Asset Purchase Agreement Dated December 19, 2002

Exhibit 10.16

ASSET PURCHASE AGREEMENT

between

SOUTHLAND BANK

and

MBNA AMERICA BANK, N.A.

DECEMBER 19, 2002

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (the " Agreement" ) is entered into as of this 19th day of December, 2002, by and between MBNA AMERICA BANK, N.A., a national banking association located at 1100 N. King Street, Wilmington, Delaware 19884 (" Purchaser" ) and SOUTHLAND BANK, an Alabama state bank located at 3299 Ross Clark Circle, NW, Dothan, Alabama 36303 (" Seller" ).

WITNESSETH:

WHEREAS, Seller presently owns certain open-end, unsecured credit card accounts, contract rights and receivables, together with certain related personal property; and

WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, all of Seller' s right, title and interest in and to certain of those credit card accounts, contract rights, receivables and related personal property, and agrees to assume certain liabilities of Seller, upon the terms and conditions set forth herein; and

WHEREAS, Seller has agreed to service these credit card accounts on behalf of Purchaser during the Interim Servicing Period (as hereinafter defined);

NOW, THEREFORE, in consideration of the mutual agreements, representations and warranties hereinafter set forth and for other good and valuable consideration, both the receipt and legal sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I. DEFINITIONS

In addition to the other capitalized terms specifically defined herein, for the purposes of this Agreement, the following capitalized terms shall mean the following:

" Account" means all of Seller' s MasterCard and VISA (whether standard, classic, gold or platinum) credit card accounts which were present on the tapes used for Purchaser' s change in terms notices, the settlement tape, the embossing tape and the conversion tapes and transmissions provided by Seller to Purchaser, except for any account, whether or not the Seller has knowledge, which (or upon which) as of the Cut-off Time: (a) an Obligor has filed or has had filed against such Obligor within the past 5 years prior to the Cut-off Time, proceedings in bankruptcy, trusteeship, or receivership (whether or not the Seller has received notice of such filing); (b) Seller has received notice that the Obligor intends to file for bankruptcy; (c) an Obligor is participating in any consumer credit counseling program; (d) an Obligor is 3 or more cycles delinquent as such cycles are set forth on Exhibit 1A or should have been in said delinquency cycles in accordance with Seller' s Policies and Procedures; (e) fraud or unauthorized use has occurred; (f) the primary address of the Obligor is not in the United States or the Obligor is under the age of eighteen (18); (g) has a lost or stolen Card; (h) is secured by any collateral whatsoever; (i) is charged-off; (j) is a Guaranteed Account; (k) is a Business Account (1) that has any authorized users and/or permits a person (other than the Obligor) to have credit access to the Business Account, or (2) in which the Obligor is a business entity and

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said business entity has not executed Purchaser' s Bearer Card Agreement; (l) is not in the name of a living individual and no other individual is contractually obligated for the payment thereof; (m) is closed or terminated with a balance equal to or less than $0.00; (n) is the subject of a legal proceeding; (o) whose repayment schedule has been altered to a payment amount that is less than the one required by the Card Agreement or is subject to a reduced interest rate (excluding promotional or introductory rates) as a result of collection efforts or a workout; (p) is not governed by the terms of a Card Agreement included in Exhibit 3.1E; (q) has a credit line of less than $500.00 and was generated from a preapproved marketing campaign; (r) has been securitized; (s) is a Cost Center Card; (t) has an annual percentage rate on any balance that can not be changed by Purchaser because of any Requirements of Law, the Card Agreements or any marketing material; (u) has an open date that is after the Cut-off Time; or (v) is a test credit card account opened and maintained by Seller with respect to the MasterCard or VISA system for verification or other internal purposes.

" Agreement" means this Asset Purchase Agreement, together with all schedules, exhibits, supplements and documents that are attached hereto or incorporated herein by reference.

" Assets" means the assets of the Business to be acquired by Purchaser as set forth in Section 2.2(A) hereof.

