EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
BETWEEN
COLLATERAL MORTGAGE, LTD
AND
NEW SOUTH FEDERAL SAVINGS BANK
1
INDEX TO AGREEMENT
Page
Article 1 - Definitions 3
Article 2 - The Sale 5
Article 3 - Representations and Warranties 6
Article 4 - Fees, Expenses and Taxes 7
Article 5 - Closing 7
Article 6 - Miscellaneous 8
INDEX TO EXHIBITS
Exhibit A - Contracts and Lease Agreements
Exhibit B - Employees
Exhibit C - Lease Agreement for Furniture, Fixtures and Equipment
Exhibit D- Residential Loan Origination Offices
2
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT effective July 1, 1997 (the "Agreement") is
made and entered into by and between Collateral Mortgage, Ltd., whose address
is 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxx (the "Seller") and New South
Federal Savings Bank whose address is 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx,
Xxxxxxx (the "Purchaser").
RECITALS
WHEREAS, the Seller is the owner of certain assets related to the operation
of its residential mortgage origination business.
WHEREAS, the Seller desires to sell, and the Purchaser desires to buy, the
assets relating to Seller's residential mortgage origination business (the
"Business") upon the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual and several promises and
undertakings herein contained, and for other good and valuable consideration,
the parties do freely and voluntarily agree as follows:
ARTICLE ONE
DEFINITIONS
Except as otherwise specified or as the context may otherwise require, the
following words and phrases as used in this Agreement shall have the following
meanings:
1.1 Assets. The Residential Loan Origination Offices, the Mortgage Loans
and the Seller's right, title and interest in and to the Leases and the
Contracts.
1.2 Closing. The closing of the transaction contemplated by this
Agreement.
1.3 Closing Date. June 30, 1997, or such subsequent date as mutually
agreed to by both parties.
1.4 Contracts. All contracts and agreements entered into by the Seller in
connection with its residential loan origination operations and its residential
loan brokerage operations described on Exhibit A.
1.5 Effective Date. July 1, 1997, or such subsequent date as mutually
agreed to by both parties.
1.6 Employees. Those employees of the Seller listed on Exhibit B who will
become employees of Purchaser upon the Effective Date.
1.7 Escrow Accounts. All escrow accounts and the money contained therein
which are maintained by the Seller in connection with the Mortgage Loans,
including, without limitation, items escrowed for private
Page 3
mortgage insurance, property taxes (either real or personal), hazard insurance,
or any other items required to be escrowed by the terms of the Mortgage Loans.
1.8 Lease Agreement for Furniture, Fixtures and Equipment. The furniture,
fixtures, cars and equipment to be leased by Purchaser from Seller as described
on the Lease Agreement effective July 1, 1997, a copy of which is attached
hereto as Exhibit C and made a part hereof as if set forth in full at this
point.
1.9 Leases. All leases for Seller's residential loan origination offices,
as described on Exhibit A attached hereto, and made a part hereof as if set
forth in full at this point.
1.10 Mortgage Loans. Those certain loans agreed to by the parties which
are originated by the Seller which have not closed prior to June 30, 1997, which
shall be assigned and transferred to Purchaser on or after the Effective Date.
1.11 Payment Dates: January 5, 1998, July 6, 1998, January 5, 1999, July 5,
1999, January 5, 2000, and July 5, 2000, respectively.
1.12 Residential Mortgage Loans. Those loans originated by Purchaser during
the three (3) year period from the Effective Date which are produced by the
Residential Loan Origination Offices, as described herein.
1.13 Related Documents. All documents, files and other underlying
materials which are maintained by the Seller in connection with the Mortgage
Loans and/or the Seller's residential loan operations which are required to be
delivered to Purchaser in connection with this Agreement.
1.14 Transfer Date. The date that the Purchaser shall assume the Mortgage
Loans. This date shall be the close of business of June 30, 1997, or such other
date as mutually agreed to by both parties.
1.15 Residential Loan Origination Offices. Those residential loan
origination offices of Seller which shall be transferred to Purchaser as of the
Effective Date which are described on Exhibit D attached hereto, and made a part
hereof as if set forth in full at this point.
ARTICLE TWO
THE SALE
2.1 Agreement to Purchase and Sell. Subject to the terms and conditions
------------------------------
contained herein, the Purchaser agrees to purchase and the Seller agrees to sell
on the Closing Date the Assets which comprise Seller's residential loan
origination operations. Such sale shall include the transfer to the Purchaser of
all of the Seller's rights to: (i) the Escrow Accounts; (ii) the Related
Documents; (iii) the Residential Loan Origination Offices; and the (iv) Mortgage
Loans.
