Exhibit 10.4


 


COLLECTION SERVICES AGREEMENT


 


This
Collection Agreement (the “Agreement”) is entered into as of the 13th
day of September, 2005 between P2P Credit, Inc., a Delaware corporation with
its principal place of business at 153 Kearny Street, Mezzanine, San Francisco,
California 94108 (“Company”), and Penncro Associates, Inc., with its principal
place of business at 95 James Way, Suite 113, Southampton, PA 18966
(hereinafter referred to as “Collector”) (each of Company and Client,
individually, the “Party”, and collectively, the “Parties).


 


WHEREAS,
Collector is a nationwide debt collection agency engaged in the business of
taking assignments of, purchasing and collecting debts owed to creditors by
consumers residing in the United States;


 


WHEREAS, Company is an online lender engaged in the business of originating
direct consumer loans to U.S. residents and selling the loans to third parties
on a servicing retained basis;


 


WHEREAS, Company,
as duly appointed servicer of the loans pursuant to consumer loan purchase and
servicing agreements between Company and third party purchasers of the loans,
desires to engage Collector to perform collection services in connection with
delinquent loans (“Accounts”) on the terms provided in this Agreement;


 


NOW THEREFORE,
in consideration of the foregoing, other good and valuable consideration, and
the mutual terms and covenants contained herein, the Parties hereto agree as
follows:


 


1.                                      NATURE
AND SCOPE OF COLLECTION ACTIVITIES


 


Company is engaging
Collector to use its reasonable best efforts to collect Accounts that have become
more than 30 days contractually past due, and bring those Accounts current. The
Parties understand and agree that this Agreement is intended to cover the time
period commencing when an Account becomes 30 days contractually past due and
ending on the earlier of (i) when the delinquency is fully cured, or (ii) when
Company in its discretion exercises its right to recall the Account, or (iii)
when the Account has payments which are 120 days contractually past due or (iv)
when 90 days after assignment no currently delinquent payments have been
collected on the Account. If, after any delinquent payments becoming 120 days contractually
past due, or no delinquent payments have been collected by Collector 90 days
after assignment of the Account, or if the Company in its discretion exercises
its right to recall the Account, Collector shall cease all collection activity
on the subject Account, and Company may in its sole discretion sell the Account
to a third party debt collector. Company hereby engages Collector and Collector
agrees to render to provide collection services on the terms provided herein.


 


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2.                                      DUTIES AND OBLIGATIONS OF
COLLECTOR


 


2.1                                 Collector shall: (i) act prudently in
accordance with customary and usual third party deficiency collection
procedures for other institutional collection companies which collect
receivables similar to the Accounts; and (ii) use and exercise that degree of
skill and attention that is customary with other third party deficiency
collection companies in the industry that collect receivables in connection
with direct loans and sales contracts and that is customary for receivables for
which it provides collection services. Subject to the forgoing standards and
except as provided in this Agreement, Collector shall have the full power and
authority acting alone to do any and all things in connection with collecting
Accounts that it may deem reasonably necessary or desirable to recover
delinquent amounts.


 


2.2                                 All collection services performed by
Collector or its agents, subcontractors or representatives shall be performed
in full compliance with all applicable federal, state and local laws, including
without limitation federal and state laws governing business practices and debt
collection practices. Collector may not use any threats, intimidation,
harassment, or otherwise violate any applicable law or regulation in performing
the services under this Agreement. Collector shall be duly licensed and bonded
in all states that require licensure and/or bonding for collection agencies.


 


2.3                                 Collector shall immediately notify Company of
Collector’s receipt of any service of process or any inquiries by federal,
state, or local governmental authorities relating to any Account. In the event
a lawsuit, administrative proceeding or customer complaint is initiated with
respect to any Account during or after Collector takes assignment of the
Account, Collector shall promptly upon request provide Company with all
documentation and information within Collector’s possession or control
affecting the subject Account. Collector shall also cooperate with Company in
the defense or response to any lawsuit, administrative proceeding or customer
complaint affecting an Account, and shall provide declarations or documentation
reasonable required by Company to assist in Company’s defense or response, or
in Company’s prosecution of any lawsuit or proceeding. Collector shall, at the
request and direction of the Company, make all files and records available to Company
and to any federal or state regulator with regulatory authority over Company.


 


2.4                                 Collector shall not have the right to
commence or participate in legal proceedings to collect any Accounts.


