Document:

Processing Agreement                                                      RETAIL
___________________________________________________

         EFFECTIVE DATE: _____________

         The parties to this Agreement are as follows:

         TOWNE SERVICES, INC.  ("TOWNE")
         3950 Johns Creek Court, Suite 100
         Suwanee, Georgia   30024

         BANK NAME  ("the Bank"), and
         ---------------------------------

         ---------------------------------

         CLIENT NAME  ("the Client")
         ---------------------------------

         ---------------------------------

         The Bank is a participant in the Retail program ("the Program") offered
         by TOWNE. The Program is comprised of an automated merchant
         point-of-sale service offering a "virtual credit card" program,
         automated accounts receivable processing and financing services to
         businesses that offer terms to their customers. The Client desires to
         participate in the Program through the Bank.

         The Bank, the Client, and TOWNE agree as follows:

    SECTION 1.  DEFINITIONS

    1.1  ACCOUNT. The term "Account" means one of the Client's Customer credit
         accounts.

    1.2  ACCOUNT STATEMENT. The term "Account Statement" means the statement of
         Account activity billed to the Client's Customer, on behalf of Client,
         by TOWNE on a monthly basis.

    1.3  BANK SERVICE FEE. The term "Bank Service Fee" means the charge that the
         Client agrees to pay to the Bank for the Receivables funded by the Bank
         pursuant to this Agreement. The Bank Service Fee will be deducted from
         the Face Amount of the Receivables funded. Subject to the limitations
         set forth below, the Bank may amend the Bank Service Fee from time to
         time upon written notice to the Client based upon considerations of
         transaction volume, delinquency, current economic conditions, and other
         factors described in this Agreement. Initially, and except as otherwise
         provided, the Bank Service Fee will be equal to the percentage rate set
         forth in Schedule A to this Agreement. Notwithstanding any provision in
         this Agreement to the contrary, the Client does not agree to pay, and
         the Bank does not intend to contract for, reserve, charge or collect
         any charge or interest which is higher than the maximum rate of
         interest that could be charged under applicable law for the extension
         of credit that is agreed to in this Agreement. If any notice of
         interest accrual is sent that is in error, the Bank and the Client
         mutually agree to correct it, and if the Bank actually collects more
         interest than allowed by law and this Agreement, the Bank agrees to
         refund the excess portion. Any interest in excess of that maximum
         amount shall be credited to the Client's Demand Deposit Account or to
         the principal amount of the Client's Obligations relating to this
         Agreement, or, if the principal amount of the debt has been paid,
         refunded to the Client. The credit or refund of any such excess
         interest shall be the Client's sole remedy with regard to any such
         excess, and the Client hereby waives any other right or claim with
         respect to any such excess interest, payment, charge or notice.

    1.4  CREDIT AGREEMENT. The term "Credit Agreement" means any written
         installment, charge, purchase order or other written form of Credit
         Agreement between the Client and a Customer.

    1.5  CREDIT MEMO. The term "Credit Memo" means the form reflecting a credit,
         other than a credit arising from a payment, to a Customer's Account.

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    1.6  CUSTOMER. The term "Customer" means a debtor obligated to the Client on
         Receivables that arise from goods sold or services rendered to a
         Customer by the Client.

    1.7  FACE AMOUNT. The term "Face Amount" means the cash price for the goods
         sold and/or services rendered to a Customer, less any down payment paid
         by a Customer, plus any taxes imposed on such sales transaction.

    1.8  INVOICE. The term "Invoice" means the form reflecting the sale of goods
         or services to a Customer.

    1.9  LINE OF CREDIT ADVANCE. The term "Line of Credit Advance" means an
         advance to the Client by the Bank pursuant to the line of credit
         agreement and/or promissory note(s) delivered to the Bank by the Client
         pursuant to this Agreement.

    1.10 NET AMOUNT. The term "Net Amount" means the Face Amount of a
         Receivable, less any Reserve Account amount, the Bank Service Fee and
         other discounts, returns, credits or allowances of any nature at any
         time issued, owing, granted or outstanding.

    1.11 OBLIGATIONS. The term "Obligations" means all of the Client's
         obligations to the Bank, whether pursuant to this Agreement, or under
         any line of credit agreement, note, contract, guaranty, accommodation
         or otherwise, however and whenever created, arising or evidenced,
         whether direct or indirect, liquidated or contingent, now existing or
         arising hereafter, and all replacements, substitutions, amendments and
         modifications to any of the foregoing.

    1.12 OPERATING ACCOUNT. The term "Operating Account" means the depository
         account(s) maintained by the Client with the Bank.

    1.13 RECEIVABLES. The term "Receivables" means all accounts, instruments,
         contract rights, chattel paper, documents, rights to payment and
         general intangibles that are acceptable to the Bank and arise from the
         sale of goods or services, and the proceeds thereof, and all security
         and guaranties therefore, whether now existing or arising hereafter.

    1.14 RELATED AGREEMENTS. The term "Related Agreements" means any other
         agreement(s) between the Bank and Client that relate to the Program.

    1.15 RESERVE ACCOUNT. The term "Reserve Account" means the restricted,
         funded or unfunded, interest or non-interest bearing account
         established pursuant to Section 3.

    SECTION 2.  THE RETAIL PROGRAM

    2.1  ELECTION TO PARTICIPATE IN THE PROGRAM

         The Client hereby elects to participate in the Program in accordance
         with the guidelines established from time to time by TOWNE and the Bank
         and to maintain a computer and peripherals that meet the minimum
         configuration requirements of TOWNE. During the term of this Agreement,
         TOWNE will assist the Client in the installation of, and will provide
         maintenance and support for, the Program system and other materials
         used in connection with the Program. Installation shall consist of a
         remote set up of the software necessary to participate in the Program,
         excluding hardware not provided by TOWNE. Support shall include
         telephone support in response to questions about the software or the
         Program. Initially, support shall include remote, telephone training on
         the use of the software to participate in the Program. Fees for
         installation and training are as set forth in Schedule A. The Client
         agrees, at its own cost and expense, to maintain its own Internet
         connection through the Internet Service Provider of Client's choice.

    2.2  DISPLAYING SYMBOLS, SERVICE MARKS AND NAMES

         Upon request, TOWNE will sell or otherwise supply the Client with a
         reasonable supply of advertising displays, decals, and other
         point-of-sale promotional materials bearing the Program symbol and name
         to be used by the Client pursuant to this Agreement. The Client agrees
         to display the current signage, symbols, service marks, and name of the
         Program on promotional materials to inform its Customers that the
         Client offers the Program. The Client's right to use or display such
         items shall continue only so long as this Agreement or any successor
         agreement is in effect. The Client and the Bank acknowledge that the
         Program trademark and the corresponding logotype are the property of
         TOWNE. The Client and the Bank shall not infringe upon the mark or
         logo, nor otherwise use the mark or logo in such a manner as to create
         the impression that the Client's goods or services are affiliated with
         or sold by TOWNE.

    2.3  OPERATION OF THE PROGRAM

         The Client agrees to enter its Program Customer credit transactions
         into the Program system at the time of the transaction in accordance
         with the instructions provided by TOWNE. Each sale transaction entered
         into the Program system will be deemed to be a request by the Client
         for an advance from the Bank against the line of credit extended to the
         Client by the Bank under Section 3 of this Agreement.
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         TOWNE will process the transactions through electronic data interchange
         on a regular basis and will send the Client and the Bank an electronic
         file containing payment and finance charge information on each
         Customer. TOWNE will also process (either directly or through a third
         party) the Client's Account Statements, Customer payments, Customer
         finance charges, past due letters, and similar items, if so elected by
         the Bank. These processing services will be provided for the fees
         established by TOWNE from time to time. The initial fees are set forth
         in Schedule A, and TOWNE will provide the Client and the Bank with at
         least 30 days' prior written notice of any change in such fees. All
         fees due to TOWNE for its processing services will be payable by the
         Bank on a monthly basis in accordance with payment terms established
         between the Bank and TOWNE.

    2.4  TRANSACTION PROCESSING

         The Client shall only process through the Program bona fide
         transactions relating to its sales of goods and services to the
         Client's Customers. In each transaction, the Client shall be deemed to
         warrant the true identity of the Customer as the purchaser of the
         Client's goods or services. The Client shall not enter or submit
         records of transactions that it or its employees know or should have
         known to be false or not authorized by the Customer. The Bank and TOWNE
         reserve the right to audit the Client's files and records relating to
         any or all transactions under the Program. This shall include the right
         to verify the accuracy of accounts and transactions by contacting
         Customers. The Client may not process through the Program any
         transaction representing the refinancing of a pre-existing obligation
         of a Customer, except where the refinancing results from conversion of
         the Client's existing credit program to the Program, or obligations
         arising from the dishonor of a Customer's check.

    2.5  COLLECTION OF ACCOUNTS.

         The Client hereby appoints and authorizes TOWNE and the Bank, and the
         Bank hereby appoints TOWNE, to serve as its attorney-in-fact in
         connection with the processing of Accounts with the Client's Customers.
         TOWNE and the Bank shall have the right on behalf of and as
         attorney-in-fact for the Client, and TOWNE shall have the right on
         behalf of and as attorney-in-fact for the Bank, to receive, take,
         endorse, assign and deliver in the Client's (or the Bank's) name any
         and all checks, drafts and other instruments for the payment of money
         relating to the Accounts processed through the Program. Nothing in this
         Agreement shall either authorize or obligate TOWNE or the Bank to take
         any action to enforce the collection of the Client's Customer Accounts.
         Payments received by TOWNE or the Bank from a Customer will be
         accounted for by credit to the Customer's Account.

