Document:

COMMUNITY BANK OF TRI-COUNTY

                             SPLIT DOLLAR AGREEMENT

     THIS AGREEMENT,  made and entered into this 12th day of April, 2001, by and
between COMMUNITY BANK OF TRI-COUNTY,  a corporation chartered under the laws of
The  State of  Maryland  and the  principal  office of which is  located  in the
Waldorf,  Maryland (hereinafter called the "Employer") and William J. Pasenelli,
an individual residing in Maryland (hereinafter called the "Employee").

     WHEREAS,  the Employee is a valuable officer of the Employer,  and wants to
obtain life insurance under a policy to be paid for by the Employer; and

     WHEREAS,  the Employer wishes to retain the services of the Employee and to
help the  Employee  obtain  such life  insurance  not only for the  benefit  and
protection  of the  Employee's  family (by  contributing  toward  payment of the
premiums due on the policy on the Employee's  life), but also through  retaining
the right to death  benefits  that would assist the  Employer in  replacing  the
Employee if necessary due to the Employee's death; and

     WHEREAS,  the Employee will be the owner of the insurance  policy  acquired
pursuant to the terms of this  Agreement  and the policy will be assigned to the
Employer as security for the  repayment  of the amounts  that the Employer  will
contribute  toward payment of the premiums due on each policy listed on Schedule
A hereto;

     NOW, THEREFORE,  in consideration of the mutual covenants contained in this
Agreement, it is agreed as follows:

                                    ARTICLE I
                                   DEFINITIONS

     1.01  "Assignment"  shall refer to the collateral  assignment of the Policy
that the  Employee  will grant to the  Employer and that will be evidenced by an
instrument of assignment filed with the Insurer.  The form of such instrument of
assignment is attached as Schedule B hereto.

     1.02 "Change of Control"  shall refer to the  acquisition of the beneficial
           -----------------
ownership  (as that  term is  defined  in Rule  13d-3 of the  General  Rules and
Regulations  under the  Securities  Exchange Act of 1934) of 25 % or more of the
voting  securities  of the  Employer  (or of any bank  holding  company  for the
Employer) by any person or by persons acting as a "group" (within the meaning of
Section  13(d) of the  Securities  Exchange  Act of 1934).  For purposes of this
subparagraph  only, the term "person"  refers to an individual or a corporation,
partnership,   trust,   association,   joint  venture,  pool,  syndicate,   sole
proprietorship,  unincorporated  organization  or any other  form of entity  not
specifically listed herein.

     1.03 "Disability"  shall refer to that medically  determinable  physical or
           ---------
mental impairment that disables or incapacitates the Employee to the extent that
he is unable to perform his duties of  employment,  as stated in his  Employment
Agreement with the Employees and that establishes the Employee's  eligibility to
receive disability benefits under his Employment Agreement.

                                      -1-
<PAGE>

     1.04  "Insurer"  shall  refer to any  insurance  company  that has issued a
            -------
policy.

     1.05  "Normal  Retirement"  shall  refer to an  Employee's  termination  of
            ------------------
service  with  the  Employer  on or after  the  Employee's  sixty-second  (62nd)
birthday for reasons  other than death,  Disability  Termination  for Cause,  or
Change of Control.

     1.06  "Policy"  shall refer to the insurance  policy or policies  listed on
            ------
Schedule A attached hereto.

     1.07 "Recovery Amount" shall mean the total amount of the Employer's share,
           ---------------
as set forth in Section 2.03(A), of the premiums paid by the Employer toward the
Policy,  except  that,  (i) in the context of the  Employee's  death while still
owning  the  Policy,  the  Recovery  Amount  shall  mean the amount to which the
Employer is entitled  under Section  3.02(B),  and (ii) in the context either of
the Employee's Termination for Cause or of the Employer's exercise of its rights
pursuant to Section 3.02 to receive the  Recovery  Amount from the cash value of
the Policy,  the  Recovery  Amount  shall mean the lesser of (a) the  Employer's
share of the premiums paid toward the Policy and (b) the cash surrender value of
the Policy as of the applicable determination date.

     1.08 "Termination for Cause" shall mean:
           ---------------------

          (A)  the Employer's termination of the Employee as a result of (1) the
               Employee's conviction of, or plea of nolo contendere to, a felony
               or crime involving moral turpitude;  (2) the Employee's  personal
               dishonesty,   incompetence,   willful  misconduct,  breach  of  a
               fiduciary duty involving personal profit,  intentional failure to
               perform stated duties,  or willful violation of any law, rule, or
               regulation (other than traffic violations or similar offenses) or
               final  cease-and-desist  order;  or (3) the  Employee's  material
               breach of any  provision  of his  Employment  Agreement  with the
               Employer; or

          (B)  the removal of the Employee and/or  permanent  prohibition of the
               Employee  from  participating  in the  conduct of the  Employer's
               affairs by an order issued under  Sections  8(e)(4) or 8(g)(1) of
               the  Federal  Deposit  Insurance  Act  ("FDIA"),  12  U.S.C.  ss.
               1818(e)(4) or (g)(l).

                                   ARTICLE II
                          GENERAL TERMS AND CONDITIONS

     2.01  Application for Insurance.  The Employee will apply to the Insurer(s)
           -------------------------
for a Whole Life  Policy or  Policies  on his life in the face  amount  totaling
$1,000,000  and will do  everything  necessary to cause the Policy to be issued.
When the Policy is issued, the policy number,  face amount and plan of insurance
will be recorded  and  attached to this  Agreement,  and the Policy will then be
subject to the terms of this Agreement.

     2.02 Ownership of Policy. The Employee shall be the owner of the Policy and
          -------------------
may  exercise  all rights of  ownership  with  respect  to the Policy  except as
otherwise  provided in this Agreement and in the Assignment.  The Employee shall
have the right to name or change the beneficiary or beneficiaries

                                      -2-
<PAGE>

of the Policy. The Employee shall have the right to borrow against the Policy up
to the maximum  loan value of the Policy,  reduced by the Recovery  Amount,  but
shall not  otherwise  have the right to borrow  against the Policy except as set
forth in Section 5.02 of this  Agreement.  The Employer shall not borrow against
the  Policy  without  the prior  written  consent  of the  Employee.  While this
Agreement is in force and effect, the Employee shall not sell, assign, transfer,
exchange or surrender or otherwise  terminate the Policy  without the Employer's
written consent. The Employee may, however,  cause the surrender and termination
of the  Policy  at any  time  by  providing  notice  of the  termination  of the
Agreement to the Employer pursuant to Section 5.01.

     2.03 Payment of Premiums.  Subject to Section 3.01,  the Employer shall pay
          -------------------
the  premiums  on the Policy  during  the  Employee's  term of service  with the
Employer and for any period thereafter for which the Employer has the obligation
to pay  premiums  under  the  terms  of this  Agreement.  Each  premium  will be
allocated between the Employee and the Employer as follows:

          A.   The  Employer's  share of the premium  shall be the amount of the
               planned  periodic  premium  reduced  by an  amount  equal  to the
               economic benefit of the premium to the Employee,  as described in
               IRS Revenue Rulings 64-328 and 66-110 (the "Economic Benefit").

          B.   The  Employee' s share of the premium  shall be the amount of the
               Economic  Benefit.  Such share  shall be paid by the  Employer as
               agent for the  Employee  and shall be charged to the  Employee as
               cash  compensation,  and for all  purposes  shall be deemed  cash
               compensation to the Employee and not Employer-paid premiums.

     2.04  Employee's   Obligation  to  Employer.   The  Recovery  Amount  shall
           -------------------------------------
constitute  indebtedness  of the  Employee to the  Employer.  Repayment  of such
indebtedness  shall  be made in  accordance  with  Section  3.02 or 5.02 of this
Agreement.