 


2.5                                 Collector shall not release an Account
obligor from payment of any unpaid amount under any Account or waive the right
to collect any unpaid amounts owing on an Account from an obligor. Collector
may accept partial Account payments as in settlement of the amount actually
paid and no more.


 


2.6                                 Collector shall not contact or communicate
with any third party investor, owner or purported owner of an Account. All
communications of any kind with the owner of an Account


 


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shall
be by and through Company. If Collector is contacted by a third party investor,
owner or purported owner of an Account, Collector shall immediately notify
Company of such contact.


 


2.7                                 Upon receipt of assignment of an Account for
collection, Collector shall use reasonable best efforts to collect delinquent
amounts on such Account. Accounts recalled by the Company, and Accounts on
which no currently delinquent payments have been received by the Collector 90 days
after assignment of the Acount, or after any payments become 120 days
contractually past due, the Account shall be transferred back to Company by
Collector at no charge to Company. When transferring an Account back to
Company, Collector shall transfer to Company all files, records and documentation
relating to the Account. Collector acknowledges and agrees that its receipt of
Accounts pursuant to this Agreement is for purposes of collection only, and Collector
shall not obtain or acquire any ownership interest in any Accounts assigned to Collector
for collection hereunder.


 


2.8                                 Delinquent amounts to be collected on
Accounts assigned to Collector may include past-due principal and interest,
late charges, ACH fees and other authorized fees as specified by Company at the
time of assignment.


 


2.9                                 Collector shall, prior to the commencement of
any collection activities on an Account, run a bankruptcy check on all obligors
of Accounts transferred to Collector. Collector shall notify the Company
immediately upon receipt of any notification with respect to Bankruptcy of an
Account obligor, and shall forward any documentation received by it with
respect to the Bankruptcy.


 


2.10                           Collector will notify Company immediately, in
writing, of any claims or litigation filed or threatened against Collector or Company.
Collector will also maintain complete and accurate records with respect to any
complaints received in connection with an Account. Collector shall promptly
notify the Company in writing of any imposed fines, penalties, suits or alleged
violations of any law or regulation in the performance of this Agreement.


 


2.11                           Collector shall maintain anti-fraud, privacy
and employee background check programs, to be monitored by Company.


 


2.12                           Collector will allow Company to audit
Collector records with respect to security, privacy, anti-fraud, commission
calculation, or any other reasonable subject, upon written notice from Company.


 


2.13                           Collector will allow display of information
regarding netback percentages and other relevant collections metrics by Company
on its Internet website. Collector will also prepare a summary of Collector’s
qualifications to be displayed by Company on its Internet website.


 


2.14                           Collector may accept payments from borrowers
in multiple formats, including cash, check, wire, ACH, debit card and credit
card. Collector shall transfer payments received by Account obligors to Company’s
designated account immediately upon receipt and clearance


 


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from
borrower, on a daily basis, and in ACH or wire format. Collector shall bear the
cost of electronic transmission of funds.


 


2.15                           Collector shall return to Company any Accounts
positively identified as resulting from ID Theft. Appropriate dispute
resolution mechanism between Collector and Company to be used in the event that
characterization of the account as from ID Theft is disputed.


 


2.16                           Collection shall meet technology requirements
of Company as set forth in Appendix B.


 


3.                                      RESPONSIBILITIES OF COMPANY


 


3.1                                 Company may reasonably direct Collector to
modify or supplement Collector’s duties or methods of performing those duties
provided that Collector shall be compensated by the requesting party at a
reasonable fee for any reasonable increase in expense experienced by Collector
due to such additional requests.


 


3.2                                 Company agrees to provide Collector with
notification of all direct payments received by Company on Accounts under
collection by the Collector. Company shall reimburse amounts due on Account
payments received directly by the Company on a monthly basis.


 


3.3                                 Upon assignment of Accounts to Collector, Company
agrees that it will cease written and telephonic communications with the
Account debtors, other than to inform them of additional fees, charges and
payments due.


 


3.4                                 Upon assignment of Accounts to Collector, Company
will provide Collector with an itemization of the specific delinquent amounts
due on each Account.


 


4.                                      MONTHLY REPORTING


 


On
or before the tenth (10th) day of each calendar month, Collector
shall report to Company on a monthly basis in a format acceptable to Company, the
gross and net amounts collected by the Collector during the immediately
preceding calendar month. This report shall be in addition to electronic data
transmissions required under the Technology Requirements in Appendix B.


