Exhibit 10.17

INTERIM SERVICING AGREEMENT

Between

SOUTHLAND BANK

and

MBNA AMERICA BANK, N.A.

DECEMBER 19, 2002

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INTERIM SERVICING AGREEMENT

THIS INTERIM SERVICING AGREEMENT (the “Agreement”) is entered into this 19th day
of December, 2002, by and between MBNA America Bank, N.A., a national banking
association, located at 1100 North King Street, Wilmington, Delaware 19884
(“Purchaser”) and Southland Bank, an Alabama state-chartered bank located at
3299 Ross Clark Circle, NW, Dothan, Alabama 36303 (“Seller”).

RECITALS

          WHEREAS, pursuant to the Asset Purchase Agreement entered into between
the parties of even date herewith (the “Asset Purchase Agreement”), Purchaser
will acquire certain Assets and assume certain liabilities of Seller; and

          WHEREAS, Purchaser is currently unable to process and service the
Accounts obtained pursuant to the Asset Purchase Agreement; and

          WHEREAS, for the term of this Agreement, Seller has agreed to
undertake, on behalf of Purchaser, the processing, servicing and collection of
the Accounts and Receivables transferred pursuant to the Asset Purchase
Agreement upon the terms and subject to the conditions hereinafter set forth;

          NOW, THEREFORE, in consideration of the promises, 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:

1.       DEFINITIONS

1.1     Terms.  All capitalized terms used herein and not otherwise specifically
defined herein shall have the meanings ascribed to such terms in the Asset
Purchase Agreement.

1.2     Other Definitions.  For the purposes of this Agreement, the following
terms have the following meanings:

          “Billed Account” shall mean an Account for which the Servicer has
produced an original statement during the applicable period within the Interim
Servicing Period (in accordance with Servicer’s Policies and Procedures and at
the completion of its billing cycle), as shown on Seller’s system generated,
daily management reports relative to the Accounts.

         “Service Transfer Event” shall mean an event set forth in Article 9
hereof.

          “Servicer” shall mean the entity designated by Purchaser, pursuant to
Section 2.1 and 2.2, to perform the Services.

          “Servicer’s Policies and Procedures” means Servicer’s policies,
procedures and normal, day-to-day business practices in compliance with such
policies and procedures and Servicer’s normal financial accounting guidelines
for the conduct of the Business, all as existing

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as of the Site Visit Date which shall not be changed or altered during the
Interim Servicing Period unless the changed or altered policy, procedure or
practice has been approved in writing by Purchaser or, if the Servicer will
continue to be in the credit card business, is going to be applied to the
Servicer’s entire credit card business, in which case Seller shall notify
Purchaser of such change, as soon as possible.

          “Services” means those services necessary for Purchaser to administer
the Accounts, including, but not limited to, those services listed in Article 3.

2.         DESIGNATION OF SERVICER

2.1     Designation of Servicer.

          (A)          The servicing, processing, administration and collection
of the Accounts and Receivables shall be conducted by such Servicer designated
in accordance with this Article 2.  Provided a Service Transfer Event has not
occurred, Seller is hereby designated as, and hereby agrees to perform (or
caused to be performed) the duties and obligations of, the Servicer pursuant to
the terms hereof. 

          (B)          During the term hereof, Purchaser shall permit Servicer
to retain possession of all Files purchased from Seller to Purchaser pursuant to
the Asset Purchase Agreement.  Servicer shall allow Purchaser access to such
Files for copying and inspection by Purchaser or its agents during Servicer’s
normal business hours and upon one (1) business day’s notice.  From time to time
prior to the Conversion Date, Servicer shall deliver all or such portion or
extracts of one or more of the Files as may be requested by Purchaser.  Such
delivery shall be effected within one (1) to three (3) business days from
Purchaser’s request, utilizing the delivery method specified by Purchaser. 

2.2     Replacement of Seller as Servicer.  In the event a Service Transfer
Event shall have occurred hereunder, Purchaser shall be permitted, in its sole
discretion, to designate another Person who shall act as Servicer hereunder in
the place of Seller.  Such designation shall become effective on the date
specified by Purchaser to Servicer in writing.  Seller shall comply with
Purchaser’s reasonable requests in ensuring that the subsequent Servicer is
provided unrestricted access to or given possession of the Files, whichever the
case may be.  Such subsequent Servicer shall be solely responsible for any costs
or expenses it incurs in connection with such service transfer.  Seller also
shall provide prompt access to the subsequent Servicer to all computer files,
magnetic tapes and any and all other media of any nature, kind and description
whatsoever related specifically to the Accounts or Receivables, to assure a
smooth and prompt transition of servicing rights hereunder.

3.        DUTIES OF SERVICER

3.1      Processing and Collection Services.

          (A)          Services Generally.  During the term of this Agreement,
the Servicer shall administer the Accounts and Receivables and perform all
Services under this Agreement with reasonable care, using that degree of skill
and attention utilized by prudent lenders engaged in the issuance of credit
cards.   Notwithstanding the generality of the preceding sentence, the Services
shall include, without limitation:

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(1)

the collection of Receivables in accordance with Section 3.3 hereof;

 

 
(2)

the prompt and timely posting of all payments to the appropriate Accounts;

 
(3)

the posting of all transactions, fees, and interest to the Accounts;

 
(4)

responding to inquiries from any governmental authority with jurisdiction over
Seller;

 
(5)

the timely provision of periodic statements to all Obligors;

 
(6)

the provision of both voice and electronic authorization services with respect
to Cardholder transactions;

 
(7)

the processing of credit line increases and requests for reinstatements;

 
(8)

the production of plastic cards as necessary to meet special replacement and
normal reissue schedules and upon appropriate Cardholder request;

 
(9)

the provision of incoming interchange ticket processing services;

 
(10)

the timely processing of all purchases, advances, convenience or access checks,
charge-backs, credits, and other transactions;

 
(11)

the provision of daily net settlement functions as more specifically described
in Article 5 below;

 
(12)

the provision of customer service activities relating to the Accounts (including
responding to inquiries from Obligors);

