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EXHIBIT 10.2
June 1, 1999
BY FEDERAL EXPRESS
United Companies Financial Corporation
4041 Essen Lane
Baton Rouge, Louisiana 70809
Attn: Deborah Hicks Midanek
Chief Executive Officer
Re: Supplementary Agreement Relating to Prorations and
Certain Other Matters
Dear Ms. Midanek:
In connection with the sale of certain assets by United
Companies Financial Corporation, United Companies Lending
Corporationr and United Companies Lending Group, Inc.
(collectively, "Sellers") to Aegis Mortgage Corporation
("Purchaser") under that certain Asset Purchase Agreement dated
April 26, 1999, by and among Sellers, Purchaser and certain other
parties ("Asset Purchase Agreement"), this letter sets forth the
supplementary agreement ("Agreement") among the Parties with
respect to certain amounts to be paid by Purchaser to Sellers
under Section 7.12(f) of the Asset Purchase Agreement, certain
amounts to be prorated or otherwise allocated between Sellers and
Purchaser in accordance with Sections 2.4, 7.13, 7.15 and 7.16 of
the Asset Purchase Agreement, revisions to Section 2.5, 7.7 and
7.12 of the Asset Purchase Agreement and the removal of UCR as a
Party to the Asset Purchase Agreement. Initially capitalized
terms used and not defined in this Agreement have the meanings
given such terms in the Asset Purchase Agreement.
1. No later than the close of business on May 28,
1999, Sellers shall deliver to Purchaser an invoice, with
supporting documentation (including a copy of the appropriate
provisions of Sellers' warehouse lending agreement specifying
Sellers' cost of funds), for the amount of interest due through
May 27, 1999, under Section 7.12(f) of the Asset Purchase
Agreement and, no later than June 1, 1999, Purchaser shall review
the invoice, and supporting documentation, and advise Sellers
whether Purchaser agrees with Sellers' calculation of the amount
due. No later than June 4, 1999, Seller shall deliver to
Purchaser an invoice, with supporting documentation (including a
copy of the appropriate provisions of Sellers' warehouse lending
agreement specifying Sellers' cost of funds), for the amount of
interest due from and after May 27, 1999, under Section 7.12(f)
of the Asset Purchase Agreement and, no later than June 8, 1999,
Purchaser shall review the invoice, and supporting documentation,
and advise Sellers whether Purchaser agrees with Sellers'
calculation of the amount due. If Purchaser disagrees with
either such calculation, Purchaser and Sellers shall work
together in good faith, and provide each other with such
information as is reasonably necessary to support its position,
to reach agreement as soon as possible on the amount due.
Subject to Purchaser and Sellers reaching agreement on the amount
due, Purchaser shall pay amounts due through May 27, 1999, under
Section 7.12(f) at the time of the Closing and Purchaser shall
pay amounts due after May 27, 1999, under Section 7.12(f) on or
prior to June 9, 1999; provided, however, that in the event of a
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Ms. Midanek
June 1, 1999
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dispute between Purchaser and Seller with respect to such amounts
due, then pending the resolution of such dispute as set forth
herein, Purchaser shall promptly pay all amounts due with respect
to which Purchaser and Seller agree.
2. On or before May 31, 1999, Sellers shall prepare
checks necessary to pay all amounts due on or prior to June 1,
1999 under the Assumed Leases. On or before May 25, 1999,
Sellers shall invoice Purchaser for the aggregate amount of such
checks and provide Purchaser with supporting documentation (such
as invoices, bills or other evidence of the amount due and to be
paid by Sellers). Sellers shall certify to Purchaser in an
officer's certificate as to the payments (including amounts) that
will be made and that, on the day on which Sellers receive
payment for a check, that check will be deposited in the U.S.
Mail addressed as necessary so as to be delivered to the payee on
the check. Purchaser shall review such invoices and supporting
documentation and, no later than the day prior to the Closing,
advise Sellers whether Purchaser agrees with Sellers' calculation
of the amount due. If Purchaser disagrees with such calculation,
Purchaser and Sellers shall work together in good faith, and
provide each other with such information as is reasonably
necessary to support its position, to reach agreement as soon as
possible on the amount due. Subject to Purchaser and Sellers
reaching agreement on the amount due, Purchaser shall pay the
amount due under this paragraph 2 at the time of the Closing.
