Document:

Exhibit
10.7

 

MARKETING AND SERVICING AGREEMENT

 

This Marketing and Servicing Agreement (this
“Agreement”) is dated as of 27 March 2003, between BankWest, Inc., a bank
organized under the laws of South Dakota and a FDIC insured financial
institution (the “Bank”), and NCAS of Pennsylvania, LLC d/b/a National Cash
Advance, Advance America, Cash Advance Centers and Advance America (“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 Limited Liability Company authorized to do
business in the Commonwealth of Pennsylvania.

 

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, 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)                                 The Parties agree
that 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 provided,
however, that Bank agrees it will not sell, transfer, grant an interest in, or
otherwise assign any Loan to any person, company, corporation or other entity
or any parent, subsidiary or affiliate of any such person, company, corporation
or entity that directly competes with Advance America. 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, 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)                                  Advance America
shall maintain and operate stores for the purpose of marketing and servicing
the Loans.

 

(iii)                               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 (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.

 

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(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, 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
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.

 

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(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 Pennsylvania 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 **** 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 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 law. 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

 

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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 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 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
Advance America will provide Bank with a key, security code and safe
combination for each location to be held in escrow by Bank during the term of
this Agreement.

 

(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

 

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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 its 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 one hundred ten (110) Advance America locations in
the Commonwealth of Pennsylvania. Advance America agrees that it shall give
written notice to the Bank if it intends to open any additional locations in
Pennsylvania beyond the originally contemplated one hundred ten (110) 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 the term of this Agreement Bank shall have
reasonable access to list of Advance America’s locations in the Commonwealth of
Pennsylvania.

 

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 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

 

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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 Pennsylvania
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 2(f) 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)                        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.

 

(ix)                                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.

 

(x)                                   To the best of its
knowledge, the Bank represents that any and all written information and
financial statements provided to Advance

 

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America in contemplation of this Agreement
did not contain any material omissions of fact and were materially correct.

 

(xi)                                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 limited
liability company 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 Pennsylvania.

 

(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 agreement, 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).

 

(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 Pennsylvania 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 tor business during its normal business operating hours.

 

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

 

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(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 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
Commonwealth of Pennsylvania 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, 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

 

9

 

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 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

 

10

 

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 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.

 

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(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 branches 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.

 

(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

 

12

 

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 places the bank in receivership or
conservatorship or otherwise 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 or under any state law relating to receivership, liquidation or
reorganization of debts.

 

(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 inside or outside of the
Commonwealth of Pennsylvania 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
Commonwealth of Pennsylvania 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.

 

13

 

(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 one of
the following two 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; 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, Vice President and
Counsel

135 North Church Street

Spartanburg, SC 29306

Fax (864) 342-5920

 

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

 

14

 

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 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.

 

15

 

(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 Commonwealth of
Pennsylvania 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 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

 

16

 

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 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.

 

(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, Delaware or Pennsylvania 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

 

17

 

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.

 

(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.

 

18

 

9.                                      Third
Party Service Providers

 

Each Party shall be responsible for
supervising any Third Party Service Providers (as hereinafter defined) retained
by it and ensuring their compliance with this Agreement, the Bank Policies, and
the Requirements of Law. For purposes hereof, the term “Third Party Service
Provider” means any contractor or service provider retained by a Party who
provides or renders services in connection with the Loans or the activities of
such Party hereunder.

 

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.

  	
  NCAS OF PENNSYLVANIA, LLC

  
	
   

  	
  d/b/a NATIONAL CASH ADVANCE,

  ADVANCE AMERICA,

  CASH ADVANCE CENTERS and

  ADVANCE AMERICA

  

 

 

	
  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 NCAS of Pennsylvania, LLC d/b/a National Cash
Advance, Advance America, Cash Advance Centers and Advance America (“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: **** per $100.00 loaned; and

 

(b)                                 the Bank is
responsible for the first **** of loan losses as compared to revenue for the
loans retained by the Bank.

 

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

 

4.                                     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.

 

5.                                     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.

 

6.                                     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.

 

20

 

7.                                      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.

 

8.                                      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.

 

9.                                      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.

 

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

 

Maximum Loan amount—One
Thousand ($1,000.00) dollars

 

Minimum Loan amount—One
hundred ($100.00) dollars

 

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

Rollovers—None

 

****

 

****

 

Dual Loan/Customer—A
customer (social security number) will not be allowed to have more than one (1)
loan outstanding at any given time.Exhibit
10.8

 

First
Amendment to Marketing and Servicing Agreement Dated March 27,

2003, Between BankWest and NCAS of Pennsylvania, LLC
d/b/a National

Cash Advance, Advance America, Cash Advance Centers and Advance America

 

This First Amendment is between BankWest, a
bank organized under the laws of South Dakota (the “Bank”), Advance America,
Cash Advance Centers of Pennsylvania, LLC and NCAS of Pennsylvania, LLC d/b/a
Advance America, Advance America, Cash Advance Centers and National Cash
Advance which shall hereinafter collectively be referred to as (“Advance
America”).

 

Whereas the Bank and NCAS of Pennsylvania,
LLC entered into a Marketing and Servicing Agreement (the “Agreement”), dated
March 27, 2003, the terms and provisions of which set forth the respective
duties, obligations and responsibilities of the parties in connection with the
Bank making short-term small Loans to consumers.

 

And Whereas NCAS of Pennsylvania, LLC is
undertaking a rebranding effort whereby it is changing its name to Advance America,
Cash Advance Centers of Pennsylvania, LLC and as result Advance America, Cash
Advance Centers of Pennsylvania shall be the name of the entity fulfilling all
of NCAS’ duties and responsibilities under the Agreement and will be the
recipient of the Bank’s duties and responsibilities under the Agreement.  Therefore, each of the aforementioned
entities desires to enter into this First Amendment to reflect the referred to
name change.

 

Insofar as the Agreement is not inconsistent
with the terms of this First Amendment, such Agreement is made a part of this
First Amendment and is

 

 

incorporated
herein by reference. All capitalized terms used herein are not otherwise
defined are defined in the Agreement.

 

NOW, THEREFORE, in consideration of the
premises and the mutual promises, covenants and agreements set forth in this
First Amendment, the Bank and Advance America do hereby agree to amend the
following sections of the Agreement as set forth below:

 

Paragraph 1

 

This
Marketing and Servicing Agreement (this “Agreement”) is dated as of March 27,
2003, 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 Pennsylvania, LLC d/b/a Advance America, Advance
America, Cash Advance Centers, National Cash Advance (“Advance America”).

 

Additionally, wherever Advance America or NCAS is used or referred in
the Agreement it shall from November 1, 2003 forward be in reference to Advance
America, Cash Advance Centers of Pennsylvania, LLC.

 

Unless specifically amended herein, all of the terms, conditions,
provisions of the Agreement remain in full force and effort.

 

In the event of any conflict, inconsistency, or incongruity between the
provisions of this First Amendment and any of the provisions of the Marketing
and Servicing Agreement, the provisions of this First Amendment shall in all
respects govern and control.

 

	
  BankWest

  	
  Advance America, Cash Advance

  Centers of Pennsylvania, LLC

  d/b/a Advance America, Advance

  America, Cash Advance Centers,

  National Cash Advance

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  

 

 

	
   

  	
  NCAS
  of Pennsylvania, LLC

  d/b/a National Cash Advance,

  Advance America, Cash Advance

  Centers and Advance America

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

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