    2.6  ACCOUNT DISPUTES

         The Client shall promptly notify the Bank and TOWNE of (and if
         requested by the Bank, will settle, at its sole cost and expense) all
         disputes concerning any Accounts funded by the Bank. However, the
         Client shall not, without the Bank's prior written consent, compromise
         or adjust any such Account. The Client is responsible for any Customer
         disclosure or collection of taxes required by law. Client undertakes
         responsibility for establishing any interest rate or late fees in
         accordance with any applicable law.

    2.7  AUTHORIZATION FOR AUTOMATED CLEARING HOUSE (ACH) TRANSACTIONS, DIRECT
         DEPOSITS, ETC.

         The Client agrees to establish an Operating Account with the Bank upon
         execution of this Agreement if it does not currently have one. The
         Client hereby authorizes the Bank to present automated clearing house
         ("ACH") credit for the payment of deposits due from the Bank or TOWNE
         and to present ACH debits or payment due the Bank or TOWNE for fees,
         purchases or charge backs of Accounts, purchase or lease payments for
         point of sale equipment, and other charges or payments pursuant to the
         Program, as well as for any Obligations due to the Bank upon an Event
         of Default. The Client's ABA Transit Routing Number, Federal Tax
         Identification Number, and Demand Deposit Account Number with the Bank
         are as shown below the Client's signature at the end of this Agreement,
         and a voided blank check or deposit slip for that account is attached
         to this Agreement.

         The authority granted in this Section 2.7 shall remain in full force
         and effect until all fees, charges, and payments due TOWNE or the Bank
         are collected and until the Client has notified the Bank in writing of
         the termination of that authorization, at a time and in a manner that
         will afford the Bank a reasonable opportunity to act on it, or, in
         consideration of the foregoing, until ten (10) days after the Bank
         shall have provided written notice to the Client of termination of the
         ACH arrangement. The Client also agrees, at the request of the Bank, to
         establish direct deposit and withdrawal and/or other arrangements for
         the transfer of funds into and out of the Client's account with the
         Bank, and to execute any forms requested by the Bank in that regard.

    SECTION 3.  FUNDING OF ACCOUNTS PROCESSED UNDER THE PROGRAM

    3.1 LINE OF CREDIT ADVANCES

         Each sale transaction processed by the Client through the Program will
         constitute a request by the Client for an advance against the line of
         credit established by the Bank for the Client pursuant to the Program.
         The Bank reserves the right in its sole and absolute discretion to
         decline to make advances against any or all of the Client's Customer
         Invoices. If the Bank
<PAGE>
         declines to make an advance to the Client with respect to any Customer
         Invoice or Invoices, the Bank agrees to provide the Client with written
         notice of that decision within twenty-four (24) hours, or as required
         by law, after having received notice of a funding request from the
         Client or TOWNE.

         The Bank will make a Line of Credit Advance to the Client on all
         Invoices approved for funding by the Bank equal to the Net Amount. The
         advance will be credited to the Client's primary Operating Account with
         the Bank on the next business day after receipt of a request for
         funding. The Bank may also from time to time make other advances to the
         Client in amounts as the Bank and the Client may agree, provided that
         the Bank will not make a Line of Credit Advance that causes the
         outstanding principal amount of Line of Credit Advances to exceed the
         line of credit limit established by the Bank.

         All payments received by the Bank from TOWNE with respect to the
         Client's Customer Accounts will be applied against the Obligations.

    3.2 CHARGE BACKS

         The Bank may charge back any Invoice funded by the Bank at its sole
         discretion. In addition, the Bank may charge back any Customer
         Accounts, including any accrued Customer finance charges: (a) if any
         Account remains past due for more than 90 days; (b) in the event of any
         dispute with a Customer with respect to any Account; or (c) in the
         event of the Client's default in the performance of any Obligation to
         the Bank under this Agreement or any other agreement with the Bank.

         In the event of a charge back, the Bank may debit the Reserve Account,
         the Operating Account or any other account maintained by the Client and
         apply it to the outstanding advances made with respect to the
         applicable Account (if under clause (a) or (b) above) or to the
         outstanding amount of the Obligations (if under clause (c) above). In
         the event of any deficiency arising with respect to the account charged
         back to the Client, the Client agrees to pay the deficiency immediately
         to the Bank upon receipt of a written request from the Bank.

    3.3 GRANT OF SECURITY INTEREST BY THE CLIENT TO THE BANK.

         As security for the performance of the Client's Obligations under this
         Agreement, the Client hereby grants to the Bank a lien and security
         interest in and to all Accounts of the Client. The Bank may also
         require additional collateral or guarantees to secure the Obligations,
         and in that regard the Client may also grant to the Bank a lien and a
         security interest in other collateral as may be required by the Bank
         and described in the Related Documents. The Client agrees to execute
         and deliver to the Bank such documents and instruments, including,
         without limitation, UCC-1 financing statements, as the Bank may request
         from time to time to evidence or perfect its security interest in the
         Accounts or any collateral securing the Obligations (collectively, "the
         Collateral"). Without the consent of the Bank, the Client shall not
         grant any security interest in or allow any liens, encumbrances or
         charges to attach to the Collateral, whether by operation of law or
         otherwise, until all Obligations are paid in full.

    3.4  RESERVE ACCOUNT.  CREATION, GRANT OF SECURITY INTEREST, ASSIGNMENT.

         The Bank may retain a portion of the sums payable to the Client, the
         amount of which the Bank may adjust from time to time in its reasonable
         discretion, as a reserve to provide for the delinquency of the
         Receivables funded by the Bank. Amounts retained by the Bank pursuant
         to this provision shall be credited to the Client's Reserve Account. No
         amounts may be drawn or disbursed from the Reserve Account without the
         Bank's consent. The amount of the Reserve Account will not normally
         exceed an amount calculated by multiplying the Face Amount of the
         acceptable Invoices submitted to the Bank, by the applicable valuation
         percentage shown in Schedule A. Any excess amounts held in the Reserve
         Account will be credited periodically, in the Bank's discretion, to the
         Client's Operating Account.

         The Client hereby pledges and grants to the Bank a security interest in
         the Reserve Account. The Client further hereby pledges, assigns and
         transfers to the Bank all right, title and interest in and to the
         Reserve Account, and all sums now or at any time hereafter on deposit
         therein together with all earnings of every kind and description which
         may now or hereafter accrue thereon, for the purpose of securing the
         Obligations, whether such Obligations now exist or are hereafter
         created or incurred, and whether it is direct or indirect, due or to
         become due, absolute or contingent or joint and/or several.

         The Client further irrevocably authorizes and empowers the Bank, at any
         time whether or not at such time the Obligations, or any part thereof,
         are due and payable, in its own name or in the Client's name, to
         demand, apply for withdrawal, receive and give a written discharge for
         any and all sums which are or will become due and payable under said
         Account, to exercise any and all rights and privileges and receive all
         benefits accorded to said Account, and to execute any and all
         instruments required therefore, and to apply such moneys toward payment
         of the Obligations, in such order of application as the Bank may
         determine, all without notice to the Client. Until this assignment has
         been released by the Bank in writing, the Client will have no right to
         make any withdrawals from said Account.

    3.5 RIGHT OF SET-OFF

         In addition to and not in conflict with the above, the Client hereby
         acknowledges that the Bank shall have the right to charge or set off
         any of the Client's Obligations, whether matured or unmatured, with the
         Bank against the Reserve
<PAGE>
         Account, Operating Account or any other account, property or assets of
         the Client in the Bank's possession or make a Line of Credit Advance to
         cover such Obligations.

    SECTION 4.  DEFAULT

    4.1  EVENTS OF DEFAULT

         The following events will constitute a Default under the terms of this
         Agreement:

    a.   The Client fails to pay or to perform any Obligation, covenant or
         liability in connection with this Agreement and ten (10) days pass
         after written notice is delivered to the Client of such default, or if
         the Client fails to pay or perform any other Obligation which the
         Client may have to the Bank in accordance with its terms;

    b.   Any warranty, representation or statement whenever made by the Client
         in connection with this Agreement proves to be false in any material
         respect when made, or if the Client fails to disclose that any such
         warranty, representation or statement has become untrue in any material
         respect;

    c.   The  dissolution  or termination of the Client's  corporate  existence
         or, if an individual,  the Client's death;

    d.   The Client's insolvency;

    e.   The assignment for the general benefit of the Client's creditors, the
         appointment of a receiver or trustee for its assets, the commencement
         of any proceeding under any bankruptcy or insolvency laws by or against
         the Client or any proceeding for the dissolution, liquidation or
         settlement of claims against the Client or winding up of its affairs;
         or

    f.   The termination or withdrawal of any guaranty for the Obligations;

    g.   The failure to pay any tax imposed upon the Client in connection with
         any transaction creating a Receivable;

    h.   If any judgment against the Client remains unpaid, unstayed on appeal,
         undischarged, unbonded or undismissed for a period of thirty (30) days;

    i.   The Client discontinues its business as a going concern; or

    j.   The Bank deems in good faith that the prospect for payment or
         performance of the Obligations has been impaired.