" Audited Closing Payment" means the payment set forth on the last line of the Audited Closing Statement reflecting the difference between the Preliminary Purchase Price and the Closing Purchase Price.

" Benefits Agreements" means all agreements with third parties or affiliates of Seller who provide benefits and services in connection with the Accounts, including, without limitation, VISA, MasterCard, any provider of credit insurance, travel accident insurance or credit card registration services. It shall not include services offered by a third party or an affiliate of Seller through a separate agreement with a Cardholder.

" Best of 85 knowledge" , as used with respect to a Person or its employees and representatives, means the actual knowledge and awareness of such Person as of the date of this Agreement.

" Books and Records" means all books, records, manuals, documents, materials and other information related to the conduct of the Business and necessary for the ongoing operations of the Business, in paper, electronic or other form in which they are maintained by Seller, and with respect to each Account, the Card Application, the Card Agreement, monthly billing statements, any correspondence from or to the Cardholder(s), and any and all other documents or other materials specifically relating to such Account.

" Business" means the following: (a) with respect to Seller, the business conducted by Seller of issuing, servicing, maintaining, promoting and owning credit card accounts; and (b) with respect to Purchaser, the business to be conducted with the use of the Assets by Purchaser of issuing, servicing, maintaining, promoting and owning the Accounts.

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" Business Account" means a credit card account for which the Obligor is a sole proprietorship or a business entity other than Seller, an Account that is established on Seller' s Card Processor' s system as a business credit card account or an Account that is used predominantly for business purposes by the Obligor and such use is known, or should be known, by Seller.

" Card" means an open-end, unsecured credit card issued by Seller to a Cardholder pursuant to a Card Agreement.

" Card Agreement" means the written agreement between Seller and Cardholder, as amended, which sets forth the terms and conditions for a credit card account and pursuant to which a Card is issued.

" Card Application" means the signed original or conformed copy ( e.g. ,microfilm/microfiche) application, or in the case where any application was made by telephone, the telesales representative' s documentation, whereby a Person applied for a Card.

" Card Marks" means the trade names, service marks, trademarks, logos, designs, images, visual representations, and tradedress used by Seller in connection with the Assets.

" Cardholder" means any Obligor who has been issued a Card.

" Cardholder List" means the names, addresses and, if available, phone numbers of all Cardholders.

" Closing" means the execution (as necessary) and delivery of all documents, certificates, resolutions, opinions, assignments, property and funds as contemplated by this Agreement.

" Closing Audit" means the audit of the Closing Statement, conducted pursuant to Section 2.3(D) hereof.

" Closing Date" means December 20, 2002, or such other date as the parties may mutually agree.

" Closing Payment" means the payment set forth on the last line of the Closing Statement reflecting the difference between the Preliminary Purchase Price and the Closing Purchase Price.

" Closing Purchase Price" means the total purchase price to be paid for the Assets as adjusted and as set forth in the Closing Statement or Audited Closing Statement, as defined in Section 2.3(D)(iii) of this Agreement.

" Closing Statement" means a statement, in the form set forth in Exhibit 2.3C, attached hereto, which sets forth the calculation of the Closing Payment.

" Conversion Date" means the date on which the processing of the Accounts is transferred from Seller' s Card Processor to Purchaser' s Card Processor.

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" Cost Center Card" means an Account for which Seller or any affiliate of the Seller is the Obligor.

" Cut-off Time" means 11:59:59 p.m., EST, on December 13, 2002, by which time all file maintenance and Account servicing shall have been performed by Seller in accordance with past custom and practice.

" Employee Accounts" means a consumer credit card account that was generated from Seller' s employee credit card applications.

" Enhancements" has the meaning set forth in Section 4.1.

" File" means, with respect to each Account, all information, comments, documents and any correspondence from or to such Account' s Cardholder(s), including, without limitation, the Card Application, Card Agreement, statement fiche and billing dispute documents.

