Contribution Agreement

Exhibit 10.14

CONTRIBUTION AGREEMENT

DATED AS OF DECEMBER ____, 2004

by and among

THE MEMBERS OF

CHURCH AND COMMERCE, LLC

AND

ADVANCE AMERICA, CASH ADVANCE CENTERS, INC.


TABLE OF CONTENTS


Page


ARTICLE I Definitions


1.1

Defined Terms

1

1.2

Referenced Terms

2


ARTICLE II Contribution of Shares


2.1

Contribution of Shares

3

2.2

Closing

3

2.3

Closing Obligations

3


ARTICLE III Representations and Warranties of the Members


3.1

Organization, Power and Good Standing

3

3.2

Financial Statements

4

3.3

Liabilities of the Companies

4

3.4

Books and Records

4

3.5

Title to Assets and Properties

4

3.6

Authority and Binding Obligation

5

3.7

Acknowledgements

5

3.8

Investment Purpose

6

3.9

Accredited Investor

6


ARTICLE IV Representations and Warranties of Advance America


4.1

Representations

6

4.2

Organization, Power and Authority of Advance America

6

4.3

Due Authorization; Binding Obligation; No Conflicts; and Consents

6


ARTICLE V Covenants of the Parties


5.1

Reasonable Best Efforts

7

5.2

Conduct of Business Pending the Closing

7

5.3

Access to the Properties and Records of the Companies

7

5.4

Power of Attorney

7

5.5

Required Approvals

8


ARTICLE VI Conditions to Obligations of Advance America


6.1

Receipt of Necessary Consents

8

6.2

Commencement of IPO of Advance America Common Stock

8


ii


6.3

Approval by Company' s Mortgage Lender

8

6.4

Resignations

9

6.5

Termination

9


ARTICLE VII Conditions to obligations of the members


7.1

Certified Resolutions

9

7.2

No Prohibition

9


ARTICLE VIII Certain actions after the Closing


8.1

Delivery of Property Received by the Members After Closing

9

8.2

Execution of Further Documents

9


ARTICLE IX Indemnification


9.1

Indemnification by the Members

10

9.2

Notification of Claims

10

9.3

Survival

11

9.4

Sole Remedy

11


ARTICLE X Miscellaneous


10.1

Amendment and Modification

11

10.2

Binding Effect; Assignment

11

10.3

Entire Agreement

11

10.4

Headings

11

10.5

Execution in Counterpart

11

10.6

Notices

12

10.7

Governing Law

12

10.8

Limitation on Rights of Other Persons

12

10.9

Severability

13

_____________________________

EXHIBITS


Exhibit A Share Ownership and Purchase Price Allocation for Shares


Exhibit A-1 Membership List as of December _____, 2004


iii


Exhibit B Property Description


Exhibit C Contracts Schedule


Exhibit D Loan Documents


iv


CONTRIBUTION AGREEMENT

This Contribution Agreement (this " Agreement" ) is made and entered into as of this ____ day of December, 2004, by and between Advance America, Cash Advance Centers, Inc., a Delaware corporation (" Advance America" ), Revocable Trust Agreement of George Dean Johnson, Jr., George Dean Johnson, Jr., Trustee; Dan C. Breeden, Jr., Trustee under Susan P. Johnson Revocable Trust dated 7/17/01; Steven A. McKenzie; Brenda G. McKenzie; Dean L. Buntrock; Rosemarie Buntrock; Charley Buntrock Zeches; Margot Weinstein; Charley Buntrock Zeches and Margot Weinstein as Co-Trustees of the Dean L. Buntrock Grandchildrens Trust dated January 1, 1997; Donovan A. Langford, III; Clayton Bunctrock; John P. Nuzzo; William M. Webster, IV; Lindsay L. Webster; George Dean Johnson, Jr., Trustee of the Irrevocable Trust Agreement dated March 15, 1999; Stewart H. Johnson; A. Foster Chapman; Dan C. Breeden, Jr., Trustee under AAI/GDJ, III Trust dated April 21, 1998; Dan C. Breeden, Jr., Trustee under AAI/SPJ Trust dated April 21, 1998; Daniel C. Breeden, Jr.; Jane J. Breeden; Jane J. Breeden as Custodian for Sally Johnson Breeden under the Uniform Gifts for Minors Act; Jane J. Breeden as Custodian for Anne Carroll Breeden under the Uniform Gifts for Minors Act; Jane J. Breeden as Custodian for Mary Nicholson Breeden under the Uniform Gifts for Minors Act; Robert A. Brannon; John T. Egeland; and Robert M. Edsel (each a " Member ," and collectively, the " Members" ).