     2.05  Assignment  of Policy.  The Employee  shall  collaterally  assign the
           ---------------------
Policy to the Employer as security for repayment of the Recovery  Amount through
execution  of the  form  of  Assignment  attached  as  Schedule  B  hereto.  The
Assignment may not be terminated, altered or changed without the written consent
of the Employer, but will terminate automatically upon the Employer's receipt of
the Recovery  Amount  pursuant to Section 3.02 or the Employee's  payment of the
Recovery Amount to the Employer pursuant to Section 5.02.

     2.06 Additional  Policy  Benefits and Riders.  The Employee may at any time
          ---------------------------------------
add a rider to the Policy.  Upon written  request by the Employer,  the Employee
will add a rider to the Policy for the benefit of the Employer.  The  additional
premium  for any  rider  that is added to the  Policy  will be paid by the party
entitled to receive the proceeds of the rider.

     2.07 Continuation of Employer's  Obligations upon Change of Control. Upon a
          --------------------------------------------------------------
Change of Control,  the Employer or its successor  organization  surviving after
the Change of Control shall be deemed to have assumed,  and shall be responsible
to discharge,  all  obligations of the Employer under this  Agreement.  Upon the
Employer's reorganization,  merger, consolidation,  or sale of substantially all
of its assets to another  organization,  the survivor or successor  organization
shall be deemed to have assumed,  and shall be  responsible  to  discharge,  all
obligations of the Employer under this Agreement,  and the term "Employer" shall
be deemed to refer to such successor or survivor organization.

                                      -3-
<PAGE>

                                   ARTICLE III
              EMPLOYER'S FUNDING OBLIGATIONS AND RIGHTS OF RECOVERY

     3.01 Employer's Rights and Funding Obligations on Certain Events.
          -----------------------------------------------------------

          A.   Disability and Normal  Retirement.  If the Employee  resigns from
               ---------------------------------
               the  Employer's   employ  on  account  of  Disability  or  Normal
               Retirement,  the Employer shall pay the remaining premiums on the
               Policy if, as, and when due in the  ordinary  course,  subject to
               Section 2.03(A).

          B.   Termination  for  Cause.  Notwithstanding  any other  intervening
               -----------------------
               event,  upon the Employee's  Termination for Cause,  the Employer
               shall notify the Insurer of the Employee's Termination for Cause,
               and all rights,  title,  and interest in the Policy  shall,  upon
               such notice,  be  transferred  to the Employer under the terms of
               the  Policy as of the date of such  Termination  for  Cause.  The
               parties  hereby agree that the terms of the Policy shall  provide
               for the automatic  transfer of all rights,  title and interest to
               the Employer upon the conditions described in this Paragraph.

          C.   Termination  or Resignation  for Other Reasons.  In the event the
               ----------------------------------------------
               Employee is  terminated or resigns from service with the Employer
               for reasons  other than  Termination  for Cause,  Disability,  or
               Normal  Retirement,  this Agreement  shall continue in full force
               and effect, except that Employer shall have no further obligation
               to  pay  premiums  on  the  Policy  upon  such   termination   or
               resignation.

          D.   Termination  of  Agreement  by  Employee.  In the event  that the
               ----------------------------------------
               Employee provides written notice of termination of this Agreement
               to the Employer pursuant to Section 5.01, the Employer shall have
               no further  obligation to pay premiums on the Policy upon receipt
               of such notice.

     3.02 Employers Recovery Upon Death Resignation or Termination of Agreement.
          ---------------------------------------------------------------------

          A.   Disability  or  Normal  Retirement.  If the  Employee  terminates
               ----------------------------------
               employment  with the Employer on account of  Disability or Normal
               Retirement, the Employer shall have the right, subject to Section
               5.02,  to receive the Recovery  Amount from the death  benefit or
               the cash value of the Policy,  upon the earlier of the Employee's
               death or the Employee's provision of notice of termination of the
               Agreement pursuant to Section 5.01.

          B.   Death of Employee.  If the Employee  dies while he still owns the
               -----------------
               Policy  (whether  or not the  Employee is then an Employee of the
               Employer),  the Employer shall have the right to receive one half
               of the death benefit payable under the Policy.

          C.   Termination of Agreement by Employee;  Termination or Resignation
               -----------------------------------------------------------------
               of Employee for Other Reasons.  In the event the Employee  either
               -----------------------------
               provides written notice of termination of this Agreement pursuant
               to Section 5.01 hereof,  or is terminated or resigns from service
               with the Employer for reasons other than  Termination  for Cause,
               Disability  or Normal  Retirement,  the  Employer  shall have the
               right,  subject to Section 5.02,  to

                                      -4-
<PAGE>

               receive the Recovery  Amount from the death benefit or cash value
               of the  Policy  upon such  provision  of notice,  termination  or
               resignation.

                                   ARTICLE IV
                         PAYMENTS UPON DEATH OF EMPLOYEE

     4.01 Employer's Actions. Upon the death of the Employee, the Employer shall
          ------------------
promptly take all actions necessary to obtain the Recovery Amount from the death
benefit of the Policy.

     4.02 Payment of Death Benefit to  Beneficiary.  Subject to the terms of the
          ---------------------------------------
Assignment  and to Section  3.02(B)  hereof,  the  balance of the death  benefit
provided under the Policy,  if any, shall be paid directly to the beneficiary or
beneficiaries of the Policy in the manner designated by the Employee. No payment
shall be made to the  beneficiary  or  beneficiaries  of the  Policy  until  the
Recovery Amount has been paid to the Employer in accordance with Section 3.02(B)
hereof. The parties hereto agree that the beneficiary  designation  provision of
the Policy shall conform to the provisions hereof.

                                    ARTICLE V
                               RIGHTS OF EMPLOYEE

     5.01 Employee's Right to Terminate Agreement.  The Employee may at any time
          ---------------------------------------
effect the  termination  of this  Agreement by providing  written  notice to the
Board of Directors of the Employer.  Following such notice,  the Agreement shall
terminate either upon the Employee's  exercise of his option pursuant to Section
5.02 or upon the Employer's  receipt of the Recovery  Amount pursuant to Section
3.02(C).

     5.02  Employee's  Option  to  Receive  Release  of  Assignment.   Upon  the
           --------------------------------------------------------
occurrence of any of the events set forth in Section 3.02 that give the Employer
the right to receive the Recovery Amount from the cash value of the Policy,  the
Employee  shall have a 60-day  option to receive  from the Employer a release of
the Assignment in  consideration  of the Employee's cash payment of the Recovery
Amount to the Employer.  The Employer  agrees that the Employee  (solely for the
purpose of facilitating  his payment of the Recovery Amount to the Employer) may
borrow  or  withdraw  from the  Policy  cash  value  amounts  in  excess  of the
Employee's share of the cash value of the Policy.  If the Employee does not make
payment of the  Recovery  Amount  within the 60-day  period,  the  Employer  may
enforce  its right to receive the  Recovery  Amount from the cash value or death
benefit of the Policy.

                                   ARTICLE VI
                                  MISCELLANEOUS

     6.01  Termination of Agreement.  This Agreement shall terminate when either
           ------------------------
of the following events occur:

          A.   Receipt by the  Employer of the  Recovery  Amount  under  Section
               3.02, 4.01, or 5.02.

          B.   A transfer of rights to the Employer pursuant to Section 3.01(B).

                                      -5-
<PAGE>

     6.02 Suspension of Employer's Obligations.  In the event of the bankruptcy,
          ------------------------------------
receivership  or dissolution of the Employer,  or the "default" of the Employer,
as defined  under  Section  3(x)(1) of the FDIA, 12  U.S.C.ss.1813  (x)(l),  the
Employer's obligations under Section 2.03 shall be suspended.