Page 4
2.2 Purchase Price. The Purchaser agrees to pay the Seller an amount
--------------
(the "Purchase Price") equal to the sum of the following for said Assets. The
Purchaser shall pay to the Seller the Purchase Price in installments which shall
be calculated, due and payable on the Payment Dates set forth below.
(i) On January 5, 1998, the Purchaser shall pay Seller the product of
.35% times the aggregate of the original principal balances of all
Residential Mortgage Loans originated by Purchaser from the Effective
Date through December 31, 1997; plus
(ii) On July 6, 1998, the Purchaser shall pay Seller the product of .35%
times the aggregate of the original principal balances of all
Residential Mortgage Loans originated by Purchaser from January 1,
1998 through June 30, 1998; plus
(iii) On January 5, 1999, the Purchaser shall pay the Seller the product of
.20% times the aggregate of the original principal balances of all
Residential Mortgage Loans originated by Purchaser from July 1, 1998
through December 31, 1998; plus
(iv) On July 5, 1999, the Purchaser shall pay the Seller the product of
.20% times the aggregate of the original principal balances of all
Residential Mortgage Loans originated by Purchaser from January 1,
1999 through June 30, 1999; plus
(v) On January 5, 2000, the Purchaser shall pay the Seller the product of
.10% times the aggregate of the original principal balances of all
Residential Mortgage Loans originated by Purchaser from July 1, 1999
through December 31, 1999; plus
(vi) On July 5, 2000, the Purchaser shall pay the Seller the product of
.10% times the aggregate of the original principal balances of all
Residential Mortgage Loans originated by Purchaser from January 1,
2000 through June 30, 2000.
Purchaser shall deliver to Seller on the Payment Dates set forth above a
list of all Residential Mortgage Loans originated by Purchaser for the time
period as set forth in items (i) through (vi) above. Seller shall have the
right to have its accountants review all documentation provided by Purchaser in
conjunction with the calculations of Purchase Price.
2.3 Liabilities. Upon its acquisition of the Assets, the Purchaser shall
-----------
assume all liabilities associated with the Assets.
2.4 Employees. Purchaser assumes any liability of Seller relating to
---------
employees of Seller transferred to Purchaser in regards to any employee welfare
benefit, health or disability benefits of Seller to its employees. Purchaser
agrees to offer employee welfare benefit, health or disability benefits to the
former employees of Seller, if any, which are transferred to Purchaser on or
after the Effective Date to the same extent such benefits are provided by
Purchaser to its other employees as of the date such former Seller employees, if
any, are transferred to Purchaser. Nothing contained herein shall operate to
preclude Purchaser from altering employee welfare benefit, health or disability
benefits provided to any employee after the Effective Date.
Page 5
2.5 Lease Agreement for Furniture, Fixtures. On the Effective Date,
---------------------------------------
Seller and Purchaser shall enter into a Lease Agreement for the Furniture,
Fixtures and Equipment in form as set forth in Exhibit C hereto.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
3.1 Liens. Seller warrants that no person, firm or corporation has any
-----
claim, lien, judgment or right of action, legal or equitable, against or in any
Assets transferred to Purchaser under the terms of this Agreement, and Seller
agrees to indemnify and save harmless Purchaser against and from any claim or
lien against said Assets prior to the Effective Date.
3.2 Ownership. Seller warrants that it has all the rights of ownership in
---------
the Assets, and that it freely transfers these ownership rights in the Assets to
Purchaser free and clear of any claims, actions, proceedings, investigations,
liens, judgments or rights of action, legal or equitable, which might otherwise
be made against Seller's ownership rights, and Seller's agrees to indemnify and
save harmless Purchaser against and from any claim or lien against said
ownership rights.
3.3 Seller's Organization. Seller represents and warrants that it is a
---------------------
limited partnership, duly, validly existing and in good standing under the laws
of the State of Alabama with power and authority to conduct the business in
which it is engaged and it has complete and unrestricted power to enter into and
to consummate this Agreement.
3.4 Tax Matters. Seller 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 Seller and the Assets.
3.5 Purchaser's Organization. Purchaser represents and warrants it is a
------------------------
federally chartered savings bank and it has the power and authority to conduct
the business in which it is engaged and has complete and unrestricted power to
enter into and to consummate this Agreement.