 
(13)

the performance of Account control activities to address overlimit, delinquent
and lost/stolen Accounts which shall include statement messages, correspondence,
phone contact and Account blocking (but which shall not include referral of
Accounts to outside collection agencies or initiation of litigation);

 
(14)

the placement of lost/stolen Accounts on appropriate exception or warning
bulletin files and, in such an event, the transfer of all Account information
and legitimate Account transactions to replacement accounts and the reporting of
all such accounts to Purchaser;

 
(15)

the appropriate notation on a Cardholder’s collection file and on any master
file of any claim or defense asserted by such Cardholder with respect to or on
behalf of any transaction;

 
(16)

the timely administration and processing of consumer credit counseling service
proposals (a “CCCS Proposal”), as per Section 3.10 of this Agreement; and

 
(17)

the appropriate notation and reporting to credit bureaus of (i) credit
information concerning Obligors; and (ii) any and all Accounts on which the
Obligor’s spouse is an authorized user.

Servicer shall perform all Services in accordance with the terms of this
Agreement, Servicer’s Policies and Procedures (except to the extent expressly
provided for in Sections 3.3, 3.7 and 5.3 hereof) all Requirements of Law, and
all applicable operating regulations of MasterCard and VISA.  Any
inconsistencies between this Agreement and Servicer’s Policies and Procedures
shall be governed by this Agreement.

          (B)        Special Requests.      Notwithstanding Section 3.1(A) and
subject to the terms of Section 11.2(B) hereof, if Purchaser reasonably
requests, in writing, that Servicer: (i) perform Services hereunder in a manner
different from Servicer’s Policies and Procedures; or (ii) conduct, or assist
Purchaser in conducting, and tracking the results, of marketing, activation or
retention programs during the Interim Servicing Period (including, but not
limited to, mailing cash advance checks that are subject to a promotional annual
percentage rate, applying new promotional annual percentage rates to cash or
retail balances and/or transactions, promoting

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balance transfers, outward and inward retention programs and credit line
increases), Servicer agrees to take all reasonable steps to comply with such
request at Purchaser’s expense (except with respect to the use of Servicer’s
personnnel).

3.2      Maintenance of Benefit Agreements.     At all times throughout the term
of this Agreement, unless otherwise agreed to by Purchaser and Servicer in
writing, Servicer shall, for its part, maintain the Benefit Agreements and their
respective services and products in full force and effect and shall maintain any
and all benefits, enhancements, programs, products or services offered or
provided to the Cardholders and/or the Accounts through Seller or any of
Seller’s affiliates (“Other Enhancements”).  Additionally, Servicer shall
respond to inquiries from Obligors and others regarding the services and
programs available to Cardholders pursuant to the Benefit Agreements and the
Other Enhancements.  In the event of any change in any of the products, services
and benefits levels provided to Cardholders under the Benefit Agreements or
Other Enhancements (which Purchaser acknowledges it does not have the right to
acquire) occurring at any time during the term hereof, Servicer shall
communicate with Purchaser as to the alternatives available to continue to
provide such products, services and benefits levels and shall take all
reasonable action to provide for the uninterrupted provision of the same, as
reasonably requested by Purchaser.

3.3      Collection of Receivables.     Servicer shall undertake on Purchaser’s
behalf to collect all payments of Receivables due with respect to any Account in
accordance with the Servicer’s Policies and Procedures.  Servicer shall not have
the power and authority to charge-off any Account, but shall charge-off any
Account when requested by Purchaser. Servicer shall also not engage in the
following practices throughout the term of this Agreement, unless consented to
by Purchaser:

(i)

reaging Accounts (a re-age is defined as an adjustment of the payment amount,
interest rate or present or past delinquent status of the Assets);

(ii)

settling on Accounts;

(iii)

fixing the payment or reducing the interest rate on Accounts; and

(iv)

taking or initiating any legal action or assigning the Accounts to a collection
agency.

In a manner consistent with Servicer’s Policies and Procedures, Servicer may
adjust the fees or small balances on an Account once during the term of this
Agreement.  In addition to all information documented on the collection system,
Servicer agrees to promptly provide Purchaser with a copy of any document or
application associated with each permitted special payment arrangement.

3.4     Personnel Assistance.     Throughout the term hereof, Servicer shall use
its commercially reasonable best efforts to preserve its business organization
relating to the Accounts intact, to keep available work force of a quality and
quantity capable of rendering Services comparable to the services of its present
employees.  In the event of a significant attrition of Servicer’s employees
which affects the provision of the Services, the parties shall confer and
consult in order to institute the steps necessary to ensure no interruption of
the quality and quantity of Services to be rendered hereunder in accordance with
the terms of this Agreement.

3.5      Limited Power of Attorney.     Purchaser hereby appoints and empowers
Seller as its true and lawful attorney-in-fact, with full power of substitution
for the term hereof, to endorse, when

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requested by Purchaser, any checks or other instruments made payable to Seller
and submitted by an Obligor as payment on any Account for deposit on Purchaser’s
behalf and for use in connection with the net settlement procedures set forth in
Article 5 hereof.  Throughout the term hereof, this power of attorney shall be
deemed to be a power coupled with an interest and shall be irrevocable.

3.6      Insurance.     Servicer agrees to maintain property insurance covering
losses or damages to Purchaser for any of the following:

(i)

replacement cost of plastics in the custody of Servicer;

(ii)

coverage for any and all amounts necessary to reconstruct sales slips or other
evidences of debt;

(iii)

coverage for any and all amounts necessary to replace magnetic tapes and
reconstruct information stored on such magnetic tapes or any other medium
whatsoever;

(iv)

coverage for additional expense incurred by Servicer which is required to allow
Servicer to continue processing and servicing of Accounts and Receivables in
accordance with this Agreement and Servicer’s Policies and Procedures in the
event of a loss; and

(v)

coverage for any and all amounts necessary to replace all processing units,
computer consoles or other computer hardware of Servicer used in connection with
the processing or servicing of the Accounts and the Receivables in accordance
with this Agreement and Servicer’s Policies and Procedures.

 

3.7       Applications in Process.     Servicer shall forward all at Purchaser’s
expense consumer credit card applications received after the Closing Date and
during the term of this Agreement to the Purchaser, in care of the individual
designated on Exhibit B via overnight delivery within twenty-four (24) hours of
its known receipt of the same to Purchaser for decisioning by Purchaser.
Servicer shall forward all commercial credit card applications received after
The Closing Date and during the term of this Agreement to the Purchaser, in care
of the individual designated on Exhibit B via overnight delivery within
twenty-four (24) hours of its known receipt of the same to Purchaser for
decisioning by Purchaser.

3.8      Audit.     Purchaser shall be permitted, at any time during Servicer’s
normal business hours and upon two (2) business days advance notice, to conduct
an audit and review of the Accounts, Receivables and the methods of internal
control established and implemented by Servicer with respect to the servicing of
the Accounts and the Receivables pursuant to this Agreement to ensure compliance
with this Agreement.  If, during or after the audit and review, Purchaser
reasonably determines that Servicer is not in compliance with this Agreement,
Purchaser shall meet with Servicer to discuss the changes that need to occur to
resolve Servicer’s non-compliance and Purchaser’s representatives may thereafter
stay on-site, until said changes are made, to assist with the changes or to
ensure that the changes are made.

3.9      Segregation of Accounts.     At Closing and during all periods through
the Conversion Date, Servicer shall, through the continued use of Seller’s
existing bank identification numbers, maintain all information whatsoever
relating to the Accounts and Receivables in a segregated format separate and
distinct from Seller’s remaining card operations so that access to all such
information is readily available to Purchaser.  In addition, all Accounts shall
be uniquely flagged by Servicer to permit Seller to provide Purchaser with
information about, and easy access to, the

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Accounts as required by this Agreement and the Asset Purchase Agreement and to
ensure a smooth and orderly deconversion as required by Section 10.

3.10    Change in Cardholder Status.

           (A)  Bankrupt Accounts.     Upon receipt by Servicer of a petition
filed in bankruptcy by an Obligor or notice of such filing, Servicer shall
promptly: (i) status the Account with an appropriate code to indicate the filing
of such a petition, (ii) stop payments from being posted; and (iii) forward
weekly to Purchaser, via overnight delivery, in care of the individual
designated on Exhibit B, for each such affected Account, a copy of the notice of
commencement of case, including case number and type of bankruptcy, any
pleadings received, including proof of claim forms, Chapter 13 plans, a copy of
the main collection screen and comments, statements for each of the last six
months, original application, or copy thereof and a copy of any and all access
checks written against the Account within the six months prior to the
bankruptcy.  If Seller inadvertently files during the Interim Servicing Period a
proof of claim in any bankruptcy case involving an Account, in addition to any
other remedy available to Purchaser, Seller agrees to execute whatever documents
are reasonably necessary to assign the proof of claim to Purchaser.

           (B)  Death of Cardholder.     Upon receipt of a death certificate of
an Obligor or notice of such death, Servicer shall promptly:  (i) status the
Account with an appropriate code to indicate the death of such Obligor, and (ii)
forward weekly, for each Account, the death certificate, if available, the name
of the individual who notified Seller of the death, and a copy of the main
collection screen and comments to the individual designated on Exhibit B. 

           (C)  Consumer Credit Counseling Service Proposals.     Upon receipt
of a CCCS Proposal, Servicer shall promptly forward the proposal and copy of the
main collection screen and comments to the individual designated on Exhibit B
via facsimile.

4.         COVENANTS

4.1      Negative Covenants of Servicer.     Servicer hereby makes the following
covenants which shall be covenants of the Servicer throughout the term hereof:

        (A)           With respect to the Accounts and the Receivables, Servicer
shall not take any action (other than actions necessary to service the Accounts
and collect the Receivables consistent with the terms of this Agreement and the
terms of the Asset Purchase Agreement) without the prior consent of Purchaser;

          (B)          Except as provided in Section 4.1 of the Asset Purchase
Agreement, without the Purchaser’s written consent, Servicer shall not amend,
terminate, or otherwise modify any terms or conditions of any Card Agreement,
Benefit Agreement, agreement affecting any Other Enhancements or any Endorsement
Agreements, or materially affect the enforceability of any Card Agreement,
Benefit Agreement, agreement affecting any Other Enhancements or any Endorsement
Agreements;

          (C)          Servicer shall not enter into any contract, agreement, or
other arrangement with respect to the Services to be provided hereunder by
Servicer, without the express prior written consent of Purchaser; such consent
not to be unreasonably withheld by Purchaser;

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          (D)          Servicer shall not communicate with any Obligor without
the express prior written approval of Purchaser, except in the ordinary course
of business and in accordance with Servicer’s Policies and Procedures or as
required by applicable Requirements of Law; and

          (E)          Servicer shall not initiate or suggest any legal action
with respect to any Account.

4.2     Affirmative Covenants of Servicer.     Servicer hereby makes the
following additional covenants which shall be covenants of the Servicer
throughout the term hereof:

          (A)          Servicer shall provide in a timely fashion, at
Purchaser’s request, such management, delinquency and other reports for the
Accounts as may be reasonably available to Servicer;

          (B)          Servicer shall timely and fully perform, and comply with
all provisions of the Card Agreements, the Benefit Agreements (except as
otherwise provided in Section 4.1 of the Asset Purchase Agreement) and any
Endorsement Agreements;

          (C)          Servicer agrees to maintain the data communication lines,
terminals, and other hardware currently located at Servicer’s facilities so as
to give Purchaser direct access, at Servicer’s facilities, to the on-line
information required for Purchaser to conduct a complete audit in accordance
with Section 3.8;

          (D)          Servicer agrees to ensure that Purchaser has direct
“read/report only” access to the Accounts, and all of Seller’s Card Processor
reports that Seller had access to prior to the Closing Date, through two
terminals at Purchaser’s facilities that are connected to Seller’s Card
Processor’s systems and agrees to ensure that Purchaser may view and download
all Account information and said reports from said terminals during the Interim
Servicing Period.  Purchaser agrees that any cost related to the terminals or
the access to, or downloading of, Account information or reports shall be
Purchaser’s sole responsibility.  With respect to the terminals, Purchaser
agrees to abide by the security and confidentiality procedures of both Seller
and Seller’s Card Processor.  Servicer acknowledges and agrees that, during the
term of this Agreement, the security and confidentiality procedures of Seller
and Seller’s Card Processor will not obstruct, prohibit or limit Purchaser’s
ability to view and download all Account information and reports from said
terminals; and

          (E)          Servicer shall decline to authorize all properly coded
internet gambling transactions so that they do not post to the Accounts.

