Lease Agreement

EXHIBIT 10.2


LEASE AGREEMENT


THIS LEASE AGREEMENT effective July 1, 1997 is entered into by Collateral Mortgage, Ltd., an Alabama Limited partnership ("Lessor") and New South Federal Savings Bank, an Alabama Corporation ("Lessee").


RECITALS


Lessor wishes to lease and Lessee wishes to lease from Lessor on the terms and conditions set forth in this Agreement certain assets of Lessor related to Lessor's operation of its residential mortgage origination business (the "Business").


NOW, THEREFORE, in consideration of the foregoing recitals and the mutual agreements contained herein Lessor and Lessee hereby agree as follows:


ARTICLE 1 - LEASE OF ASSETS


1.1 Subject to the terms and conditions of this Agreement, Lessor agrees to lease and deliver to Lessee, and Lessee agrees to lease from Lessor, the furniture, fixtures, equipment, machinery, and all other personal property used in the operation of Lessor's business identified on Schedule 1 attached hereto owned by Lessor, except such thereof as may be disposed of by Lessor in the ordinary course of business prior to the Effective Date (the "Leased Assets).


1.2 The total Lease amount to be paid for the Leased Assets (the "Leased Amount") shall be $575,487.00. Such Lease amount will be paid by Lessee in equal monthly installments over a period of eleven (11) months from the Effective Date hereof. Lease shall make each monthly installment, five business days after the first day of each month, with the first monthly installment payment due on August 5, 1997.


1.3 The term of this Agreement shall be for a period of eleven months from the Effective Date.


ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF LESSOR


Lessor represents and warrants as follows:


Page 0


2.1 Organization and Authority of Lessor. Lessor is a Limited Partnership
------------------------------------- organized, validly existing and in good standing under the laws of the State of Alabama. Lessor has the full power and authority to carry out and perform its undertakings and obligations under this Agreement. This Agreement has been duly and validly executed and delivered by Lessor. This Agreement is , valid and binding obligation of Lessor, enforceable against it in accordance with their respective terms.


2.2 Condition of Properties. The equipment, machinery and fixtures
------------------------- utilized by Lessor in the Business are and will be as of the Effective Date in good repair and operating condition and fit for their intended purpose.


2.3 Litigation. There are no claims, actions, suits, proceedings or
----------- investigations pending nor, to the knowledge of the Lessor, threatened against or affecting the property of the Business or any of the transactions contemplated by this Agreement. Lessor does not have any knowledge of any state of facts or contemplated event that reasonably may be expected to give rise to any such claim, action, suit, proceeding or investigation.


2.4 Consent. No consent or approval of, other action by, or any notice to,
-------- any governmental body or agency, domestic or foreign, or any third party is required in connection with the execution an delivery of this Agreement by Lessor or the consummation by Lessor of the transactions contemplated hereby.


2.5 Tax Matters. Lessor has filed or caused to be filed completely and accurately all Federal, state, local and foreign tax information returns required under the statutes, rules or regulations of such jurisdictions pertaining to Lessor and the Leased Assets.


2.6 Insurance. Lessor has, and will maintain until after the Effective
---------- Date, fire and casualty insurance policies, with extended coverage, for all of the Leased Assets in an amount sufficient to allow it to avoid any material loss with respect thereto.


2.7 Warranties True at the Effective Date and Survival of Warranties. The
----------------------------------------------------------------- representations and warranties hereinabove made by Lessor shall be true and correct in all material respects at the Effective Date, except that any


Page 1


representation or warranty that by its terms is made with reference to a specific date will have been correct in all material respects as of such date.


ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF LESSEE


Lessee represents and warrants to Lessor as follows:


3.1 Organization and Authority. Lessee is a federally chartered savings
--------------------------- bank, with full power and authority to carry out and perform its undertakings and obligations under this Agreement. This Agreement has been duly and validly executed and delivered by Lessee.


3.2 Consents. No consent or approval of, other action by, or any notice to
--------- ...