Exhibit
10.9


 


MARKETING
AND SERVICING AGREEMENT


 


This Marketing and Servicing
Agreement (this “Agreement”) is dated as of July 31, 2001, between BankWest,
Inc., a bank organized under the laws of South Dakota and a FDIC insured
financial institution (the “Bank”), and Advance America, Cash Advance Centers
of Georgia, Inc., a  Delaware
corporation (“Advance America”).


 


WHEREAS, the Bank is a bank organized under
the laws of South Dakota with its principal location in Pierre, South Dakota,
and insured by the FDIC, and as such, is authorized to extend credit to
borrowers, subject to federal financial institution and credit regulations in
effect and as applicable;


 


WHEREAS, Advance America is a duly authorized
and validly existing Delaware Corporation authorized to do business in Georgia.


 


WHEREAS, in accordance with its established
lending criteria as may be amended from time to time, the Bank desires to make
short-term small Loans (“Loans”) to consumers (“Borrowers”);


 


WHEREAS, Advance America desires to market and
service the Loans as the fiscal agent for the Bank, while retaining authority
and control over, and responsibility for, its own employees and methods of
operation;


 


NOW, THEREFORE, in consideration of the
foregoing and of the mutual promises contained in this Agreement, and other
valuable consideration, the sufficiency of which is hereby acknowledged, and
intending to be legally bound, the Bank and Advance America (together, the
“Parties”) agree as follows:


 


1.                                      Bank’s Making and Ownership
of Loans


 


(a)                                  The Bank in its sole discretion shall
determine all of the conditions, terms and features of the Loans, including,
without limitation, loan amounts, fees and charges, interest rates, credit
limits, credit standards and all other terms and conditions of the Loans. The
Bank shall make Loans to all Applicants (as that term is defined in Section
2(a) below) who meet such credit standards. Neither the Bank, nor Advance
America, nor their respective employees shall suggest to Applicants that Loans
are made or approved by Advance America or that Advance America (or any
employee of Advance America) can improve an Applicant’s prospect of obtaining a
Loan.


 


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(b)                                 If Bank elects to sell, transfer or
participate any Loan to a third party, then the Bank will give to Advance
America a first right of refusal to purchase, receive or participate in the
Loans. If Advance America declines to purchase, receive or participate in (or
does not exercise its right of first refusal on or before the end of the next
business day following notification by Bank to Advance America of Bank’s intent
to sell, transfer or participate) any such Loans offered, then, in its sole
discretion, Bank may sell, transfer, grant an interest in, or otherwise assign
any Loan, or any portion of any Loan, to a third party or parties. Any sale,
transfer or assignment by Bank of any such Loan shall comply with applicable
South Dakota and federal law.


 


2.                                      Advance America’s Services


 


(a)                                  General Duties of Advance America; Standards
of Performance: Advance
America shall perform all services required to market and service the Loans as
a fiscal agent for the Bank, including without limitation the establishment of
retail stores where Loan applicants (“Applicants”) may submit Loan applications
(“Applications”) and receive disclosures required by applicable law and where
Borrowers may execute and deliver Loan documentation and repay Loans. In
performing its services hereunder, Advance America shall at all times and in
all material respects comply with applicable law. Further, Advance America
shall use the documentation and follow the reasonable and lawful practices,
policies and procedures established by the Bank and communicated in writing to
Advance America from time to time (the “Bank Policies”).


 


(b)                                 Marketing of Loans:


 


(i)                                     The Bank hereby authorizes Advance America to
market and service the Loans and to use the name, and any trade name and logo,
of the Bank in connection with such marketing and servicing. Advance America
may use letters, print advertisements, the Internet and television and radio
commercials for such purposes. All advertising and promotions for the Loans
shall appropriately identify the Bank as the lender. Advance America shall
submit all advertising materials to the Bank for the Bank’s prior approval,
which shall not be unreasonably withheld.


 


(ii)                                  In connection with Advance America’s
performance of its obligations under this Agreement, it is expressly agreed
that (A) the Bank shall not hold any ownership or leasehold interest in any
Advance America store or any personal property located therein, except for
Repayment Checks, Notes (as those terms are defined in Section 2(c) below), and
cash reflecting Loan repayments as may be located at such stores from time to
time, (B) no Bank employees shall work in any Advance America store, except as
provided in Section 2(f), and


 


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(C) the
Bank shall exercise no authority or control over Advance America’s employees or
methods of operation, except as set forth in this agreement.


 


(c)                                  Servicing of Loan Applications:


 


(i)                                     Advance America employees shall take
Applications from Applicants, using an Application form approved by the Bank.
Advance America shall not discourage any prospective Applicant from submitting
an Application, and shall provide reasonable assistance to each prospective
Applicant in completing an Application. Without limiting the generality of the
foregoing, Advance America shall not discriminate against any Applicant in the
credit application process on any “prohibited basis,” as such term is defined
in the Federal Equal Credit Opportunity Act (“ECOA”) and Regulation B. Advance
America shall forward all completed Applications to the Bank (or its designated
loan processing agent) electronically, by telephone, or by appropriate means
agreeable to both Parties.


 


(ii)                                  Based upon the information provided by
Applicants to the Bank through Advance America and such other credit-related
information as obtained by Advance America at the direction of the Bank, and
pursuant to the credit granting standards adopted by the Bank, the Bank shall
be solely responsible for determining whether to extend credit to Applicants.
The Bank shall, either itself or through its designated loan-processing agent,
communicate to Advance America its credit decision on any Application, together
with the reason for any negative credit decision, electronically, by telephone
or by other means acceptable to both Parties. Advance America shall provide an
appropriately completed adverse action notice to any Applicant whose
Application is rejected by the Bank.