" Guaranteed Account" means a credit card account that has any Person contractually liable as a guarantor on such account.

" Interchange Fees" means the fees paid in connection with the exchange of Card transactions between VISA and MasterCard members pursuant to VISA' s and MasterCard' s operating rules and regulations.

" Interim Closing Payment" means the payment representing any undisputed amounts comprising the difference between the Preliminary Purchase Price shown on the Preliminary Closing Statement and the Closing Purchase Price shown on the Closing Statement.

" Interim Servicing Agreement" means the interim servicing agreement entered into as of the Closing Date by and between Seller and Purchaser and providing for the servicing of the Accounts by Seller during the Interim Servicing Period, attached hereto as Exhibit 1 .

" Interim Servicing Period" means the period beginning as of the Closing Date and continuing until the Conversion Date.

" Joint Marketing Agreement" means that agreement entered into as of the Closing Date by and between Seller and Purchaser pursuant to which Purchaser markets and issues credit cards for Seller to Seller' scustomers.

" Liens" means any and all debts, liens, options, security interests, rights of first refusal, claims, encumbrances or any other liabilities, interests, restrictions of every nature, kind and description whatsoever.

" MasterCard" means MasterCard International, Inc.

" Obligor" means, and shall only include with respect to any Account, any Person obligated to make payments with respect to such Account, including any guarantor thereof.

" Par Account" means an Account that is closed with a balance greater than $0.00.

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" Payments" means the Preliminary Purchase Price, the Closing Payment, any Interim Closing Payment, and any Audited Closing Payment.

" Person" means any legal person, including, without limitation, any natural person, corporation, partnership, joint venture, association, limited liability company, joint-stock company, business trust, unincorporated organization, governmental entity or any other entity of every nature, kind and description whatsoever.

" Preliminary Purchase Price" means the payment initially paid for the sale of all of the Assets based on the Preliminary Closing Statement, as set forth on the last line of the Preliminary Closing Statement.

" Preliminary Closing Statement" means a statement, in a form substantially similar in all material respects to the form set forth in Exhibit 2.3B attached hereto, setting forth the calculation of the Preliminary Purchase Price.

" Purchaser' s Card Processor" means MBNA Technology, Inc.

" Receivable" means any amount owing by an Obligor under any Account, including, without limitation, any amounts owing for the payment of goods and services, cash advances, cash advance fees, access check fees, annual membership fees, billed interest, billed finance charges, billed late charges and any other billed fee, expense or charge of every nature, kind and description whatsoever, less any amount owed by Seller to the Obligor as a credit balance.

" Reject Account #1" means any Account that timely rejects Purchaser' s first change in terms notice described in Section 4.2 which contains the notice changing the state law that governs the Cardholder' s applicable Card Agreement to Delaware as well as the amendment portion of the Card Agreement.

" Reject Account #2" means any Account that timely rejects Purchaser' s second change in terms notice described in Section 4.2 which contains the notice changing the Cardholder' s entire Card Agreement to Purchaser' s credit card agreement.

" Requirements of Law" with respect to any Person, means any certificate of incorporation, articles of association, by-laws or other organizational or governing documents of such Person, and any law, ordinance, statute, treaty, rule, judgment, regulation or other determination or finding of any arbitrator or governmental authority applicable to or binding upon such Person or to which such Person is subject, whether federal, state, county, local or otherwise (including, without limitation, usury laws, the Federal Truth-In-Lending Act, the Fair Debt Collection Practices Act, the Federal Equal Credit Opportunity Act, the Fair Credit Reporting Act, the FFIEC Uniform Retail Credit Classification and Account Management Policy, the USA Patriot Act, the National Bank Act and Regulations B, E, and Z of the Board of Governors of the Federal Reserve System).

" Restricted Period" means the five (5) year period immediately following the Cut-off Time.

" Seller' s Card Processor" means TYSY.

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" Seller' s Policies and Procedures" means Seller' s policies and normal, day-to-day operating procedures and practice in compliance with such policies and Seller' s normal financial accounting guidelines for the conduct of the Business, all as existing as of the execution of this Agreement.

" Tax" means any federal, state or local tax of the United States or of any state, including without limitation any income tax, franchise tax, real or personal property tax, employment tax, sales and use tax, vault tax and any interest and penalties thereon (including, without limitation, those levied on any failure to make appropriate withholdings), but not including any tax that is levied on this transaction or chargeable on this Agreement or any documents or instruments required to be executed hereunder or pursuant hereto.

" Valuation Date" means a date mutually agreed upon by the parties which is no more than three (3) business days prior to the Closing Date.

" VISA" means Visa U.S.A., Inc.

ARTICLE II. Purchase of Assets; Assumption of Liabilities

2.1 Schedule of Accounts . By December 30, 2002, Seller shall deliver to the Purchaser an Exhibit 2.1 reflecting all Accounts. Exhibit 2.1 shall, with respect to each Account, contain the information set forth in Section 3.1(C). Exhibit 2.1 shall be provided to Purchaser in an electronic or magnetic format, whichever is specified by Purchaser in writing. When a complete Exhibit 2.1 is provided to Purchaser, such Exhibit 2.1 shall be deemed automatically attached hereto.

2.2 Purchase of Assets .

(A) On the Closing Date and subject to all of the terms and conditions set forth herein, Seller shall sell, assign, transfer and convey to Purchaser, and Purchaser shall purchase and receive from Seller, all of Seller' s right, title and interest in and to the following: (i) all Accounts; (ii) all Receivables; (iii) any and all rights to receive payment for accrued but not yet billed interest on the Accounts; (iv) any and all periodic statements, plastics, applications, and other supplies held in inventory by Seller which relate to the Accounts; (v) the pro-rata portion of any annual fee associated with the Accounts relating to any period following the Cut-off Time; (vi) all Cards; (vii) the Cardholder List; (viii) all Interchange Fees earned after the Cut-off Time; (ix) all of the Books and Records; and (x)any other rights or assets solely and directly relating to the foregoing (collectively, the " Assets" ).

(B) All assets of Seller not specifically listed or included in Section 2.2(A) hereof shall remain the property of Seller. Without limitation, Seller shall retain all right, title and interest in and to all of those MasterCard Card and VISA accounts which do not qualify as an Account.

2.3 Purchase Price .

(A) Computation. The total Preliminary Purchase Price shall consist of the sum of the following:

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(i)


1.00 multiplied by the total amount of Receivables (other than Receivables from Par Accounts) as of the Valuation Date; plus


(ii)


a premium of eighteen percent (18%) of the amount calculated pursuant to Section 2.3(A)(i) above; plus


(iii)


1.00 multiplied by the total amount of Receivables from Par Accounts as of the Valuation Date; less


(iv)


the pro rata portion of any annual fee relating to any period following the Cut-off Time.


(B) Preliminary Closing Statement. On the Closing Date, Seller shall prepare a Preliminary Closing Statement setting forth the calculation of the Preliminary Purchase Price. The form of Preliminary Closing Statement is attached hereto as Exhibit 2.3B . After being agreed to by the parties, the Preliminary Purchase Price shall be paid by Purchaser on the Closing Date by a wire transfer to an account that has been designated in writing by Seller at least three (3) business days prior to the Closing Date.

(C) Closing Statement. Approximately sixty (60) days after the Closing Date, Purchaser shall conduct and complete a post-Closing audit of the Accounts and Receivables (the " Post-Closing Audit" ) and prepare a Closing Statement, the form of which is attached as Exhibit 2.3C . The Closing Statement shall set forth the Closing Purchase Price and shall describe any adjustments to the Preliminary Purchase Price which reflect the difference between (i) the actual aggregate face value of the Receivables and Purchaser' s pro rata portion of any annual fee, all as determined by the Purchaser in the Post-Closing Audit, as of the Cut-off Time and (ii) the actual aggregate face value of the Receivables and Purchaser' s pro rata portion of any annual fee as of the Valuation Date, as reflected on the Books and Records of Seller' s Card Processor, and upon which the calculation of the Preliminary Purchase Price was based pursuant to Section 2.3(A) hereof.

(D) Closing Audit.

(i) Closing Payment. If within fifteen (15) days after Seller' s receipt of the Closing Statement, Purchaser and Seller mutually agree on each line item in the Closing Statement, then: (a) if the Preliminary Purchase Price shown on the Preliminary Closing Statement is less than the Closing Purchase Price shown on the Closing Statement, Purchaser shall pay to Seller the Closing Payment, plus interest calculated at the federal funds rate from the Closing Date to the date the Closing Payment is made; or (b) if the Preliminary Purchase Price shown on the Preliminary Closing Statement is greater than the Closing Purchase Price shown on the Closing Statement, Seller shall pay to Purchaser the Closing Payment, plus interest calculated at the federal funds rate from the Closing Date to the date the Closing Payment is made. The payment required under this paragraph shall be made no later than thirty (30) business days after Seller' s receipt of the Closing Statement.

(ii) Interim Closing Payment. If within fifteen (15) days after Seller' s receipt of the Closing Statement, Purchaser and Seller do not mutually agree upon the correct amounts

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for all line items in the Closing Statement, then Seller shall, within said 15 day period, notify Purchaser in writing of all line items still in dispute. Upon such notification to Purchaser that certain items remain in dispute, Seller shall pay to Purchaser, or Purchaser shall pay to Seller, (whichever the case may be) the Interim Closing Payment, plus interest calculated at the federal funds rate from the Closing Date to the date the Interim Closing Payment is made.

(iii) Audited Closing Statement. Within fifteen (15) days after Seller' s notice to Purchaser that some line items remain in dispute, Purchaser and Seller shall select a nationally recognized independent accounting firm which is one of the four largest such firms as of such date to audit the line items in dispute on the Closing Statement and any other items that must be reviewed to resolve the dispute, provided that such accounting firm may not be the accounting firm then employed by Seller or Purchaser. The cost of such audit and the preparation of the Audited Closing Statement shall be shared equally between the Purchaser and the Seller. Except as otherwise provided in this Agreement, the " Audited Closing Statement" prepared by such accounting firm shall be final, conclusive and binding on the parties for matters covered thereby and a judgment may be entered thereon. The Audited Closing Statement shall be in a form substantially similar to the Closing Statement, except that it will reflect the payment of any Interim Closing Payment.

(iv) Audited Closing Payment. If an Audited Closing Statement is prepared, then: (a) if the Preliminary Purchase Price, adjusted if applicable by any Interim Closing Payment made, is less than the Closing Purchase Price shown on the Audited Closing Statement, Purchaser shall pay to Seller the Audited Closing Payment, plus interest calculated at the federal funds rate from the Closing Date to the date the Audited Closing Payment is made; or (b) if the Preliminary Purchase Price, adjusted if applicable by any Interim Closing Payment made, is greater than the Closing Purchase Price shown on the Audited Closing Statement, Seller shall pay to Purchaser the Audited Closing Payment, plus interest calculated at the federal funds rate from the Closing Date to the date the Audited Closing Payment is made.

(E) Fee Prorations. Any fees payable to MasterCard or VISA with respect to the Assets shall be prorated between the parties as follows: for Seller' s account through the Cut-off Time and for Purchaser' s account after the Cut-off Time. To the extent possible, such prorations shall be made as soon as possible after the Closing Date in accordance with adjustment procedures set forth in Section 2.6(C).