Recitals

The Members own all of the outstanding Membership Shares (the " Shares" ) in Church and Commerce, LLC, a South Carolina limited liability company (the " Company" ) . Each of the Members desires to contribute, and Advance America desires to accept, all of the Shares of the Company, on the terms and subject to the conditions of this Agreement. For federal income tax purposes, it is intended that the contribution of the Shares to Advance America pursuant to this Agreement be treated as a tax free contribution under Section 351 of the Internal Revenue Code of 1986, as amended.

Covenants

In consideration of the mutual representations, warranties and covenants and subject to the conditions contained in this Agreement, the parties agree as follows:

ARTICLE I

Definitions

The following terms, as used herein, have the following meanings:

1.1 Defined Terms

" Financial Statements" means the financial statements (including the notes thereto) referenced in Section 3.4.

" GAAP" means the generally accepted United States accounting principles, applied on a basis consistent with the basis on which the Financial Statements were prepared but not including any accounting for ad valorem taxes which are the responsibility of, and accounted for, by Advance America as the Tenant under the Lease defined below.


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" Governmental Authority" means any foreign or United States federal, state or local governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

" HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

" Liabilities" means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, including those arising under any law, action or governmental order and those arising under any contract, agreement, arrangement, commitment or undertaking or otherwise in respect of the assets or the business of the Companies.

" Lien" means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance or other adverse claim of any kind in respect of such property or asset, other than Liens for fees, taxes, levies, duties or other governmental charges of any kind, Liens of mechanics, materialmen, laborers, employees or suppliers and similar Liens, in each case arising by operation of law incurred in the ordinary course of business for sums that are not yet due and payable or are being contested in good faith. For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any property or asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset.

" Loan Obligation" means the outstanding indebtedness of the Company, which is due under that certain Note originally executed by the Company on or about May 16, 2002 in favor of National Integrity Life Insurance Company.

" Person" means a natural person, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

" Property" means that certain parcel of real property located at Church and Commerce Streets, in the City of Spartanburg, County of Spartanburg, State of South Carolina, as more particularly described on Exhibit B attached hereto and hereby made a part hereof, together with all buildings, structures and other improvements located thereon.

1.2 Referenced Terms

Each of the following terms is defined in the Section set forth opposite such term:

Term


Section

Agreement


Caption

Closing


2.2

Closing Date


2.2

Common Stock


2.1

Company


Recitals


2


Damages


9.1

Effective Time


2.2

Indemnified Party


9.2

Indemnified Persons


9.1

Indemnifying Party


9.2

Lease


3.11

Members


Caption

Shares


Recitals


ARTICLE II

Contribution of Shares

2.1 Contribution of Shares. Subject to the terms and conditions of this Agreement, at the Closing each of the Members shall contribute and transfer to Advance America the Shares that are indicated as owned by that Member on Exhibit A attached hereto and hereby made a part hereof, and Advance America shall accept the Shares from the Members. In consideration for the Shares, Advance America shall issue to the Members an aggregate of ______ shares of fully paid, non-assessable, authorized common stock, no par value per share, of Advance America (the " Common Stock" ), as allocated to the Members as indicated on Exhibit A (the " Contribution Stock" ).

2.2 Closing. The closing of the contribution of Shares, and of the other transactions contemplated herein, will take place at the offices of Advance America, at _____ ___.m. (Eastern time), on December ___, 2004, or at such other time and place as the parties may agree (such event is referred to as the " Closing ," and such date is referred to as the " Closing Date" ).

2.3 Closing Obligations

2.3.1 The Members' Closing Deliveries . At the Closing, the Members shall deliver to Advance America assignment instruments representing the Shares and investment letters, duly executed; consent of the holder of the Loan Obligation to the transfer of the Shares, and any and all other agreements, certificates, instruments and documents that shall be reasonably required of Members under this Agreement.

2.3.2 Advance America' s Closing Deliveries . At the Closing, Advance America will deliver to the Members certificates, evidencing the Contribution Stock registered in the respective names of the Members as set forth on Exhibit A, and any and all other agreements, certificates, instruments and documents that shall be reasonably required of Advance America under this Agreement.