3. Expenses to be prorated or allocated between
Sellers and Purchaser under Sections 2.4, 7.13, 7.15 and 7.16 of
the Asset Purchase Agreement, and which are not addressed in
paragraph 2 above or identified on the Closing Statement as paid
at the time of the Closing, shall be paid by the party owing the
prorated or allocated amount to the party entitled to receive the
prorated or allocated amount on a monthly basis after the
Closing, with the party paying such bills (the "Paying Party")
delivering to the party obligated to reimburse such payments (the
"Reimbursing Party"), no later than the 10th day of the month
following the month in which such disbursement was made, an
invoice with supporting documentation sufficient to allow the
Reimbursing Party to determine the amounts due to and paid by the
Paying Party. The Reimbursing Party shall review such invoices
and documentation and, as soon as practicable, but in any event
no later than the 15th day of such month, advise the Paying Party
whether the Reimbursing Party agrees with the Paying Party's
calculation of the amount due by the Reimbursing Party. If the
Reimbursing Party disagrees with such calculation, the Paying
Party and the Reimbursing Party shall work together in good
faith, and provide each other with such information as is
reasonably necessary to support its position, to reach agreement
as soon as possible on the amount due; provided, however, that
with respect to the amounts not disputed by the Reimbursing
Party, the Reimbursing Party shall pay the Paying Party such
amounts as soon as possible, pursuant to the provisions of the
immediately succeeding sentence. Once the Paying Party and the
Reimbursing Party have agreed on the amount due, the Reimbursing
Party shall pay such amount. Subject to the Reimbursing Party
and the Paying Party reaching agreement on the amount due, it is
the intent that amounts due under this paragraph 3 will be paid
on or before the 20th day of the month in which the invoice was
received by the Reimbursing Party.
4. The cost of segregating the management
information services equipment and facilities pursuant
to Section 7.13 of the Asset Purchase Agreement has been
calculated (as set forth on Attachment 1 hereto)
to be $90,164.90. The monthly fee to be paid by Purchaser to
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Ms. Midanek
June 1, 1999
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Sellers under Section 7.15 of the Asset Purchase Agreement
for monthly data processing support shall be $11,190, as
detailed on Schedule 1 to Attachment 1 hereto. The
MIS Transition Date is expected to be May 31, 1999.
Notwithstanding this, Sellers shall, if requested by Purchaser,
provide Purchaser with programming support and time for such
support shall be billed at the rates set forth on Schedule 1 to
Attachment 1 hereto. The employees whose time will be shared
pursuant to Section 7.16 of the Asset Purchase Agreement by
Purchaser, on the one hand, and Sellers, on the other hand, and
the time periods during which such persons time will be shared,
are listed on Attachment 2 hereto. Both of the employees listed
on Attachment 2 hereto will be hired by Purchaser immediately
after the Closing. Accordingly, notwithstanding the last
sentence of Attachment 1 hereto, Sellers shall reimburse
Purchaser for one-half of the costs of Mr. Hamachek through June
15, 1999, and Sellers shall pay the costs for Ms. Paul through
June 30, 1999.
5. Purchaser and Sellers agree to use their
reasonable commercial efforts to have invoices and other billing
statements with respect to all of the Assumed Leases, Assumed
Contracts, and Assumed Furniture and Equipment Leases transferred
from Sellers to Purchaser as soon as practicable after the
Closing.
6. Purchaser and Sellers agree that the last sentence
of Section 2.5 shall be revised to read as follows: "The
effective date and time of the Closing shall be 12:00 midnight on
May 31, 1999, and is herein referred to as the 'Closing Date'."
7. The Parties agree that UCR shall be removed as a
party to the Asset Purchase Agreement and that the references to
United Realty XII L.L.C. shall be changed to United Companies
Realty Twelve, L.L.C.
8. Subpart (a)(iii) of the third sentence of Section
7.7 shall be revised to read as follows:
"(iii) to the extent legally permissible, loans
produced by such Branch Offices shall be funded by and
closed in the name of Sellers and, on the first
Business Day after funding thereof, Purchaser shall
purchase such loans and such loans shall be
simultaneously assigned to Purchaser and, for each such
loan purchased, Purchaser shall pay Sellers an amount
equal to the actual amount funded by Sellers to close
the loan plus an amount equal to Sellers' cost of funds
with respect to the amount so funded for the period
beginning on (and including) Sellers' funding date for
the loan and ending on (but not including) the date
Purchaser pays Sellers for the loan,"
9. A new Section 7.20 shall be added, as follows:
"7.20 Post-Closing Date Funding by Sellers.
