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COLLECTION SERVICE AGREEMENT

AGREEMENT FOR COLLECTION SERVICE

THE PROFESSIONALS AGENCY, hereinafter referred to as "AGENCY" and CLIENT NAME, hereinafter referred to as "CLIENT", agree that CLIENT's delinquent accounts (the "Accounts") placed with AGENCY are uncontested and subject to the terms and conditions of the following agreement between the parties:

1. The conduct of AGENCY in collecting the Accounts shall be in compliance with all applicable Federal, State and Local laws and shall be courteous and businesslike, consistent with the image and reputation of CLIENT.

2. Sums collected by AGENCY on Accounts shall be deposited immediately in a separate trust account maintained in a bank, the deposits of which are insured by the FDIC, for CLIENT as well as AGENCY's other clients (the "Trust Account"). AGENCY is authorized to endorse checks received from or in behalf of debtors and drawn in favor of CLIENT for deposit to the Trust Account.

3. All sums received by AGENCY on the Accounts will be remitted to CLIENT, less AGENCY's Collection Fee (as such term is defined below), on the twentieth (20th) day of each month following the previous month collections. In the event CLIENT receives any sums in payment of an Account directly from or in behalf of a debtor after AGENCY has commenced work to collect the Account, CLIENT shall report such collection to AGENCY and AGENCY shall invoice CLIENT for the amount of the Collection Fee due on its next monthly statement.

4. AGENCY will prepare a monthly statement of financial transactions containing the names of all Accounts, numbers, dates any payments were received by AGENCY or CLIENT, gross amounts of collections, and Collection Fees due AGENCY.

5. Collection Fees due AGENCY on any statement to CLIENT are due and payable upon receipt of the statement by CLIENT. AGENCY has the right to offset such fees unpaid after thirty (30) days against sums received by it on the Accounts.

6. In the event a check is received directly by CLIENT on an Account and the check is returned unpaid to CLIENT after CLIENT has paid AGENCY the Collection Fee due, CLIENT shall report such returned check to AGENCY. AGENCY will list such returned checks on the next statement as a deduction from the amount of the Collection Fee due and payable by CLIENT for that month's statement.

7. As compensation to AGENT for its services under this Agreement, the Collection Fee applicable to sums actually collected on Accounts, other than for collections involving civil litigation, whether such collections are received by AGENCY or CLIENT, shall be: for Accounts that have never been placed with a collection agency or receivables management firm previously ("First Placement Accounts"), ____% of the amount collected after the Account is received by AGENCY and AGENCY has begun to work the Account.

8. For Accounts that have previously been placed with one or more collection agencies or receivables management firms ("Secondary/Tertiary Placement Accounts"), ____% of the amount collected after the Account is received by AGENCY and AGENCY has begun to work the Account.

9. AGENCY will not institute civil legal collection action on any of CLIENT's Accounts without requesting and receiving CLIENT's permission and an Account balance verification.

10. The Collection Fee on Accounts referred for civil legal action by AGENCY shall be ____% of the amounts collected prior to or as a result of a judgment obtained through civil legal collection action referred by AGENCY. AGENCY agrees to advance all court costs on Accounts referred for civil legal collection action. CLIENT agrees that, with respect to any given Account, AGENCY may reimburse itself for such advanced court costs and shall deduct its Collection Fee out of the sums collected on such Account. The balance after such deductions shall be remitted to CLIENT. In addition, AGENCY shall retain any other amounts awarded by the court and collected from the debtor, such as attorney fees and court costs awarded by a court. AGENCY will not receive any reimbursement for court costs or other fees advanced by it with respect to Accounts for which no sums are collected on the Account.

11. AGENCY shall furnish information concerning the Accounts placed with AGENCY to any of the available Credit Bureaus (If Applicable).

12. CLIENT warrants that all Accounts placed with AGENCY are valid and legally enforceable debts and are not disputed or subject to defense, offset, set off, counterclaim or bankruptcy proceeding, unless otherwise disclosed in writing to AGENCY by CLIENT. CLIENT shall immediately notify AGENCY, in writing, of any disputes or payments or bankruptcy notifications received by CLIENT subsequent to placement of an Account with AGENCY.

13. CLIENT shall be liable for and shall indemnify, defend and save AGENCY harmless from and against any and all suits, actions, claims and demands, costs, actual damages, expenses and attorney fees incurred in connection with any Account that is disputed by the debtor or alleged to be subject to any defense, offset, set off, counter claim or bankruptcy proceeding.

14. AGENCY shall be liable for and shall indemnify, defend and save CLIENT harmless from and against any and all suits, actions, claims and demands, costs, actual damages, expenses and attorney fees to which CLIENT may be subject resulting from (i) the failure of AGENCY to perform or observe any material covenant, term or condition of this Agreement, (ii) the material breach by AGENCY of any representation or warranty made by it in this Agreement, or (iii) the reckless or willful misconduct of AGENCY, its employees or agents.

15. AGENCY is not obligated to file suit in connection with Accounts placed with it pursuant to this Agreement. AGENCY is not liable for claims that become barred by any statute of limitations while in AGENCY's possession unless AGENCY is negligent in failing to timely refer an Account for civil legal collection action. AGENCY reserves the right to close and return Accounts at such time as AGENCY makes a determination to do so.

16. CLIENT retains the right, upon 48 hours prior notice, to audit the collection practices of AGENCY for cash control, promptness of recording and remitting payments and general compliance with the terms of this Agreement.

17. This Agreement may be terminated by either party upon giving sixty (60) days prior written notice to the other party. Termination or cancellation of this Agreement by either party shall not have no effect on the collection, enforcement or validity of any accrued obligations owing between the parties, nor shall it have an effect on AGENCY's right to receive Collection Fees in connection with paying Accounts, as well as the right to recover any court costs advanced on Accounts as set forth in Section 7 hereof.

18. All notices given or required by this Agreement shall be sent by United States certified or registered mail, postage prepaid, by a nationally-recognized overnight courier service, fee prepaid, or by facsimile, any of which shall be addressed as set forth below. It is further understood that AGENCY is and will be acting and occupying the status of an independent contractor and not the status of an agent (except as defined in paragraph 7) or employee of CLIENT.

This agreement is entered into by and between AGENCY and CLIENT, THIS ______ day of ___________, 19__ by their duly authorized and empowered representatives.

___________________________ DATE:___________
CLIENT SIGNATURE

___________________________ DATE: __________
COLLECTOR SIGNATURE

rev. 3/15/1999


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