     6.03 Amendment. This Agreement shall not be modified or amended except by a
          ---------
writing signed by the Employer and the Employee. This Agreement shall be binding
upon the heirs,  administrators  or executors and the  successors and assigns of
each party to this Agreement.

     6.04 Unfunded Arrangement.  The split-dollar arrangement established hereby
          --------------------
is an unfunded  employee  benefit plan maintained by the Employer  primarily for
the purpose of providing a life insurance death benefit for an Employee who is a
member of a select group of management and a highly  compensated  employee,  and
the parties  acknowledge and agree that this Agreement is exempt from Parts 2, 3
and 4 of the Employee Retirement Income Security Act of 1974.

     6.05 Claims Procedures.  The Employer,  Employee,  or any beneficiary under
          -----------------
the Policy may file a claim for benefits with the Insurer,  and shall be subject
to the claims procedure thereof.

     6.06 Binding  Agreement.  This Agreement shall be binding upon and inure to
          ------------------
the benefit of the Employer and its  successors  and  assignees and the Employee
and his assignees, heirs, executors, administrators and beneficiaries

     6.07  Governing  Law.  This  Agreement  shall be  subject  to and  shall be
           --------------
construed in accordance with the laws of the State of Maryland.

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first above written.

                                        COMMUNITY BANK OF TRI-COUNTY

Attest: /s/ Christy M. Lombardi         By: /s/ H. Beaman Smith
        -----------------------             -----------------------------------
                                            H. Beaman Smith
                                            Acting in his capacity as a Director

Witness: Christy M. Lombardi                /s/ William J. Pasenelli
         -------------------                ------------------------------------
                                            William J. Pasenelli

                                      -6-
<PAGE>

                          COMMUNITY BANK OF TRI-COUNTY

--------------------------------------------------------------------------------
                             SPLIT DOLLAR AGREEMENT:
                                   SCHEDULE A
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
LIFE INSURANCE                         POLICY
COMPANY NAME                           NUMBER                    TYPE OF POLICY          FACE AMOUNT
----------------------------------------------------------------------------------------------------
<S>                                    <C>                       <C>                     <C>
Valley Forge Life Insurance                                      Flexible Premium
                                       #AUCK002631               Adjustable Life         $1,000,000
----------------------------------------------------------------------------------------------------
                                                                 Whole Life
                                       #                         Insurance               $
----------------------------------------------------------------------------------------------------

</TABLE>

                                      -7-
<PAGE>

                          COMMUNITY BANK OF TRI-COUNTY

                             SPLIT DOLLAR AGREEMENT:
                                   SCHEDULE B

                                   ASSIGNMENT

     A. FOR VALUE  RECEIVED,  the  undersigned  (hereinafter  the "Owner")  does
hereby  assign,  transfer  and set  over to  Community  Bank  of  Tri-County,  a
corporation with principal  offices and place of business in Waldorf,  Maryland,
its successors and assigns (hereinafter the "Assignee"),  the following specific
rights in and to each and every  policy  listed in Schedule A, which is attached
hereto and made a part hereof,  issued by each and every insurance company named
in said Schedule A (hereinafter the "Insurer") and any supplementary contract or
contracts  issued in connection  therewith  (said policy and any such  contracts
hereinafter collectively referred to as the "Policy" as the context may require)
insuring the life of William J. Pasenelli,  (hereinafter the "Insured"), subject
to all the terms and conditions of the Policy and to all superior liens, if any,
that the Insurer may have against the Policy. The Owner, by this assignment (the
"Assignment"),  and the Assignee,  by acceptance of the assignment of the Policy
to it hereunder, agree to the terms and conditions contained herein.

     B. This  Assignment  is made  pursuant  to, and the Policy is to be held as
collateral  security  for all  liabilities  of the  Owner  to the  Assignee  now
existing or hereafter arising under, that certain Split Dollar Agreement, by and
between  the Owner and the  Assignee,  dated  April 12,  2001  (hereinafter  the
"Agreement"), which is attached hereto as Exhibit 1, and made a part hereof. The
Owner  reserves  all  rights  and  powers  in and to the  Policy,  except  those
specific,  limited  rights  granted in the  Policy to the  Assignee  hereby,  as
security for the  liabilities  of the Owner to the Assignee  under the Agreement
and except as otherwise provided by the Agreement. The parties hereto agree that
the provisions of the Agreement shall take precedence over this Assignment.

                                      -8-
<PAGE>

     C. It is expressly agreed that the Assignee's  interest in the Policy under
and by virtue of this Assignment  shall be limited to the rights provided for in
the Agreement, the following specific rights, and no others: (a) the right to be
paid the total  amount due it under the  Agreement  by  recovering  said  amount
directly from the Insurer out of the net death proceeds of the Policy,  upon the
death of the Insured; (b) the right to be paid the total amount due it under the
Agreement by recovering said amount from the net cash surrender  proceeds of the
Policy, pursuant to the terms and conditions of the Agreement; and (c) the right
to have the  Policy  transferred  to the  Assignee  in the event of the  Owner's
Termination  for Cause.  The Assignee shall have no other rights or powers in or
to the Policy as a result of the assignment to it hereunder.  and  specifically,
the Assignee shall not have the right or power to borrow against or obtain loans
or advances  on the  Policy,  make  withdrawals  from the Policy,  nor cancel or
surrender the Policy or exercise any other option or incident of ownership  with
respect to the Policy, except as otherwise provided under the Agreement.

     D.  Subject to the  Agreement,  the Owner  shall  retain all  incidents  of
ownership  in and to the  Policy,  subject  to the terms and  conditions  of the
Agreement,   including,  but  not  limited  to:  (a)  the  right  to  cause  the
cancellation  or surrender of the Policy and to receive the Owner's share of the
surrender  value  thereof at any time provided by the terms of the Policy and at
such other times as the Insurer may allow;  (b) the right to collect and receive
all  distributions  or share of surplus,  dividend  deposits or additions to the
Policy now or hereafter made or apportioned thereto, and to exercise any and all
options contained in the Policy with respect thereto;  (c) the right to exercise
all non-forfeiture rights permitted by the terms of the Policy or allowed by the
Insurer and to receive all benefits and advantages  derived  therefrom;  (d) the
right to designate and change the  beneficiary  of the Policy;  (e) the right to
borrow  against,  obtain  loans or  advances  on, or make  withdrawals  from the
Policy;  (f) the  right to  assign  the  Policy  (subject  to the  terms of this
Assignment and the  Agreement);  and (g) the right

                                      -9-
<PAGE>
to collect  directly from the Insurer that portion of the net death  proceeds of
the  Policy  in excess  of those  proceeds  payable  to the  Assignee  under the
Agreement.

     E. The  Assignee  agrees  with the Owner as follows  (a) any balance of any
amount  received by the  Assignee  hereunder  from the Insurer  remaining  after
payment of the then existing  liabilities of the Owner to the Assignee under the
Agreement  shall be paid by the Assignee to the persons  entitled  thereto under
the terms of the Policy had this  Assignment not been  executed;  and (b) if the
Policy is in the possession of the Assignee,  the Assignee  will,  upon request,
forward the Policy to the Insurer,  without  unreasonable delay, for endorsement
of any  designation or change of  beneficiary,  any election of optional mode of
settlement, or the exercise of any other right reserved by the Owner hereunder.

     F.  Except as  otherwise  provided  under the terms of the  Agreement,  the
Assignee  shall be under no  obligation  to pay any premium on the Policy or the
principal of or interest on any loans or advances on the Policy,  whether or not
obtained by the Assignee, or any other charges on the Policy.

     G. The Insurer shall be fully  protected in recognizing the request made by
the Owner for cancellation or surrender of the Policy,  with the written consent
of the Assignee,  and upon such  cancellation or surrender,  the Policy shall be
terminated and be of no further force or effect.

     H. Upon the full  payment of the  liabilities  of the Owner to the Assignee
pursuant to the Agreement,  the Assignee shall promptly  release this Assignment
and thereby  reassign to the Owner all  specific  rights in the Policy  included
herein.

     I.  Is  The  Assignee  may  take  or  release  other  security,  may  grant
extensions, renewals or indulgences with respect to the obligations of the Owner
or the  Assignee  under the  Agreement,  or may apply the proceeds of the Policy
hereby  assigned or any amount received on account of the Policy by the exercise
of any right permitted under this Assignment,  without resorting to or regard to
other security for such obligations if any.

                                      -10-
<PAGE>

     J. The Owner declares that no proceedings in bankruptcy are pending against
the Owner,  and that the Owner's  property is not subject to any  assignment for
the benefit of creditors of the Owner.

     K. This  Assignment  supersedes  any prior  assignment  entered into by the
Owner with respect to the Policy.

Signed and sealed as of the 12th day of April, 2001.

                                   /s/ William J. Pasenelli
                                   --------------------------------------------
                                   William J. Pasenelli, Owner

                                   COMMUNITY BANK OF TRI-COUNTY, ASSIGNEE

/s/ Christy M. Lombardi            By: /s/ H. Beaman Smith
---------------------------            ------------------------------
Witness                                H. Beaman Smith
                                       Acting in his capacity as a Director

                                   Endorsed By: _____________________________
                                   Insurer

                                      -11-LEASE
                                      -----

     THIS LEASE is made and entered into  effective  this 1st day of  September,
2001, by and between KENTUCKY  NATIONAL  PROPERTIES,  L.L.C.,  of P.O. Box 2504,
Elizabethtown, Kentucky 42702-2504, hereinafter referred to as the "Lessor", and
KENTUCKY  NATIONAL  BANK of 1000 North  Dixie  Avenue,  Elizabethtown,  Kentucky
42701, hereinafter referred to as the "Lessee", WITNESSETH:

     That for the consideration  hereinafter set out, the Lessor agrees to lease
to the  Lessee,  and the Lessee  agrees to lease  from the Lessor the  following
described real estate located in Elizabethtown, Hardin County, Kentucky upon the
following terms and conditions:

1.   Property  being rented:  The property which is the subject of this Lease is
     ----------------------
     described as follows:

     Being Lot No. 1 of Amended  Record  Plat Lot lA,  Taco Bell and Record Plat
     Kentucky National  Subdivision,  recorded in Plat Cabinet 1, Sheet 2735, in
     the Office of Clerk of the County Court of Hardin County, Kentucky.

     Kentucky  National  Properties,  L.L.C,  acquired title to said Lots by (a)
     Deed from George A. Howell Enterprises, Inc., a Kentucky corp., dated March
     6, 1997,  recorded in Deed Book 864,  Page 464;  (b) by Deed from Harold E.
     Cowley  and Ida B.  Cowley,  husband  and wife,  dated  January  12,  2000,
     recorded  in Deed  Book 956,  Page 540;  (c) by Deed from Joe Guy Hagan and
     Merwyn R Hagan,  husband and wife,  dated April 13, 2000,  recorded in Deed
     Book 964, Page 668; and (d) by Deed from Dr. Peter Grotuss,  single,  dated
     July 26, 2000,  recorded in Deed Book 979, Page 177, all in the Office.  of
     Clerk of the County Court of Hardin County, Kentucky.

     The building  constructed  on the  above-described  premises is included in
     this Lease.

2.   Term: The term of this Lease shall commence as of the lst day of September,
     ----
     2001 and extend  thereafter  for an initial  period of ten (10) years.  The
     Lessee shall then have an option to renew the Lease for four (4) successive
     terms of ten (10) years each, by giving to the Lessor written notice of its
     intent to exercise  this option of renewal at least  ninety (90) days prior
     to the termination of any term then in effect.

3.   Rent: Lessee agrees to pay monthly rental for the premises in the amount of
     ----
     Twenty-Two Thousand Five Hundred (22,500.00) Dollars per month,  payable in
     advance on the first day of each month during the first year of this Lease.
     After the first year,  the rental shall be increased  annually based on the
     percentage  increase in the Consumer Price Index,  calculated from the date
     of the  commencement of each yearly  anniversary date until the end of that
     particular year. (For example,  for the first year, the percentage increase
     would  be  based on the  increase  in the  Consumer  Price  Index  from the
     commencement of this Lease term September 1, 2001 until August 31, 2002).

4.   Use of premises:  Lessee  agrees that during the term of this Lease and any
     ---------------
     extensions thereof, it shall use the premises only for a bank and a banking
     institution,  and any other use of the premises shall only be done with the
     Lessor's prior written permission.

5.   Lessor's warranties and covenants:  Lessor hereby covenants and warrants to
     ---------------------------------
     Lessee that:

     (a.) Lessor owns and/or  leases the premises and has full right,  power and
          authority  to execute  and  deliver  this  Lease,  to  consummate  the
          transaction  contemplated hereby, to comply

<PAGE>

          with and fulfill the terms and  conditions  hereof,  and to demise and
          let the premises unto Lessee; there are no legal, contractual or other
          restrictions  upon  Lessor's  right,  power or authority to demise the
          premises unto Lessee except as otherwise set forth herein.

     (b.) That the  premises  hereby  demised is free of any  tenancies  whether
          written or oral.

     (c.) This  Lease has been  fully  executed  and  delivered  by  Lessor  and
          constitutes  a legal,  valid  and  binding  obligation  of  Lessor  in
          accordance with its terms and conditions.

     (d.) Lessor  has not made any other  agreement  to sell or lease all or any
          part of the premises to any person  other than Lessee,  nor has Lessor
          given to any  person  an  option  to  purchase  all or any part of the
          premises.

     (e.) The leased  premises  are not  located  in any area of  special  flood
          hazard as designated by any federal,  state or local authority,  there
          are no hazardous or toxic wastes or substances, or underground storage
          tanks,  in or upon the  premises or  building  to be located  upon the
          premises,  and no hazardous or toxic  wastes or  substances  have been
          produced, used, stored, handled or disposed of upon the premises.

     (f.) There are no  existing,  contemplated  or proposed  federal,  state or
          local laws, ordinances, rules, regulations, codes or other orders, and
          no pending or threatened  proceedings or actions against Lessor or the
          premises before any court or governmental  agency or authority,  which
          would  interfere  with,  or make  infeasible  or  undesirable  from an
          economic or other point of view the operation, use and/or occupancy of
          the premises.

     (g.) There are no pending or threatened  claims,  demands,  liabilities  or
          actions against Lessor or the premises  (including without limitation,
          any pending or threatened  condemnation  proceedings  by any public or
          governmental  agency or authority)  which  constitutes  or might ripen
          into a lien or claim against the premises superior to Lessee.

     (h.) Lessor shall  indemnify and hold Lessee  harmless from and against any
          and  all  costs,  expenses,  losses,  claims,  liabilities,   damages,
          injuries or actions of any kind, including reasonable attorney's fees,
          (i) arising from Lessor's use or  possession of the premises  prior to
          the term of this Lease,  or the  negligence of or use of the realty on
          which the premises  are located by,  Lessor or its agents or employees
          at any time, or (ii) resulting  from the presence on or under,  or the
          escape, seepage,  leaking,  spillage,  discharge,  emission or release
          from the  premises  of any  hazardous  or toxic  waste,  substance  or
          material  placed or located on the premises prior to the  commencement
          date hereof or from and after the termination or expiration hereof, or
          during the term of this Lease at Lessor's fault, or at any time placed
          or located on other  portions of real  property on which the  premises
          are located. Such indemnification shall include any damages, injuries,
          costs,  including  reasonable  attorneys'  fees, or claims asserted or
          arising  under  any  federal,  state or local  statute,  ordinance  or
          regulation  imposing  liability  or  standards  of conduct  concerning
          hazardous materials.