    4.2  EFFECT OF DEFAULT

         Upon the occurrence of any Event of Default, the Bank and TOWNE may
         immediately terminate this Agreement upon written notice of termination
         to the Client, at which time all amounts owed to the Bank for the
         Obligations, at its sole option, shall become immediately due and
         payable, and TOWNE's and the Bank's obligations with respect to the
         further performance of services hereunder shall, at the Bank's and
         TOWNE's sole option, immediately terminate. All Obligations under this
         Agreement, including specifically the Obligation to repay all Line of
         Credit Advances, accrued interest thereon, and related charges, will
         survive a termination of this Agreement.

    SECTION 5.  GENERAL PROVISIONS

    5.1  CLIENT'S COVENANTS.

         The Client covenants that it will supply, or allow the Bank to review,
         financial information and necessary documents on the Client or on any
         Customer upon the Bank's request.

    5.2  CLIENT'S REPRESENTATIONS AND WARRANTIES.

         The Client represents and warrants:

    a.   that it is fully authorized to enter into this Agreement and to perform
         hereunder;

    b.   that this Agreement constitutes a valid and binding obligation upon the
         Client;

    c.   that it is solvent and in good standing in the State of its formation;

    d.   that all Receivables are and will be in the future bona fide and
         existing obligations of the Client's Customers arising out of the sales
         of goods and/or services, free and clear of all security interests,
         liens or claims of any kind whatsoever of third parties;
<PAGE>
    e.   that the Client has a valid Credit Agreement with its Customers and has
         identified each Customer with whom it does not have an existing written
         Credit Agreement;

    f.   that, unless approved in writing by the Bank, its inventory is not
         subject to any security interests, liens or encumbrances of any kind
         whatsoever, and that it will not permit it to become so encumbered
         without the Bank's prior written consent;

    g.   it will have made delivery of the goods or rendered the services to
         which the Receivable relates, that the documentation pertaining to the
         sale is valid and genuine, and that the goods or services have been
         accepted by the Customer;

    h.   it will have preserved and will continue to preserve any liens and any
         rights to liens available by virtue of the sale of goods or services;

    i.   the Customer will not, unless approved in writing by the Bank, be
         affiliated with the Client;

    j.   it has no knowledge of any dispute or potential dispute that might
         impair the validity of the transaction or the Customer's obligation to
         pay the related Receivable in accordance with its terms;

    k.   it has the right to render the services or to sell the goods creating
         the Receivable, and will have done so in accordance with any applicable
         laws; and

    l.   it has made all required disclosures and has paid, or provided for the
         payment of, all taxes arising from the transaction creating the
         Receivable.

    5.3  BANK'S AND TOWNE'S REPRESENTATIONS AND WARRANTIES. LIMITATIONS ON
         LIABILITY.

         Subject to the below paragraph, the Bank and TOWNE each represent that
         the services rendered by them pursuant to the terms of this Agreement
         will be performed timely and in a workmanlike manner. NEITHER TOWNE NOR
         THE BANK MAKES ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR
         IMPLIED.

         The Client acknowledges that data transfer and conversion is subject to
         a likelihood of human, software and equipment errors, omissions,
         delays, and losses, including inadvertent mutilation of documents,
         which may give rise to loss or damage. Accordingly, the Client agrees
         that neither TOWNE nor the Bank shall be liable on account of any such
         good faith errors, omissions, delays, or losses unless caused by gross
         negligence or willful misconduct. The Client expressly agrees that it
         will be solely responsible for adopting reasonable measures to limit
         its exposure with respect to such potential losses and damages,
         including (without limitation) examination and confirmation of results
         prior to use thereof, provision for identification and correction of
         errors and omissions, preparation and storage of backup data,
         replacement of lost or mutilated documents, and reconstruction of data.
         The Client is also responsible for complying with all local, state, and
         federal laws pertaining to the use and disclosure of any data in
         connection with all agreements the Client enters into with its
         Customers. The Client acknowledges that any forms or agreements
         provided by TOWNE or the Bank which the Client may use with its
         Customers is provided by TOWNE solely for the Client's convenience and
         benefit; the Client is not obligated to use any such agreement; and the
         Client should consult its own legal and accounting advisers with
         respect to the enforceability and accounting treatment thereof. Neither
         TOWNE nor the Bank makes any implied or express representation or
         warranty of any kind that the forms or materials supplied by TOWNE are
         merchantable or fit for any particular purpose. The Client has an
         independent responsibility to consult its own legal and accounting
         advisers with respect to the enforceability and accounting treatment of
         any of its Customer agreements and to advise its Customers to similarly
         consult professionals with respect to the enforceability thereof. Towne
         does not undertake the responsibility of advising the Client of any
         laws, rules, regulations, or interpretations affecting Client, its
         Customers, or its participation in the Program. IN NO EVENT SHALL TOWNE
         OR THE BANK BE LIABLE FOR ANY LOSS OF PROFITS, ANY INCIDENTAL, SPECIAL,
         OR CONSEQUENTIAL DAMAGES OF ANY KIND. THIS LIMITATION ON DAMAGES SHALL
         APPLY WHETHER OR NOT OTHER PROVISIONS OF THIS AGREEMENT HAVE BEEN
         BREACHED.

    5.4  COMPLIANCE WITH LAWS AND INDEMNIFICATION.

         The Client agrees to comply with all federal, state, and local laws,
         regulations, and ordinances in connection with its dealings with
         Customers and in the performance of its Obligations hereunder. The
         Client shall obtain or deliver and maintain all Credit Agreements or
         other documentation with its credit Customers which may be required to
         comply with any usury, disclosure or similar state or federal law,
         statute or regulation, including but not limited to the
         truth-in-lending disclosures required by Regulation Z. Upon request
         from the Bank or TOWNE, the Client agrees that it will promptly provide
         a copy of such documentation to the Bank or TOWNE. TOWNE processes
         transactions requested by Client pursuant to this Agreement and may, in
         the process, receive confidential financial information about Client or
         Client's customers. To the extent that such information is available
         to, used, and relied upon by the Bank, TOWNE is simply an agent of
         Client and Client is merely reporting its own experience information to
         TOWNE, as its agent, and to the Bank. In no event does TOWNE undertake
         responsibility to Client or Bank to act as a collection agency, a
         credit reporting agency, or to process transactions other than on
         behalf of Client or Bank as directed.
<PAGE>
         THE CLIENT AND THE BANK EACH ACKNOWLEDGE AND AGREE THAT THE BANK IS
         RESPONSIBLE FOR MAKING ITS OWN CREDIT DECISIONS TAKE ALL STEPS
         NECESSARY TO PERFECT ANY LIENS ON COLLATERAL, AND EACH AGREES TO
         INDEMNIFY AND HOLD TOWNE HARMLESS AGAINST ALL CLAIMS, LOSSES, OR
         DAMAGES RELATING THERETO. THIS INDEMNIFICATION SHALL SURVIVE ANY
         TERMINATION OR CANCELLATION OF THIS AGREEMENT.

    5.5  RECORDS.

         The Client agrees that it will keep and preserve tangible copies of
         Invoices, credit memos, bills of lading, shipping and delivery
         documents and other documentation relating to its sales and credit
         transactions processed through the Program for seven (7) years from the
         date of each such transaction. In the event any statutes, laws,
         ordinances or regulations require the Bank or TOWNE to maintain records
         of sales or credit transactions, the Client hereby agrees to maintain
         such records on behalf of the Bank and TOWNE for the period required by
         such statutes, laws, ordinances or regulations.

    5.6  MODIFICATION OF PROGRAM TERMS; NOTICES

         TOWNE or the Bank may modify the terms set forth on Schedule A from
         time to time upon 30 days' prior written notice to the Client as
         provided in this Agreement. Otherwise, this Agreement may not be
         modified, altered, or amended except by the written consent of all
         parties to this Agreement.

         Any notice required or permitted to be given may be given in writing by
         depositing such notice in the United States mail, postage paid,
         addressed as indicated below or to such other place or places as any
         party to this Agreement shall designate by written notice to the
         others. The Client hereby waives notice of default or non-payment,
         protest or notice of protest, demand for payment, and any other demands
         or notices in connection with this Agreement or any sales or credit
         processed through the Program. The Client hereby consents to extensions
         of time granted, or compromise made, with any Customer liable on any
         sales processed through the Program without affecting any liability of
         the Client thereon or hereunder.