The Pipeline Mortgage Loans shall be funded by and in
the name of Sellers after the Closing Date. Purchaser
shall purchase from Sellers, on the first Business Day
after funding thereof, loans for which funds are
disbursed by a closing agent. Purchaser shall
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June 1, 1999
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be entitled to all principal, interest and other
amounts due with respect to such loans. For each
such loan purchased, Purchaser shall pay to Sellers
an amount equal to the actual amount funded by Sellers
to close the loan plus an amount equal to Sellers'
cost of funds with respect to the amount so funded for
the period beginning on (and including) Sellers' funding
date for the loan and ending on (but not including) the
date Purchaser pays Sellers for such loan. Sellers shall
deliver to Purchaser all loan documentation in Sellers'
possession (including any applicable mortgage guaranty
certificate) and shall execute a recordable assignment
and appropriate endorsement to be prepared by
Purchaser. Sellers shall also deliver to Purchaser
loan documentation in Sellers' possession (including
any applicable mortgage guaranty certificate) and shall
execute an appropriate endorsement and recordable
assignment to be prepared by Purchaser for the loans
funded by and in the name of Sellers and purchased by
Purchaser pursuant to Section 7.7."
10. Amounts due by Purchaser to Sellers to reimburse
Sellers for the cost of funds pursuant to Section 7.7 (as amended
herein) shall be invoiced and paid on a monthly basis, in
accordance with the provisions of paragraph 3 above.
This letter agreement supplements Sections 2.4, 2.5,
7.7, 7.12(f), 7.13, 7.15 and 7.16 of and adds Section 7.20 to the
Asset Purchase Agreement, removes UCR as a Party to the Asset
Purchase Agreement and corrects the name of United Companies
Realty Twelve, L.L.C. Nothing contained herein shall affect or
amend any other provision of the Asset Purchase Agreement, which
shall remain in full force and effect. Initially capitalized
terms used and not otherwise defined herein shall have the
meanings set forth in the Asset Purchase Agreement.
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Ms. Midanek
June 1, 1999
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The execution and delivery of this letter by each of
the Parties other than Purchaser in the spaces provided below
shall evidence the agreement of all such Parties to the terms
hereof.
Sincerely,
AEGIS MORTGAGE CORPORATION
By: /s/ D. RICHARD THOMPSON
---------------------------------
Name: D. Richard Thompson
Title: President
ACKNOWLEDGED AND AGREED:
SELLER:
UNITED COMPANIES FINANCIAL
CORPORATION
By: /s/ Jesse O. Griffin
- -----------------------------
Name:
Title:
UNITED COMPANIES LENDING
CORPORATION(R)
By: /s/ Jesse O. Griffin
- -----------------------------
Name:
Title:
UNITED COMPANIES LENDING
GROUP, INC.
By: /s/ Jesse O. Griffin
- -----------------------------
Name:
Title:
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Ms. Midanek
June 1, 1999
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RELATED PARTIES:
PELICAN MORTGAGE COMPANY, INC.
By: /s/ Jesse O. Griffin
- -----------------------------
Name:
Title:
ADOBE, INC.
By: /s/ Jesse O. Griffin
- -----------------------------
Name:
Title:
ADOBE FINANCIAL, INC. I
By: /s/ Jesse O. Griffin
- -----------------------------
Name:
Title:
GINGER MAE(R), INC.
By: /s/ Jesse O. Griffin
- -----------------------------
Name:
Title:
UNICOR MORTGAGE, INC.
By: /s/ Jesse O. Griffin
- -----------------------------
Name:
Title:
SOUTHERN MORTGAGE ACQUISITION, INC.
By: /s/ Jesse O. Griffin
- -----------------------------
Name:
Title:
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Ms. Midanek
June 1, 1999
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UNITED COMPANIES FUNDING, INC.
By: /s/ Jesse O. Griffin
- -----------------------------
Name:
Title:
GOPHER EQUITY, INC. I
By: /s/ Jesse O. Griffin
- -----------------------------
Name:
Title:
CERBERUS PARTNERS, L.P.
By: /s/ CERBERUS ASSOCIATES LLC, its General Partner
- -------------------------------------------------------
Name: Mark A. Neporent
Title: V.P., C.O.O.
UNITED COMPANIES REALTY TWELVE, L.L.C.
By: /s/ F. Wayne Bono
- -----------------------------
Name:
Title:
UNITED COMPANIES REALTY L.L.C.
By: /s/ Jesse O. Griffin
- -----------------------------
Name:
Title: