Exhibit 4.5
COLLECTION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the 1st day of
September, 2005, by and between FIRST NATIONAL BANK OF OMAHA, Bankcard Recovery,
referred to hereafter as "FNBO" and PLATINUM RECOVERY SOLUTIONS INC., referred
to hereafter as "PRS" or "Agency".
WHEREAS, FNBO has unpaid accounts requiring collections and Agency is a
collection agency licensed to collect in any state where it attempts collection,
follows all state and federal statutes and law, and is desirous of collecting
accounts placed by FNBO.
WHEREAS, Agency will use its best efforts to collect accounts referred by FNBO,
and shall employ lawful means and procedures for which the Agency will be held
responsible, and in its discretion it believes will best effect the collection
of the accounts.
WHEREAS, this Agreement is intended to replace and supersede any prior
agreements or contracts concerning the same.
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
agreements contained herein the adequacy of which is acknowledged, the parties
agree as follows:
1. FILE MANAGEMENT
CCCS Payments - CCCS payments will be allowed as long as FNBO does not pay any
fee to the CCCS agency.
2. COLLECTION EFFORT
ACTIVATION
Initial Demand Letter - The initial Request for Payment/Validation letter must
be sent to the debtor within three working (3) days from the receipt of the
account.
Collector Activation - The first phone call to the debtor normally should be
placed within fifteen (15) days. If no answer, a call must be placed at the
business phone and/or an evening and Saturday/Sunday call must be placed within
seven (7) days. The collector must work the account therafter at least once
every seven (7) days.
Busy Signal - If a busy signal is received, the collector must call back later
in the day.
No Phone - If no good telephone number is available, the collector should
utilize a form of directory assistance.
Skip Tracing - If directory assistance attempt fails, the account must be
reviewed for skip tracing within the first 30 (30) days of placement as return
mail from the first notice will be monitored, or when it is determined that the
account is a skip. This applies to other skip tracing tools such as, but not
limited to, Fast Data, Nearbys, Post Office, Voter registration, Libraries, etc.
Credit Bureau Reports - If the debtor cannot be located, a Credit Bureau maybe
considered as an additional tool for location information.
Managers or Supervisor's Review - A portion of the accounts must be reviewed by
the manager or supervisor regularly. Comments relative to any inadequacies must
be detailed with
175
suggestions for improvement and direction. Copies of findings and corrective
action should be maintained on file for subsequent review in the audit process
by FNBO.
PROMISE TO PAY
Arrangements - Payment arrangements cannot extend beyond eighteen (18) months,
unless approved by FNBO.
PPA Status - An account can only be placed into a PPA file if a payment is
received from the promised payment arrangements. Once in the PPA status, the
account will be removed if sixty-five (65) days lapse between payments.
Broken Promise Follow-Up - Broken promise must be followed up on within three
(3) days of the missed payment.
Upgrade Payments - The collector must attempt to upgrade the payment amount if
the plan is longer than twelve months. The attempt must be within the first four
(4) months measured from the first payment date and once every three months
thereafter.
SETTLEMENTS
Settlement Amount - Agency has the authority to settle account at its own
discretion, provided at month end the aggregate amount of all settlements
approved and remitted to FNBO is no lower than 40% on Regular Collection
Accounts. Payment in full accounts do not constitute a settlement and will not
be allowed to count toward the 40% aggregate. Agency will submit an aggregate
settlement report monthly.
LEGAL ACTIVITY
Approval - All suits must be approved by FNBO.
Legal Placement - Suit requests should be placed with the forwarding attorney in
five business (5) days and suit should normally be filed within 60 (60) days
from the receipt of the account by the attorney in the debtors area.
Legal Fees - First National Bank of Omaha is responsible for all fees and costs
associated with the collection of accounts authorized for suit action. Upon
recovery of advanced legal costs and fees PRS will remit such recovery by check
on a monthly basis for all recovered costs received by PRS the previous month.
Legal Cancel and Return Policy - The Agency may keep legal accounts more than
the 360 days provided they review the account for possible executable assets
(bank accounts or wages) at least quarterly. FNBO reserves the right at any time
to recall any account where judgment has been obtained and the account is deemed
not collectible.
Updates - A written status report reflecting the current classification of the
legal category must be submitted no less than every ninety (90) days.
3. FEE ARRANGEMENT
Remits - Unless otherwise required by FNBO, the Agency may retain its
commissions described below and remit net collections.
Regular Collection Account - 30% of the payments received will be the fee.
Legal Accounts - Accounts approved as legal will receive 40% of the payments as
the fee.
176
Direct Pays - Any payment received by FNBO within five (5) days of placement
with the Agency will not be eligible for fees. Placement date will be determined
by FNBO. All direct pays after the five (5) days will be entitled to commission.
4. REMITTANCE CONTROL
Posting Payments - Payments must be remitted to FNBO within thirty (30) days of
receipt by the Agency.
Remitting Payments - The Agency will remit to FNBO weekly that portion of each
collection due FNBO.
NSF Recollect - Attempts to recollect NSF items usually should occur within one
(1) day after receipt of the returned item.
