AGREEMENT
THIS AGREEMENT ("Agreement"), is made and entered into as of this 7th day of
September, 2005, by and between Credex Corporation (a Florida corporation),
located at 000 X. Xxx Xxxx Xxx., Xxxxx 0, XxXxxx, XX 00000, hereinafter
referred to as "CRE" and xxx Collections, Inc. (a Florida Corporation),
located at XXXXX X. Xxxxx Xxxxxx, Xxxxxx Xxxx, XX 00000, hereinafter referred to
as "XXX".
RECITALS
WHEREAS, CRE is in the business of purchasing, managing and reselling
portfolios of non-performing and re-performing major credit card debt;
WHEREAS, XXX is a Florida licensed debt collection business; WHEREAS, CRE
wishes to utilize the services of XXX as a
collection agency and XXX wishes to become a collection agent for CRE;
NOW, THEREFORE, in consideration of the mutual promises herein contained, the
parties hereto hereby agree as follows:
1. APPOINTMENT OF XXX
Upon the execution of this Agreement by both parties, CRE appoints XXX as a
collection agency for CRE.
2. Acquisition of Portfolios
CRE will acquire portfolios of non-performing major credit card debt (Visa,
Master Card, etc.). The account balances (face amounts) will be in the range of
approximately $2,000 per account. They will be considered "One Agency"
receivables that are one to two years old from the date the accounts were
determined to be non-performing by the credit card issuers. ("One Agency" means
that the accounts have been processed by not more than one agency for collection
in the past). The typical portfolio will consist of several hundred to several
thousand accounts. At all times, CRE will be the sole owner of the accounts
until they have either been collected or sold.
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CRE will be responsible for obtaining as much existing information, in hard copy
form, as possible on each debtor file when the accounts are purchased, storing
same for ready access and alerting XXX as to which files do not have proof that
the debtor signed the application for the credit card account or other proof
such as copies of check payments on the account(s), etc. It is agreed between
the parties that no legal action will be attempted against any debtor for which
CRE has no written proof of the debt.
3. ASSIGNMENT OF RIGHT TO COLLECT
CRE will assign the exclusive right to collect those accounts that have been
assigned to XXX.
4. BANK ACCOUNT(S)
CRE will open and maintain a commercial bank account at Wachovia National Bank
that is separate from its operating account. This account will be used to
deposit collections from debtors only, whose accounts are owned by CRE and will
be used to disburse commissions to XXX, purchase additional portfolios and
transfer any remaining balances to the operating account of CRE at its sole
discretion. XXX will be provided with deposit forms in order for XXX to make
deposits of the collections payable to CRE.
5. COLLECTION ACTIVITY
XXX, at its sole discretion, will manage the collection of accounts assigned to
it by CRE. XXX will, at all times, supervise all of its employees that are
engaged in the collection process to insure that they conduct their
communications with debtors in accordance with the Fair Debt Collection
Practices Act and the consumer collection practices of Florida Statutes, Title
XXXIII, Chapter 559, Part VI. XXX, at its expense, will be responsible for
obtaining background information including credit reports sufficient to
determine the debtors ability to pay or not pay. Accounts deemed uncollectible
by XXX will be returned to CRE for resale or abandonment.
CRE will be responsible for providing the debtors with the initial written
notice that it now owns the debt, that XXX has been assigned to collect the
debt and that the payments be made to CRE and mailed to a XX Xxx # (xx xx
xxxxxxxxxx), Xxxxxx Xxxx, XX. The PO box will be rented by CRE with a key
provided to XXX for its use to receive debtors payments.
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CRE will, at its expense, be responsible for reporting payment information to
the respective credit bureaus for all debtors who have "paid in full" or "paid
as agreed", in accordance with the Fair Debt Reporting Act.
6. Collections
It is in the best interest of parties to collect the full outstanding balance
from each debtor. The degree to which that can be attained is the
responsibility of XXX. Since CRE owns the debt, it can allow relief to the
debtors in the form of discounts from the outstanding balances. XXX, at its
sole discretion, can offer a discount of up to 25% off the
outstanding balance(s) without obtaining permission from CRE if it believes
that by doing so it facilitates the prompt collection of the remaining
balance(s). XXX must obtain permission from CRE to offer larger discounts and
offer a reasonable explanation to CRE as to why a deeper discount would be in
the best interest of both parties.
7. Commissions
CRE will pay XXX a commission of Twenty Five (25%) Percent of all collections
net of discounts obtained by XXX. The percentage applies to immediate
collections (front line collections), Planned Payment Agreements (see # 11
below), the resale of re-performing debt and legal collections. No commission
will be paid to XXX for the resale of non- performing debt deemed
uncollectible.
Commissions will be paid to XXX on the Friday following the previous week's
collections that are deposited in the bank account used for such deposits. The
commission paid or about to be paid on any account where the payment was denied
for any reason from the debtors bank will cause an immediate charge back
against the total commissions due on the respective payment date. If the debtor
payment is honored in the future by the debtor's bank, the commission will be
earned and paid to XXX.