 


5.                                      COMPENSATION


 


5.1                                 In consideration for the collection services
performed by Collector hereunder, Collector shall receive the fees as outlined
in Appendix A (“Fees”). Company acknowledges and agree that all amounts payable
to Collector pursuant to this Agreement shall be payable solely from amounts
collected and that in no event shall the Company be liable for any costs or
expenses of Collector, except as provided in Section 10 (Indemnification). By
way of clarification and not limitation, there shall be no additional fees
associated with technology, licensing, implementation, account maintenance,
transmission fees, bankruptcy checks and authentication fees, or other costs
associated with the collection efforts.


 


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5.2                                 Collector will be entitled to withhold Fees
from Account monies remitted directly to Collector prior to transfer to Company
so long as proper accounting for this withholding is provided to Company. Collector
shall reflect amounts collected as well as Fees as part of the Account
reporting, and additionally shall provide monthly statements reflecting both
amounts collected and Fees, as well as report these items as part of the  electronic transmissions.


 


6.                                      REPRESENTATIONS
AND WARRANTIES OF COLLECTOR


 


6.1                                 Collector
is duly organized, validly existing and in good standing under the laws of its
state of incorporation and is duly qualified to do business, and is in good
standing in every jurisdiction in which the nature of its business requires it
to be so qualified. Collector has full corporate power and authority to enter
into this Agreement and to carry out the provisions of this Agreement.
Collector will comply with the laws of each state to the extent necessary to
perform its obligations under this Agreement.


 


6.2                                 This
Agreement and all other instruments or documents to be delivered hereunder or
pursuant hereto, and the transactions contemplated hereby, have been duly
authorized by all necessary corporate proceedings of Collector.


 


6.3                                 The
execution and delivery of this Agreement by Collector hereunder and the
compliance by Collector with all provisions of this Agreement do not conflict
with or violate any applicable law, regulation or order and do not conflict
with or result in a breach of or default under any of the terms or provisions
of any contract or agreement to which Collector is subject or by which it or
its property is bound, nor does such execution, delivery or compliance violate
the by-laws or articles of incorporation or formation of Collector.


 


6.4                                 This
Agreement constitutes a legal, valid and binding obligation of the Collector
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, or other similar laws affecting
the enforcement of creditors’ rights generally and by equitable limitations on
the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.


 


6.5                                 There
are no proceedings or investigations pending or, to the Collector’s knowledge,
threatened against the Collector, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over the Collector or its properties (i) asserting the invalidity
of this Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement, (iii) seeking any determination or
ruling that might materially and adversely affect the performance by the Collector
of its obligations under, or the validity or enforceability of, this Agreement
or (iv) that could have a material adverse effect on the Loans.


 


6.6                                 The
Collector is not required to obtain the consent of any other party or any
consent, license, approval or authorization, or registration or declaration
with, any governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
which has not already been obtained. The Collector has in


 


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place the errors and
omissions and/or blanket crime policies required to be maintained pursuant to Section
8.


 


6.7                                 The
representations and warranties contained in this Section shall survive the
execution of this Agreement.


 


7.                                      TERM AND TERMINATION


 


7.1                                 Term. This Agreement shall become effective on the date hereof and shall
continue for a period of one (1) year, unless earlier terminated as set forth.
Upon the expiration of the initial term, the Agreement will renew on a yearly
basis unless either Party provides written notice of their intent not to renew
at least sixty (60) days in advance of the end of the initial term or any
renewal term.


 


7.2                                 Termination. Either Party shall have the right to terminate this Agreement at any
time without cause upon ninety (90) days prior written notice. Each Party shall
have the right to terminate this Agreement immediately on notice upon the
occurrence of an event of default as described in Section 9 of this Agreement.


 


7.3                                 Post-Termination Rights. In the event of termination or expiration
of this Agreement, the Parties’ respective obligations under this Agreement
shall continue in full force and effect through the effective date of
termination or expiration, except (i) to the extent such obligations are
expressly designated to survive termination, and (ii) that Collector shall
continue its collection efforts with respect to the Accounts assigned prior to
and existing on the date of termination for a period of ninety (90) days, and
at no additional cost will provide information to Company or Company’s designee
to facilitate the recall or ultimate sale of Accounts if necessary. Collector
will provide Company a final accounting with respect to all Accounts remaining
with the Collector at the end of the 90 day period.