    5.7  TERMINATION

         The initial term of this Agreement shall be for a period of three (3)
         years. The Agreement will be automatically renewed for additional
         three-year terms unless any party gives written notice to the other
         parties not to renew the Agreement, at least ninety (90) days prior to
         the scheduled termination date. If any party hereto defaults in the
         performance of any material obligation under this Agreement, and this
         default continues for a period of thirty (30) days after written notice
         is given by a non-defaulting party, then each non-defaulting party will
         have the right, at its option, to terminate this Agreement by giving
         written notice of such termination to the other parties. From and after
         such effective date of termination, for any reason, the Bank and Client
         shall cease processing sales through the Program, shall cease
         displaying the service marks, symbols, and names related to the
         Program, and shall promptly return to TOWNE all materials relating to
         the Program. If termination is due to an uncured, material breach by
         any party in its obligations hereunder, any non-breaching party may
         recover the actual costs of enforcing this Agreement, including court
         costs and reasonable attorney's fees to the prevailing party if the
         issue goes to court. All obligations of the parties incurred or
         existing under this Agreement as of the date of termination shall
         survive such termination. Towne or Bank may terminate this Agreement
         upon thirty (30) days' written notice. A notice from either Bank or
         TOWNE shall satisfy the above notice requirements.

    5.8  GENERAL

    a.   GOVERNING LAW. This Agreement will be deemed to have been made and
         delivered in the State of Georgia. The validity, performance and all
         matters relating to the interpretation and effect of this agreement
         will be governed by the laws of the State of Georgia, without regard to
         conflict of laws rules applied in the State of Georgia. This Agreement
         may be executed in one or more counterparts.

    b.   FURTHER DOCUMENTS. Upon request by the Bank or TOWNE, the Client shall
         promptly execute and deliver such other agreements or instruments and
         give all assistance reasonably required to evidence more fully and
         otherwise give full and proper effect to the Bank's and TOWNE's rights
         under this Agreement.

    c.   SEVERABILITY. If any provision of this Agreement is held by a court of
         competent jurisdiction to be void, voidable, or unenforceable, the
         remaining provisions of this Agreement will remain in full force and
         effect. The Bank, TOWNE, and the Client are independent contractors and
         nothing contained in this Agreement shall be deemed to constitute
         either the Bank, TOWNE, or the Client as agent for the others.

    d.   ASSIGNMENT. This Agreement shall be binding upon the successors of the
         parties but may not be assigned by any party without the written
         consent of the others, except that TOWNE may assign this Agreement to
         any subsidiary or affiliate or pursuant to a merger, sale of
         substantially all its assets, or similar transaction without such
         consent. Provided, however, no such assignment by the Client shall have
         the effect of releasing the Client from any of the Obligations without
         the express written consent of the Bank.
<PAGE>
    e.   EXCLUSIVITY. While this Agreement is in effect, the Client agrees that
         it will not offer any other in-house credit program of a similar nature
         to the Program.

    f.   EXPENSES AND ATTORNEY'S FEES. In the event of any default or dispute
         between TOWNE, the Bank or the Client arising under this Agreement, the
         party prevailing in such dispute shall be entitled to a recovery of
         expenses incurred by that party in enforcing this Agreement, including
         costs of court and a reasonable attorney's fee.

    g.   NON-WAIVER. No delay or failure on the Bank's or TOWNE's part in
         exercising any right, privilege or option hereunder shall be deemed a
         waiver of any such right, privilege or option and no waiver, amendment,
         or modification of any provision of this Agreement (except as otherwise
         expressly provided in this Agreement) shall be valid unless it is in
         writing and signed by all parties to this Agreement.

    h.   HEADINGS. The headings in this Agreement are for convenience only and
         shall not define or limit the scope, extent, meaning, or intent of this
         Agreement.

    i.   THIRD PARTY PROVIDERS. The Programs offered to the Bank and Client by
         TOWNE may or may not have services that are fulfilled by Third Party
         Providers ("Providers"). TOWNE reserves the right to replace Providers
         from time to time as deemed appropriate solely at the discretion of
         TOWNE. However, TOWNE does not by anything in this Agreement or in any
         assignment or otherwise assume any of the Providers' obligations under
         this Agreement, and TOWNE shall not be responsible in any way for the
         performance by the Providers of any of the terms and conditions
         thereof. If requested, the Bank and the Client agree to execute any
         forms necessary in connection with Provider changes. Neither the Bank
         nor the Client may make Provider changes without the prior written
         consent of TOWNE

    j.   Miscellaneous. Nothing herein shall be construed to create a
         partnership or joint venture between the parties. This Agreement and
         its attachments constitute the entire agreement between the parties
         with respect to the matters covered hereby and supersede all prior
         agreements, oral or written, and all other communications relating to
         the subject matter hereof, including any training materials or
         publications (except any lease or rental of the Program point-of-sale
         terminal which shall be governed by the terms of a separate rental or
         lease agreement applicable thereto). All amounts which are due and not
         paid as provided anywhere in this Agreement will thereafter bear
         interest at the rate of eighteen percent (18.0%) per annum or the
         highest legal rate permitted by applicable law, whichever is greater.

         IN WITNESS WHEREOF, TOWNE, the Client, and the Bank have executed this
         Agreement as of the date set forth on Page 1 of this Agreement.

________________________________________________________________________________

         THE CLIENT ACKNOWLEDGES THAT THERE ARE NO ORAL STATEMENTS OR
         REPRESENTATIONS UPON WHICH IT IS RELYING IN EXECUTING THIS AGREEMENT.

         THE CLIENT HEREBY FURTHER ACKNOWLEDGES THAT IT HAS READ, UNDERSTANDS,
         AND AGREES TO THE TERMS AND CONDITIONS OF THIS AGREEMENT. THE CLIENT
         ACKNOWLEDGES RECEIVING AN EXACT COPY OF THIS AGREEMENT. THIS AGREEMENT
         AND RELATED DOCUMENTS HAVE BEEN EXECUTED IN THE COUNTY OF THE BANK'S
         ADDRESS UNLESS OTHERWISE SPECIFIED.

         TOWNE SERVICES, INC.                        ADDRESSS

                                               3950 Johns Creek Court, Suite 100
         By:  _____________________________    Suwanee, GA 30024
                                               Facsimile:  678-475-5300

         (Please Print Name) __________________
         Its:     _____________________________

<PAGE>

         THE BANK ____________________________________________         ADDRESS

         By:      ____________________________________________________

         (Please Print Name) __________________________________

         Its:     _____________________________________________

         THE CLIENT  __________________________________________ADDRESS

         By:      _____________________________________________

         (Please Print Name) __________________________________
         -------------------------------------

         Its:     _____________________________________________
         -------------------------------------

                   --------------------------------------------

         PHONE NUMBER: ____________________________             FAX NUMBER:
         ----------------------

<PAGE>

                                   SCHEDULE A
                                       TO

                           RETAIL PROCESSING AGREEMENT
                        DATED _____________________, 2001

         THE PARTIES AGREE AS FOLLOWS:

          "REMIT TO" ADDRESS - Unless otherwise authorized by the Bank, TOWNE
         will direct customers to submit all payments to one of the three TOWNE
         lockboxes. Additionally, the Client will be expected to change the
         "remit to" address to the TOWNE lockbox, on any invoice it sends which
         has been processed through the Retail program.

1.       The Bank agrees to monitor the payment stream and invoice "REMIT TO"
         address on a regular basis. Bank signature required:
         ______________________________________________

2.       The Client agrees to change the "REMIT TO" address on ALL invoices
         which have been processed through the Retail program, to the Client's
         Business Name, C/O Towne Services Processing Center and to one of the
         three lockbox addresses offered. PLEASE CHOOSE ONLY ONE:

            [ ]   Atlanta Lockbox:           Please select if Statements are
                                             if STATEMENTS are
                  PO Box 105165              desired.  (Will be sent regardless
                  Atlanta, GA 30348          of what lockbox is chosen)
                                              [ ] Yes         [ ]No

             [ ]  Minnesota Lockbox:

                  PO Box 582744
                  Minnesota, MN 55458-2744

             [ ]  New York Lockbox:
                  PO Box 2037
                  Syracuse, NY 13220-2037

                      Client signature required: ____________________________

         LOAN CLOSING DATE      ____________________________

         INITIAL LINE OF CREDIT AMOUNT                $

         OPERATING ACCOUNT NO.  ____________________________

         ABA TRANSIT ROUTING NO.  ____________________________

         FEDERAL TAX ID NO.  ____________________________

         RETAIL DISCOUNT FEE                               ____________%

         RETAIL ADVANCE RATE                               ____________%

         RETAIL RESERVE (VALUATION) PERCENTAGE             ____________%
         [ ] Fluctuating %

<PAGE>

         [ ]Fixed Rate
                Pulled: _______% of A/R Daily OR  _______ First Upload OR
                                        ________ 100% of Uploads until Funded

         INTERNET SERVICE PROVIDER ____________________________________
         (MUST FILL OUT)

         INITIAL SET-UP FEE AND TRAINING: Client shall pay to TOWNE a $500
         documentation fee upon signing up with this program. The fee shall
         include initial, on-line training.

         ONSITE TRAINING OR ONSITE RETRAINING: Client shall pay to TOWNE a
         $1,000 per day fee for training or retraining ONSITE.

         INITIALS REQUIRED VERIFYING THAT THE ABOVE STATED INFORMATION HAS BEEN
         READ AND AGREED UPON BY:

         TOWNE SERVICES, INC                         ______________________

         THE BANK                                    ______________________

         THE MERCHANT                                ______________________Processing Agreement                                               COMMERCIAL
__________________________________________________

EFFECTIVE DATE: _____________

The parties to this Agreement are as follows:

TOWNE SERVICES, INC.  ("TOWNE")
3950 Johns Creek Court, Suite 100
Suwanee, Georgia   30024

BANK NAME  ("the Bank"), and
---------------------------------

---------------------------------

CLIENT NAME  ("the Client")
---------------------------------

---------------------------------

The Bank is a participant in the Commercial program ("the Program") offered by
TOWNE. The Program is comprised of automated accounts receivable processing and
financing services to businesses that offer terms to their customers. The Client
desires to participate in the Program through the Bank.