<PAGE>

     (i.) If Lessor  receives  any notice of (i) the use,  spill,  discharge  or
          removal of any hazardous substance or material, or (ii) any complaint,
          order or notice regarding air emissions, water discharges or any other
          environmental,  health,  or  safety  matter  affecting  Lessor  or the
          premises from any person or entity, including, without limitation, the
          United States  Environmental  Protection Agency, then Lessor will give
          written notice of such an occurrence to Lessee within seven (7) days.

6.   Lessee's  covenants:  Lessee  covenants  and agrees that during the term of
     -------------------
     this  Lease and for such  further  time as Lessee,  or any person  claiming
     under it, shall hold the premises or any part thereof:

     (a.) To pay rent on the days and in the manner aforesaid.

     (b.) Not to suffer the estate of Lessor in the  premises at any time during
          the said term to become  subject to any lien,  charge,  or encumbrance
          whatsoever  and to indemnify and keep  indemnified  Lessor against all
          such liens,  charges and encumbrances;  it being expressly agreed that
          Lessee  shall have no  authority,  express or  implied,  to create any
          lien,  charge, or encumbrance upon the estate of Lessor in the demised
          premises.

     (c.) To maintain the exterior and interior of the  premises,  including all
          HVAC systems. Lessee shall keep the interior painted and decorated and
          in a clean and sanitary condition,  complying in all respects with the
          applicable laws, ordinances and regulations of competent  authorities.
          Lessee shall also maintain the exterior of the premises, including the
          roof, and be  responsible  for any repairs needed to the driveways and
          parking lots.

     (d.) Not to make or suffer any use or occupancy of the premises contrary to
          any law or ordinances now or hereafter in force.

     (e.) To  indemnify  Lessor  against  all  costs  and  expenses,   including
          reasonable  attorney's  fees,  lawfully  and  reasonably  incurred  in
          discharging  the  premises  from  any  charge,  lien,  or  encumbrance
          resulting  from  Lessee's   action  (other  than  charges,   liens  or
          encumbrances   resulting  from  Lessor's  actions),  or  in  obtaining
          possession after default of Lessee or the termination of this Lease by
          reason of Lessee's default.

     (f.) Upon  the  termination  of this  Lease,  either  by  lapse  of time or
          otherwise,  to  surrender,  yield and deliver up the  premises in such
          condition as it shall be in as of the effective date hereto.

     (g.) To  indemnify  and hold Lessor  harmless  from and against any and all
          costs, expenses,  losses, claims,  liabilities,  damages,  injuries or
          actions of any kind, including reasonable attorney's fees, (i) arising
          from Lessee's use or possession of the premises throughout the term of
          this Lease,  or the  negligence  of Lessee or its  agents,  employees,
          licensees  or  invitees,  at any  time,  or (ii)  resulting  from  the
          presence on or under, or the escape,  seepage,  leaking,  spillage, or
          discharge,  emission or release from the premises of any  hazardous or
          toxic waste,  substance or material  placed or located on the premises
          (including  other  portions of the real

<PAGE>
          property on which the  premises  are  located) by Lessee,  its agents,
          employees,  licensees or invitees  throughout  the term  hereof.  Such
          indemnification shall include any damages,  injuries, costs, including
          reasonable  attorneys'  fees,  or claims  asserted  or  arising  under
          federal,  state or local  statute,  ordinance or  regulation  imposing
          liability or standards of conduct concerning hazardous materials.

     (h.) If Lessee  receives  any notice (i) of the use,  spill,  discharge  or
          removal of any hazardous substance or material, or (ii) any complaint,
          order or notice regarding air emissions, water discharges or any other
          environmental,  health,  or  safety  matter  affecting  Lessor  or the
          premises from any person or entity, including, without limitation, the
          United States  Environmental  Protection Agency, then Lessee will give
          written notice of such an occurrence to Lessor within seven (7) days.

     (i.) To save Lessor harmless from all loss, costs,  damages and expenses of
          any kind, whatsoever,  arising out of any accident,  damage or injury,
          or any claim,  suit or action for damages or  injuries  from any cause
          whatsoever,  either to persons or  property  happening,  occurring  or
          resulting in or upon the premises or  improvements  thereon during the
          term herein  demised,  in  connection  with or growing out of the use,
          occupation  and operation of the premises by Lessee,  except for loss,
          costs,  damages and expenses incurred as a result of the negligence or
          acts of Lessor or its agents or  employees.  Lessee  shall  carry such
          insurance  policies covering the Lessor and Lessee and in such amounts
          and  against  such  liability  risk  and  casualty  as are  set out in
          paragraph 22 hereof.

     (j.) To replace any plate glass  windows or any other  broken  glass during
          the term of this Lease or any renewal thereof.

     (k.) Not to obstruct or permit the  obstruction  of sidewalks  and roadways
          adjacent  to  the   premises,   except  while   loading  or  unloading
          merchandise  or  other  materials,  and  then  not to an  unreasonable
          extent.

     (l.) To promptly pay for all public utilities  rendered or furnished to the
          premises during the term hereof or any renewal, including heat, water,
          gas electricity,  sewer charges, and sewer taxes. Lessee shall provide
          for the  prompt  removal of  garbage,  rubbish,  and  litter  from the
          demised premises and to provide adequate facilities for containing the
          same prior to such removal.  Lessee shall keep the premises  clean and
          keep all  sidewalks  adjacent to the premises  clean and free from all
          rubbish,  litter,  debris,  ice and snow. If Lessee fails to carry out
          the foregoing,  Lessor, at its option, may provide such facilities and
          service and charge same to Lessee as additional rent.

7.   DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS:
     ----------------------------------------

     (a.) If the building on said  premises  shall be rendered  untenantable  by
          fire or other casualty,  and if the building cannot be made tenantable
          and  usable  for  Lessee's  use  within  ninety  (90) days  after such
          damages,  Lessee may, at Lessee's  option to be evidenced by notice in
          writing given to Lessor  within thirty (30) days after the  occurrence
          of such  damage or  destruction,  elect to  terminate  this Lease upon
          written  notice  to  Lessor

<PAGE>

          as of the date of such fire or other casualty,  whereupon Lessor shall
          be entitled to all proceeds of insurance and right of recovery against
          insurer on policies  covering such damages or  destruction;  provided,
          however,   Lessee  shall  be  entitled  to  such  insurance   proceeds
          representing payments for losses to moveable fixtures, trade fixtures,
          leasehold improvements,  machinery, equipment and other property owned
          by Lessee.

     (b.) In the event Lessee  fails to validly  exercise its right to terminate
          this Lease under  Section  7.a.,  or if the premises can be.  restored
          within ninety (90) days of the damage, Lessor shall commence forthwith
          to  effect   repairs  and  the  rental  then  in  effect  shall  abate
          proportionately (based upon square footage).  Lessor shall restore the
          premises  to  its  condition   immediately   prior  to  the  casualty,
          regardless  of the  sufficiency  of  insurance  proceeds  received  by
          Lessee.