 


8.                                      ERRORS
AND OMISSIONS AND BLANKET CRIME INSURANCE


 


8.1                                 Collector
shall maintain, at its own expense, (i) an errors and omissions insurance
policy or comparable self-insurance plan and (ii) a blanket crime policy, in
each case in accordance with industry standards for receivables similar to the
Loans and with broad coverage with established insurance companies, covering
all officers, employees or other persons acting on behalf of Collector in any
capacity with regard to the Loans to handle funds, money, documents and papers
relating to the Loans. The Collector shall provide Company with evidence of
such coverage upon request. Any such insurance shall protect and insure
Collector against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such persons and shall be maintained in a
form and amount that would meet the requirements of prudent institutional
collection companies servicing consumer receivables.


 


8.2                                 No
provision of this Section requiring such insurance shall diminish or relieve
Collector from its duties and obligations as set forth in this Agreement. Collector
shall cause each of its sub-contractors engaged as permitted under this
Agreement, if any, to maintain a policy of


 


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insurance covering errors
and omissions which would meet the above stated requirements. Upon Company’s
request, the Collector shall cause any sub-contractor to deliver to such person
a certificate evidencing coverage under such errors and omissions and/or crime
protection policies. Notwithstanding the foregoing, the Collector will give
prompt written notice to Company if the insurance coverage maintained by the
Collector pursuant to this Section is modified or amended in any way that would
be adverse to Company.


 


9.                                      EVENTS
OF DEFAULT


 


If any one of the
following events (“Events of Default”) shall occur and be continuing:


 


Any failure by Collector
to deliver to Company any proceeds or payment required to be so delivered under
the terms of this Agreement that shall continue unremedied for a period of two
(2) Business Days after the earlier of knowledge by the Collector of such
failure and receipt of written notice to Collector;


 


Failure on the part of
Collector to observe or to perform in any material respect any other covenants
or agreements set forth in this Agreement, which failure shall continue
unremedied for a period of thirty (30) days after the date on which written
notice of such failure shall have been received by Collector;


 


If there is breach of any
representation or warranty and such breach shall not be cured in all material
respects within thirty (30) consecutive days after the earlier of (i) receipt
of written notice from Company or (ii) upon discovery by Collector;


 


A voluntary or
involuntary petition for bankruptcy concerning Collector is filed under
Title 11 of the United States Code, the Collector makes a general
assignment for the benefit of creditors or commences any other proceeding under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Collector, or a custodian is
appointed for, or takes charge of, all or any substantial part of the property
of the Collector;


 


Any representation,
warranty, certification or statement made by the Collector in this Agreement or
in any certificate or report delivered by it pursuant to this Agreement shall
prove to have been incorrect in any material respect when made or deemed made
and such error shall not be cured in all material respects within thirty (30)
consecutive days after the earlier of (i) receipt of written notice from Company
or (ii) upon discovery by the Collector; or


 


Any merger or
consolidation of the Collector (including, without limitation, any conveyance,
transfer or lease of substantially all of its assets to another person) that
has not been consented to by Company.


 


then, and in each and
every case and so long as such event of default shall not have been remedied, Company
may terminate all of the rights and obligations of Collector under this
Agreement. In addition to the indemnification rights and the right to terminate
this Agreement


 


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as provided herein, the
Collector agrees that upon the happening of any of the foregoing events of
default, Company may avail itself of any other relief to which it may be
legally or equitably entitled.


 


10.                               INDEMNIFICATION


 


10.1                           Collector agrees to indemnify and hold Company and its respective officers, directors
employees and agents (each an “Indemnified Party”), harmless from and against
any and all claims, damages, losses, liabilities, penalties, fines,
forfeitures, legal fees and related costs, judgments and any other costs, fees
and expenses, including reasonable legal fees and expenses (collectively, “Losses”)
that such Indemnified Party may sustain in any way related to the negligence or
misconduct of Collector (or any person hired by the Collector) in its
performance under the terms of this Agreement, or arising from any breach of
the representations and warranties of Collector, provided, however,
that Collector shall not be required to indemnify any Indemnified Party against
any Losses that the Collector Indemnitees may sustain in any way related to
errors in such accounting and servicing records and other documentation
provided to the Collector by Company or third party retained by Company. Collector shall immediately notify Company if a claim is made by a third party with
respect to this Agreement or any of the Loans.


 


10.2                           Collector may accept and reasonably rely on
all accounting and servicing records and other documentation provided to
Collector by or at the direction of Company. Company acknowledges
and agrees that Collector, its respective officers, directors, employees and
agents (each a “Collector Indemnitee”), shall be held harmless and indemnified from
and against any and all claims, losses, liabilities, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that Collector may sustain in any way related to the negligence or
misconduct of the Company with
respect to the origination of the Loans, provided, however, that Company shall not be required to indemnify Collector
Indemniteees against any Losses that the Collector Indemnitees may sustain in
any way related to errors in such accounting and servicing records and other
documentation provided to the Collector by Collector or any third party
retained by the Collector.


 


10.3                           This right to indemnification shall survive
the termination of this Agreement.


 


11.                               CONFIDENTIALITY


 


11.1                           Confidential Information. Each Party and their respective affiliates, directors, officers, employees,
authorized representatives, agents and advisors (including without
limitation, attorneys, accountants, consultants, bankers and financial
advisors) shall keep confidential all
information concerning the other Party’s proprietary business procedures,
products, services, operations, marketing materials, fees, policies or plans
and all Nonpublic Personal Information of the other Party that is
received or obtained during the negotiation or performance of the Agreement,
whether such information is oral or written, and whether or not labeled as
confidential by such Party (collectively “Confidential Information”). “Nonpublic
Personal Information” shall include all personally identifiable financial
information and any list,


 


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description
or other grouping of consumers, and publicly available information pertaining
to them, that is derived using any personally identifiable financial
information that is not publicly available, and shall further include all “nonpublic
personal information” as defined by federal regulations implementing the
Gramm-Leach-Bliley Act, as amended from time to time. “Personally identifiable
financial information” means any information a consumer provides to a Party in
order to obtain a financial product or service, any information a Party
otherwise obtains about a consumer in connection with providing a financial
product or service to that consumer, and any information about a consumer
resulting from any transaction involving a financial product or service between
a Party and a consumer. Personally identifiable information may include,
without limitation, a consumer’s first and last name, physical address, zip
code, email address, phone number, social security number, birth date, and any
other information that itself identifies or when tied to the above information,
may identify a consumer.


 


11.2                           Use of Confidential Information. The Parties shall use Confidential
Information only as necessary to perform the Agreement, provided however, that
the Parties may use Confidential Information that is Nonpublic Personal
Information in a manner consistent with the direction of the consumer to which
it relates. For as long as Confidential Information is in possession of a Party,
such Party shall take reasonable steps, at least substantially equivalent to
the steps it takes to protect its own proprietary information, to prevent the
use, duplications or disclosure of Confidential Information, provided, however,
that a Party may disclose Confidential Information (i) to its employees or
agents who are directly involved in negotiating or performing the Agreement and
who are apprised of their obligations under this Addendum and directed by the
receiving Party to treat such information confidentially, or (ii) as required
by law or by a supervising regulatory agency of a receiving Party. Neither Party
shall disclose, share, rent, sell or transfer to any third party any
Confidential Information except as necessary to perform the Agreement;
provided, however, that if either Party discloses, shares, rents, sells or
transfers Nonpublic Personal Information to any third party, the disclosing Party
shall (i) prohibit each third party recipient of Nonpublic Personal Information
from disclosing, sharing, renting, selling or transferring such Nonpublic
Personal Information to any other third party except as necessary to perform
the Agreement, and (ii) require each third party recipient of Nonpublic
Personal Information to comply with the requirements of this Addendum. The Parties’
rights and obligations under this Addendum shall survive termination of the
Agreement indefinitely.


 


11.3                           Privacy Policies. Each Party’s Privacy Notices and Privacy
Policies are consistent with the Federal Trade Commission’s procedures, rules
and regulations, as applicable and as amended from time to time, and comply
with acceptable trade practices and the instructions of the consumer whose
Nonpublic Personal Information is involved. Neither Party’s Privacy Notices and
Privacy Policies conflict with such Party’s obligations under the Agreement.


 


11.4                           Return of Information. Upon the termination or expiration of the
Agreement, or at any time upon the request of the disclosing Party, the other Party
shall promptly return all Confidential Information received in connection with
the transaction, and shall promptly destroy such materials containing such
information (and any copies, extracts, and summaries thereof) and shall further
provide the other Party with written confirmation of such return or


 


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destruction
upon request; provided, however, that this Section shall not apply to Nonpublic
Personal Information received by a Party in accordance with the terms of the
Agreement, for the sole purpose of performing the Agreement.