 


(iii)                               For each Loan to a Borrower, Advance America
shall: (A) have the Borrower sign the Note; (B) deliver a copy of the Note to
the Borrower; (C) obtain from the Borrower the executed Note, and the
Borrower’s signed, postdated personal check made payable to the Bank (the
“Repayment Check”), which Repayment Check shall be for the Total of Payments
set forth in the Agreement; and (D) upon receipt (and only upon receipt) of the
signed Note and Repayment Check, deliver to the Borrower a check,
electronically signed by an officer of the Bank in the Bank’s name for the
Amount Financed set forth on the Note (the “Proceeds Check”). In accordance with
the policy of the Bank, Advance America will not allow any Borrower to
roll-over a Loan made pursuant to this Agreement.


 


(iv)                              The Bank’s Loans hereunder shall be evidenced
by an Agreement comprised of a Consumer Loan Agreement and Federal Truth in
Lending Disclosures (collectively the “Note”). The Note shall inter alia include an arbitration
agreement, and class action participation waiver. The Note shall be


 


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electronically
signed by an officer of the Bank in the Bank’s name. The Bank solely is
responsible for ensuring that the Note complies with all applicable law.


 


(d)                                 Monitoring, Inventorying and Auditing of
Proceeds Checks: As part of
its servicing of the Loans, Advance America shall monitor and inventory the
Proceeds Checks, ensuring that all Proceeds Checks are issued as the result of
Applications approved by the Bank and are given to Borrowers for Loans.


 


(e)                                  Additional Servicing: Advance America shall perform all necessary
servicing functions with respect to the Loans. Without limiting the foregoing:


 


(i)                                     Advance America shall use its reasonable best
efforts to collect payments on the Loans prior to, at and after maturity
thereof. In collecting payments owed under the Notes, Advance America shall comply
in all material respects with applicable law, including without limitation the
Fair Debt Collection Practices Act (the “FDCPA”) and applicable debt collection
regulations and consumer protection laws applicable to Advance America in
Georgia and the Best Practices of the Community Financial Services Association
of America. Advance America shall not encourage or allow its employees to
threaten or imply that failure to honor any payment instrument in connection
with any Loan shall subject the Borrower to potential criminal prosecution that
Advance America does not reasonably believe will in fact result from such
failure. The Bank has established a standard to monitor the effectiveness of
the collection efforts of Advance America. 
The Bank requires that loan losses to the Bank on the Loans shall be
eight and one half percent (8.5%) or less of the amount of the finance charge
on the Loans, as the finance charge is disclosed in the federal Truth in
Lending box contained in the Notes (the “Loss Rate Standard”). Advance America
agrees to meet the Loss Rate Standard in its collections. If Advance America’s
collection efforts do not meet this Loss Rate Standard established by the Bank,
the Fees (as that term is defined in Section 2(g) below) to be paid Advance America
for marketing and servicing the Loans as the Bank’s fiscal agent will be
reduced by the dollar amount that the loan losses exceed the Loss Rate
Standard. The Fees will be adjusted in accordance with this Section on a
quarterly basis based on the calendar year to date loss experience.


 


(ii)                                  On each day Advance America operates its
stores for regular business, Advance America shall deposit in a Bank account
designated by the Bank (the “Bank Deposit Account”) all cash receipts for that
day and all Repayment Checks required to be deposited on that day. Advance
America shall reconcile the Bank Deposit Account on a monthly basis.


 


(iii)                               Advance America shall maintain and retain all
original Applications and copies of all Adverse Action Notices and other documents
relating to rejected Applications for the period required by applicable


 


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law. Further, Advance
America shall maintain originals or copies, as applicable, of all Applications,
Notes, Proceeds Checks, Repayment Checks and other documents provided to or
received from Borrowers (all such documents referred to collectively as “Loan
Documents”) for the period required by applicable law. Prior to repayment or
charge-off of a Loan, the Loan Documents shall be maintained by Advance America
in a secure environment. Advance America will work with the Bank’s designated
loan processing agent to ensure that the Bank is provided timely information
concerning the basis for each Adverse Action Notice relating to a rejected
Application.


 


(f)                                    Reports: Access to Stores, Books and Records
and Employees:


 


During
the term of this Agreement, both Parties shall provide the other Party data
submissions and reports reasonably required by the other Party in order to
maintain effective internal controls and to monitor results under this
Agreement, including without limitation the performance of the Loans and each
Party’s obligations hereunder. Such reports from Advance America shall include
a daily report showing Loans made, repaid and outstanding each day, as agreed
upon by the Bank and Advance America. Such reports from the Bank shall be
limited to U.B.P.R. reports, call reports, statements to shareholders and
(effective for calendar year 2002) annual audited financial statements. The
Parties agree to each provide the other with copies of their audit reports for
Advance America’s stores. Anything in this Agreement to the contrary
notwithstanding, the Parties’ obligation to provide data and reports shall be
limited to those reports which they may share with third parties consistent
with applicable laws or regulations or the policies or directives of regulators
with jurisdiction over the Parties. During the term of this Agreement, both
Parties and the agencies with regulatory authority over the Parties and their
auditors shall have reasonable access to the other party’s locations and to the
books and records of the other Party as well as the officers, employees and
accountants of the other Party for the same purposes, provided, however, that
in no event shall Advance America have access to information (in whatever form
or however obtained) beyond that available in the reports described above.


 


In
the event that Advance America becomes insolvent or otherwise ceases operations
with less than five (5) days’ notice to Bank, then Bank may enter Advance
America’s stores and have access to Advance America’s employees or former
employees for the limited purpose of taking possession of the Applications,
Notes, Repayment Checks and such other documents, books and records as Bank in
its reasonable discretion deems necessary to protect its interest in the Loans
and to provide the ongoing servicing of the Loans. The Parties agree to place a
key to each store in escrow with a mutually agreeable escrow agent, which
escrow agent shall release such keys to an authorized representative of Bank
upon written request. Upon such written request and release, the escrow agent
shall immediately notify Advance America of the request and release.


