EX-10.27





Exhibit 10.27




BACKUP AND SUCCESSOR SERVICING AGREEMENT




	 	 	 	 	 
	DATE:

	 	September 15, 2008
	 	(“Effective Date”)
	 
	 	 	 	 
	BETWEEN:

	 	Portfolio Financial Servicing Company
	 	(“PFSC”)
	 

	 	2121 S.W. Broadway, Suite 200	 	 
	 

	 	Portland, OR 97201	 	 
	 
	 	 	 	 
	AND:

	 	Lendingclub Corporation
	 	(“Client”)
	 

	 	440 North Wolfe Road	 	 
	 

	 	Sunnyvale, CA 94085	 	 






Whereas, Client provides financial products and services for certain accounts, including the
servicing of borrower member loan accounts and the remittance of payments due on other obligations
associated with such borrower member loan accounts to Client lender member payment accounts
(Client’s borrower member loan accounts and lender member payment accounts, collectively, the
“Client Portfolio”);



Whereas, PFSC is engaged in the business of primary and back-up servicing of leases and loans as
well as providing technology and other consulting services;



Whereas, Client wishes to engage PFSC to provide back-up servicing for the Client Portfolio
under the terms and conditions in this Servicing Agreement (“Agreement”).



NOW, THEREFORE, in consideration of the parties’ mutual promises and for other consideration,
the sufficiency of which is hereby acknowledged, the parties agree as follows:



1. Services.




1.1 Services Provided.   PFSC shall provide all services reasonably necessary to service
the Client Portfolio, including without limitation those services set forth on Schedule 1
(collectively, the “Services”).




1.1.1 Preparation. To the extent not already completed as of the Effective Date,
PFSC shall promptly commence the Services listed on Schedule 1 relating to preparing to
service the Client Portfolio and shall complete all such preparations within Sixty (60)
days after the Effective Date.




1.1.2 Standby. Following the completion of the preparations to service the Client
Portfolio, PFSC shall remain in readiness to service the Client Portfolio throughout the
Term of this Agreement.


 












 






1.1.3 Successor Servicing. With five (5) business days prior written notice from
Client or Client’s designated indenture trustee, PFSC shall service the Client Portfolio.




1.2 Standard of Care. In providing the Services,
 PFSC shall use a standard of care and
diligence reasonable in the consumer loan servicing industry.




1.3 Exclusions from Services. PFSC shall have no obligation to originate, underwrite,
book or service new loans once it is designated the successor servicer, nor extend credit to
any Client borrower member or to Client in performance of its obligations under this Agreement.
PFSC acknowledges that it is the intent of the parties that this Agreement not be deemed a
“financial accommodation” for purposes of the United States Bankruptcy Code, 11 U.S.C. § 101 et
seq.



2. Compensation.



2.1 Fees. PFSC shall receive the amounts listed in Schedule 2 in exchange for the
Services. PFSC shall be responsible for all bank, clearing house, or any other third party
fees, costs or expenses arising from or relating to the provision of the Services.




2.2 Costs. PFSC shall have no obligation to pay or advance on behalf of Client any
third-party costs and expenses incurred out of the ordinary course in providing the Services,
but Client may request that PFSC advance such extraordinary third-party costs and expenses. If
in the exercise of PFSC’s sole discretion PFSC elects to pay such extraordinary third-party
costs and expenses on behalf of Client, Client shall reimburse PFSC for all reasonable
third-party costs and expenses incurred or otherwise advanced by PFSC as a direct result of
providing the Services.




2.3 Invoices. PFSC’s invoices for the fees listed in Schedule 2 and third-party costs
and expenses incurred by PFSC under this Agreement shall be due from Client within fifteen (15)
calendar days of invoice receipt (whether paper or electronic), and in readily collectible U.S.
Dollars. Upon request, PFSC will provide to Client copies of documents showing that third-party
costs and expenses invoiced have been incurred by PFSC.