Inventory and Closure - The Agency will close all accounts that no payment has
been received within 180 days of placement or last payment date, unless approval
to maintain the account is received from FNBO. The closure report will list
specifically the reason for the close (i.e., bankruptcy, skip, disputed, PIF or
SIF). All closing due to bankruptcy must include the bankruptcy case number, if
available the court where the case was filed and the filing date. All closing
due to deceased would normally include a death certificate and/or a date of
birth.
Inventory Report - The Agency must provide a complete inventory of FNBO accounts
upon request.
5. COMPLIANCE
The Agency shall comply with all Federal, State and local laws, including, but
not limited to, the Fair Debt Collection Practices Act, applicable privacy
statutes and regulations, and all other applicable statutory and regulatory
authority. The Agency will refrain from any practices which may reflect
adversely upon FNBO's reputation, or the reputation of any affiliate. The
Agency's collections activity shall be courteous, dignified, and business-like.
The Agency agrees to disclose to FNBO any pending, past, or future legal actions
brought against it for violations of either the Fair Debt Collection Practices
Act, or any state consumer protection or consumer credit collection laws or
regulations only on accounts placed by FNBO with PRS. This disclosure should
include, at a minimum, the case name, court in which it was filed, alleged
violations of either Federal or State consumer protection statutes or
regulations claimed to have occurred, and resolution of the case. In the course
of performance of this Agreement, the Agency shall also notify FNBO within 48
hours of any lawsuit initiated against it for violation of either Federal or
State consumer protection or consumer credit collection statutes or regulations
on accounts placed by FNBO or where a class action for a FDCPA violation has
been filed...
6. INDEMNIFICATION AND INSURANCE
Hold Harmless - The Agency shall indemnify and hold FNBO harmless from any and
all suits, claims, actions, liabilities, settlements, losses, damages, costs,
attorney fees, and any other expenses, arising from or relating to actions by
the Agency, its employees, agents, officers, or directors.
The Agency also agrees to defend, indemnify, and hold harmless FNBO from and
against any and all claims, actions, losses, or expenses, including attorney's
fees incurred by FNBO as a
177
result of the Agency's actions, inactions, or alleged actions with respect to
any account to include, but not be limited to, any alleged or actual violation
of Federal, State, or local law or regulation or any negligent or unauthorized
act of the Agency, its officers, employees, or agents, regardless of whether the
Agency is ultimately found responsible or liable by any trier of fact.
Insurance - The Agency shall carry commercial general liability insurance with
minimum limits of $1,000,000.00 per occurrence, $2,000,000.00 annual aggregate.
The Agency shall also carry excess (umbrella) liability coverage of at least
$1,000,000.00 per occurrence.
Evidence of Insurance - The Agency shall provide a certificate of insurance
evidencing general liability, excess liability and surety coverage. The Agency
shall provide a new certificate upon the renewal of each policy or bond. The
Agency shall notify FNBO in writing within thirty (30) days of cancellation of
coverage, material modification of coverage, reduction in coverage, or
non-renewal of coverage.
7. NATURE OF RELATIONSHIP
Nothing contained in this Agreement shall be construed to create an agency or
employment relationship between the Agency and FNBO, and the Agency and FNBO
are, and shall remain, independent contractors.
8. TERM AND TERMINATION
Term - This Agreement shall continue in effect until it is terminated as
hereinafter provided. Either party may terminate this Agreement by giving the
other party thirty (30) day written notice. Upon termination of the Agreement,
all accounts will be returned to FNBO, unless written authorization is received
from FNBO to maintain any account.
Termination - If any provision of this Agreement is breached in any way, FNBO
may terminate this contract and all monies held become due immediately and all
accounts will be returned regardless of status. Additionally, if there has been
an adverse change in the Agency's performance, financial status, integrity,
behavior, or reputation, this Agreement will be terminated.
Determination of Performance - It is FNBO's sole opinion that will govern in a
termination situation.
9. CONFIDENTIALITY
Confidentiality - The Agency agrees to comply with the terms of the Privacy
Commitment attached hereto as Exhibit A and incorporated herein by this
reference.
References - The Agency is strictly prohibited to use FNBO as a business
reference, without prior written consent. Breach of this provision will
terminate this contract.
10. AUDIT
On-Site Reviews - Upon reasonable advance notice to Agency, FNBO shall have the
right to visit Agency's facilities and/or inspect Agency's books and reports to
verify that Agency complies with this Agreement and performs in accordance with
the standards set forth in this Agreement.
Reports - During the term of this Agreement, and after termination until all
monies due FNBO are determined by FNBO to be paid in full, Agency agrees to
provide FNBO with any available reports which FNBO requests.
178
11. JURISDICTION
Choice of Jurisdiction - It is the specific intent of the Agency and FNBO that
this Agreement and the performance thereunder, and any and all suits or other
proceedings brought directly or indirectly as a result hereof, be construed in
accordance with and pursuant to the laws of Nebraska, and any acts or
proceedings that may be brought, in connection with or by reason of this
Agreement shall be brought in Xxxxxxx County District Court, Nebraska.
179
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their
duly authorized agents as of the date set forth above.
FIRST NATIONAL BANK OF OMAHA
By: /s/ Xxxx Xxxxx
------------------------------------
Name: Xxxx Xxxxx
Title: Recovery Officer
PLATINUM RECOVERY SOLUTIONS INC.
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------
Name: XXXX X. XXXXXXXXX
Title: PRESIDENT
180