 


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(g)                                 Fee and Costs; Number of Locations:


 


(i)                                     In consideration for Advance America’s
performance of its obligations under this Agreement, the Bank shall pay Advance
America the marketing and servicing fees set forth on Exhibit A attached hereto
(the “Fees”). Advance America will be responsible for all costs associated with
its stores and its services under this Agreement, including without limitation
rental and occupancy costs; costs of up-fit and leasehold improvements; equipment
costs; processing costs; printing costs; maintenance costs; staffing costs;
taxes assessed to Advance America; signage costs; and advertising costs. In the
event Advance America becomes insolvent and cannot continue to perform its
duties and obligations under this Agreement, Bank shall have the right to
offset any fees owed to Advance America for it performance under this Agreement
against any losses Bank receives as a result thereof.


 


(ii)                                  The Parties agree that Advance America may
service and market the Loans for the Bank pursuant to this Agreement in at
least fifty (50) Advance America locations in the State of Georgia.  Advance America agrees that it shall give
written notice to the Bank if it intends to open any additional locations in
Georgia beyond the originally contemplated fifty (50) locations and will give
the Bank the right of first refusal to offer the Loans in any such new
location, on the same terms and conditions set forth in this Agreement.  If the Bank does not wish to offer Loans in
any new location, the Bank agrees that Advance America may market and service
Loans for another federally insured financial institution in that new location
or do business in some other lawful manner. During term of this Agreement Bank
shall have reasonable access to list of Advance America’s locations in the
state of Georgia.


 


3.                                      Representations and
Warranties


 


(a)                                  The Bank hereby represents and warrants to
Advance America, as of the date hereof and on a continuing basis throughout the
term of this Agreement, that:


 


(i)                                     The Bank is a duly organized and validly
existing state bank organized under the laws of the State of South Dakota, with
its headquarters office located in Pierre, South Dakota, and is legally
authorized under applicable state and federal law to conduct its business as
described and contemplated in this Agreement. The Bank is insured by the FDIC,
and has the power and authority and all requisite licenses, permits and
authorizations to execute and deliver this Agreement and perform its obligations
hereunder


 


(ii)                                  The Bank is authorized to make Loans as
contemplated by this Agreement and to contract with a third party to provide
the


 


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services that Advance
America will provide under this Marketing and Servicing Agreement.


 


(iii)                               The Bank is authorized under applicable law
to contract with a third party to provide loan processing services not covered
by this Marketing and Servicing Agreement, and transmission by and between
Advance America and such third party of information required for processing the
Loans does not violate South Dakota or Georgia state law or federal law.


 


(iv)                              The Bank is authorized under applicable law
to sell participation interest(s) in the Loans, or to sell the Loans to a third
party or third parties prior to the maturity date on such Loans.


 


(v)                                 This Agreement has been duly authorized by
the Bank’s Board of Directors, executed and delivered by the Bank and
constitutes the legal, valid and binding agreement of the Bank, enforceable
against the Bank in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other laws affecting
creditors’ rights and remedies generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).


 


(vi)                              The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
will not: (A) violate or conflict with any provision of the articles of
incorporation or other governing documents of the Bank; or (B) violate or
conflict with, constitute a breach of or default under, result in the loss of
any material benefit under, or permit the acceleration of or entitle any party
to accelerate any obligation under or pursuant to, any material mortgage, lien,
lease, agreement, instrument, order, law, arbitration award, judgment or decree
to which the Bank is a party or by which the Bank or any of its assets may be
bound.


 


(vii)                           Except as otherwise provided in Paragraph 2F
above, during the term of this Agreement, the Bank shall provide to Advance
America data submissions and reports reasonably required by Advance America and
its advisors in order to maintain effective internal controls and to monitor
results under this Agreement, including without limitation the performance of
the Loans and the Bank’s obligation hereunder.


 


(viii)                        Except as otherwise provided in Paragraph 2F
above, during the term of this Agreement, but only to the extent permissible
under applicable laws, regulations and regulatory practices, Advance America
and its auditors shall have reasonable access to the Bank’s accounting records
relating to Loans made in Georgia. Subject to the foregoing limitations,
Advance America will also have access to the officers, employees and
accountants of the Bank for the same purposes as set forth in (vii) to discuss
such records.


 


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(ix)                                There are no undisclosed formal regulatory
actions, formal investigations, or lawsuits against the Bank or its affiliates,
relating to or potentially impacting upon the marketing and servicing of the
Loans.


 


(x)                                   The Bank will inform Advance America in
writing of any changes to the conditions, terms and features of the Loans at
least thirty (30) days before they are adopted and/or implemented by the Bank,
unless such changes are mandated by applicable law, or the interpretation of
such law by federal, state, or other regulatory authorities with jurisdiction.


 


(xi)                                To the best of its knowledge, the Bank
represents that any and all written information and financial statements
provided to Advance America in contemplation of this Agreement did not contain
any material omissions of fact and were materially correct.


 


(xii)                             The Bank shall use its reasonable best
efforts to comply in all material respects with the CFSA Best Practices in
effect on the date of this Agreement, in the form provided to it by Advance
America, and any reasonable Best Practices, or modifications to such practices
approved and adopted by the Community Financial Services Association of America
(the “CFSA”) during the term of this Agreement; provided the practices comply
in all respects with applicable law, and the interpretation of such law by federal,
state, or other regulatory authorities with jurisdiction over the bank.


 


(b)                                 Advance America hereby represents and
warrants to the Bank, as of the date hereof and on a continuing basis
throughout the term of this Agreement, that:


 


(i)                                     Advance America is duly organized and validly
existing, and licensed to do business as a corporation under the laws of the
State of Delaware, and is duly qualified to do business as contemplated under
this Agreement, and in good standing in Georgia


 


(ii)                                  Advance America has the corporate power and
authority, and all requisite licenses, permits and authorizations, to execute
and deliver the Agreement and to perform its duties hereunder. This Agreement
has been duly authorized by Advance America’s Board of Directors, executed and
delivered by it and constitutes its legal, valid and binding agreements,
enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or other laws
affecting creditors’ rights and remedies generally and by general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).


 


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(iii)                               Advance America will market and service the Loans
in accordance with this Agreement and in accordance with the policies and
procedures established and approved by the Bank pursuant to this Agreement.


 


(iv)                              Advance America will operate its stores in
Georgia in accordance with this Agreement and will follow its normal operating
procedures in operating these stores, including providing adequate security
measures, hiring appropriate employees, and being open for business during its
normal business operating hours.


 


(v)                                 There are no regulatory actions, investigations,
or lawsuits against Advance America or its affiliates relating to the marketing
and servicing of the Loans.


 


(vi)                              To the best of its knowledge, Advance America
represents that any and all written information and financial statements
provided to the Bank in contemplation of this Agreement did not contain any
material omissions of fact and were materially correct. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby will not (A) violate or conflict with any provision of the
articles of incorporation or other governing documents of Advance America; or
(B) violate or conflict with, constitute a breach of or default under, result
in the loss of any material benefit under, or permit the acceleration of or
entitle any party to accelerate any obligation under or pursuant to, any
material mortgage, lien, lease, agreement, instrument, order, law, arbitration
award, judgment or decree to which Advance America is a party or by which
Advance America or any of its assets may be bound.


 


(vii)                           Advance America represents that it will
continue, to the best of its ability, to monitor lobbying efforts and all state
and federal legislation concerning the State of Georgia relating to payday
lending and/or the exportation of rates by banks, and to advise the Bank of all
such relevant legislation and lobbying activities.


 


4.                                      Indemnification


 


(a)                                  Except as to Losses for which Advance America
is indemnified by the Bank as set forth in Section 4(b), Advance America hereby
indemnifies and agrees to hold harmless the Bank, its affiliates and the
officers, directors, members, employees, representatives, shareholders, agents
and attorneys of such entities (the “Bank Indemnified Parties”) against any and
all claims, losses, liabilities, damages, penalties, demands, judgments,
settlements, costs and expenses (“Losses”) suffered or incurred by such Bank
Indemnified Parties as a result of, or with respect to, or arising from (i) any
breach by Advance America of any representation, warranty, covenant, duty or
obligation contained herein,


 


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or
any negligence or misconduct by Advance America or its employees; (ii) any
burglary, robbery, fraud, or theft at the Advance America locations marketing
and servicing the Loans; (iii) any claim or allegation made by or on behalf of
any Applicant or Borrower arising from or relating to the Loans in which the
Bank is named a party and where Advance America and not the Bank is found to have
acted in violation of the law. Notwithstanding the foregoing, there shall be no
indemnification under this Agreement for: (A) Losses caused by the Bank’s
breach of this Agreement (including but not limited to the breach by the Bank
of any representation, warranty, covenant, duty or obligation contained
herein); (B) Losses caused by the burglary, robbery, fraud, theft, negligence
or misconduct of the Bank or its employees; (C) Losses resulting from any
claim, investigation or allegation made by any regulatory or governmental
authority or agency arising from or relating to the Loans; (D) Losses arising
from the settlement of any claim, or a judgment or ruling by a court,
arbitrator or regulatory authority on such claim, that the Bank has violated
state or federal usury laws, state or federal consumer protection laws, state
or federal racketeering laws (including the federal Racketeering Influenced and
Corrupt Organizations Act), or federal Truth in Lending laws, or is liable for
fraud or unconscionability; (E) the loss of the Bank’s South Dakota bank
charter, or the loss of any license or permit required by the Bank to transact
business as a federally insured financial institution; (F) claims that any Bank
Indemnified Party is in violation of federal or state securities or corporate
laws; (G) claims brought by employees or shareholders of any Bank Indemnified
Party; (H) a decline in the value of the stock of any Bank Indemnified Party;
(I) adverse publicity or customer relations problems encountered by any Bank
Indemnified Party; (J) non-monetary sanctions by any court or regulatory
agency; (K) loss of non-Loan related business or profits of any Bank
Indemnified Party; (L) management time relating to attending hearings and
meetings with respect to indemnified matters; or (M) any action by Advance
America against Bank.


 


(b)                                 Except as to Losses for which Bank is
indemnified by Advance America as set forth in Section 4(a), the Bank hereby
indemnifies and agrees to hold harmless Advance America, its affiliates, and
the officers, directors, members, employees, representatives, shareholders,
agents and attorneys of Advance America and its affiliates (the “Advance
America Indemnified Parties”) against any and all Losses suffered or incurred
by such Advance America Indemnified Parties as a result of, or with respect to,
or arising from (i) any breach of this Agreement by the Bank (including, but
not limited to the breach by the Bank of any representation, warranty,
covenant, duty or obligation contained herein); (ii) any burglary, robbery,
fraud, theft, negligence or misconduct by the Bank or its employees; or (iii)
any error or omission in the information or services rendered by any other
third party with whom the Bank contracts to provide services not covered by
this Agreement, including loan processing services. Notwithstanding the
foregoing, there shall be no indemnification under this Agreement for: (A)
Losses caused by Advance America’s breach of this Agreement (including but not
limited to the breach by