The Bank, the Client, and TOWNE agree as follows:

SECTION 1.  DEFINITIONS

1.1 ACCOUNT. The term "Account" means one of the Client's Customer credit
accounts.

1.2 ACCOUNT STATEMENT. The term "Account Statement" means the statement of
Account activity billed to the Client's Customer by TOWNE on a monthly basis.

1.3 BANK SERVICE FEE. The term "Bank Service Fee" means the charge that the
Client agrees to pay to the Bank for the Receivables funded by the Bank pursuant
to this Agreement. Subject to the limitations set forth below, the Bank may
amend the Bank Service Fee from time to time upon written notice to the Client
based upon considerations of transaction volume, delinquency, current economic
conditions, and other factors described in this Agreement. Initially, and except
as otherwise provided, the Bank Service Fee will be equal to the percentage rate
set forth in Schedule A to this Agreement. Notwithstanding any provision in this
Agreement to the contrary, the Client does not agree to pay, and the Bank does
not intend to contract for, reserve, charge or collect any charge or interest
which is higher than the maximum rate of interest that could be charged under
applicable law for the extension of credit that is agreed to in this Agreement.
If any notice of interest accrual is sent that is in error, the Bank and the
Client mutually agree to correct it, and if the Bank actually collects more
interest than allowed by law and this Agreement, the Bank agrees to refund the
excess portion. Any interest in excess of that maximum amount shall be credited
to the Client's DDA or the principal amount of the Client's Obligations relating
to this Agreement, or, if the principal amount of the debt has been paid,
refunded to the Client. The credit or refund of any such excess interest shall
be the Client's sole remedy with regard to any such excess, and the Client
hereby waives any other right or claim with respect to any such excess interest,
payment, charge or notice.

1.4 CREDIT AGREEMENT. The term "Credit Agreement" means any written installment,
charge, purchase order or other written
form of Credit Agreement between the Client and a Customer.

1.5 CREDIT MEMO. The term "Credit Memo" means the form reflecting a credit,
other than a credit arising from a payment, to a Customer's Account.

1.6 CUSTOMER. The term "Customer" means a debtor obligated to the Client on
Receivables that arise from goods sold or services rendered to a Customer by the
Client.

<PAGE>
1.7 FACE AMOUNT. The term "Face Amount" means the cash price for the goods sold
and/or services rendered to a Customer, less any down payment paid by a
Customer, plus any taxes imposed on such sales transaction.

1.8 INVOICE. The term "Invoice" means the form reflecting the sale of goods or
services to a Customer.

1.9 LINE OF CREDIT ADVANCE. The term "Line of Credit Advance" means an advance
to the Client by the Bank pursuant to the line of credit agreement and/or
promissory note(s) delivered to the Bank by the Client pursuant to this
Agreement.

1.10 NET AMOUNT. The term "Net Amount" means the Face Amount of a Receivable,
less any Reserve amount, the Bank Service Fee, and other discounts, returns,
credits or allowances of any nature at any time issued, owing, granted or
outstanding.

1.11 OBLIGATIONS. The term "Obligations" means all of the Client's obligations
to the Bank, whether pursuant to this Agreement, or under any line of credit
agreement, note, contract, guaranty, accommodation or otherwise, however and
whenever created, arising or evidenced, whether direct or indirect, liquidated
or contingent, now existing or arising hereafter, and all replacements,
substitutions, amendments and modifications to any of the foregoing.

1.12 OPERATING ACCOUNT. The term "Operating Account" means the depository
account(s) maintained by the Client with the Bank.

1.13 RECEIVABLES. The term "Receivables" means all accounts, instruments,
contract rights, chattel paper, documents, rights to payment and general
intangibles that are acceptable to the Bank and arise from the sale of goods or
services, and the proceeds thereof, and all security and guaranties therefor,
whether now existing or arising hereafter.

1.14 RELATED AGREEMENTS. The term "Related Agreements" means any other
agreement(s) between the Bank and Client that relate
to the Program.

1.15 RESERVE ACCOUNT. The term "Reserve Account" means the restricted, funded or
unfunded, interest or non-interest bearing account established pursuant to
Section 3.

SECTION 2.  THE COMMERCIAL PROGRAM

2.1      ELECTION TO PARTICIPATE IN THE PROGRAM

The Client hereby elects to participate in the Program in accordance with the
guidelines established from time to time by TOWNE and the Bank and to maintain a
computer and peripherals that meet the minimum configuration requirements of
TOWNE. During the term of this Agreement, TOWNE will assist the Client in the
installation of, and will provide maintenance and support for, the Program
system and other materials used in connection with the Program, excluding
hardware not provided by Towne. Installation shall consist of a remote set up of
the software necessary to participate in the Program. Support shall include
telephone support in response to questions about the software or the Program.
Initially, support shall include remote, telephone training on the use of the
software to participate in the Program. Fees for installation and training are
as set forth in Schedule A. The Client agrees, at its own cost and expense, to
maintain its own Internet connection through the Internet Service Provider of
Client's choice.

2.2      DISPLAYING SYMBOLS, SERVICE MARKS AND NAMES

Upon request, TOWNE will sell or otherwise supply the Client with a reasonable
supply of advertising displays, decals, and other point-of-sale promotional
materials bearing the Program symbol and name to be used by the Client pursuant
to this Agreement. The Client agrees to display the current signage, symbols,
service marks, and name of the Program on promotional materials to inform its
Customers that the Client offers the Program. The Client's right to use or
display such items shall continue only so long as this Agreement or any
successor agreement is in effect. The Client and the Bank acknowledge that the
Program trademark and the corresponding logotype are the property of TOWNE. The
Client and the Bank shall not infringe upon the mark or logo, nor otherwise use
the mark or logo in such a manner as to create the impression that the Client's
goods or services are affiliated with or sold by TOWNE.

2.3      OPERATION OF THE PROGRAM

The Client agrees to enter its Program Customer credit transactions into the
Program system at the time of the transaction in accordance with the
instructions provided by TOWNE. Each sale transaction entered into the Program
system will be deemed to be a request by the Client for an advance from the Bank
against the line of credit extended to the Client by the Bank under Section 3 of
this Agreement.

TOWNE will process the transactions through electronic data interchange on a
regular basis and will send the Client and the Bank an electronic file
containing payment and finance charge information on each Customer. TOWNE will
also process (either directly or through a third party) the Client's Account
Statements, Customer payments, Customer finance charges, past due letters, and
similar items, if so elected by the Bank. These processing services will be
provided for the fees established by
<PAGE>
TOWNE from time to time. The initial fees are set forth in Schedule A, and TOWNE
will provide the Client and the Bank with at least 30 days' prior written notice
of any change in such fees. All fees due to TOWNE for its processing services
will be payable by the Bank on a monthly basis in accordance with payment terms
established between the Bank and TOWNE.

2.4      TRANSACTION PROCESSING

The Client shall only process through the Program bona fide transactions
relating to its sales of goods and services to the Client's Customers. In each
transaction, the Client shall be deemed to warrant the true identity of the
Customer as the purchaser of the Client's goods or services. The Client shall
not enter or submit records of transactions that it or its employees know or
should have known to be false or not authorized by the Customer. The Bank and
TOWNE reserve the right to audit the Client's files and records relating to any
or all transactions under the Program. This shall include the right to verify
the accuracy of accounts and transactions by contacting Customers. The Client
may not process through the Program any transaction representing the refinancing
of a pre-existing obligation of a Customer, except where the refinancing results
from conversion of the Client's existing credit program to the Program, or
obligations arising from the dishonor of a Customer's check.

2.5      COLLECTION OF ACCOUNTS.

The Client hereby appoints and authorizes TOWNE and the Bank, and the Bank
hereby appoints TOWNE, to serve as its attorney-in-fact in connection with the
processing of Accounts with the Client's Customers. TOWNE and the Bank shall
have the right on behalf of and as attorney-in-fact for the Client, and TOWNE
shall have the right on behalf of and as attorney-in-fact for the Bank, to
receive, take, endorse, assign and deliver in the Client's (or the Bank's) name
any and all checks, drafts and other instruments for the payment of money
relating to the Accounts processed through the Program. Nothing in this
Agreement shall either authorize or obligate TOWNE or the Bank to take any
action to enforce the collection of the Client's Customer Accounts. Payments
received by TOWNE or the Bank from a Customer will be accounted for by credit to
the Customer's Account.

2.6      ACCOUNT DISPUTES

The Client shall promptly notify the Bank and TOWNE of (and if requested by the
Bank, will settle, at its sole cost and expense) all disputes concerning any
Accounts funded by the Bank. However, the Client shall not, without the Bank's
prior written consent, compromise or adjust any such Account. The Client is
responsible for any Customer disclosure or collection of taxes required by law.
Client undertakes responsibility for establishing any interest rate or late fees
in accordance with any applicable law.

