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
---------
any governmental body or agency, domestic or foreign, or any third party is
required in connection with the execution and delivery of this Agreement by
Lessee or the consummation by Lessee's of the transactions contemplated hereby.
3.3 Warranties True at the Effective Date and Survival of Warranties. The
-----------------------------------------------------------------
representations and warranties hereinabove made by Lessee will be true and
correct in all material respects at the Effective Date.
ARTICLE 4 - MISCELLANEOUS
4.1 The parties agree to cooperate in promptly taking any and all action
appropriate to consummate the transactions contemplated by this Agreement.
4.2 Termination. This Agreement will automatically terminate on May 30,
------------
1998.
4.3 Amendment. This Agreement may be amended or supplemented at any time
----------
by mutual written agreement of the parties.
4.4 Indemnification by Lessor. Lessor shall and hereby agrees to indemnify
--------------------------
and hold Lessee harmless against and with respect to any damages as hereinafter
defined. Damages to Lessee, as used herein, shall include any claim, action,
loss, cost, expense, liability, penalty, interest or damage, including, without
limitation, reasonable attorneys' fees, and all costs and expenses of all
actions, suits, proceedings, demands, assessments, claims and judgments
resulting from, occurring in connection with, or arising out of:
Page 2
a) Any inaccurate representation made by Lessor in this Agreement;
b) Any breach of any of the warranties made by Lessor in this Agreement;
c) Breach or default in performance by Lessor of any of the obligations
that are to be performed by Lessor under this Agreement.
The above indemnification shall extend for a period of one year after the
Effective Date.
Lessee shall give notice to Lessor within a reasonable time from discovery
by Lessee of any matters that may give rise to a claim for indemnification from
Lessor under this Agreement, and Lessee shall cooperate with Lessor in any
investigation by Lessee of such matters.
4.5 Indemnification by Lessee. Lessee shall and hereby agrees to indemnify
--------------------------
and hold Lessor harmless against and with respect to any damages as hereinafter
defined. Damages to Lessor as used herein, shall include any claim, action,
loss, cost, expense, liability, penalty or interest or damage, including without
limitation, reasonable attorneys' fees, and all costs and expenses of all
actions, suits, proceedings, demands, assessments, claims or judgements
resulting from, occurring in connection with, or arising out of:
a) Any inaccurate representation made by Lessee in this Agreement:
b) Breach of any of the warranties made by Lessee in this Agreement; and
c) Breach or default in performance by Lessee of any of the obligations
that are to be performed by it under this Agreement.
The above indemnification shall extend for a period of one year after
Effective Date.
Lessor shall give notice to Lessee within a reasonable time from discovery
by Lessor of any matters that may give rise to a claim for indemnification from
Lessee under the Agreement, and Lessor shall cooperate with Lessee in any
investigation by Lessee of such matters.
Page 3
4.6 Assignment of Contracts. To the extent that the assignment of any
------------------------
contract, lease, license, commitment, sales order or purchase order to be
assigned to Lessee as part of the Leased Assets shall require the consent of any
other party, this Agreement shall not constitute an agreement to assign the same
if the attempted assignment would constitute a breach thereof. Lessee and Lessor
agree to use reasonable efforts to obtain each such consent to the assignment to
the Lessee and, failing to obtain such consent will cooperate with each other in
order to affect a reasonable arrangement for performance under any such assigned
contract.
4.7 Possession of Assets. Lessor agrees that on and after the Effective
---------------------
Date it will upon reasonable request take any and all steps reasonably required
to place Lessee in operating control of the Leased Assets to be transferred
hereunder and will execute, acknowledge or cause to be executed, acknowledged
and delivered all such further assignments, transfers and conveyances as may be
reasonably required by Lessee for transferring and confirming to Lessee the
Leased Assets.
4.8 Expense. Except as otherwise provided in this Agreement:
--------
(a) each party shall pay its own expense for the preparation and execution
of this Agreement and in connection with the transactions contemplated hereby;
(b) all transfers, sales, use or similar taxes levied on the transfer of
the Leased Assets hereunder and all filing fees with respect to the transactions
hereunder shall be paid by Lessor.
4.9 Access to Records After Closing Date. Lessor and Lessee agree that so
-------------------------------------
long as the books and records retained by Lessor relating directly to the Leased
Assets, or the books and records delivered to Lessee hereunder, remain in
existence and are available, each party shall have the right to inspect and, at
its expense, to make copies of same at any time during business hours for any
proper purpose. Lessee will not destroy, without first having offered in writing
to deliver to Lessor any of the books and records delivered to Lessee hereunder
for a period of two years following the Effective Date. Each party agrees that
it will make available to the other party, and to any
Page 4
accountants or attorneys or tax agents authorized by such other party, at the
expense of the party requesting the same, any such records or information needed
in connection with any tax, accounting, litigation or similar matters.
4.10 Notices. Any notice, request, instruction or other documents to be
-------
given hereunder by either party hereto to the other shall be given in writing,
delivered personally or mailed by registered or certified mail, postage paid:
(a) If to Lessor, addressed to: Mr. Robert Couch
Collateral Mortgage, Ltd.
1900 Crestwood Boulevard
Birmingham, Al 35210
With a copy to: Lizabeth R. Nichols, Esquire
(b) If to Lessee, addressed to: Ms. Cheryl Stone
New South Federal Savings Bank
1900 Crestwood Boulevard
Birmingham, AL 35210
With a copy to: Lizabeth R. Nichols, Esquire
4.12 Counterparts and Headings. This Agreement may be executed in one or
-------------------------
more counterparts, each of which shall be deemed to be an original instrument,
but all of which together shall constitute but one instrument. Any headings used
in this Agreement are for convenience only, and only the text of this Agreement
shall be binding upon the parties.
4.13 Parties In Interest. This Agreement is made solely for the benefit of
-------------------
Lessee, and Lessor, and no other person, partnership, trust association or
corporation shall acquire or have any right under or by virtue of this
Agreement. This Agreement shall be binding on the parties hereto and their
respective successors and assigns.
4.14 Entire Agreement. This Agreement, including the Schedules hereto,
----------------
constitutes the entire agreement among the parties with respect to the subject
matter hereof and, except as otherwise specifically provided herein, supersedes
all prior agreements and understandings of the parties in connection therewith.
No covenant or condition not expressed in this Agreement shall affect or be
effective to interpret, change or restrict this Agreement. The
Page 5
provisions of this Agreement may not be changed, modified or amended except in
writing duly executed by each party hereto.
4.15 Partial invalidity. If any term, provision, covenant or condition of
------------------
this Agreement is held by any court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the provisions hereof shall continue in
full force and effect.
4.16 No Waiver. Any of the terms and conditions of this Agreement may be
---------
waived at any time and from time to time, in writing, by whichever party hereto
is entitled to the benefit of such terms or conditions. The failure of a party
to insist upon strict adherence to any term of this Agreement on one or more
occasions will not be considered a waiver or deprive that party of the right
thereafter to insist upon adherence to that term or any other.
4.17 Choice of Law. This Agreement shall be governed by and construed
-------------
according to the laws of the State of Alabama.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed this
Agreement.
Lessor - Collateral Mortgage, Ltd.
BY:
-------------------------------------------
Its:
-------------------------------------
Lessee - New South Federal Savings Bank
BY:
-------------------------------------------
Its:
-------------------------------------