4.3     Credit Decisioning/Compliance with Laws.     Purchaser shall make all
credit decisions on applications forwarded to it by Servicer pursuant to Section
3.7.  Purchaser shall bear all credit risks, including, but not limited to,
compliance risks, except for any compliance violations caused by Servicer’s
delay in forwarding applications to Purchaser for decisioning.   

4.4     Mutual Covenants Concerning Property Rights.

          (A)          Except to the extent expressly provided for in Section
4.4(B) hereof, the parties to this Agreement shall regard and preserve as
confidential all information of the other party obtained pursuant to the
relationship created hereby, including without limitation, master file records
and statistical data derived therefrom, computer programs, Account information,
forms,

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documents, training materials and system documentation (the “Confidential
Information”).  Neither party shall, without first obtaining the written
permission of the other party, use for its own benefit the Confidential
Information of the other party, or disclose the Confidential Information to any
Person, except to third parties currently retained by Servicer to assist in the
performance of Servicer’s duties under this Agreement and except as may be
necessary in order to comply with legal, accounting or regulatory requirements. 
This section shall survive any termination whatsoever of this Agreement, except
as may be necessary in order to comply with legal, accounting or regulatory
requirements.

          (B)           The parties agree that information obtained pursuant
hereto shall not be Confidential Information to the extent such information: (i)
was in the receiving party’s possession or in the public domain at the time of
the disclosing party’s initial disclosure; (ii) subsequently enters the public
domain through no act or failure to act on the part of the receiving party;
(iii) is lawfully obtained by the receiving party from a third party; provided
such third party does not have a duty of confidentiality to the party owning
such information.

          (C)          Servicer and Purchaser agree that the Assets, including,
but not limited to, the master file records and any statistical or other data
whatsoever derived therefrom, Files, Cards, forms, documents and all other
information specifically related to the Accounts and the Receivables, are the
property of, and shall remain confidential to, Purchaser and shall not be
released by Servicer, its officers, directors, or employees or its agents, to
any Person without the express prior written consent of Purchaser unless
required by Requirements of Law.

5.           SETTLEMENT, REPORTS, CUSTOMER FUNDS, AND SPECIAL PROCEDURES

5.1          Settlement.

          (A)          Settlement Reports.     Servicer shall prepare and send
to Purchaser, on the next business day following file maintenance processing, by
facsimile to the individual designated on Exhibit B, the Seller’s generated
reports and statements and the Seller’s system-generated, daily management
reports relating to the Accounts and reflecting the Account credits and debits
and other items necessary to complete the settlement procedures set forth
herein, together with such additional documents and information as Purchaser may
reasonably request. 

          (B)          Settlement Statement.     Servicer shall prepare and
deliver to Purchaser (via facsimile to the individual designated on Exhibit B),
on the first business day following file maintenance processing, a settlement
statement reflecting the following data as of the completion of such file
maintenance (the form of which is attached hereto as Exhibit 5.1):

(1)

the aggregate amount paid by Servicer that day in respect of cash advances and
credit card purchases on the Accounts plus those miscellaneous debit advises
(i.e., charge backs and supporting charge back documentation with a transaction
date on or after the Closing Date); and

(2)

the aggregate amount of funds received by Servicer on behalf of Purchaser as
collections on the Receivables plus returned merchandise credits and
miscellaneous fee advises received by Servicer on such business day.  Servicer
shall use its commercially reasonable best efforts to transmit the settlement
statement to Purchaser by facsimile no later than 12:00 p.m., prevailing eastern
time.

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          If the difference between (1) and (2) above is positive (i.e., the
amount computed under (1) exceeds the amount computed under (2)), Purchaser
shall pay the amount of the difference to Servicer. 

          If the difference is negative, Servicer shall pay the amount of the
difference to Purchaser.  The party owing the amount shall pay such amount by
wire transfer of immediately available funds no later than 3:00 p.m., prevailing
eastern time, on the same day that Servicer provides the related settlement
statement to Purchaser by 12:00 p.m.

          (C)          Settlement Communication.     In addition, Servicer and
Purchaser shall each provide to the other, settlement information by phone, and
confirm via telefax if requested by either party.  Purchaser and Servicer shall
make available to each other contacts throughout their respective credit card
account operations in order to facilitate settlement.  The requirements of this
Section are subject to change as mutually agreed upon by the parties pending
further review and familiarity with Servicer’s accounting operation.

          (D)          Settlement of Interchange income.     Interchange income
shall be settled daily as mutually agreed upon between Servicer and Purchaser. 

           (E)          Segmentation.      Servicer agrees that if it is unable
to properly segment settlement information and applicable reporting materials
for the Receivables, upon Purchaser’s request, Servicer shall manually segment
the Accounts and provide to Purchaser such necessary information in accordance
with the time frames noted above.  

          (F)          Settlement of Credit Life Insurance.     On a monthly
basis, Servicer and Purchaser shall also settle the credit life insurance net
premiums billed on the Accounts.  Seller hereby assigns to Purchaser and
Purchaser shall hereby be entitled to the net premiums Seller would otherwise be
entitled to pursuant to any existing agreement of Seller’s under which credit
insurance is provided and which has been billed to each Cardholder (which shall
be an amount equal to premiums received from each Cardholders less adjustments,
and fees due Servicer’s insurance provider).