8. Deposits
XXX will deposit all collections on accounts owned by CRE into a bank account
established by CRE for this purpose. XXX agrees to never deposit collections
from CRE accounts into its own bank account(s). If such a deposit is done in
error, XXX agrees to immediately notify CRE of the error and deposit the amount
in question into CRE's bank account.
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XXX agrees to deposit collections of CRE accounts at least every Friday
(Tuesdays and Fridays are preferred) or more often at the discretion of XXX. In
addition, collections must also be deposited on the last working day of every
month. Deposits must be made before 2:00 PM in order to insure credit that day.
Every payment received must be photocopied before depositing and the copy must
be kept in the respective debtor's account/folder.
9. Legal Collections
Legal collections are defined as any collection that requires the use of an
attorney or collection through small claims courts and from judgments.
Commissions are based upon the net amount collected in addition to any filing
cost incurred by XXX.
10. Licenses
XXX will keep current licenses in force at all times and provide a copy of same
at the execution of this agreement and at the time of renewals in a timely
manner. These licenses include, but are not limited to, City and County
Occupational licenses and a Florida state Collection Agency license.
11. Notification to Debtors
CRE will notify all of the debtors in the portfolios as soon as they are
purchased. The notification will include, but is not limited to, the debtors
name and address, credit card account number and the name of the initial
issuer, current balance due, a statement that CRE is now the owner of the
account and its account number, CRE's name and address where to send payment, a
statement that XXX has been assigned to act as the collection agent for CRE and
a statement that the notification is an attempt to collect a debt using
industry standard language.
CRE will send monthly notices to those debtors who have agreed to make monthly
or other periodic payments (Planned Payment Agreements). A monthly list will be
prepared each month and will be compared with a like list prepared by XXX.
12. Planned Payment Agreements
Planned Payment Agreements (PPA) are agreements with the debtor(s) wherein the
debtor agrees to make monthly payments or other periodic payments in order to
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pay their debt in an orderly fashion. XXX will be responsible for the
management of this part of the collection process for which commission is paid.
All agreements must be in writing and signed by the debtor.
XXX will arrange for these agreements to be executed and implemented. The
original of each agreement is to be provided to CRE in a timely manner. All
such agreements, when executed, must be sent to XXX with an initial payment in
the amount agreed upon between the debtor and XXX in order to bind the
agreement. The format or template for the agreement is to be determined between
CRE and XXX.
13. Record Keeping
XXX will be responsible for keeping its own records. When deposits are made for
the collection of CRE accounts, XXX will promptly notify CRE on a list (format
to be determined) that will include the debtor's name, SS#, payment amount,
date and any internal account number that may be assigned. When more than one
portfolio of accounts is being collected, deposit tickets must only include
payments for accounts from the same portfolio. Example: three checks received
from accounts in three separate portfolios require that there be three
different deposit tickets prepared and deposited. There will be no exception to
this procedure.
CRE will be responsible for keeping its own records. CRE is a private company
that will prepares quarterly and annual reports for its investors, which are
very transparent and provide all of the information that is required by the
investors.
CRE reserves the right to have the books of XXX audited if CRE detects fraud or
dishonest dealings on the part of XXX in connection with its collection of
accounts owned by CRE.
14. Sale of Accounts Deemed Re-Performing
CRE, at its own discretion, may sell accounts in portfolio form that are
considered to be re-performing. These accounts would be accounts in PPA that
have made at least three monthly or other periodic payments in a timely manner.
Typically, the debtors of these accounts are making small monthly/periodic
payments that will require several months or years to pay off the debt. Buyers
in the market place typically pay $0.40 to $0.60 on a dollar on the remaining
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balances. XXX will be included in the process, but CRE will make the final
determination to sell or retain the accounts.
15. Sale of Accounts Deemed Uncollectible
CRE, at its own discretion, will sell accounts in portfolio form from time to
time that are deemed to be uncollectible by XXX. XXX will not receive a
commission from the proceeds of such sales as they are only a partial recovery
of the cost of the accounts paid by CRE. Notification of such accounts deemed
uncollectible is to be made to CRE by XXX as soon as possible after the
determination is made.
16. Termination
The parties have the right to cancel this agreement at any time for any reason
by giving each other thirty (30) days written notice in the form of a
resolution from the Board of Directors by the party authorizing the termination
of this agreement. All existing PPA accounts will be put into portfolio form
and sold within sixty days following the 30 day cancellation period. The
commission due under such sale will be paid to XXX within ten (10) days after
the receipt of payment from the purchaser of such portfolio(s).
This agreement has been negotiated at arm's length between persons
sophisticated and knowledgeable in these types of matters. In addition, each
party has been represented by experienced and knowledgeable legal counsel. No
change, modification, addition or amendment to this Agreement shall be valid
unless in writing and signed by all parties hereto. This Agreement contains all
of the terms negotiated between the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date shown on page one above.
Credex Corporation XXX Collections, Inc.
/s/ Xxxxx X. Xxxxxx /s/ Xxxx Xxxx
Xxxxx X. Xxxxxx, President Xxxx Xxxx, President
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