8.   IMPROVEMENTS:  Lessee shall have the right to remove,  at its sole expense,
     ------------
     any and all  improvements  on the  premises  providing  that in doing so it
     shall comply with all statutes,  laws,  rules and regulations in connection
     with the  demolition,  including  any laws or  restrictions  on disposal of
     hazardous  waste or materials  that may be in and about the  premises.  The
     term  "hazardous  waste  materials"  shall  mean  any  and  all  materials,
     substances,  and  conditions  which are  designated  or  deemed  hazardous,
     dangerous,  toxic,  a  contaminant,  or a  pollutant  under  any  valid and
     enforceable  federal,  state, or local lave,  statute,  ordinance,  policy,
     code, rule, regulation, order, or decree relating to human health or safety
     or the  environment,  as the same may be amended from time to time,  as are
     now or may hereafter be in effect.

9.   ASSIGNMENT,  SUB-LETTING  AND  MORTGAGING:  Lessee  shall not  voluntarily,
     -----------------------------------------
     involuntarily  or by  operation  of law  assign or  transfer,  mortgage  or
     otherwise encumber all or any part of its interest in this Lease, or sublet
     the premises or any part thereof  without first obtaining in each and every
     instance  Lessor's  prior  written  consent,  and any attempt to so assign,
     transfer or sublet,  without  Lessor's  written  consent  shall be null and
     void;  and if any such  assignment  or  transfer  is made with the  written
     consent of Lessor,  Lessee shall  nevertheless  remain liable to Lessor for
     payment of rent  according to the terms hereof and for due  performance  of
     all terms,  covenants and  conditions  of this Lease.  Any transfer of this
     Lease  by  merger,   consolidation  or  liquidation   shall  constitute  an
     assignment for the purposes of this  paragraph.  If written consent is once
     given by Lessor to any such  assignment or  subletting,  such consent shall
     not operate as a waiver of the  necessity for  obtaining  Lessor's  written
     consent to any subsequent assignment or subletting.

10.  SUBORDINATION:  This Lease shall at all times be subject and subordinate to
     -------------
     the  lien  of  any  mortgage   (which  term  shall   include  all  security
     instruments)  that may be placed on the  premises  by  Lessor;  and  Lessee
     agrees,  upon demand,  without  cost,  to execute any  instrument as may be
     required to effectuate such subordination. Provided, however, that any such
     mortgagee  agrees  not to disturb  possession  of the  premises  as long as
     Lessee is not in default hereunder.

11.  LESSOR'S RIGHT OF RE-ENTRY:  If Lessee shall fail to pay any installment of
     --------------------------
     rent  promptly  on the day when  the  same  shall  become  due and  payable
     hereunder or within ten (10) days after written  notice  thereof by Lessor,
     or if Lessee shall fail to promptly keep and perform any other  affirmative
     convenants  of this Lease  strictly  in  accordance  with the terms of this
     Lease and shall fail to cure within thirty (30) days after  written  notice
     thereof by Lessor of demand of performance,  then and in any event,  and as
     often as any such event shall  occur,  Lessor may (a) declare the said term
     ended,  and enter into said premises,  or any part thereof,  either with or
     without  process of law, and expel Lessee or any person  occupying the same
     in or upon said  premises,  using such force as may be  necessary so to do,
     and so to repossess and enjoy the

<PAGE>

     premises as in Lessor's former estate; or (b) re-let the premises. Anything
     hereinbefore  contained  to the  contrary  notwithstanding,  if any default
     shall  occur,  other than in the  payment of rent,  which  cannot  with due
     diligence be cured within a period of thirty (30) days, and Lessee prior to
     the  expiration  of thirty (30) days from and after the giving of notice as
     aforesaid,  commences  to  eliminate  the cause of such  default,  then the
     Lessor shall not have the right to declare the said term ended by reason of
     such default.

12.  RIGHTS ON  TERMINATION  OF LEASE:  Upon  termination  of this  Lease or any
     --------------------------------
     renewal thereof, by lapse of time or upon its termination by Lessor for any
     of the causes specified in the preceding paragraph, Lessee agrees to remove
     all property and effects belonging to Lessee which Lessee is entitled under
     the terms hereof to remove from said premises, to repair any and all damage
     caused  by such  removal  and to vacate  and  surrender  possession  of the
     premises  to Lessor in the same  condition  as when  received,  except  for
     ordinary wear and tear.

     Lessor  further  agrees  that  if  such   possession  is  not   immediately
     surrendered to Lessor as hereinabove provided Lessor may forthwith re-enter
     the  premises  and  repossess  thereof as its former  estate and remove any
     persons  or  effects  therefrom,  using  such  force  as may be  reasonably
     necessary  for that  purpose,  without being deemed guilty in any manner of
     trespass or forcible entry or detainer.

     Lessor  shall not be  responsible  for the  storage or  safekeeping  of any
     property  or effects of Lessee so removed  from  premises,  or for the loss
     thereof,  but may, at his option, store same for the account of Lessee, and
     Lessee  agrees to pay Lessor for any and all expenses  incurred in removing
     and storing said effects and repairing damage caused by their removal, and,
     in the event  Lessee  fails to do so within  ten (10)  days  after  written
     demand for such  payment  has been  mailed to Lessee by Lessor at  Lessee's
     address as given in paragraph 19 herein, Lessor may, without further notice
     to Lessee, sell any or all of said property or effects at public or private
     sale,  for such  price as  Lessor  may be able to  obtain,  and  apply  the
     proceeds  of such sale to the payment of any amounts due Lessor from Lessee
     under this Lease,  including the cost of removing,  storing or selling said
     property  and effects and the cost of  repairing  the damage  caused by its
     removal.

     The  receipt of money by Lessor  from  Lessee,  after  Lessor has  notified
     Lessee of his intention to terminate this Lease,  or after the  termination
     thereof,  shall not in any way  reinstate,  continue  or extend the term of
     this Lease,  or affect or  invalidate  any notice given prior  thereto,  it
     being agreed that after service of notice, or the commencement of a suit or
     entry of final judgment for possession of the premises.  Lessor may recover
     and collect any rent due, and that the payment thereof shall not invalidate
     or operate as a waiver of any notice,  suit or judgment  theretofore given,
     filed or rendered.

13.  RIGHTS OF LESSOR  CUMULATIVE:  The rights and remedies of Lessor under this
     ----------------------------
     Lease  shall be  cumulative  and shall not  exclude  any other  rights  and
     remedies authorized by law, and that the failure of Lessor to insist upon a
     strict  performance  of,  or  compliance  with,  any  of the  covenants  or
     conditions  of this Lease by Lessee,  or to  declare a  forfeiture  for any
     violation thereof, or to exercise any option conferred on Lessor, shall not
     be construed as a waiver,  or  relinquishment  for the future,  of Lessor's
     right to insist upon strict  compliance  by Lessee with all the  covenants,
     agreements and conditions herein contained or of its right to exercise such
     options,  or of its right to declare a forfeiture for the violation of such
     condition, if the violation be continued or repeated.

<PAGE>

14.  REIMBURSEMENT  OF LESSOR FOR PAYMENTS MADE ON ACCOUNT OF ACTIONS OF LESSEE:
     --------------------------------------------------------------------------
     Lessee agrees that in the event Lessor  shall,  by reason of the failure of
     Lessee to keep and perform any of the  covenants,  agreements or conditions
     herein contained,  be compelled to pay or shall pay any sum of money, or do
     any act  requiring  the payment of money,  then the sum or sums of money so
     paid or required to be paid shall be added to the  installment of rent next
     becoming  due,  and shall be  collectible  as  additional  rent in the same
     manner  and  with  the  same  remedies  as if  said  sum or sums  had  been
     originally reserved as rent.