5.2          Reports.

          (A)          Servicer Reports.     Servicer shall send to Purchaser
within one (1) business day after preparation or receipt, a copy of all reports
customarily issued by or on behalf of Servicer with respect to the Accounts for
the prior day, along with such information as may be available and as may be
reasonably requested by Purchaser. All such reports shall be sent to the
individual designated on Exhibit B via facsimile and overnight mail.

          (B)          Credit Reports.     During the term of this Agreement,
Servicer shall forward to Purchaser to the individual designated on Exhibit B
via facsimile the following:

           (1)   Daily reports.  By facsimile, daily reports prepared by or on
behalf of Servicer  setting forth the following information for the Accounts:

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(a)

total dollars outstanding in the Accounts and the number of Accounts
outstanding; and

 

 

(b)

total dollars outstanding and the number of Accounts outstanding for each
delinquency level, including those Accounts that are one (1) cycle delinquent.

 

          (2)          Monthly reports.  

(a)

Via regular (overnight?)mail and facsimile, at the end of each month, a monthly
report prepared by Servicer that lists Account number and Account balance for
each Account that meets one of the following criteria:

 

 

 

(i)

bankrupt Cardholder;

 

(ii)

deceased Cardholder;

 

(iii)

consumer credit counseling participation;

 

(iv)

fraud or security related occurrence (including all applicable file
information); or

 

(v)

charged-off (including the following information regarding any transactions that
may occur after charge-off: (1) transaction date; (2) description of
transaction; and (3) amount of transaction.

 

 

 

(b)

Via mail and facsimile, at the end of each month, monthly operations reports
prepared by Servicer setting forth the following information for the Accounts:

 

 

 

 

(i)

the average credit limit;

 

(ii)

the most recent credit line increase; and behavior/FICO score distribution.

 

 

 

(c)

Via mail and facsimile, at the end of each month, a monthly report prepared by
Servicer that lists, within each delinquency level (including those that are one
(1) level delinquent)  the number of Accounts and total Account balances, with a
breakdown within each delinquency level the number of accounts and related
balances within each of the following categories:  bankruptcy, deceased,
consumer counseling programs, accounts with balances less than $500 and regular
accounts (i.e., the remaining accounts that don’t fit within one of the above
categories).

                Deliveries by mail shall be sent to the individual designated on
Exhibit B.

(C)          Customer Service Reports.     On a bi-weekly basis, Servicer shall
forward to Purchaser, via facsimile sent to the individual designated on Exhibit
B: 

(1)

Credit balance refund reports, prepared by or on behalf of Servicer, setting
forth the following information for the Accounts:

 

(a)

account number;

(b)

original credit balance due;

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(c)

dollar amount;

(d)

age of the credit balance in months; and

(e)

documentation provided for cause of credit balances beyond five (5) months of
age.

(2)          In-process customer dispute correspondence reports, prepared by
Servicer or on behalf of Servicer, by category:

(a)

Chargebacks:

 

(1) account number; (2) reference number; (3) original chargeback date; (4)
dollar amount; and (5) post and transaction dates.

(b)

Representments:

 

(1) account number; (2) reference number; (3) original chargeback date and date
of representment; (4) dollar amount; (5) representment age; and (6) resolution
(re-bill Customer or represent).

(c)

Compliance, Arbitration and Collections letters:

 

(1) account number; (2) reference number; (3) filing date and/or origination
date; (4) dollar amount; and (5) status.

          (D)          Other reports.     Purchaser may request that it receive
such reports on some other basis after evaluating the information contained in
the reports.

          (E)          Fraud Report.     Seller also agrees to provide Purchaser
at Conversion with a report that lists the Accounts where fraud or unauthorized
use has occurred, which report shall contain all of Seller’s documentation
regarding said fraud or unauthorized use.

5.3      Special Procedures.

           (A)          During the term of this Agreement, Servicer shall
designate Carolyn Newsome, at (229) 890-1111, as the contact for all collection
related questions from Purchaser.

           (B)          Servicer shall document the receipt of any post-dated
checks on the Accounts in Servicer’s collection comments and provide such
comments to Purchaser at the time of conversion.

          (C)          Servicer agrees to remove all Accounts from any auto-dial
system utilized by Servicer on the Conversion Date.

          (D)          Servicer shall respond to any credit line increase
request and credit maintenance request for any Account in accordance with
Servicer’s Policies and Procedures.

          (E)          Servicer agrees to eliminate the Accounts from any
automated line increase program on or after the Closing Date.

          (F)          Servicer agrees to eliminate the Accounts from any
program designed to, among other things, increase usage of the Accounts unless
otherwise agreed to by Purchaser. 

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          (G)          Servicer shall not provide any of the Services to any
Account after the end of the Interim Servicing Period except as required by the
Asset Purchase Agreement or as otherwise agreed to by the parties in writing.

6.           COMPENSATION

6.1         Compensation.     In consideration for Servicer’s providing the
Services described herein, Purchaser shall pay to Servicer, during the period
from Closing Date through Conversion Date, inclusive, a fee of three dollars
($3.00) per calendar month for each Billed Account outstanding during the month
(pro-rated for partial months pursuant to section 6.2).

6.2          Payment.     During the term hereof, Servicer shall invoice
Purchaser promptly after (i) the last day of each calendar month for the
compensation due Servicer pursuant to Section 6.1 for such month and (ii)
promptly after the Conversion Date for the compensation due Servicer pursuant to
Section 6.1 for the period from the end of the most recent calendar month for
which Servicer has invoiced Purchaser through the Conversion Date.  In the event
of a payment computed hereunder on a monthly basis for any period of time less
than a full month, such payment will be calculated as follows: take the prior
month’s number of Billed Accounts and multiply that by a fraction the
denominator of which is the number of days in the current calendar month and the
numerator is the number of days lapsed in the current calendar month and then
multiply that result by $3.00.  Payment shall be due no later than the five (5)
business days after receipt by Purchaser of such invoice. 

6.3          Servicer’s Delay.     In the event that Servicer fails to perform
as required by Section 10 of this Agreement and the Conversion Date agreed to by
the parties is delayed solely as a result of such failure, Purchaser, at its
option, may elect not to pay Servicer the compensation set forth in Section 6.1
for any period following such agreed upon Conversion Date, even though Servicer
remains obligated to perform the Services.