 


11.5                           Indemnity; Remedies. In the event a Party discovers that
Confidential Information has been used in an unauthorized manner or disclosed
in violation of this Addendum, the Party discovering the unauthorized use or
disclosure shall immediately notify the other Party of such event, and the
disclosing Party shall indemnify and hold the other Party harmless from all
claims, damage, liability, costs and expenses (including court costs and
reasonable attorneys’ fees) arising or resulting from the unauthorized use or
disclosure. In addition, the non-disclosing Party shall be entitled to all
other remedies available at law or equity, including injunctive relief.


 


12.                               MISCELLANEOUS


 


12.1                           Subcontractors. Neither Party may subcontract any of its
obligations hereunder to any third party without the prior express written
consent of the other.


 


12.2                           No Agency Relationship. The relationship between Company and Collector shall not be construed as a
joint venture, partnership or principal-agent relationship, and under no
circumstances shall any of the employees of one Party be deemed to be employees
of the other Party for any purpose. This Agreement shall not be construed as
authority for either Party to act for the other in any agency or any other
capacity, except as expressly set forth in this Agreement.


 


12.3                           Waivers; Cumulative Remedies. No failure or delay on the part of Company to insist upon the strict performance of any
term or condition under this Agreement or to exercise any right or remedy
available under this Agreement at law or in equity, shall imply or otherwise
constitute a waiver of such right or remedy, and no single or partial exercise
of any right or remedy by any Party will preclude exercise of any other right
or remedy. All rights and remedies provided in this Agreement are cumulative
and not alternative; and are in addition to all other available remedies at law
or in equity.


 


12.4                           Further Assurances. Each Party agrees, if reasonably requested
by the other Party, to execute and deliver such additional documents or
instruments and take such further actions as may be reasonably necessary to
effect the transactions contemplated by this Agreement.


 


12.5                           Notices. All notices and other communications required
or permitted to be given under this Agreement shall be in writing and shall be deemed given (i) three business days
after being deposited in the U.S. mail, first class, postage prepaid, (ii) upon
transmission, if sent by facsimile transmission, or (iii) upon delivery, if
served personally or sent by any generally recognized overnight delivery
service, to the following addresses:


 


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  To
  the Collector:

  	
  Penncro
  Associates, Inc.

  
	
   

  	
   

  	
  95
  James Way, Suite 113

  
	
   

  	
   

  	
  Southampton,
  PA 18966.

  
	
   

  	
   

  	
  Attn:
  Steve Beranek, SVP – Business Development

  
	
   

  	
   

  	
   

  
	
   

  	
  To
  Company:

  	
  P2P
  Credit, Inc.

  
	
   

  	
   

  	
  153
  Kearny Street, Mezzanine

  
	
   

  	
   

  	
  San
  Francisco, CA 94108

  
	
   

  	
   

  	
  Attn:
  JP Whelan, VP Finance

  
	
   

  	
   

  	
  Fax
  no. (415) 362-7233

  



 


The timing and content of any advertisements,
announcements, press releases or other promotional activity relating to this
Agreement, and the use of each other’s name or trademarks shall be subject to
the prior approval of both Parties.


 


12.6                           Assignment. Neither Party may transfer or assign all or a portion of its rights,
obligations and duties under this Agreement to unless the other Party has
consented to such transfer or assignment.


 


12.7                           Limitation of Liability. NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY UNDER THIS
AGREEMENT FOR ANY DAMAGES OR CLAIMS FOR LOST PROFITS OR CONSEQUENTIAL,
INCIDENTAL OR PUNITIVE DAMAGES.


 


12.8                           Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.


 


12.9                           Entire Agreement. This Agreement, including any exhibits or
other documents attached hereto or referenced herein, each of which is hereby
incorporated into this Agreement and made an integral part hereof, constitutes
the entire agreement between the Parties relating to the subject matter hereof
and there are no representations, warranties or commitments except as set forth
herein. This Agreement supersedes all prior understandings, negotiations and
discussions, written or oral, of the Parties relating to the transactions
contemplated by this Agreement.


 


12.10                     Modification. This Agreement may not be changed orally but
only by an agreement in writing, signed by the Party against whom enforcement
of any waiver, change, modification, or discharge is sought.