2.7 AUTHORIZATION FOR AUTOMATED CLEARING HOUSE (ACH) TRANSACTIONS, DIRECT
    DEPOSITS, ETC.

The Client agrees to establish an Operating Account with the Bank upon execution
of this Agreement if it does not currently have one. The Client hereby
authorizes the Bank to present automated clearing house ("ACH") credit for the
payment of deposits due from the Bank or TOWNE and to present ACH debits or
payment due the Bank or TOWNE for fees, purchases or charge backs of Accounts,
purchase or lease payments for point of sale equipment, and other charges or
payments pursuant to the Program, as well as for any Obligations due to the Bank
upon an Event of Default. The Client's ABA Transit Routing Number, Federal Tax
Identification Number, and Demand Deposit Account Number with the Bank are as
shown below the Client's signature at the end of this Agreement, and a voided
blank check or deposit slip for that account is attached to this Agreement.

The authority granted in this Section 2.7 shall remain in full force and effect
until all fees, charges, and payments due TOWNE or the Bank are collected and
until the Client has notified the Bank in writing of the termination of that
authorization, at a time and in a manner that will afford the Bank a reasonable
opportunity to act on it, or, in consideration of the foregoing, until ten (10)
days after the Bank shall have provided written notice to the Client of
termination of the ACH arrangement. The Client also agrees, at the request of
the Bank, to establish direct deposit and withdrawal and/or other arrangements
for the transfer of funds into and out of the Client's account with the Bank,
and to execute any forms requested by the Bank in that regard.

SECTION 3.  FUNDING OF ACCOUNTS PROCESSED UNDER THE PROGRAM

3.1  LINE OF CREDIT ADVANCES

Each sale transaction processed by the Client through the Program will
constitute a request by the Client for an advance against the line of credit
established by the Bank for the Client pursuant to the Program. The Bank
reserves the right in its sole and absolute discretion to decline to make
advances against any or all of the Client's Customer Invoices. If the Bank
declines to make an advance to the Client with respect to any Customer Invoice
or Invoices, the Bank agrees to provide the Client with written notice of that
decision within twenty-four (24) hours, or as required by law, after having
received notice of a funding request from the Client or TOWNE.

The Bank will make a Line of Credit Advance to the Client on all Invoices
approved for funding by the Bank equal to the Net Amount. The advance will be
credited to the Client's primary Operating Account with the Bank on the next
business day after receipt of a request for funding. The Bank may also from time
to time make other advances to the Client in amounts as the Bank
<PAGE>
and the Client may agree, provided that the Bank will not make a Line of Credit
Advance that causes the outstanding principal amount of Line of Credit Advances
to exceed the line of credit limit established by the Bank.

All payments received by the Bank from TOWNE with respect to the Client's
Customer Accounts will be applied against the Obligations.

3.2  CHARGE BACKS

The Bank may charge back any Invoice funded by the Bank at its sole discretion.
In addition, the Bank may charge back any Customer Accounts, including any
accrued Customer finance charges: (a) if any Account remains past due for more
than 90 days; (b) in the event of any dispute with a Customer with respect to
any Account; or (c) in the event of the Client's default in the performance of
any Obligation to the Bank under this Agreement or any other agreement with the
Bank.

In the event of a charge back, the Bank may debit the Reserve Account, the
Operating Account or any other account maintained by the Client and apply it to
the outstanding advances made with respect to the applicable Account (if under
clause (a) or (b) above) or to the outstanding amount of the Obligations (if
under clause (c) above). In the event of any deficiency arising with respect to
the account charged back to the Client, the Client agrees to pay the deficiency
immediately to the Bank upon receipt of a written request from the Bank.

3.3  GRANT OF SECURITY INTEREST BY THE CLIENT TO THE BANK.

As security for the performance of the Client's Obligations under this
Agreement, the Client hereby grants to the Bank a lien and security interest in
and to all Accounts of the Client. The Bank may also require additional
collateral or guarantees to secure the Obligations, and in that regard the
Client may also grant to the Bank a lien and a security interest in other
collateral as may be required by the Bank and described in the Related
Documents. The Client agrees to execute and deliver to the Bank such documents
and instruments, including, without limitation, UCC-1 financing statements, as
the Bank may request from time to time to evidence or perfect its security
interest in the Accounts or any collateral securing the Obligations
(collectively, "the Collateral"). Without the consent of the Bank, the Client
shall not grant any security interest in or allow any liens, encumbrances or
charges to attach to the Collateral, whether by operation of law or otherwise,
until all Obligations are paid in full.

3.4      RESERVE ACCOUNT.  CREATION, GRANT OF SECURITY INTEREST, ASSIGNMENT.

To the extent applicable, if a Reserve Account is indicated on Schedule A, the
Bank may retain a portion of the sums payable to the Client, the amount of which
the Bank may adjust from time to time in its reasonable discretion, as a reserve
to provide for the delinquency of the Receivables funded by the Bank. Amounts
retained by the Bank pursuant to this provision shall be credited to the
Client's Reserve Account. No amounts may be drawn or disbursed from the Reserve
Account without the Bank's consent. The amount of the Reserve Account will not
normally exceed an amount calculated by multiplying (y) the Face Amount of the
acceptable Invoices submitted to the Bank, by (z) the applicable valuation
percentage shown in Schedule A. Any excess amounts held in the Reserve Account
will be credited periodically, in the Bank's discretion, to the Client's
Operating Account.

The Client hereby pledges and grants to the Bank a security interest in the
Reserve Account. The Client further hereby pledges, assigns and transfers to the
Bank all right, title and interest in and to the Reserve Account, and all sums
now or at any time hereafter on deposit therein together with all earnings of
every kind and description which may now or hereafter accrue thereon, for the
purpose of securing the Obligations, whether such Obligations now exist or are
hereafter created or incurred, and whether it is direct or indirect, due or to
become due, absolute or contingent or joint and/or several.

The Client further irrevocably authorizes and empowers the Bank, at any time
whether or not at such time the Obligations, or any part thereof, are due and
payable, in its own name or in the Client's name, to demand, apply for
withdrawal, receive and give a written discharge for any and all sums which are
or will become due and payable under said Account, to exercise any and all
rights and privileges and receive all benefits accorded to said Account, and to
execute any and all instruments required therefore, and to apply such moneys
toward payment of the Obligations, in such order of application as the Bank may
determine, all without notice to the Client. Until this assignment has been
released by the Bank in writing, the Client will have no right to make any
withdrawals from said Account.

3.5  RIGHT OF SET-OFF

In addition to and not in conflict with the above, the Client hereby
acknowledges that the Bank shall have the right to charge or set off any of the
Client's Obligations, whether matured or unmatured, with the Bank against the
Reserve Account, Operating Account or any other account, property or assets of
the Client in the Bank's possession or make a Line of Credit Advance to cover
such Obligations.
<PAGE>

SECTION 4.  DEFAULT

4.1      EVENTS OF DEFAULT

The following events will constitute a Default under the terms of this
Agreement:

a.    The Client fails to pay or to perform any Obligation, covenant or
      liability in connection with this Agreement and ten (10) days pass after
      written notice is delivered to the Client of such default, or if the
      Client fails to pay or perform any other Obligation which the Client may
      have to the Bank in accordance with its terms;

b.    Any warranty, representation or statement whenever made by the Client in
      connection with this Agreement proves to be false in any material respect
      when made, or if the Client fails to disclose that any such warranty,
      representation or statement has become untrue in any material respect;

c.    The dissolution or termination of the Client's corporate existence or, if
      an individual, the Client's death;

d.    The Client's insolvency;

e.    The assignment for the general benefit of the Client's creditors, the
      appointment of a receiver or trustee for its assets, the commencement of
      any proceeding under any bankruptcy or insolvency laws by or against the
      Client or any proceeding for the dissolution, liquidation or settlement of
      claims against the Client or winding up of its affairs;

f.    The termination or withdrawal of any guaranty for the Obligations;

g.    The failure to pay any tax imposed upon the Client in connection with any
      transaction creating a Receivable;

h.    If any judgment against the Client remains unpaid, unstayed on appeal,
      undischarged, unbonded or undismissed for a period of thirty (30) days;

i.    The Client discontinues its business as a going concern; or

j.    The Bank deems in good faith that the prospect for payment or performance
      of the Obligations has been impaired.

4.2      EFFECT OF DEFAULT

Upon the occurrence of any Event of Default, the Bank and TOWNE may immediately
terminate this Agreement upon written notice of termination to the Client, at
which time all amounts owed to the Bank for the Obligations, at its sole option,
shall become immediately due and payable, and TOWNE's and the Bank's obligations
with respect to the further performance of services hereunder shall, at the
Bank's and TOWNE's sole option, immediately terminate. All Obligations under
this Agreement, including specifically the Obligation to repay all Line of
Credit Advances, accrued interest thereon, and related charges, will survive a
termination of this Agreement.

SECTION 5.  GENERAL PROVISIONS

5.1      CLIENT'S COVENANTS.

The Client covenants that it will supply, or allow the Bank to review, financial
information and necessary documents on the Client or on any Customer upon the
Bank's request.