15.  LESSOR'S  LIABILITY:  Neither Lessor nor its agents shall be liable for any
     -------------------
     injury  or  damage  to  person  or  property  of  Lessee,  or for  loss  or
     interruption of business resulting from fire,  explosion,  failing plaster,
     steam, gas,  electricity,  water, rain or snow, or from leaks from any part
     of said building or from pipes,  appliances  or plumbing  works or from the
     roof,  street, or subsurfaces or from any other place, or by dampness or by
     any other cause unless caused by or due to the  negligence  of Lessor,  nor
     shall Lessor or its agents be liable for any damage caused by other tenants
     or persons in said building or caused by the construction of any private or
     public or  quasi-public  work;  nor shall  Lessor be liable  for any latent
     defects in the premises or the building of which it forms a part.

16.  LESSEE'S LIABILITY AND INDEMNITY:  Lessee shall be liable to Lessor for any
     --------------------------------
     damage to the premises caused by Lessee's acts or negligence,  or caused by
     the acts or negligence of its agents, employees,  customers,  licensees, or
     invitees; Lessor may repair such damage, though not obligated so to do, and
     Lessee shall thereupon  reimburse and compensate  Lessor as additional rent
     within five (5) days after the  rendition  of a statement by Lessor for the
     actual cost of such repair or damage.

17.  SIGNS:  Lessee shall have the right at its sole cost and expense during the
     -----
     term hereof or any  extension  thereof,  to erect,  replace,  maintain  and
     operate any signs,  electrical or otherwise,  in and on the premises and on
     or about  any  improvements  thereof,  so long as such  signs  comply  with
     applicable laws and  regulations.  Lessee agrees not to permit the exterior
     of the  premises  to be used  for the  purpose  of  advertising  except  in
     connection with Lessee's business.

18.  HOLDING  OVER: In the event Lessee  continues to occupy the premises  after
     -------------
     the last  day of the  term  hereby  created,  or after  the last day of any
     extension  of said term,  and Lessor  elect to accept  rent  thereafter,  a
     tenancy  from month to month  only shall be created  and not for any longer
     period.

19.  SERVICE OF NOTICE:  If at any time after the  execution  of this Lease,  it
     -----------------
     shall become necessary or convenient for one of the parties hereto to serve
     any notice,  demand or  communication  upon the other  party,  such notice,
     demand or  communications  shall be in writing  signed by the party serving
     the same,  personally delivered or deposited in the registered or certified
     United States mail, return receipt requested,  postage prepaid or deposited
     with an overnight  carrier  that  guarantees  next-day  delivery and (a) if
     intended for Lessor shall be  addressed  to KENTUCKY  NATIONAL  PROPERTIES,
     LLC, P.O. BOX 2504,  ELIZABETHTOWN,  KY. 42702-2504,  ATTENTION: DR. ROBERT
     ROBBINS,  and (b) if intended for Lessee,  shall be addressed to;  KENTUCKY
     NATIONAL  BANK,   ATTN:   LAWRENCE   CALVERT,   1000  NORTH  DIXIE  AVENUE,
     ELIZABETHTOWN, KENTUCKY 42701, or to such other address as either party may
     have  furnished  to the other in writing as a place for  service of notice.
     Any notice so mailed  shall be deemed to have been given on the  earlier of
     when  received or three (3) days after the same is  deposited in the United
     States mail.

<PAGE>

20.  Condemnation
     ------------

     (a.)(1) If at any time  during the term of this Lease  fifty per cent (50%)
          or more of the premises  shall be taken for any public or  quasipublic
          purpose by any lawful  power or authority by the exercise of the right
          of  condemnation  or eminent  domain,  Lessor shall be entitled to and
          shall  receive any and all awards  that may be in any such  proceeding
          for the  taking  of real  property;  and  Lessee  hereby  assigns  and
          transfers  to  Lessor  any and all  such  awards  that  may be made to
          Lessee, subject to paragraph (c) below.

               Lessee shall be entitled to any payment based inter alia upon the
                                                             ----------
               value of the unexpired term of this Lease,  consequential  damage
               to the premises not so taken,  fixtures,  or  alterations  to the
               premises or their use or otherwise.

          (b.)(1) If such proceedings  shall result in the taking of fifty (50%)
               per cent or more of the premises,  or if such taking  renders the
               premises unusable for Lessee's purposes,  this Lease and the term
               hereof shall terminate and expire on the date of such taking, and
               the rent and other sums or charges  provided  in this Lease to be
               paid by the Lessee shall be  apportioned  and paid to the date of
               such taking.

          (c)  If less than fifty percent  (50%) of the premises  shall be taken
               in such  proceedings  and if such  taking  does  not  render  the
               premises  unusable  for Lessee's  purposes,  Lessor  shall,  with
               reasonable dispatch, repair the remaining portion of the premises
               so as to restore the  premises;  provided,  however,  that if the
               expense of such restoration would be greater than the sum allowed
               to Lessor,  less such expenses in such  condemnation  proceeding,
               then  Lessor  shall have an option,  for a period of thirty  (30)
               days after such partial taking, within which to decide whether to
               make such  restoration or terminate  this Lease.  If, within such
               30-day  period,  Lessor  shall give  written  notice to Lessee of
               termination,  this Lease and the term hereof shall  terminate and
               expire on the last day of the calendar month  following the month
               in which such  notice  shall be given and the rent and other sums
               or charges in this Lease  provided to be paid by Lessee  shall be
               apportioned and paid to the date of such  termination;  provided,
               however, that if Lessee shall agree in writing, within sixty (60)
               days after receiving any such notice of termination  from Lessor,
               to pay the difference between the cost of restoration and the net
               proceeds of such condemnation proceeding, then Lessor's notice of
               termination  and right to  terminate  hereunder  shall  cease and
               Lessor shall make such restoration as hereinbefore  required. The
               annual base rental shall be reduced in  proportion  to the amount
               of the premises taken.

          (c)  Lessee  shall be entitled to receive out of any award the sum, if
               any,  specifically  allowed to Lessee  for the value of  Lessee's
               leasehold  estate  taken,  moving  expenses  and  Lessee's  trade
               fixtures and for improvements made to the premises by Lessee.

21.  LESSOR'S  COVENANT  OF TITLE  AND QUIET  ENJOYMENT:  Lessor  covenants  and
     --------------------------------------------------
     warrants that Lessor has full right and lawful authority to enter into this
     Lease for the full term hereof,  and that Lessor is lawfully  seized of the
     entire premises  hereby demised and has good title thereto,  free and clear
     of all tenancies and encumbrances, and that all times when Lessee is not in
     default under the terms and during the term of this Lease or any extensions
     of said term,  Lessee's quiet peaceable enjoyment of the premises shall not
     be disturbed or interfered with by anyone.

<PAGE>

22.  INSURANCE:
     ---------

     (c)  Lessee   shall   procure  and   maintain  in  full  force  and  effect
          continuously   during  the  term  of  this  Lease  together  with  any
          extensions at its sole expense  general public  liability and property
          damage insurance against claims for personal injury, death or property
          damage  occurring  in, or about the  premises  or  sidewalks  or areas
          adjacent to the premises to afford protection to the limit of not less
          than One Million Dollars ($1,000,000,00) in respect to injury or death
          of a single  person  and to the limit of not less than  Three  Million
          Dollars  ($3,000,000.00),  in respect to any one  accident  and to the
          limit of Five Hundred  Thousand  Dollars  ($500,000.00)  in respect to
          property  damage.  Such  insurance  shall be written by  companies  of
          recognized  standing  which are  qualified to engage in the  insurance
          business in the Commonwealth of Kentucky, such insurance to include as
          the insured parties thereunder Lessor and Lessee as their interest may
          appear.