 


12.11                     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.


 


12.12                     Provisions Severable. If any provision of this Agreement shall be
or become wholly or partially invalid, illegal or unenforceable, such provision
shall be enforced to the extent that its


 


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legal
and valid and the validity, legality and enforceability of the remaining
provisions shall in no way be affected or impaired.


 


12.13                     Counterparts. This Agreement may be executed in two or
more counterparts, each of which together shall be deemed an original, but all
of which shall constitute one and the same instrument.


 




12.14                     Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the Parties hereto and their respective
successors and assigns.


 


 [SIGNATURE PAGE TO FOLLOW]


 


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IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the date first written above.


 


 


COLLECTOR:


 


Penncro
Associates, Inc.


 


	
  By:

  	
    /s/
  REGINA CROWLEY

  	
   

  
	
  Name:

  	
  Regina
  Crowley

  	
   

  
	
  Its:

  	
  President

  	
   

  
					



 


 


COMPANY:


 


P2P
CREDIT, INC.


 


 


	
  By:

  	
    /s/
  CHRIS LARSEN

  	
   

  
	
  Name:

  	
  Chris
  Larsen

  	
   

  
	
  Its:

  	
  CEO

  	
   

  
					



 


13

















 


APPENDIX A


 


Fees


 


Any
amounts due which are collected during the first 30 days a Collector has an
Account shall entitle the Collector to 15% of all these amounts (the “Collection
Fee”), whether past due or due for the current period.


 


The
applicable Collection Fee shall be multiplied by 70% for each 30 days that the
Collector has a particular Account. For instance, a collection made during the
second 30 day period during which the Collector has account shall be subject to
a 10.50% commission. If made during the third 30 day period, it shall be
subject to a 7.35 % commission.


 


Regardless
of which during which 30 day period collected, the Collection Fee shall have 5%
added to it for any collections which bring an Account current. For instance, a
collection made during the first 30 day period which brings an Account totally
current shall be subject to a 20% commission.


 


14

















 


Appendix B


 


Technology Requirements


 


•                  Technology requirements may be modified by
the mutual written consent of the Parties.


 


•                  Data transmissions to and from P2P Credit
will occur via a secure FTP server on a daily batch basis using a P2P Credit
approved format.


 


•                  “Diff” files on P2P Credit account
information to be transmitted from Collector to P2P Credit daily. Complete P2P
account information to be transmitted on a weekly basis.


 


•                  Borrower account information to be maintained
will include, among other items, number and mode of contact attempts,
successful contacts and content of interaction, and repayment information.


 


•                  Collector to maintain appropriate firewalls,
anti-virus and encryption standards for the protection of P2P account
information.


 


•                  Collection agents computer systems to operate
under lockdown, with no printing and downloading capabilities available at
agent terminals. Appropriate security measures to be followed with respect to
information security.


 


•                  Collector to host all P2P account database
information domestically, and all account records to remain onshore.


 


•                  Collector to keep current and provide to P2P
Credit with written documentation of the Disaster Recovery, Security and
Security Audit programs to be implemented on P2P Credit accounts.


 


•                  P2P Credit to have ability to conduct an
onsite audit of Collector facilities and practices on a reasonable, periodic
basis.


 


•                  Collector to maintain records of all
collection attempts, all collection e-mails sent to or received from borrower,
and recordings of all phone conversations.


 


•                  Collector to notify P2P Credit immediately if
a security breach is detected and suspected.


 


15

















 


ADDENDUM NUMBER ONE


TO


COLLECTION SERVICE AGREEMENT


 


This Addendum Number One (“Addendum”) supplements and
amends the Collection Services Agreement dated as of September 13, 2005 (the “Agreement”)
by and between P2P Credit, Inc., now known as Prosper Marketplace, Inc. (“Prosper”),
and Penncro Associates, Inc. (“Penncro”). Capitalized terms not defined in this
Addendum shall have the definitions set forth in the Agreement.