2.4 Assumption of Liabilities.

(A) Except as otherwise expressly set forth herein or in the Interim Servicing Agreement, on the Closing Date, Purchaser shall assume and, thereafter, discharge fully only the following liabilities of Seller to be performed after the Cut-off Time: (i) all of the obligations of Seller to the Cardholders under the Card Agreements (excluding obligations for Enhancements); (ii) any expenses related to the Accounts and the activity thereon after the Cut-off Time (excluding expenses for Enhancements); and (iii) subject to the prorations of fees set forth in Section 2.3 (E) hereof, all fees, normal operating assessments and other charges of VISA or MasterCard arising after the Cut-off Time, except for those charges: (a) arising from Seller' s violation on or before the Cut-off Time of any operating regulation of VISA or MasterCard; or (b) arising from or relating to any special assessments with respect to periods up to and including the Cut-off Time. Except as provided above, Purchaser shall not assume any liability,

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commitment, or any other obligation of Seller, whether absolute, contingent, or otherwise known or unknown of any nature, kind or description whatsoever, arising from or related to the operation of the Seller' s Business prior to or after the Cut-off Time. For the avoidance of doubt, Seller expressly retains all liability arising out of or from the Enhancements.

(B) Seller agrees that: (i) it shall be solely responsible for any draft retrievals, chargebacks, representments or incorrectly posted transactions that occur through the Cut-off Time and that relate to an Account that bears Seller' s BIN or ICA (as defined in Section 5.2(D)) number; (ii) it shall be responsible for processing any draft retrievals, chargebacks, representments or incorrectly posted transactions through the Conversion Date and that relate to an Account that bears Seller' s BIN or ICA, all in accordance with the requirements of the Interim Servicing Agreement; and (iii) it will be responsible for all expenses related to the Accounts and activity thereon prior to the Cut-off Time. Seller will be responsible for all expenses charged by Seller' s Card Processor for the Closing and for the conversion of the Accounts from Seller' s Card Processor to the Purchaser' s Card Processor, including, but not limited to, the cost of all electronic transmissions, back-up tapes and other Seller' s Card Processor pass through costs and expenses. Seller will also be responsible for any fees or expenses assessed to Seller or Seller' s Card Processor in relation to this transaction by MasterCard or VISA. Purchaser shall have no responsibility for any such Closing or conversion expenses or for any penalties, termination fees, or similar expenses payable because of the termination of Seller' s agreement with Seller' s Card Processor.

(C) Seller shall be liable for any Tax that relates to its operation of the Business on or prior to the Cut-off Time. Purchaser shall be liable for any Tax that relates to its operation of the Business after the Cut-off Time.

2.5 Seller' s Repurchase of Certain Credit Card Accounts . If within the earlier of September 30, 2003 or one hundred and eighty (180) days after the Conversion Date Purchaser and Seller determine that: (i) any Account or Receivable purchased should not have been deemed an " Account" or a " Receivable" , respectively, as of the Cut-off Time, (ii) any Account or Receivable purchased is not as represented by Seller to Purchaser as expressly set forth in this Agreement as of the Cut-off Time for reasons that existed on or before the Cut-off Time; or (iii) an Account becomes a Reject Account #1, then under any of these scenarios, Seller shall repurchase the applicable Account and/or the applicable Receivable from time to time as necessary. In such event, Seller shall pay Purchaser, on demand, the amount of the Receivable as of the date of such repurchase by Seller, plus any applicable premium paid for such Receivable. The parties each agree that they shall cooperate in producing a transfer document and any other related documents as the other may reasonably request under the circumstances. The obligations of the parties under this Section 2.5 are not subject to the limitations contained in Article IX.

2.6 Post-Closing Adjustments . Following the Closing, the parties shall, with each other' s reasonable cooperation and assistance, promptly make any adjustments to the Payments based on the following:

(A) Unposted Items. Any items or transactions that affect any of the Payments, but that were unposted or unaccounted for on or before the Cut-off Time, including, without

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limitation, cash letters for cash advance checks in process, payments in process, unidentif ...