     (c)  Lessee may maintain such insurance under a blanket policy covering the
          premises.  Lessee  shall  deliver  to  Lessor  a  certificate  of  all
          insurance  coverage  and of renewals  thereof from time to time during
          the term of this Lease including renewals thereof.  Any such insurance
          policy shall  contain to the extent  obtainable in an agreement by the
          insurer  that it will not cancel any such policy  except upon ten (10)
          days prior  written  notice to Lessor.  If Lessee fails to procure any
          such insurance or keep the same in force or effect, Lessor may procure
          the necessary  insurance and pay the premiums thereof and Lessee shall
          repay  Lessor on demand the amount so paid as premium,  together  with
          interest at the rate often percent (10%) per annum.

     (c)  Lessee shall, during the course of the improvements which it may place
          on the property and  thereafter  and at all times,  insure at its sole
          cost  the  property  against  damage  by  fire,  vandalism,  malicious
          mischief,  sprinkler leakage and other extended coverage to the extent
          of the full  replacement  value thereof with the Lessor to be named as
          additional  insured.  Such  insurance  shall contain a clause that the
          Lessor will receive  thirty (30) days notice of either  non-renewal or
          cancellation  of the policy.  Such insurance shall insure the property
          against fire and casualty and shall be written by a company acceptable
          to the Lessor and qualified to do business in the State of Kentucky.

23.  BROKERS AND  COMMISSIONS:  Lessor and Lessee  represent and warrant to each
     ------------------------
     other  that  they have not dealt  with any real  estate  agent or broker in
     connection  with this Lease or its  negotiation.  Lessor  and Lessee  shall
     indemnify  and hold the other  party  harmless  from any cost,  expense  or
     liability (including costs of suit and reasonable  attorneys' fees) for any
     compensation, commission or fees claimed by any real estate broker or agent
     in connection  with this Lease or its  negotiation  by reason of any act of
     such indemnifying party.

24.  RECORDING:  Either party, at their option, may record a Memorandum of Lease
     ---------
     and the cost of all documentary  stamps or  conveyancing,  transfer tax and
     recording fees shall be paid equally by the parties thereto.

25.  CAPTIONS:  The  captions  appearing  in this Lease are  inserted  only as a
     --------
     matter of convenience and in no way define, limit, construe or describe the
     scope or intent of such  paragraphs of this Lease or in any way affect this
     Lease.  Any gender used herein shall be deemed to refer to any other gender
     more  grammatically  applicable  to the  party to whom  such use of  gender
     relates,  the use of

                                      F-33
<PAGE>

     singular herein shall be deemed to include the plural and, conversely,  the
     plural shall be deemed to include the singular.

26.  SUCCESSOR OR ASSIGN: It is further expressly agreed and understood that all
     -------------------
     the covenants and  agreements  herein made,  shall extend to and be binding
     upon the  successors in interest,  and assigns of Lessor,  and of Lessee as
     permitted above. The terms, conditions and covenants of this Lease shall be
     binding upon and shall inure to the benefit of each of the parties  hereto,
     successors or assigns, and shall run with the land; and where more than one
     patty shall be Lessor under this Lease,  the word LESSOR  whenever  used in
     this Lease  shall be deemed to  include  all  parties  hereto  jointly  and
     severally.

27.  INVALID  PROVISIONS:  If any  terms  or  provision  of  this  Lease  or the
     -------------------
     application  thereof to any person or circumstance shall, to any extent, be
     invalid or  unenforceable,  the remainder of this Lease, or the application
     of such term or provision to persons whose  circumstances  other than those
     as to which it is held  invalid  or  unenforceable,  shall not be  affected
     thereby.

28.  ENTIRE AGREEMENT: No waivers, alterations or modifications of this Lease or
     ----------------
     any  agreements  in connection  therewith  shall be valid unless in writing
     duly executed by both Lessor and Lessee herein.

29.  TRADE FIXTURES  MACHINERY AND  EQUIPMENT:  All trade  fixtures,  machinery,
     ----------------------------------------
     equipment, furniture or other personal property of whatever kind and nature
     kept or  installed  on the premises by Lessee shall not become the property
     of Lessor or a part of the realty no matter how affixed to the premises and
     may be removed by Lessee.

30.  MECHANIC'S LIENS: Lessee shall not suffer or permit any mechanics' liens to
     ----------------
     be filed against the fee of the premises,  nor against  Lessee's  leasehold
     interest in the premises,  by reason of work, labor,  services or materials
     supplied,  or claimed to have been supplied,  to Lessee,  or anyone holding
     the premises or any part thereof,  through or under Lessee;  and nothing in
     this  Lease   contained  shall  be  deemed  or  construed  in  any  way  as
     constituting  the consent or request of Lessor,  expressed  or implied,  by
     inference  or  otherwise,  to any  contractor,  subcontractor,  laborer  or
     material  man for the  performance  of any labor or the  furnishing  of any
     materials for any specified improvement, alteration or repair of, or to the
     premises,  or any part thereof,  nor as giving  Lessee any right,  power or
     authority to contract for, or permit the rendering of, any services, or the
     furnishing  of any  materials  that  would  give rise to the  filing of any
     mechanics'  liens  against the fee of the  premises.  Lessor shall have the
     right at all reasonable times to post, and keep posted, on the premises any
     notices  that may be provided by law which  Lessor may deem to be necessary
     for the protection of Lessor,  and the premises from  mechanics'  liens. If
     any such  mechanics'  lien shall at any time be filed against the premises,
     Lessee  covenants  that it will  promptly  take  and  diligently  prosecute
     appropriate  action to have the same  discharged;  and, upon its failure to
     do, Lessor,  in addition to any other right or remedy that it may have, may
     take such action as may be  reasonably  necessary to protect its  interest,
     and any  reasonable  amount paid by Lessor in connection  with such action,
     and all  reasonable  legal and  other  expenses  of  Lessor  in  connection
     therewith,  including  reasonable  counsel  fees,  court  costs  and  other
     necessary  disbursements,  with  interest  thereon at the rate of ten (10%)
     percent  per annum from the date of  payment,  shall be repaid by Lessee to
     Lessor on demand.

31.  Notwithstanding any other provisions  contained in this lease, in the event
     (a)  Lessee or its  successors  or  assignees  shall  become  insolvent  or
     bankrupt, or if it or their interests under this Lease shall be levied upon
     or sold under  execution  or other  legal  process,  or (b) the  depository

                                      F-34
<PAGE>
     institution  then operating on the premises is closed,  or is taken over by
     any depository institution supervisory authority ("Authority"), Lessor may,
     in either such event, terminate this Lease only with the concurrence of any
     Receiver or Liquidator appointed by such Authority;  provided,  that in the
     event this Lease is terminated by the Receiver or  Liquidator,  the maximum
     claim of Lessor for rent,  damages,  or indemnity for injury resulting from
     the termination,  rejection, or abandonment of the unexpired Lease shall by
     law in no event be in an amount equal to all accrued and unpaid rent to the
     date of termination.

32.  PROPERTY TAXES: All real estate property taxes shall be the  responsibility
     --------------
     of the Lessee during the term of this Lease.

33.  REPLACEMENT  OF PRIOR  LEASE:  This  document  replaces in its entirety the
     -----------------------------
     prior lease between these same parties dated March 1, 1998,  and that prior
     lease shall no longer be of any legal effect.

     IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the
day and year first above written.

                                 LESSOR:
                                 ------

                                 KENTUCKY NATIONAL
                                 PROPERTIES, I,.L.C.

                                 BY: /s/ KEVIN ADDINGTON
                                     -------------------------------------------
                                     KEVIN ADDINGTON

                                 LESSEE:
                                 ------

                                 KENTUCKY NATIONAL BANK

                                 BY:/s/ LAWRENCE CALVERT
                                    --------------------------------------------
                                    LAWRENCE CALVERT, CEO

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