6.5          Conversion Schedule. 

          (A)          For each Conversion Schedule deadline missed by the
Servicer through no fault of Purchaser, Servicer will pay Purchaser a penalty of
$500 per day until the required material is provided to Purchaser.  The penalty
amount shall be paid to Purchaser by Servicer by the end of the month in which
the penalty amount was assessed, or at Purchaser’s option, deducted from any
future interim servicing fees.

          (B)          If Servicer fails to provide all of the information
required, or fails to provide the information in the format or manner required
and agreed to by the parties in the Conversion Schedule, in each case through no
fault of Purchaser, Servicer shall pay Purchaser the incremental costs incurred
by Purchaser as a result of such failure.  The incremental costs of Purchaser
shall be paid by Servicer within 10 business days after receipt of a reasonably
detailed invoice from Purchaser.

7.      REPRESENTATIONS AND WARRANTIES OF SERVICER

Servicer hereby represents, warrants  and covenants to Purchaser as follows:

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7.1    Appropriate Resources.      Servicer has and shall maintain throughout
the term of this Agreement all necessary facilities, manpower, equipment,
supplies, insurance, and such other resources as are necessary to provide the
Services.

7.2    Administration of Accounts; Compliance with Laws.     The Services
provided by Servicer will be performed so as to permit the administration and
operation of the Accounts in  accordance with this Agreement.

7.3    Contingency Procedures.     The contingency procedures currently used by
Servicer as disclosed to Purchaser, including but not limited to contingency
procedures for data processing, telecommunications, payment processing and
off-site maintenance and retention of Accounts and File information will
continue to be used by Servicer throughout the term of this Agreement.

7.4    Performance of Services.     Unless otherwise expressly agreed to by
Purchaser in writing, Servicer shall directly perform all Services related to
the Accounts and Receivables pursuant to systems, software, and applications
used by Servicer.  Servicer has no agreements, contracts or other understandings
or arrangements with any third party whatsoever related to the Services, the
Accounts and the Receivables, other than those agreements Purchaser has been
informed of and which are currently in effect pursuant to which such third party
performs any of the Services, processing, collection or other activity relating
to the Accounts or Receivables to be performed hereunder.

8.       TERM OF AGREEMENT

This Agreement shall become effective as of the Closing Date and shall continue
until Purchaser’s Card Processor assumes all of the Services, which is expected
to occur in the second quarter of 2003 or until such other date as mutually
agreed upon or until Purchaser designates another servicer.

9.       SERVICE TRANSFER EVENTS

The occurrence of any one or more of the following events shall constitute a
Service Transfer Event hereunder whether or not any requirement for the giving
of notice, the lapse of time or both, or any other condition has been satisfied:

          (A)          MasterCard/VISA Termination.  Servicer’s membership
and/or agreement with MasterCard and/or VISA shall be terminated or an event
shall occur which under the terms of such membership or agreement would
constitute, or upon the passage of time or the giving of notice or both would
constitute, an event of default thereunder; or

          (B)          Bankruptcy; Receivership. (1) Any governmental authority
shall: (i) adjudicate Servicer a debtor in bankruptcy; (ii) appoint a trustee or
receiver for all or a substantial part of the property of Servicer; (iii)
approve a petition for bankruptcy or reorganization pursuant to federal
bankruptcy law for Servicer; (2) Servicer shall make an assignment for the
benefit of creditors, or make an admission of inability to pay its debts
generally as they become due; or (3) the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corporation or any other governmental
authority having jurisdiction over Servicer shall assume control of or appoint a
conservator or receiver for all or substantially all of the assets of Servicer;
or

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          (C)           Breach of Agreement.     The failure to perform the
Services as provided for herein or any other material breach of any provision of
this Agreement; or

          (D)           Breach of Representations and Warranties.     Any
material breach of Servicer’s representations and warranties contained herein.

10.     DECONVERSION

In recognition of the importance of ensuring a smooth and orderly transition
that is as indiscernible to the Cardholders as practicably possible, Seller
shall use its commercially reasonable best efforts in the deconversion of the
Accounts and Receivables from the Seller’s processing system to Purchaser’s
system.  Seller agrees that it shall, at its sole cost and expense, provide or
cause Seller’s Card Processor to provide (in a timely fashion that meets all of
the deconversion timelines established by Purchaser and agreed to by Seller in
the Conversion Schedule, the form of which is attached hereto as Exhibit A) such
deconversion tapes and transmissions and other necessary materials in a form
reasonably requested by Purchaser as reasonably necessary to install and
maintain the information contained therein on Purchaser’s system.  Seller agrees
to make all such requests of Seller’s Card Processor as may be reasonably
necessary to ensure the transition of the processing of the Accounts and
Receivables to the Purchaser, which both parties agree includes having the
Seller’s Card Processor agree in writing to the Conversion Schedule the Servicer
and Purchaser agree to in accordance with the above requirements.  Seller shall,
if requested by Purchaser, participate in and attend, at Seller’s own expense,
the on-site meeting that occurs between Purchaser’s Card Processor and Seller’s
Card Processor to perform field to field mapping.

11.     INDEMNIFICATION

11.1   Indemnification of Purchaser.     Servicer agrees to indemnify, defend
and hold Purchaser, its subsidiaries, affiliates, and their respective officers,
directors and employees, harmless of and from any claim, proceeding, suit,
damage, liability, loss, cost, charge or expense or any other liability of every
nature, kind and description whatsoever (including, without limitation,
reasonable attorneys’ fees and expenses) incurred or suffered by Purchaser, by
reason of, resulting from or arising directly or indirectly out of:

          (A)          the failure by Servicer to properly perform its duties
and obligations hereunder in a timely manner through the Conversion Date
including, without limitation, the failure by the Servicer or its agents,
directors, officers, servants or employees to comply with any Requirements of
Law or with applicable MasterCard and VISA operating regulations in connection
therewith; or

          (B)          the breach of any of Servicer’s representations,
warranties, covenants or agreements contained herein.