3.6 Contracts; Leases. Seller has duly and punctually performed all the
-----------------
terms, covenants, conditions and warranties of the Leases and Contracts. To the
best of Seller's knowledge, the other parties to such leases and contracts are
not in default under any of the terms thereof.
ARTICLE FOUR
FEES, EXPENSES, AND TAXES
4.1 Costs. Each party shall pay all costs incurred by it for legal and
-----
other services received or utilized in connection herewith, except as otherwise
provided in this Agreement.
4.2 Mortgage Payments. Payments and other receipts on the Mortgage Loans
-----------------
attributable to periods commencing on or after the Effective Date shall be the
sole property of Purchaser and Seller shall not have any right, title or
interest therein.
Page 6
4.3 Receivables. On or after the Effective Date, Purchaser shall have the
-----------
right and authority to collect all receivables and other items which shall be
transferred by Seller to Purchaser hereunder and to endorse without recourse and
without warranties of any kind.
4.4 Correspondence. Any and all correspondence, records or other
--------------
documents coming to Seller after the Effective Date pertaining to the Assets
shall be immediately and forthwith delivered to Purchaser, without charge.
4.5 Access to Files. Seller agrees to make available prior to the
---------------
Effective Date and to deliver without charge to Purchaser on the Effective Date
all of Seller's files, and records related to the Assets transferred hereunder.
ARTICLE FIVE
CLOSING
5.1 Time and Place for Closing. The closing shall occur on the Closing
--------------------------
Date at the offices of the Purchaser in Birmingham, Alabama, provided all
appropriate regulatory approvals, if any are required, have been received.
5.2 Reporting. The Seller shall make all remittances and reports which
---------
are due prior to the Effective Date.
5.3 Related Documents. Seller agrees to execute any and all necessary
-----------------
documents and agrees to take all other reasonable actions necessary to
effectuate or facilitate the assignment and transfer to Purchaser of the Assets
pursuant to this Agreement.
5.4 Leases and Contracts. On the Closing Date, the Seller shall assign
--------------------
all of its rights and obligations under the Leases and the Contracts to
Purchaser.
5.5 Mortgage Loans. Seller shall endorse the Mortgage Loans owned by
--------------
Seller to the Purchaser and shall execute and deliver such assignment as may be
necessary in order to convey all of Seller's right, title and interest in and to
said Mortgage Loans.
5.7 Employees. On the Closing Date, the Employees shall become the
---------
employees of the Purchaser and the Purchaser shall thereafter pay directly to
the Employees all salary, benefits, commissions and bonuses that may become due
and payable.
5.8 Deliveries of Seller. At Closing, Seller shall deliver to Purchaser
--------------------
the following:
a) Duly executed assignments and other instruments of transfer and
conveyance in appropriate form so as effectively to convey, transfer and assign
to Purchaser all items to be transferred to Purchaser pursuant to the terms of
this Agreement.
Page 7
b) Certificate of the President or Chief Executive Officer of Seller
certifying that the representations and warranties of Seller contained herein
are true and correct as of the Closing Date and that all obligations, covenants
and conditions required to be performed or satisfied by Seller prior to the date
of Closing have been performed and satisfied.
c) The Related Documents.
d) Duly executed Lease Agreement for Furniture, Fixtures and Equipment.
5.9 Deliveries of Purchaser. At Closing, Purchaser shall deliver to
-----------------------
Seller the following:
a) Certificate of the President or Chief Executive Officer of Purchaser
certifying that the representations and warranties of Purchaser contained herein
are true and correct as of the Closing Date and that all obligations, covenants
and conditions required to be performed or satisfied by Purchaser prior to the
date of Closing have been performed and satisfied.
b) Duly executed Lease Agreement for Furniture, Fixtures and Equipment.
ARTICLE SIX
MISCELLANEOUS
6.1 Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the Seller and the Purchaser with respect to the subject matter hereof
and supersedes all prior agreements or communications, written or oral, express
or implied.
6.2 Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of the parties hereto and their respective permitted successors and
assigns.
6.3 No Assignment. This Agreement may not be assigned, in whole or in
-------------
part, by either party hereto without the prior written consent of the other,
which consent shall not be unreasonably withheld or denied.
6.4 Applicable Law. This Agreement shall be construed in accordance with
--------------
the governed by the laws of the State of Alabama. Except as to the provisions
of this Agreement relating to arbitration of disputes hereunder which shall be
governed by the Federal Arbitration Act, 9 U.S.C. Section 1 et. seq., and , to
the extent not in conflict with the Federal Arbitration Act, by the Commercial
Arbitration Rules of the American Arbitration Association. The venue for any
court action involving this Agreement shall be the State of Alabama.