 


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Advance
America of any representation, warranty, covenant, duty or obligation contained
herein); (B) Losses caused by burglary, robbery, fraud, or theft at the Advance
America locations marketing and servicing the Loans by persons other than the
Bank or its employees; (C) negligence or misconduct of Advance America or its
employees; (D) Losses resulting from any claim, investigation or allegation
made by any regulatory or governmental authority or agency arising from or
relating to the Loans; (E) Losses arising from the settlement of any claim, or
a judgment or ruling by a court, arbitrator or regulatory authority on such
claim, that Advance America has violated state or federal usury laws, state or
federal consumer protection laws, state or federal racketeering laws (including
the federal Racketeering Influenced and Corrupt Organizations Act), or federal
Truth in Lending laws, or is liable for fraud or unconscionability; (F) claims
that any Advance America Indemnified Party is in violation of federal or state
securities or corporate laws; (G) claims brought by employees or shareholders
of any Advance America Indemnified Party; (H) a decline in the value of the
stock of any Advance America Indemnified Party; (I) adverse publicity or
customer relations problems encountered by any Advance America Indemnified
Party; (J) non-monetary sanctions by any court or regulatory agency; (K) loss
of non-Loan related business or profits of any Advance America Indemnified
Party; (L) management time relating to attending hearings and meetings with
respect to indemnified matters; or (M) any action by the Bank against Advance
America.


 


(c)                                  The Bank Indemnified Parties and the Advance
America Indemnified Parties are sometimes referred to herein as the
“Indemnified Parties” and Advance America or the Bank, as indemnitor hereunder,
is sometimes referred to herein as the “Indemnifying Party.”


 


(d)                                 Any indemnified Party seeking indemnification
hereunder shall promptly notify the Indemnifying Party, in writing, of any
indemnified Loss hereunder, specifying in reasonable detail the nature of the
Loss, and, if known, the amount, or an estimate of the amount, of the Loss,
provided that failure to promptly give such notice shall only limit the liability
of the Indemnifying Party to the extent of the actual prejudice, if any,
suffered by such Indemnifying Party as a result of such failure. The
Indemnified Party shall provide to the Indemnifying Party as promptly as
practicable thereafter information and documentation reasonably requested by
such Indemnifying Party to support and verify the claim asserted.


 


(e)                                  The Indemnifying Party may assume the defense
of a claim that they are indemnifying, or prosecute a claim resulting from such
indemnified claim, and may employ counsel chosen by the Indemnifying Party
(which counsel shall be reasonably acceptable to the Indemnified Party), at the
Indemnifying Party’s sole cost and expense. The Indemnified Party shall have
the right, at its own expense, to employ counsel separate from counsel employed
by the Indemnifying Party in any such action and to participate therein. The
Indemnifying Party shall not be liable for any settlement of any claim affected


 


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without
its prior written consent, which shall not be unreasonably withheld. However,
if the Indemnifying Party does not assume the defense or prosecution of a claim
within thirty (30) days after notice thereof, the Indemnified Party may settle
such claim without the Indemnifying Party’s consent. The Indemnifying Party
shall not agree to a settlement of any claim which provides for any relief
other than the payment of monetary damages by the Indemnifying Party without
the Indemnified Party’s prior written consent, which shall not be unreasonably
withheld. Whether or not the Indemnifying Party chooses to so defend or
prosecute such claim, all the Parties hereto shall cooperate in the defense or
prosecution thereof and shall furnish such records, information and testimony,
and attend such conferences, discovery proceedings, hearings, trials and
appeals, as may be reasonably requested in connection therewith, all at the
Indemnifying Party’s sole cost and expense.


 


(f)                                    The Parties agree that, if both Parties are
named as defendants in the same lawsuit, arbitration or other proceeding, the
Parties may enter into a Joint Defense Agreement reasonably acceptable to the
Parties, provided that any such Joint Defense Agreement shall not preclude any
Party from asserting any counterclaims, cross-actions or third-party claims to
which it may be entitled.


 


(g)                                 The Parties agree that, if both Parties are
named as defendants in the same lawsuit, arbitration or other proceeding, and
such lawsuit, arbitration or other proceeding does not arise from any
negligence, misconduct, error or omission of either Party, the Parties will
equally share any and all fees, expenses, costs, losses or judgments as a
result thereof.


 


5.                                      Termination


 


(a)                                  The term of this Agreement will be for an
initial period of three (3) years from the date of this Agreement.


 


(b)                                 This Agreement shall terminate upon (i) 180
days written notice of termination from either Party to the other Party: (ii)
upon an Event of Default (as defined below) that is not cured after notice is
given as provided in Section 5(c); (iii) upon a material decrease in the fees
and/or interest that can be charged by the Bank on the Loans pursuant to a
change in federal or state law or the interpretation thereof by a regulatory
agency or a court of competent jurisdiction asserting jurisdiction as to that
issue; or (iv) upon the termination by the Bank’s designated loan processing
agent of the Bank’s agreement with such agent to provide the services
contemplated in this Agreement, through no fault of Advance America, if the
termination of such agreement results in the inability of Advance America to
market and service the Loans in its stores for a period of five (5) or more
business days. In the event this Agreement is terminated pursuant to (iii) above,
the Parties agree to negotiate in good faith as to the terms of a new
agreement.


 


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(c)                                  Upon the occurrence of an Event of Default
(as hereinafter defined) by either Party, the other Party may terminate this
Agreement by giving written notice at least thirty (30) days in advance of
termination and an opportunity for the defaulting Party to cure the Event of
Default, provided that: (i) the non-defaulting Party may suspend its
performance under this Agreement during the thirty (30) day period prior to any
cure of the Event of Default; and (ii) the thirty (30) day written notice
requirement shall not apply if the Event of Default is the Bank’s failure to
fund a Loan marketed by Advance America that meets the criteria established by
the Bank for Loans.


