, as Member of Cherrywood Development, LLC a Kentucky
limited liability company, on behalf of said company.
My Commission Expires:
NOTARY PUBLIC, STATE AT LARGE
STATE OF KENTUCKY
COUNTY OF FAYETTE
The foregoing instrument was subscribed, sworn to, and acknowledged before me
on this the 23rd day of February, 2000, by Julian Beard, as President of First
Security Bank of Lexington, a Kentucky banking corporation, on behalf of said
corporation.
My Commission Expires:June 14, 2000
/s/ Donna Ann Collins
NOTARY PUBLIC, STATE AT LARGE
Prepared By:
Fleming, Horstmeyer & Fleming
200 West Vine Street
Suite 700
Lexington, Kentucky 40507
(606) 255-6806
BY:/s/Kermin E. Fleming
KERMIN E. FLEMING