EXHIBIT 10.2
PREMIUM RECOVERIES, INC.
SERVICE AGREEMENT
This Agreement is entered into by and between Premium Recoveries, Inc., located
at 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx X, Xxxxxxxxxx, Xxxxx 00000, (hereafter the
"Agency") and Saratoga Holdings I, Inc., located at 000 Xxxxxxxx Xxx., Xxxxx
0000, Xxxxxx, Xxxxx 00000, (hereinafter the "Client"). In consideration of the
mutual covenants contained in this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:
1. Transfer of Accounts. Client shall, during the term of this agreement,
transfer certain accounts receivable (the "Accounts") to the Agency for
collection. Client agrees not to transfer any such Account(s) to any other
collection agency while the Account is in Agency's possession. Referral of
Accounts shall be at the Client's sole discretion.
2. Collection Efforts. Agency shall use reasonable efforts to effect the
collection of said Accounts referred to it by the Client. Agency agrees
that it shall comply will all provisions of the Fair Debt Collection
Practices Act (FDCPA) and all applicable state statutes.
3. Direct Payments. Client shall immediately notify Agency of all direct
payments made to them on all referred Accounts. Client understands and
agrees that full commissions are due and payable to Agency on such direct
payments. Client further agrees to indemnify Agency as detailed in
paragraph 15 below for all losses caused by Client not reporting any such
direct payments.
4. Escrow Account. All funds collected by Agency on behalf of Client shall be
deposited in Agency's escrow account. Client authorizes Agency to endorse
negotiable instruments made payable to Client for purposes of depositing
funds in said account. Any interest earned on funds shall be retained by
Agency.
5. Client Payments. Agency shall remit monies collected on the referred
Accounts during the preceding month, less commissions and associated
expenses, no later than the 15th of the following month. Agency will
provide Client with a statement summary detailing the collections for each
period. Each party shall maintain true and correct records pertaining to
the Accounts which are the subject of this agreement, and each party shall
have the right to audit sufficient to verify the accounting of all funds,
and the accuracy and appropriateness of all charges.
6. Documentation Requirements. Client acknowledges that in connection with
the collection of delinquent consumer debts, the FDCPA requires that the
Agency provide the consumer with verification of the underlying obligation
if that request is made to the Agency, in
writing, by the consumer within 30 days of our initial communication with
the consumer. The law prohibits Agency from collecting on any obligation
once a verification request is made to the Agency from the consumer, until
such time as said verification has been mailed by the Agency to the
consumer. Client acknowledges that in any situation in which it does not
provide Agency with the requested verification, Agency can no longer
legally attempt to collect the debt.
[ X ] Client agrees to designate Agency as its agent to assist in
obtaining Documentation from the originator on the Accounts. In this
event, any costs of obtaining said documentation from the
originator, not to exceed $7.50 per Account, shall be reimbursed by
the Client to the Agency. Such reimbursement shall be made from
collection proceeds on a monthly basis.
7. Skip Tracing. Agency, in the general course of its operations, provides
initial skip tracing of the Accounts, in order to locate the debtor for
whom a current address is not available. Client understands and agrees
that this process shall be limited to an automated review of certain
national databases.
[ X ] Client agrees that in the event that certain accounts require
additional and more advanced skip-tracing in order to locate the
debtor, Client will reimburse Agency for the cost of such
activities, not to exceed $3.00 per account. Such reimbursement
shall be made from collection proceeds on a monthly basis.
8. Account Returns. Agency shall return, at no charge, any account placed in
error.
9. Term of Agreement. This agreement shall be for an initial term of ______
months from the date of execution of this agreement. After the initial
term, this agreement shall continue on a month to month basis. After the
initial term, this agreement may be terminated by either party upon thirty
(30) days written notice to the other. Notice of termination shall be sent
by certified or registered mail, and by facsimile. Payment arrangements,
promises to pay, and legal accounts placed with the Agency prior to the
effective date of the termination will be retained by the Agency for
further collection, until ultimate resolution of the account.
10. Credit Bureau Reporting. Client hereby authorizes Agency, at its sole
discretion, to report to credit reporting bureaus all assigned account
information provided under this agreement. Client agrees not to report to
such credit reporting bureaus any collection account information
authorized to be reported by the Agency.
11. Settlements. Agency shall not initiate legal action nor accept settlement
on an account without prior written authorization of the Client. Legal
action will be brought in the Client's name where applicable.
Authorization by client for legal action will be on a claim by claim
basis. Client agrees to advance all court costs associated with the filing
of legal
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action on an account, and agrees that it will be reimbursed such costs if
recovered from the debtor.
12. Base Settlement Authority. Without prior notification on an individual
account basis, Client agrees to authorize Agency to settle any account
placed for a percentage of the outstanding balance equal to fifty percent
or greater.
13. Commissions. In consideration for the collection efforts of the Agency, a
commission shall be retained by Agency of thirty percent of the monies
collected from first placement efforts, and thirty percent of the monies
collected from accounts authorized for legal collection efforts.
14. Agency's Indemnification. Agency shall hold harmless and indemnify Client
from any and all liability, claim, demand, litigation, damages, or legal
fees resulting from any actions taken by Agency with regard to the
collection of accounts during the term of this agreement.
15. Client's Indemnification. Client shall hold harmless and indemnify Agency
from any and all liability, claim, demand, litigation, damages, or legal
fees resulting from any actions taken by Client with regard to the
collection of accounts prior to the date of this agreement. Client hereby
states that the information provided to Agency is true and correct to the
best of their knowledge and control, and shall hold harmless and indemnify
Agency from any and all liability, claim, demand, litigation, damages, or
legal fees resulting from the inaccuracy of such information.
16. Binding Agreement. This Agreement shall be binding upon both parties,
their heirs, executors, successors, or assigns. If any term, provision, or
condition of this Agreement shall be held invalid, void or unenforceable,
the remainder herein shall survive and remain in full force and effect.
The parties agree that any claim or action brought concerning this
Agreement shall be brought in Xxxxxxxxxx County, Texas, and agree to
forebear from filing a claim in any other jurisdiction. This Agreement
shall be governed by the laws of the State of Texas. In any litigation
arising under the terms of this Agreement, the prevailing party shall be
entitled to reasonable legal fees and expenses in addition to any amount
of the judgment.
By signing below, Client represents and warrants that they have read and
understand this Agreement.
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EXECUTED and effective this 12th day of November, 1998.
Client: Agency:
Saratoga Holdings I, Inc. Premium Recoveries, Inc.
By: /s/XXXXXX X. XXXXX By: /s/XXXXXXX X. XXXXXXX
Xxxxxx X. Xxxxx, CEO Xxxxxxx X. Xxxxxxx, Vice President
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EXHIBIT C
ASSIGNMENT AND XXXX OF SALE
The Premium Group (the "Seller"), has entered into a Purchase Agreement dated
November 12, 1998, (the "Agreement") for the sale of certain accounts receivable
described in the Purchase Agreement so dated, with Saratoga Holdings I, Inc.
(the "Buyer"), upon the terms and conditions set forth in the Agreement.
Now, therefore, for good and valuable consideration, Seller hereby sells,
assigns, and transfers to Buyer, its successor and assigns, all of the Seller's
rights, title, and interest in each and every one of the accounts described in
the Agreement.
Buyer and Seller agree that the Purchase Price shall be as stated in "Exhibit
B", the Closing Statement of the Agreement.
In witness thereof, Seller has assigned and delivered this instrument on the
12th day of November, 1998.
The Premium Group
By: /s/XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx, Managing Partner
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