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ARTICLE III

Representations and Warranties of the Members

3.1 Organization, Power and Good Standing . Each Member warrants that the Company is a limited liability company, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and the Company has full limited liability and authority (i) to own or lease the assets and properties it purports to own or use, (ii) to conduct the business as it is now being conducted, and (iii) to carry out the other transactions and agreements contemplated by this Agreement. The Company has heretofore delivered to Advance America true and complete copies of its organizational documents as currently in effect.

3.2 Financial Statements . References to " Financial Statements" includes:

3.2.1 balance sheets for the Company as at December 31, 2003, and the related statements of income and equity, and cash flows for each of the fiscal years then ended.

3.2.2 balance sheet for the Company as at September 30, 2004 (" Companies' Interim Balance Sheet" ), and the related statements of income and equity, and cash flows for the nine months then ended; and

3.2.3 balance sheet for the Company as at November 30, 2004 (" Effective Time Balance Sheet" ), and the related statements of income and equity, and cash flows for the eleven months then ended.

Such Financial Statements are true, complete, and accurate in all material respects and fairly present the financial condition and the results of operations, changes in members' equity, and cash flow for the Companies as at the respective dates of and for the periods referred to in such Financial Statements, all in accordance with GAAP, subject, in the case of interim Financial Statements, to normal recurring adjustments (the effect of which will not, individually or in the aggregate, have a material adverse effect).

3.3 Liabilities of the Companies . The Company has no Liabilities except for: (i) Liabilities reflected or reserved against in the Company' s Balance Sheet, the Company' s Interim Balance Sheet, or the Effective Time Balance Sheet, (ii) current Liabilities incurred in the ordinary course of business since the date of the Company' s Interim Balance Sheet which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect.

3.4 Books and Records . All books of account, minute books, stock record books, and other records of the Company, all of which have been made available to ADVANCE AMERICA, are complete and correct in all material respects. The minute book of the Company contains materially accurate and complete records of all formal meetings held of, and formal actions taken by, each Company' s governors, managers, or members (in the case of a limited liability company) or the shareholders, the board of directors, and committees of the board of the directors (in the case of a corporation) (collectively referred to as the " Managers" ), and no formal meeting of any Managers has been held for


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which minutes have not been prepared and are not contained in such minute books. At the Closing, all of such books and records will be in the possession of the Company.

3.5 Title to Assets and Properties . The Company owns (with good and marketable title, subject only to the matters permitted by the following sentence) all the properties and assets (whether real, personal or mixed and whether tangible or intangible) that it purports to own located in the facilities owned or operated by it or reflected as owned in the books and records of the Companies, including all of the properties and assets reflected in Companies' Balance Sheet and Companies' Interim Balance Sheet (except personal property sold since the date of Companies' Balance Sheet or Companies' Interim Balance Sheet, as the case may be, in the ordinary course of business), and all of the properties and assets purchased or otherwise acquired by such Company since the date of Company' s Balance Sheet and Companies' Interim Balance Sheet (except for personal property acquired and sold since the date of Companies' Balance Sheet or Companies' Interim Balance Sheet, as the case may be, in the ordinary course of business and consistent with past practice). All properties and assets reflected in Company' s Balance Sheet and Companies' Interim Balance Sheet are free and clear of all Liens and are not, in the case of real property, subject to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except, with respect to all such properties and assets: (i) mortgages or security interests shown on Companies' Balance Sheet or Companies' Interim Balance Sheet as securing specified liabilities or obligations, with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists; (ii) mortgages or security interests incurred in connection with the purchase of property or assets after the date of Companies' Interim Balance Sheet (such mortgages and security interests being limited to the property or assets so acquired), with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists; (iii) Liens for current taxes, which are due and payable but not past due; and (iv) with respect to real property, (A) minor immaterial imperfections of title, if any, none of which is substantial in amount, materially detracts from the value or impairs the use of the property subject thereto, or impairs the operations of the Company, (B) zoning laws and other land use restrictions that do not impair the present or anticipated use of the property subject thereto, (C) that certain Lease Agreement by Company as lessor and Advance America as lessee dated September 1, 2000; and (D) those other exceptions to title as more particularly set forth in that that certain Owner' s Title Policy with an effective date of May 16, 2002, 4:06 P.M. issued by First American Title Insurance Company.

3.6 Authority and Binding Obligation . Each Member: (a) has the absolute and unrestricted right, power and authority to execute and deliver this Agreement and perform his, her or its obligations hereunder and this Agreement constitutes the legal, valid and binding obligations, subject to general equity principles, of such Member, enforceable against it in accordance with its terms, except as the same may be limited by bankruptcy, insolvency or reorganization or similar laws affecting the rights of creditors generally; and (b) owns the Shares indicated as owned by it on Exhibit A , free and clear of any Lien and such Shares are not bound by or subject to any proxy agreement, voting trust or other restriction regarding the voting thereof.