11.2   Indemnification of Servicer.     Purchaser agrees to indemnify, defend
and hold Servicer, its subsidiaries, affiliates, and their respective officers,
directors and employees, harmless of and from any claim, proceeding, suit,
damage, liability, loss, cost, charge, or expense or any other liability of
every nature, kind and description whatsoever (including, without limitation,
reasonable attorneys’ fees and expenses) incurred or suffered by Servicer, by
reason of, resulting from or arising directly or indirectly out of:

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          (A)          the failure by Purchaser to properly perform its duties
and obligations hereunder in a timely manner through the Conversion Date
including, without limitation, the failure by the Purchaser or its agents,
directors, officers, servants or employees to comply with any Requirements of
Law or with applicable MasterCard and VISA operating regulations in connection
therewith;

          (B)          the provision of Services in a manner other than as set
forth in Servicer’s Policies and Procedures as a result of Purchaser’s request
or the express provisions of this Agreement provided that, indemnification
against Purchaser shall exist only if such Services were rendered substantially
in accordance with Purchaser’s request or the express provisions of this
Agreement; or

          (C)           the breach of any of Purchaser’s representations,
warranties, covenants or agreements contained herein.

11.3   Manner of Handling Claims. 

          (A)          Either Purchaser or Seller, as the indemnified party
pursuant to Section 11. 1 or Section 11. 2 hereof, as the case may be, shall
give prompt written notice to the other, as the indemnifying party, of any claim
by such indemnified party based on the indemnity agreements contained in this
Agreement, stating the nature and basis of the claim and the amount thereof, if
known. 

          (B)          If it is a third party claim, following receipt of such
notice, the indemnifying party shall be entitled to participate in the defense
of such claim and to the extent it shall wish to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party, and, after notice from
the indemnifying party to the indemnified party of its election to assume the
defense thereof, the indemnifying party shall not be liable to the indemnified
party for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by the indemnified party, in the conduct of the
defense thereof other than reasonable costs of investigation.  The indemnified
party shall be permitted to participate in the defense of such claim and may
retain additional counsel of its choice at its own expense.  If, however, the
defendants in such action include both the indemnifying party and the
indemnified party and the indemnified party shall have concluded that there may
be legal defenses available to it that are different from or additional to those
available to the indemnifying party, the indemnified party shall be entitled to
separate counsel, reasonably acceptable to the indemnifying party, which shall
be paid for by the indemnifying party.  An indemnifying party shall not be
liable for any claim or action settled without its consent.  The indemnified
party shall make available to the indemnifying party and its counsel and
accountants at reasonable time and for reasonable periods, during normal
business hours, all books and records of the indemnified party relating to any
possible claim for indemnification and each party hereunder will render to the
other such assistance as it may reasonably require of the other in order to
ensure the prompt and adequate defense of any suit, claim or proceeding based
upon a state of facts which may give rise to a right of indemnification
hereunder.

11.4    Subrogation.     The indemnifying party shall be subrogated to any
claims or rights of the indemnified party as against any other persons with
respect to any amounts paid by the indemnifying party under this Section.  The
indemnified party shall cooperate with the

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indemnifying party, at the indemnifying party’s expense, in the indemnifying
party’s assertion of any such claim.

11.5   Mitigation of Losses.     Each of Servicer and Purchaser shall use
reasonable efforts to minimize (and Purchaser shall cause any assignee or
transferee of its rights or obligations hereunder to use its reasonable efforts
to minimize)any losses for which any other party hereto may be liable pursuant
to this Agreement.

11.6   Survival of Representations, Warranties and Covenants.     Except as
expressly provided otherwise herein, all representations, warranties, covenants
contained in this Agreement shall survive for a period of two years after the
Conversion Date (as such term is defined in the Asset Purchase Agreement).

11.7   Survival of Indemnification and Other Limitations.     Indemnification
under this Article IX shall be subject to the limitations set forth in Section
9.4 of the Asset Purchase Agreement.

12.      ADDITIONAL PROVISIONS

12.1    Expenses.     Except as otherwise expressly set forth herein, any other
costs, expenses, or other charges incurred by either of the parties hereto shall
be borne by the party incurring such cost, expense or charge whether or not the
series of transactions contemplated hereby shall be consummated.

12.2     Notices.     Except as otherwise expressly set forth herein, any
notice, payment, demand  or any other communication required or permitted to be
given hereunder shall be in writing and delivered via by hand or overnight
courier or telefaxed to the applicable party or parties at the address indicated
below:

If to Seller:

If to Purchaser:

 

 

Southland Bank

MBNA America Bank, N.A.

c/o ABC Bancorp

1100 N. King Street

24 2nd Avenue SE

Wilmington, Delaware 19884-0144

Moultrie, Georgia  31768

 

Attn: Mike McDonald

Attn:  Jeff Fincher

Senior Vice President

Executive Vice President

Fax #:  (229) 873-4456

Fax #:  (302) 432-2957

 

 

With copies (which will not constitute notice to the parties hereto) to:

 

 

 

Steven E. Fox, Esq.

Diana Cebrick

Rogers & Hardin LLP

Counsel

2700 International Tower, Peachtree Center

 

229 Peachtree Street, N.E.

 

Atlanta, Georgia  30303

 

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or, as to each party at such other address as may be designated from time to
time by such party or parties by like notice to the other parties, complying
with this Section.  All such notices, payments, demands or other communications
shall be deemed validly given and legally effective when received.

12.3     Severability.     If any term or condition of this Agreement should be
held invalid by a court, arbitrator or tribunal of competent jurisdiction in any
respect, such invalidity shall not affect the validity of any other term or
condition hereof.  If any term or condition of this Agreement should be held to
be unreasonable as to time, scope or otherwise by such a court, arbitrator or
tribunal, it shall be construed by limiting or reducing it to the minimum extent
so as to be enforceable under then applicable law.  The parties hereto
acknowledge that they would have executed this Agreement with any such invalid
term or condition excluded or with any such unreasonable term or condition so
limited or reduced.