 


WHEREAS, under the Agreement, Penncro performs
collection services in connection with delinquent Accounts that have become
more than thirty (30) days past due and have been referred to Penncro for
collection;


 


WHEREAS, Prosper desires to have Penncro make telephone
calls on behalf of Prosper to customers whose Accounts are delinquent but less
than thirty (30) days past due;


 


NOW, THEREFORE, in consideration of the mutual promises
contained in the Agreement and this Addendum, the parties hereby acknowledge
and agree as follows:


 


1.                                      ADDITIONAL
COLLECTION SERVICES


 


1.1                                 Commencing upon
execution of this Addendum, in addition to the collection services provided by
Penncro as set forth in the Agreement, Penncro shall make telephone calls (“Payment
Follow-up Calls”) on Saturdays and Sundays, to designated Prosper customers
whose Accounts are delinquent but less than thirty (30) days past due, to
request that monthly payments on the customers’ Accounts be made.


 


1.2                                 All Payment Follow-up
Calls will be made in Prosper’s name. When making the calls Penncro shall not
tell or suggest to customers that their Accounts have been referred to Penncro
for collection.


 


1.3                                 In connection with the
Payment Follow-up Calls, Penncro shall follow the guidelines and reporting
requirements set forth on the attached Exhibit A.


 


2.                                      PROSPER’S
RIGHTS AND OBLIGATIONS


 


2.1                                 Prosper shall provide
Penncro with a list of Accounts and customers to be contacted during the
upcoming weekend.


 


2.2                                 Prosper may, in its
sole discretion, request that Penncro make Payment Follow-up Calls on days
other than Saturdays and Sundays, and Penncro shall make calls on the
additional days as well.


 


16

















 


2.3                                 Prosper is not
obligated to forward any minimum number of Accounts, or request that Penncro
make any minimum number of Payment Follow-up Calls, pursuant to this Addendum.


 


3.                                      COMPENSATION


 


Prosper shall pay Penncro compensation for making the
Payment Follow-up Calls, as described on the attached Exhibit b.


 


4.                                      TERMINATION
OF ADDENDUM


 


Either party shall have the right to terminate this
Addendum for convenience, with or without cause, upon thirty (30) days prior
written notice to the other party.


 


5.                                      MISCELLANEOUS


 


Except for the changes set forth in this Addendum, the
Agreement shall remain unchanged in all respects, and shall remain in full
force and effect in accordance with its terms.


 


	
  PROSPER MARKETPLACE, INC.

  	
  PENNCRO ASSOCIATES, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ JOHN B. WITCHEL

  	
   

  	
  By:

  	
    /s/ REGINA CROWLEY

  	
   

  	
   

  
	
  John B. Witchel

  	
   

  	
  Regina Crowley

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  CTO & Secretary

  	
   

  	
  Title:

  	
  President

  	
   

  
													



 


17

















 


EXHIBIT A


 


PAYMENT FOLLOW-UP CALL GUIDELINES AND REPORTING


 


1.               Accounts are 1-30 days past due.


2.               Accounts that have a payment in process will
be excluded.


3.               Borrowers should be asked to make a manual
payment on the Prosper website (www.prosper.com) by going to the “Your Account –
Borrower” tab.


 


a.               Borrowers can schedule a payment in advance
on our website if funds are not currently available – e.g. they can post-date
payments


b.              If borrowers no longer have a checking
account, Penncro can take a payment or we will take checks/money orders, but
these are not the preferred methods of payment


 


	
   

  	
  i.

  	
  Prosper
  Marketplace

  
	
   

  	
   

  	
  111
  Sutter Street, 22nd floor

  
	
   

  	
   

  	
  San
  Francisco, CA 94104

  



 


4.               When leaving message, tell Borrowers to look
for Prosper emails and leave Prosper’s Customer Service number
(1-800-208-0103). Hours are M-F, 6AM-6PM PST.


5.               If borrowers ask, their account is not
considered to be at the “collection agency” and will not be reported as
delinquent to the bureau until they are > 30 days past due


6.               Any account questions, take name and number
and Prosper will have someone from Prosper call them back


7.               Penncro will email Excel file to Nancy
Satoda, Prosper’s Director of Credit Risk, at nancy@prosper.com on the morning
of the next business day after calls are made, with the following details:


 


a.               User ID


b.              Loan ID


c.               Call attempt detail


 


	
  i.

  	
   

  	
  Date/time
  attempts

  
	
  ii.

  	
   

  	
  Call
  result

  
	
  iii.

  	
   

  	
  Decoder
  for call result notations

  



 


18

















 


EXHIBIT B


 


COMPENSATION


 


Compensation for the services performed will be
$0.20/account for each Payment Follow-up
Call attempt made.


 


19