6.5 Number and Gender of Words. Whenever herein the singular number is
--------------------------
used, the same shall include the plural where appropriate, and words of any
gender shall include each other gender where appropriate.
6.6 Captions. The captions, headings and arrangements used in this
--------
Agreement are for convenience only and do not affect, limit, or amplify the
terms and provisions hereof.
Page 8
6.7 Amendment. This Agreement may not be amended or modified without the
---------
express written consent of the parties hereto.
6.8 Arbitration. All disputes or differences between the parties arising
-----------
under or which are related to this Agreement upon which an amicable
understanding cannot be reached within thirty (30) days shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, except as hereinafter provided, and judgment upon the
award entered by the arbitrators may be entered in any court having jurisdiction
thereof.
The Court of Arbitrators shall consist of three arbitrators familiar with
mortgage business. The parties agree that this Court of Arbitrators, if
implemented under this Agreement, shall be held at a site selected by the
Arbitrators.
The parties agree to arbitrate within thirty (30) days following the
transmittal of written demand of either party to arbitrate any dispute
arbitrable under this Agreement. Each of the parties shall appoint an
arbitrator within thirty (30) days following notice of written demand to
arbitrate, notifying the other party of the name and address of such arbitrator.
If either party shall fail to appoint an Arbitrator as herein provided, or
should the two arbitrators so named fail to select the third arbitrator within
thirty (30) days of their appointment, then, in either event, the President of
the American Arbitration Association or its successor shall appoint such second
and/or third arbitrator. The three arbitrators so selected shall constitute the
Court of Arbitrators.
A decision of a majority of the Court of Arbitrators shall be final and
binding and there shall be no appeal therefrom. The Court of Arbitrators shall
not be bound by legal rules of procedure and may receive evidence in such a way
as to do justice between the parties. The Court of Arbitrators shall promptly
enter an award which shall do justice between the parties and the award shall be
supported by a written opinion.
The cost of arbitration, including the fees of the arbitrators, shall be
borne by the losing party unless a Court of Arbitrators shall decide otherwise.
6.9 Seller's Indemnification. Seller shall and hereby agrees to indemnify
------------------------
and hold Purchaser harmless against and with respect to any damages as
hereinafter defined. Damages to Purchaser, 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:
a) any inaccurate representation made by Seller in this Agreement;
b) any breach of any of the warranties made by Seller in this Agreement;
c) breach or default in performance by Seller of any of the obligations
that are to be performed by Seller under this Agreement.
Page 9
Except as provided below, the above indemnification shall extend for a
period of two years after the Closing Date, provided, however, that the
foregoing two year limitation shall not apply to any claim resulting from the
assessment of taxes or claims of third parties, for which indemnification shall
extend for the period of the statute of limitations applicable to such claims.
Purchaser shall give notice to Seller within a reasonable time from
discovery by Purchaser of any matters that may give rise to a claim for
indemnification from Seller under this Agreement, and Purchaser shall cooperate
with Seller in any investigation by Lessee of such matters.
6.10 Purchaser's Indemnification. Purchaser shall and hereby agrees to
---------------------------
indemnify and hold Seller harmless against and with respect to any damages as
hereinafter defined. Damages to Seller 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 judgments
resulting from, occurring in connection with, or arising out of:
a) any inaccurate representation made by Purchaser;
b) breach of any of the warranties made by Purchaser in this Agreement;
and,
c) breach or default in performance by Purchaser of any of the
obligations that are to be performed by it under this Agreement.
Except as provided below, the above indemnification shall extend for a
period of two years after Closing Date, provided, however, that the foregoing
two-year limitation shall not apply to any claim resulting from the assessment
of taxes or claims of third parties, for which indemnification shall extend for
the period of the statute of limitations applicable to such claims.
Seller shall give notice to Purchaser within a reasonable time from
discovery by Seller of any matters that may give rise to a claim for
indemnification from Purchaser under the Agreement, and Seller shall cooperate
with Purchaser in any investigation by Purchaser of such matters.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this Agreement
to be executed by their duly authorized officers, on the day and year shown
below.
SELLER: COLLATERAL MORTGAGE, LTD.
BY:
--------------------------------
ITS:
-------------------------------
Page 10
PURCHASER: NEW SOUTH FEDERAL SAVINGS BANK
BY:
--------------------------------
ITS:
-------------------------------
Page 11