5.2      CLIENT'S REPRESENTATIONS AND WARRANTIES.

The Client represents and warrants:

a.    that it is fully authorized to enter into this Agreement and to perform
      hereunder;

b.    that this Agreement constitutes a valid and binding obligation upon the
      Client;

c.    that it is solvent and in good standing in the State of its formation;

d.    that all Receivables are and will be in the future bona fide and existing
      obligations of the Client's Customers arising out of the sales of goods
      and/or services, free and clear of all security interests, liens or claims
      of any kind whatsoever of third parties;

<PAGE>
e.    that the Client has a valid Credit Agreement with its Customers and has
      identified each Customer with whom it does not have an existing written
      Credit Agreement;

f.    that, unless approved in writing by the Bank, its inventory is not subject
      to any security interests, liens or encumbrances of any kind whatsoever,
      and that it will not permit it to become so encumbered without the Bank's
      prior written consent;

g.    it will have made delivery of the goods or rendered the services to which
      the Receivable relates, that the documentation pertaining to the sale is
      valid and genuine, and that the goods or services have been accepted by
      the Customer;

h.    it will have preserved and will continue to preserve any liens and any
      rights to liens available by virtue of the sale of goods or services;

i.    the Customer will not, unless approved in writing by the Bank, be
      affiliated with the Client;

j.    it has no knowledge of any dispute or potential dispute that might impair
      the validity of the transaction or the Customer's obligation to pay the
      related Receivable in accordance with its terms;

k.    it has the right to render the services or to sell the goods creating the
      Receivable, and will have done so in accordance with any applicable laws;
      and

l.    it has made all required disclosures and has paid, or provided for the
      payment of, all taxes arising from the transaction creating the
      Receivable.

5.3 BANK'S AND TOWNE'S REPRESENTATIONS AND WARRANTIES. LIMITATIONS ON LIABILITY.

Subject to the below paragraph, the Bank and TOWNE each represent that the
services rendered by them pursuant to the terms of this Agreement will be
performed timely and in a workmanlike manner. NEITHER TOWNE NOR THE BANK MAKES
ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED.

The Client acknowledges that data transfer and conversion is subject to a
likelihood of human, software and equipment errors, omissions, delays, and
losses, including inadvertent mutilation of documents, which may give rise to
loss or damage. Accordingly, the Client agrees that neither TOWNE nor the Bank
shall be liable on account of any such good faith errors, omissions, delays, or
losses unless caused by gross negligence or willful misconduct. The Client
expressly agrees that it will be solely responsible for adopting reasonable
measures to limit its exposure with respect to such potential losses and
damages, including (without limitation) examination and confirmation of results
prior to use thereof, provision for identification and correction of errors and
omissions, preparation and storage of backup data, replacement of lost or
mutilated documents, and reconstruction of data. The Client is also responsible
for complying with all local, state, and federal laws pertaining to the use and
disclosure of any data in connection with all agreements the Client enters into
with its Customers. The Client acknowledges that any forms or agreements
provided by TOWNE or the Bank which the Client may use with its Customers is
provided by TOWNE solely for the Client's convenience and benefit; the Client is
not obligated to use any such agreement; and the Client should consult its own
legal and accounting advisers with respect to the enforceability and accounting
treatment thereof. Neither TOWNE nor the Bank makes any implied or express
representation or warranty of any kind that the forms or materials supplied by
TOWNE are merchantable or fit for any particular purpose. The Client has an
independent responsibility to consult its own legal and accounting advisers with
respect to the enforceability and accounting treatment of any of its Customer
agreements and to advise its Customers to similarly consult professionals with
respect to the enforceability thereof. Towne does not undertake the
responsibility of advising the Client of any laws, rules, regulations, or
interpretations affecting Client, its Customers, or its participation in the
Program. IN NO EVENT SHALL TOWNE OR THE BANK BE LIABLE FOR ANY LOSS OF PROFITS,
ANY INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND. THIS LIMITATION
ON DAMAGES SHALL APPLY WHETHER OR NOT OTHER PROVISIONS OF THIS AGREEMENT HAVE
BEEN BREACHED.

5.4      COMPLIANCE WITH LAWS AND INDEMNIFICATION.

The Client agrees to comply with all federal, state, and local laws,
regulations, and ordinances in connection with its dealings with Customers and
in the performance of its Obligations hereunder. The Client shall obtain or
deliver and maintain all Credit Agreements or other documentation with its
credit Customers which may be required to comply with any usury, disclosure or
similar state or federal law, statute or regulation, including but not limited
to the truth-in-lending disclosures required by Regulation Z. Upon request from
the Bank or TOWNE, the Client agrees that it will promptly provide a copy of
such documentation to the Bank or TOWNE. TOWNE processes transactions requested
by Client pursuant to this Agreement and may, in the process, receive
confidential financial information about Client or Client's customers. To the
extent that such information is available to, used, and relied upon by the Bank,
TOWNE is simply an agent of Client and Client is merely reporting its own
experience information to TOWNE, as its agent, and to the Bank. In no event does
TOWNE undertake responsibility to Client or Bank to act as a collection agency,
a credit reporting agency, or to process transactions other than on behalf of
Client or Bank as directed.
<PAGE>
THE CLIENT AND THE BANK EACH ACKNOWLEDGE AND AGREE THAT THE BANK IS RESPONSIBLE
FOR MAKING ITS OWN CREDIT DECISIONS TAKE ALL STEPS NECESSARY TO PERFECT ANY
LIENS ON COLLATERAL, AND EACH AGREES TO INDEMNIFY AND HOLD TOWNE HARMLESS
AGAINST ALL CLAIMS, LOSSES, OR DAMAGES RELATING THERETO. THIS INDEMNIFICATION
SHALL SURVIVE ANY TERMINATION OR CANCELLATION OF THIS AGREEMENT.

5.5      RECORDS.

The Client agrees that it will keep and preserve tangible copies of Invoices,
credit memos, bills of lading, shipping and delivery documents and other
documentation relating to its sales and credit transactions processed through
the Program for seven (7) years from the date of each such transaction. In the
event any statutes, laws, ordinances or regulations require the Bank or TOWNE to
maintain records of sales or credit transactions, the Client hereby agrees to
maintain such records on behalf of the Bank and TOWNE for the period required by
such statutes, laws, ordinances or regulations.

5.6      MODIFICATION OF PROGRAM TERMS; NOTICES

TOWNE or the Bank may modify the terms set forth on Schedule A from time to time
upon 30 days' prior written notice to the Client as provided in this Agreement.
Otherwise, this Agreement may not be modified, altered, or amended except by the
written consent of all parties to this Agreement.

Any notice required or permitted to be given may be given in writing by
depositing such notice in the United States mail, postage paid, addressed as
indicated below or to such other place or places as any party to this Agreement
shall designate by written notice to the others. The Client hereby waives notice
of default or non-payment, protest or notice of protest, demand for payment, and
any other demands or notices in connection with this Agreement or any sales or
credit processed through the Program. The Client hereby consents to extensions
of time granted, or compromise made, with any Customer liable on any sales
processed through the Program without affecting any liability of the Client
thereon or hereunder.

5.7      TERMINATION

The initial term of this Agreement shall be for a period of three (3) years. The
Agreement will be automatically renewed for additional three-year terms unless
any party gives written notice to the other parties not to renew the Agreement,
at least ninety (90) days' prior to the scheduled termination date. If any party
hereto defaults in the performance of any material obligation under this
Agreement, and this default continues for a period of thirty (30) days after
written notice is given by a non-defaulting party, then each non-defaulting
party will have the right, at its option, to terminate this Agreement by giving
written notice of such termination to the other parties. From and after such
effective date of termination, for any reason, the Bank and Client shall cease
processing sales through the Program, shall cease displaying the service marks,
symbols, and names related to the Program, and shall promptly return to TOWNE
all materials relating to the Program. If termination is due to an uncured,
material breach by any party in its obligations hereunder, any non-breaching
party may recover the actual costs of enforcing this Agreement, including court
costs and reasonable attorney's fees to the prevailing party if the issue goes
to court. All obligations of the parties incurred or existing under this
Agreement as of the date of termination shall survive such termination. Towne or
Bank may terminate this Agreement upon thirty (30) days' written notice. A
notice from either Bank or TOWNE shall satisfy the above notice requirements.