 


(d)                                 It shall constitute an Event of Default by
the Bank hereunder if: (a) the Bank shall be in material breach of any duty,
obligation, Representation, Warranty or covenant hereunder or if the Bank fails
to make any payment due hereunder; (b) Advance America has not defaulted
hereunder and the Bank nonetheless discontinues making Loans; (c) the Bank
shall fail to fund a Loan marketed by Advance America which meets the criteria
established by the Bank for Loans; or (d) the Bank shall file for protection
under any state or federal liquidation provision, or if the FDIC or any other
regulatory authority takes control of the Bank.


 


(e)                                  It shall constitute an Event of Default by
Advance America hereunder if: (a) Advance America shall be in material breach
of any duty, obligation, Representation, Warranty, or covenant hereunder; (b)
the Bank has not defaulted hereunder and Advance America nonetheless
discontinues marketing and servicing the Loans; or (c) Advance America files
for protection under any chapter of the federal Bankruptcy Code.


 


(f)                                    In the event an act of God or other natural
disaster makes the carrying out of this Agreement impossible, or if a Party’s
performance hereunder is rendered illegal or is materially adversely affected
by reason of changes in Law (either federal or state) applicable to the Loans
or to either Party hereto, or if a Party is advised in writing by any
regulatory agency having or asserting jurisdiction over such Party or the Loans
that the performance of its obligations under this Agreement is or may be
unlawful or constitutes or may constitute an unsafe or unsound banking practice
or that such activity may jeopardize such Party’s standing with or applicable
rating from such regulatory agency, then the Party unable to perform, or whose
performance has been rendered illegal or who has been so advised by a
regulatory agency, may terminate this Agreement by giving written notice at
least ninety (90) days in advance of termination to the other Party, unless
such changes in the Laws or communication from such regulatory agency require
earlier termination, in which case termination shall be effective upon such
earlier required date.


 


(g)                                 The Bank may terminate this Agreement on
sixty (60) days written notice to Advance America in the event the Bank becomes
aware of any adverse legal, regulatory or other developments (either federal or
state), whether


 


13

















 


inside
or outside of the state of Georgia and regardless of whether they involve
Advance America or the Bank, related to type of program contemplated by this
Agreement and which could have a material adverse impact on the Bank, its rate
of return for the Loans or its litigation or risk exposure.


 


(h)                                 Advance America may terminate this Agreement
on sixty (60) days written notice to the Bank in the event Advance America
becomes aware of any adverse legal, regulatory or other developments (either
Federal or State), whether inside or outside of the State of Georgia and
regardless of whether they involve Advance America or the Bank, related to the
type of program contemplated by this Agreement and which could have a material
adverse impact on Advance America, its fees for the Loans or its litigation or
risk exposure.


 


(i)                                     Bank may terminate this Agreement upon sixty
(60) days written notice in the event that Advance America is sold to a
non-affiliated third party.


 


(j)                                     Sections 4 through 8 hereof shall survive the
termination of this Agreement.


 


(k)                                  Bank may terminate this Agreement upon sixty
(60) days written notice in the event that any two of the following three key
persons are for any reason no longer actively engaged in the day-to-day
management of the business affairs of Advance America: William M. Webster, IV;
Brendan L. Carpenter; John T. Egeland.


 


6.                                      Notice


 


Any
notice hereunder by either Party shall be given to the other Party at its
address set forth below or at such other address designated by notice in the
manner provided in this Section 6, by personal delivery, certified mail or
overnight courier, or by facsimile with a confirmation copy by first class
mail, postage prepaid. Such notice shall be deemed to have been given when
received. Unless otherwise agreed, notice shall be sent to the contact persons
at the addresses or facsimile numbers, as the case may be, set forth below:


 


If
to Advance America:


 


William
M. Webster, IV, President


S.
Sterling Laney III, Esquire


961
East Main Street


Spartanburg,
SC 29302


Fax
(864) 580-5454


 


14

















 


With
a copy to:


 


Robert
M. Buell, Esquire


Bowman
and Brooke, LLP


Riverfront
Plaza West Tower


901
East Byrd Street


Suite
1500


Richmond,
VA 23219-4027


 


John
C. Stophel, Esquire


Chambliss,
Bahner & Stophel P.C.


1000
Tallan Square, Two Union Square


Chattanooga,
TN 37402-2500


 


If
to the Bank:


 


Charles
H. Burke III, President/CEO


Bank
West


420
South Pierre Street


Pierre,
SD 57501


 


With
a copy to:


 


Timothy
M. Engel, Esquire


503
South Pierre Street


P.O.
Box 160


Pierre,
SD 57501-0160


 


7.                                      Confidentiality and Use of
Customer Information; Non-Solicitation of Employees


 


(a)                                  Advance America agrees that all information
received by Advance America from the Bank or from any other source on the
Bank’s behalf pursuant to this Agreement is “Confidential Information” and
shall be maintained in confidence and not disclosed, used or duplicated by
Advance America except as described in this paragraph. Confidential information
includes, without limitation, all lists of customers, former customers, applicants
and prospective customers and all information relating to and identified with
such person.


 


(b)                                 Advance America may use Confidential
Information in connection with its performance under this Agreement, and
Advance America may disclose Confidential Information to its affiliates who may
also use the Confidential Information to the same extent which Advance America
may use and disclose the Confidential Information. Further, Advance America may


 


15

















 


disclose
and use the Confidential Information in its ordinary course of business in
order to service and carry out its duties under this Agreement. Any
Confidential Information shall be returned to the Bank as requested by the Bank
once the services contemplated by this Agreement have been completed.