3.7 Acknowledgements . Each Member is aware and understands that (i) Advance America is relying upon the representations, warranties, and agreements set forth in this Article III in determining the applicability of certain laws and regulations to the transactions contemplated hereby and accordingly such representations and warranties shall survive the Closing; (ii) there are substantial risks incident to an investment in the Common Stock, an investment in the Common Stock is inherently speculative in


5


nature, and each Member may suffer a complete loss of investment; (iii) no federal or state agency has passed upon the Common Stock or made any finding or determination as to the fairness of this investment or the merits of the terms of the offer and the sale of the Common Stock; (iv) each Member must bear the economic risk of its investment in the shares of Common Stock for an indefinite period of time because the shares of Common Stock have not been registered under the Securities Act or any state securities law and, therefore, cannot be sold or transferred unless either they are subsequently registered under the Securities Act or an exemption from such registration is available; (v) ownership of the Common Stock is suitable only for persons who have adequate means of providing for their current needs and personal contingencies and have no need for liquidity in this investment; (vi) there is no market for the Common Stock and none is likely to develop; and (vii) the shares of Common Stock are and will be " restricted securities," as said term is defined in Rule 144 promulgated under the Securities Act.

3.8 Investment Purpose . Each Member severally is acquiring the shares of Common Stock for investment, for its own account and not with a view to distribution or resale, and is not holding all or any portion of the shares of Common Stock for any other person. Each Member shall execute an investment letter or subscription agreement that Advance America and its counsel may rely upon as to the Member' s understandings and representations in acquiring its respective Common Stock.

3.9 Accredited Investor . Each Member severally warrants it is an " accredited investor" within the meaning of Rule 501(a) of Regulation D under the Securities Act.

3.10 Real Property. The only real property owned by the Company is the Property.

3.11 Lease. The Members warrant and represent to Advance America that the only lease entered into by the Company that affects the Property is that certain Lease Agreement (the " Lease" ) between the Company, as lessor, and Advance America, as lessee, dated September 1, 2000. The Lease is an enforceable agreement of the Company. The Company has fulfilled all material obligations required to have been performed by the Company. The Company is not in material breach of or material default under the Lease, and no event has occurred that, with the passage of time or giving of notice or both, would constitute such a material breach or default, result in a loss of any material rights or result in the creation of any Lien thereunder or pursuant thereto.

3.12. Existing Contracts. The Members warrant and represent to Advance America that the schedule attached hereto as Exhibit C (the " Contracts Schedule" ) and hereby made a part hereof is true, correct and complete with respect to all service, maintenance, repair, management, supply and other contracts (including, without limitation, all service contracts of the Tenant) affecting the Property entered into by the Company.

3.13 Insurance. The Members warrant and represent to Advance America that Advance America as Tenant under the lease is responsible for maintaining such insurance policies for the Property as are customarily maintained with respect to similar properties. To each Member' s knowledge, true, correct and complete copies of all insurance policies with respect to the Property are in the possession of Advance America. No Member has received nor does any Member have knowledge of any notice or request from any insurance company requesting the performance of any work or alteration with respect to the Property.


6


3.14 Litigation. The Members warrant and represent to Advance America that there are no actions, suits or proceedings before any judicial or quasi-judicial body, by any governmental authority or other third party, pending or to the Member' s best knowledge, threatened, against or affecting all or any portion of the Property and, to the Member' s best knowledge, there is no basis for any such action. There are no action, suits or proceedings pending, contemplated or threatened by the Company in connection with all or any of the Property or the Company' s ownership, rights, use, development or maintenance thereof, including, without limitation, tax reduction proceedings; and from and after the date hereof, the Company shall not commence or allow to be commenced on its behalf any action, suit or proceeding with respect to all or any portion of the Property without the prior written consent of Advance America. No attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending, or, to the Member' s knowledge, threatened, against the Company.

3.15 Compliance with Laws. To the Members' best knowledge and as of the date possession of the Property was delivered to Advance America as Tenant under the lease, the Property was in full compliance with all existing laws, rules, regulations, ordinances and orders of all applicable federal, state, city and other governmental, authorities in effect as of the Execution Date (collectively " Laws" ), including, without limitation, (a) the Americans with Disabilities Act, 42 U.S.C. a7 12102, et seq., t ...