5.8      GENERAL

a.    GOVERNING LAW. This Agreement will be deemed to have been made and
      delivered in the State of Georgia. The validity, performance and all
      matters relating to the interpretation and effect of this agreement will
      be governed by the laws of the State of Georgia, without regard to
      conflict of laws rules applied in the State of Georgia. This Agreement may
      be executed in one or more counterparts.

b.    FURTHER DOCUMENTS. Upon request by the Bank or TOWNE, the Client shall
      promptly execute and deliver such other agreements or instruments and give
      all assistance reasonably required to evidence more fully and otherwise
      give full and proper effect to the Bank's and TOWNE's rights under this
      Agreement.

c.    SEVERABILITY. If any provision of this Agreement is held by a court of
      competent jurisdiction to be void, voidable, or unenforceable, the
      remaining provisions of this Agreement will remain in full force and
      effect. The Bank, TOWNE, and the Client are independent contractors and
      nothing contained in this Agreement shall be deemed to constitute the
      Bank, TOWNE, or the Client as agent for the others.

d.    ASSIGNMENT. This Agreement shall be binding upon the successors of the
      parties but may not be assigned by any party without the written consent
      of the others, except that TOWNE may assign this Agreement to any
      subsidiary or affiliate or pursuant to a merger, sale of substantially all
      its assets, or similar transaction without such consent. Provided,
      however, no such assignment by the Client shall have the effect of
      releasing the Client from any of the Obligations without the express
      written consent of the Bank.
<PAGE>
e.    EXCLUSIVITY.  While this Agreement is in effect,  the Client agrees that
      it will not offer any other  in-house  credit program of a similar nature
      to the Program.

f.    EXPENSES AND ATTORNEY'S FEES. In the event of any default or dispute
      between TOWNE, the Bank or the Client arising under this Agreement, the
      party prevailing in such dispute shall be entitled to a recovery of
      expenses incurred by that party in enforcing this Agreement, including
      costs of court and a reasonable attorney's fee.

g.    NON-WAIVER. No delay or failure on the Bank's or TOWNE's part in
      exercising any right, privilege or option hereunder shall be deemed a
      waiver of any such right, privilege or option and no waiver, amendment, or
      modification of any provision of this Agreement (except as otherwise
      expressly provided in this Agreement) shall be valid unless it is in
      writing and signed by all parties to this Agreement.

h.    HEADINGS.  The  headings  in this  Agreement  are for  convenience  only
      and shall not define or limit the  scope,  extent, meaning, or intent of
      this Agreement.

i.    THIRD PARTY PROVIDERS. The Programs offered to the Bank and Client by
      TOWNE may or may not have services that are fulfilled by Third Party
      Providers ("Providers"). TOWNE reserves the right to replace Providers
      from time to time as deemed appropriate solely at the discretion of TOWNE.
      However, TOWNE does not by anything in this Agreement or in any assignment
      or otherwise assume any of the Providers' obligations under this
      Agreement, and TOWNE shall not be responsible in any way for the
      performance by the Providers of any of the terms and conditions thereof.
      If requested, the Bank and the Client agree to execute any forms necessary
      in connection with Provider changes. Neither the Bank nor the Client may
      make Provider changes without the prior written consent of TOWNE

j.    Miscellaneous. Nothing herein shall be construed to create a partnership
      or joint venture between the parties. This Agreement and its attachments
      constitute the entire agreement between the parties with respect to the
      matters covered hereby and supersede all prior agreements, oral or
      written, and all other communications relating to the subject matter
      hereof, including any training materials or publications (except any lease
      or rental of the Program point-of-sale terminal which shall be governed by
      the terms of a separate rental or lease agreement applicable thereto). All
      amounts which are due and not paid as provided anywhere in this Agreement
      will thereafter bear interest at the rate of eighteen percent (18.0%) per
      annum or the highest legal rate permitted by applicable law, whichever is
      greater.

IN WITNESS WHEREOF, TOWNE, the Client, and the Bank have executed this Agreement
as of the date set forth on Page 1 of this Agreement.

--------------------------------------------------------------------------------

THE CLIENT ACKNOWLEDGES THAT THERE ARE NO ORAL STATEMENTS OR REPRESENTATIONS
UPON WHICH IT IS RELYING IN EXECUTING THIS AGREEMENT.

THE CLIENT HEREBY FURTHER ACKNOWLEDGES THAT IT HAS READ, UNDERSTANDS, AND AGREES
TO THE TERMS AND CONDITIONS OF THIS AGREEMENT. THE CLIENT ACKNOWLEDGES RECEIVING
AN EXACT COPY OF THIS AGREEMENT. THIS AGREEMENT AND RELATED DOCUMENTS HAVE BEEN
EXECUTED IN THE COUNTY OF THE BANK'S ADDRESS UNLESS OTHERWISE SPECIFIED.

TOWNE SERVICES, INC.                        ADDRESS

                                            3950 Johns Creek Court, Suite 100
By:      ________________________________   Suwanee, GA 30024

Its:     ________________________________   Facsimile:  678-475-5300

THE BANK                                    ADDRESS

By:      ________________________________   ____________________________________

Its:     ________________________________   ____________________________________

<PAGE>

THE CLIENT                                         ADDRESS

By:      __________________________________    _________________________________

Its:     __________________________________    _________________________________

Operating Account No.      ________________    _________________________________

ABA Transit Routing No.    ________________    Facsimile:_______________________

Federal Tax ID Number:     ________________

(PLEASE ATTACH A VOIDED CHECK OR DEPOSIT SLIP)

<PAGE>

                                   SCHEDULE A
                                       TO

                         COMMERCIAL PROCESSING AGREEMENT

                       DATED _____________________ , 2001

THE PARTIES HEREBY AGREE AS FOLLOWS:

NOTIFICATION - Notification letters will be mailed by Bank to the Client's
customers to notify the customers of the new remittance address and Statement of
Account.
<TABLE>
<CAPTION>

         CHOOSE NUMBER 1 OR NUMBER 2 BELOW:

<S>                                                                <C>
1.       The Bank will assume responsibility for the NOTIFICATION letter being sent to the Client's customers.
                      Bank Initials__________________                     Client Initials _____________________

2.       The Bank agrees to "waive" the required NOTIFICATION letter.
                      Bank Initials__________________                     Client Initials _____________________

"REMIT TO" ADDRESS - The Client will be expected to change the "remit to"
address on the invoices sent to their customers.

1.        The Bank agrees to monitor the payment stream and invoice "REMIT TO" address on a regular basis.
          Bank signature required: ______________________________________________

2.        The Client agrees to change the "REMIT TO" address on ALL
          invoices to Client's Business Name, P.O. Box 932109,
          Atlanta, GA 31193-2109 Client signature required:
          _____________________________________________

STATEMENT OF ACCOUNT - The Statement of Account will be sent once a month to the
Client's customer summarizing the outstanding invoices and the balance owed.

         CHOOSE NUMBER 1 OR NUMBER 2 BELOW:

1.       The Bank will require Towne Services to send the monthly STATEMENT OF ACCOUNT to the Client's customers.
                      Bank Initials__________________                     Client Initials _____________________

2.       The Bank agrees to "waive" the required monthly STATEMENT OF ACCOUNT.
                      Bank Initials__________________                     Client Initials _____________________

PAYMENTS If the Client receives any payment from a customer that is processed
through the Commercial program, the Client shall receive such remittance in
trust for the Bank. Payment collection options:

         CHOOSE NUMBER 1, NUMBER 2, OR NUMBER 3 BELOW:

1.       The Client MAY accept ALL PAYMENTS at its place of business.
                      Bank Initials__________________                     Client Initials _______________

2.       The Client MAY accept OCCASIONAL PAYMENTS at its place of business.
                      Bank Initials__________________                     Client Initials _______________

3.       The Client MAY NOT accept any customer payments.
                      Bank Initials________________              Client Initials _______________

VALUATION PERCENTAGES - Unpaid invoices or portions thereof not deemed
ineligible will be valued daily for purposes of determining the available draw
against the Credit Limit according to the following percentages:

                           ------------------------------- PAST DUE --------------------------------------

               CURRENT               1-30 DAYS        31-60 DAYS               61-90 DAYS                 OVER 91 DAYS
               -------               ---------       -----------               ----------                 ------------

          ________%               ___________ %      ____________ %         ___________   %              ______________ %

</TABLE>

<PAGE>

BANK SERVICE FEES - Client shall pay to the Bank monthly such fees as indicated
below by having the fees due added to the unpaid loan balance (SELECT ONE
METHOD).

         FIXED RATE - A fixed percentage of _____% will be multiplied by the
         original Face Amount of each invoice presented to the Commercial
         program during the billing cycle. The minimum fee per invoice presented
         will be $1.00.

         FIXED RATE +VARIABLE RATE - A fixed percentage of ______% will be
         multiplied by the original Face Amount of each invoice presented to the
         Commercial program to cover payment for the initial period of _______
         days. An incremental rate of ______% will be applied for each
         incremental period of ______ day(s) that the invoice or portion thereof
         remains unpaid, provided that the maximum rate charged on an invoice or
         portion thereof will not exceed ______%. The minimum fee per invoice
         presented will be $1.00. Total of the fixed and variable fees on unpaid
         balances will not exceed ______%.

         NET FUNDS EMPLOYED (NFE) RATE - A fee will be calculated for the
         billing period by converting the annualized rate of _____% into the
         periodic rate and by multiplying such periodic rate against the average
         daily loan balance for the period.

INITIAL SET-UP AND TRAINING FEE - Client shall pay to TOWNE a $500 documentation
fee upon signing up on this program.

ONSITE TRAINING OR ONSITE RETRAINING: Client shall pay to TOWNE a $1,000 per day
fee for training or retraining onsite.

LOAN CLOSING DATE _____________________

INITIAL LINE OF CREDIT AMOUNT $___________________

IN WITNESS WHEREOF, the Client and the Bank have executed this Agreement as of
the date set forth on the first page of this Agreement.

THE BANK: ______________________         THE CLIENT:____________________________

By: ____________________________         By:____________________________________
Its duly authorized officer                       Its duly authorized officer

Date:___________________________         Date:__________________________________

Towne Services, Inc.

By: ____________________________
Its duly authorized officer

Date: __________________________

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