 


(c)                                  Except as set forth and authorized under the
Agreement, Advance America shall not advertise, market or otherwise make known
to others any information relating to the subject matter of this Agreement.
Except as set forth in this Agreement, if requested by the Bank, any employee,
representative, agent or subcontractor of Advance America shall enter into a
non-disclosure agreement with the Bank to protect the Confidential Information
satisfactory to the Bank.


 


(d)                                 The Bank agrees not to target the Borrowers
for any solicitation of any product or service, and not to provide any Customer
or Confidential Information to any person or entity not a party to this
Agreement, except to the extent required under applicable law or judicial,
administrative or regulatory process or except incident to its normal marketing
efforts in the State of South Dakota, without the prior written consent of
Advance America.  The Bank shall use
reasonable care to ensure that its agents do not violate this provision.  In addition to the above, the Parties
specifically agree that they will not sell any customer list originated from
the acts contemplated by this Agreement for the state of Georgia to any third
parties.


 


(e)                                  The Bank and Advance America agree to treat
in confidence the provisions of this Agreement and all documents, materials and
other information related to this Agreement, which shall have been obtained
during the course of the negotiations leading to, and during the performance of,
this Agreement (collectively, “Confidential Information”), and not to
communicate Confidential Information to any third party, except that
Confidential Information may be provided to a Party’s affiliates, as such term
is defined in the Securities Exchange Act of 1934, regulatory authorities,
counsel, accountants, financial or tax advisors without the consent of the
other Party, provided that such parties agree to hold such Confidential
Information in confidence.  As used
herein, the term “Confidential Information” shall not include any information
which (i) is or becomes available to a Party (the “Restricted Party”) from a
source other than the other Party, (ii) is or becomes available to the public
other than as a result of disclosure by the Restricted Party or its agents, or
(iii) is required to be disclosed under applicable law or judicial,
administrative or regulatory process (but only to the extent it must be
disclosed).


 


(f)                                    The Parties agree that monetary damages would
not be adequate compensation in the event of a breach by a Restricted Party of
its obligations under this Section 7 and, therefore, the Parties agree that in
the event of any such breach the Restricted Party, in addition to its other
remedies at law


 


16

















 


or
in equity, shall be entitled to an order requiring the Restricted Party to
specifically perform its obligations under Section 7 or enjoining the
Restricted Party from breaching Section 7, and the Restricted Party shall not
plead in defense thereto that there would be an adequate remedy at law.


 


(g)           Each Party agrees that it shall not
directly or indirectly solicit, hire or otherwise retain or engage, whether as
an employee, independent contractor or otherwise, any employee or other personnel
of the other Party.


 


8.                                      Miscellaneous


 


(a)                                  Neither the existence of this Agreement, nor
its execution, is intended to be, nor shall it be construed to be, the
formation of a partnership, association, or joint venture between the Bank and
Advance America. In fulfilling its obligations pursuant to this Agreement, each
Party shall be acting as an independent contractor.  The Parties agree not to hold themselves out to the public as
doing business together in any other capacity. Neither Party is granted any
right or authority to assume or to create any obligation or responsibility,
express or implied, on behalf of or in the name of the other Party, except as
expressly provided in this Agreement. 
Each Party shall be responsible only for its obligations and liabilities
as set forth in this Agreement.


 


(b)                                 This Agreement and the other Agreements
supersede any negotiations, discussions or communications between the Bank and
Advance America and constitute the entire agreement of the Bank and Advance
America with respect to the Loans and the Loan Documents.


 


(c)                                  Advance America shall on a timely basis
provide the Bank with its monthly financial statements, and its annual audited
financial statements. The Bank shall on a timely basis provide Advance America
with its quarterly financial statements, and its annual financial statements.


 


(d)                                 To the extent permissible by applicable law,
the Parties agree to promptly notify each other in the event either Party
becomes aware of any threatened or actual investigation, regulatory action,
allegation, arbitration or lawsuit pertaining to the Loans or this Agreement or
any similar marketing and servicing agreement of third parties.


 


(e)                                  Failure of any Party to insist, in one or
more instances, on performance by any other Party in accordance with the terms
and conditions of this Agreement shall not be deemed a waiver or relinquishment
of any right granted hereunder or of the future performance of any such term or
condition or of any other term or condition of this Agreement unless and to the
extent that such waiver is in a writing signed by or on behalf of the Party
alleged to have granted such waiver.


 


17

















 


(f)                                    Any written notice or demand to be given
under this Agreement shall be duly and properly given if delivered as described
in Section 6 herein.


 


(g)                                 This Agreement and the rights and duties
described herein shall be governed by, and interpreted in accordance with, the
laws of the State of South Dakota without regard to the conflicts of law
provisions of South Dakota or Georgia and, where applicable, Federal Law.


 


(h)                                 Any action or proceeding seeking to enforce
any provision of, or based on any right arising out of, this Agreement must be
brought against any of the Parties in the courts of Minnehaha County South
Dakota or, if it has or can acquire jurisdiction, in the United States District
Court for the District of South Dakota, and each of the Parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to such venue.


 


(i)                                     Advance America shall not assign or delegate
any of its rights and/or obligations hereunder without the Bank’s prior written
consent, which consent shall not be unreasonably withheld. The Bank shall not
assign any of its rights and/or obligations hereunder to any other party
without Advance America’s prior written consent, which consent shall not be
unreasonably withheld.


 


(j)                                     The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.


 


(k)                                  This Agreement may be executed by the Parties
in separate counterparts, each of which shall be an original, but all of which
together shall constitute one and the same document.