12.4     Specific Performance.     The parties hereto hereby expressly recognize
and acknowledge that immediate, extensive and irreparable damage would result in
the event that this Agreement is not specifically enforced.  Therefore, in
addition to, and not in limitation of, any other remedy available to Purchaser
or Servicer, subject to Section 12.12  hereof, the respective rights and
obligations of an aggrieved party hereunder shall be enforceable in a court of
equity by a decree of specific performance and appropriate injunctive relief may
be applied for and granted in connection therewith.  Such remedies and any and
all other remedies provided for in this Agreement shall, however, be cumulative
in nature and not exclusive and shall be in addition to any other remedies
whatsoever which any party may have under this Agreement or otherwise.

12.5     Entire Agreement and Amendments.     This Agreement, together with the
Asset Purchase Agreement and the Joint Marketing Agreement between Purcahser and
Seller, constitutes the entire agreement of the parties with regard to the
specific subject matter hereof and supersede all prior written and/or oral
understandings between the parties.  This Agreement may not be amended except
pursuant to a writing signed by the parties.

12.6     Waiver.     Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement.  Any waiver must be in writing and signed by the party to be charged
therewith.

12.7     Assignment.     Neither party shall assign this Agreement without the
written consent of the other and any attempted assignment without said consent
shall be null, void and without any effect whatsoever; provided, that Purchaser
may assign any or all of its rights hereunder to any affiliate or subsidiary of
MBNA Corporation, a Maryland corporation.   Any such assignment shall not
relieve Purchaser from its obligations hereunder.

12.8     Other Documents.     Any list, summary or other document provided or
delivered pursuant to this Agreement or in connection with the transaction
contemplated hereby are incorporated herein by this reference and made a part
hereof.

12.9     Construction.     The parties agree that this Agreement shall be
governed, enforced by and construed in accordance with the laws of the State of
Delaware (excepting only those conflicts of laws provisions which would serve to
defeat the operation of Delaware substantive law). 

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12.10   No Third Party Beneficiaries.     This Agreement is for the sole and
exclusive benefit of the parties hereto; nothing in this Agreement shall be
construed to grant to any person other that the parties hereto, and their
respective successors and permitted assigns, any right, remedy or claim under or
in respect of this Agreement or any provision hereof.

12.11   Further Assurances.     The parties hereto hereby agree to do such
further acts and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as either may at any time reasonably
request in order to better assure and confirm unto each party their respective
rights, powers and remedies conferred hereunder.

12.12    Counterparts.     Provided that all parties hereto execute a copy of
this Agreement, this Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same instrument.  The parties acknowledge that delivery of executed copies
of this Agreement may be effected by facsimile or other comparable means.

12.13     Headings.     The headings contained herein are included solely for
case of reference and in no way shall limit, expand or otherwise affect either
the substance or construction of the terms and conditions of this Agreement or
the intent of the parties hereto.

12.14     No Agency.     The parties agree that in performing their
responsibilities pursuant to this Agreement, they are in a position of
independent contractors.  This Agreement shall not be deemed to constitute the
parties hereto as partners or joint venturers, and neither party hereto shall be
deemed to be an agent of any nature, kind and description whatsoever of the
other.

12.15     Force Majeure.     Neither party shall be in breach hereunder by
reason of its delay in the performance of or failure to perform any of its
obligations herein if such delay or failure is caused by acts of God or the
public enemy, riots, incendiaries, interference by military authorities or any
other similar event beyond its reasonable control or without its fault or
negligence.

12.16     Time of the Essence.      Time is of the essence with respect to the
performance of this Agreement.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers  as of the
day and year first above written.

SELLER:
 

 

PURCHASER:

 
 

 

 

SOUTHLAND BANK
 

 

MBNA AMERICA BANK, N.A.

By:

/s/ KENNETH J. HUNNICUTT

 

By:

/s/ WILLIAM P. MORRISON, SR.

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

Name:

Kenneth J. Hunnicutt

 

Name:

William P. Morrison, Sr.

Title:

Authorized Representative

 

Title:

Senior Executive Vice President

19

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EXHIBIT A

Conversion Schedule

--------------------------------------------------------------------------------

EXHIBIT B

PURCHASER DESIGNATED INDIVIDUALS

3.7     Applications in Process.

Consumer credit card accounts

Commercial credit card accounts

Name

Name

Address

Address

Telephone

Telephone

Facsimile

Facsimile

3.10   Change in Cardholder Status.

(A)   Bankrupt Accounts.

Consumer credit card accounts

Commercial credit card accounts

Name

Name

Address with mailstop

Address with mailstop

Telephone

Telephone

Facsimile

Facsimile

(B)    Death of Cardholder.

Consumer credit card accounts

Commercial credit card accounts

Name

Name

Address with mailstop

Address with mailstop

Telephone

Telephone

Facsimile

Facsimile

(C)   Consumer Credit Counseling Service Proposals.

Consumer credit card accounts

Commercial credit card accounts

Name

Name

Address with mailstop

Address with mailstop

Telephone

Telephone

Facsimile

Facsimile

5.1     Settlement.

(A)    Settlement Reports. 

Consumer credit card accounts

Commercial credit card accounts

Name

Name

Address with mailstop

Address with mailstop

Telephone

Telephone

Facsimile

Facsimile

--------------------------------------------------------------------------------

(B)    Settlement Statement

Consumer credit card accounts

Commercial credit card accounts

Name

Name

Address with mailstop

Address with mailstop

Telephone

Telephone

Facsimile

Facsimile

5.2    Reports.

(A)    Servicer Reports.

Consumer credit card accounts

Commercial credit card accounts

Name

Name

Address with mailstop

Address with mailstop

Telephone

Telephone

Facsimile

Facsimile

(B)    Credit Reports. 

Consumer credit card accounts

Commercial credit card accounts

Name

Name

Address with mailstop

Address with mailstop

Telephone

Telephone

Facsimile

Facsimile

(C)    Customer Service Reports. 

Consumer credit card accounts

Commercial credit card accounts

Name

Name

Address with mailstop

Address with mailstop

Telephone

Telephone

Facsimile

Facsimile

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SCHEDULE I

CONVERSION FILE REQUIREMENTS