 


(l)                                     Advance America shall use its reasonable best
efforts to train and supervise its employees to act in conformity with the Bank
Policies provided in writing to Advance America by the Bank and the
requirements of applicable law pertaining to their duties.


 


(m)                               Neither Party shall take or omit to take any
action that would cause such Party to violate any of its representations or
warranties hereunder.


 


(n)                                 The Bank shall forward to Advance America
within five (5) business days of receipt any written notices it receives that
bankruptcy proceedings have been initiated with respect to any person known to
be a Borrower.


 


(o)                                 This Agreement may only be amended or
modified by the written agreement of both Parties.


 


18

















 


(p)                                 This Agreement shall be binding upon and
inure to the benefit of the Parties hereto, their respective heirs,
representatives, agents, insurers, successors and assigns.


 


(q)                                 The provisions of this Agreement are
severable, and in the event that any portion of this Agreement shall be
adjudged to be invalid or unenforceable, such adjudication shall have no effect
on any remaining portions hereof, and all such provisions shall remain in full
force and effect.


 


(r)                                    The Parties agree that upon the request of
any one of them, they will execute and deliver any such further documents and
undertake any such further action as may reasonably be required to fully
implement the terms of this Agreement.


 


IN WITNESS WHEREOF, the Bank and Advance
America, intending to be legally bound hereby, have caused this Agreement to be
executed by their duly authorized officers as of the day and year first set
forth above.


 


 


	
  BANKWEST,
  INC.

  	
  ADVANCE
  AMERICA,

  CASH ADVANCE CENTERS

  OF GEORGIA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  CHARLES H. BURKE, III

  	
   

  	
  By:

  	
  /s/
  WILLIAM M. WEBSTER, IV

  	
   

  
	
  Charles H. Burke, III

  	
  William M. Webster, IV

  
	
  Its: President and C.E.O.

  	
  Its: President

  
						



 


19

















 


EXHIBIT “A”


 


COMPUTATION
OF SERVICING FEES


 


1.                                         This
is Exhibit “A” to that certain Marketing and Servicing Agreement (the
“Agreement”) between BANKWEST (the “Bank”), and ADVANCE AMERICA, CASH ADVANCE
CENTERS OF GEORGIA, INC. (“Advance America”). 
All capitalized terms used herein and not otherwise defined are defined
in the Servicing Agreement.


 


2.                                         As
Advance America’s sole compensation under the Servicing Agreement, the Bank
shall pay Advance America marketing and servicing fees as follows:


 


(a)          For
Loans retained by the Bank and collected: $13.80 per $100.00 loaned (the Bank
is responsible for the first eight and one half (8.5%) percent of loan losses
as compared to revenue for the loans retained by the Bank); and


 


(b)         For
Loans purchased by Advance America and collected: $16.40 per $100.00 loaned
(the Bank is relinquished of any losses associated with the loans purchased by
Advance America, or any third party).


 


The Bank and Advance America agree to
increase/decrease these fees upon a change in the Finance Charges agreed upon
by the parties, and/or mandated by applicable law, or the interpretation of
such law by federal, state, or other regulatory authorities with jurisdiction.


 


3.                                         The
Bank agrees to initially retain one hundred percent (100%) of the value of
Loans originated pursuant to this Agreement. If the Bank desires to change its
position regarding the Loans retained by the Bank it agrees to give Advance
America thirty (30) days’ written notice of such change.


 


4.                                         The
Fees shall he paid two (2) times per month, payable within one (1) day after
receipt of invoices therefore delivered by Advance America to the Bant (the
“Invoice(s)”).


 


5.                                         Each
Invoice shall show (a) the fees and charges actually received by the Bank
during the calendar month on Loans that were repaid in full during such month;
and (b) the Fees owed by the Bank to Advance America.


 


6.                                         Advance
America will be responsible for all costs associated with its storefronts and
its services under the Servicing Agreement, including without limitation rental
and occupancy costs; costs of up-fit and leasehold improvements; equipment
costs; processing costs; insurance; printing costs; taxes; maintenance costs;
staffing costs; signage costs; legal fees; and advertising costs.


 


7.                                         The
Bank shall be responsible for paying all fees and costs incurred on any bank
accounts which are held in the Bank’s name, from which Proceed Checks are
written or into which Repayment Checks or Loan repayments are deposited.


 


8.                                         The
Bank is responsible for all charges and expenses of its designated loan
processing agent, initially Tele-track, in connection with the Loans on a
monthly basis during the term of this Agreement.


 


9.                                         Advance
America and the Bank will evenly divide revenues derived from the collection of
NSF Fees paid by the customer in connection with the Loans on a monthly basis
during the term of this Agreement.


 


10.                                   The
Bank allows and will be reimbursed for funds used for petty cash purposes at
the Advance America locations by a reduction, which will be noted separately,
in the Marketing and Servicing Invoice.


 


11.                                   The
Bank allows the Advance America locations to "cash" a check made
payable to a customer if the Advance America location has sufficient funds to
do so and if preferred by the customer.


 

















 


12.                                   Advance America and the Bank
agree to the following terms for a customer Loan:


 


Maximum
Loan amount—One thousand ($500.00) dollars


Fee—Seventeen
($17.00) dollars per one hundred ($100.00) dollars loaned.


Rollovers—None


Consecutive
transactions—Ten
(10)


Cooling
off period—Next
business day after the tenth (10th) transaction.


Write-offs—A
customer will be written-off if they fail to pay at least fifteen (15%) percent
of the "original amount" every sixty (60) days where the
"original amount" is the face value of the check made payable to the
Bank by the customer when the loan was originated


Dual
loan/customer—A customer (social security number) will not be allowed to have
more than one (1) loan outstanding at any given time