2.4 Late Charge. If Client fails to pay any amounts owed by Client when due, Client
shall pay to PFSC a late charge equal to the greater of one and one-half percent (1.5%) per
month (or the daily prorated amount thereof) on any past-due amounts, or $150.00.



3. Software Development and License.





3.1 Development. Client will develop and deliver to PFSC in object code form only a
software program with the functionality and reliability that allows PFSC to perform certain of
the successor servicer services identified in Schedule 1 (the “Licensed Software”) no later
than sixty (60) days after the Effective Date.




3.2 License. Effective upon delivery of the Licensed Software to PFSC, Client grants
PFSC
during the Term a royalty-free, irrevocable, non-transferable (by operation of law or
otherwise), non-sublicenseable, non-exclusive, license to use the Licensed Software in the
United States solely in connection with providing the Services for the Client Portfolio.


 


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3.3 No Other Rights. Nothing contained in this Agreement shall be construed as
conferring any rights with respect to the Licensed Software or any other software, technology or
intellectual property of Client by implication, estoppel or otherwise. All rights not expressly
granted above or otherwise in this Agreement are reserved by Client. Subject to the license
rights granted in this Agreement, Client retains all right, title, and interest it holds in and
to all of its intellectual property.




3.4 DISCLAIMER OF WARRANTIES.  EXCEPT AS MAY BE EXPRESSLY PROVIDED IN SCHEDULE 3, THE
LICENSED SOFTWARE IS LICENSED TO PFSC “AS IS” AND WITHOUT WARRANTY OF ANY KIND. CLIENT
DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
NON-INFRINGEMENT.



4. Agent and Power of Attorney. Client hereby appoints PFSC as Client’s agent to execute,
file, prepare, or record documents and otherwise perform on Client’s behalf all actions reasonably
necessary for PFSC to perform the Services. Client hereby appoints PFSC as Client’s
attorney-in-fact to act in the name of Client to perform the Services, if PFSC commences the
servicing of the Client Portfolio. Without limiting the generality of the foregoing, Client’s
agency and attorney-in-fact appointment authorizes PFSC to execute UCC documents, vehicle title or
registration documents, or bills of sale or prepare or file any other document PFSC deems necessary
or desirable to perform the Services. Upon PFSC’s request, Client shall execute and deliver to PFSC
a revocable and limited power of attorney to further authorize PFSC to perform the Services.



5. Term of Agreement.




5.1 Initial Term and Renewals. This Agreement shall commence on the Effective Date and
continue for a period of three (3) years after the Effective Date (the “Initial Term”). This
Agreement shall automatically renew for consecutive one (1) year periods (each, a “Renewal
Term” and, together with the Initial Term, the “Term”), unless either party provides written
notice of that party’s intent not to renew at least one hundred twenty (120) calendar days
prior to expiration of the Initial Term or any Renewal Term.




5.2 Early Termination.




5.2.1 Early  Termination by Client for Cause. Client may terminate this
Agreement for cause by giving at least thirty (30) calendar days’ written notice to PFSC,
upon the occurrence of any of the following:




(a) PFSC commits a material breach of this Agreement, which breach is not cured within
ten (10) business days of written notice from Client; or




(b) Any gross negligence or willful misconduct of PFSC.


 


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5.2.2 Early Termination by PFSC for Cause. PFSC may terminate this Agreement for
cause by giving at least thirty (30) calendar days’ written notice to Client, upon the
occurrence of any of the following:




(a) Client commits a material breach of this Agreement, which breach is not cured
within ten (10) business days of written notice from PFSC; or




(b) Any gross negligence or willful misconduct of Client.




(c) PFSC determines that the performance of its duties hereunder is no longer
permissible under any laws, rules, or regulations applicable to it or if termination of
the Services is required by governmental or regulatory authorities.




5.2.3 Early Termination by Client for Convenience. In addition to Client’s rights
not to renew this Agreement under Section 5.1, Client may terminate this Agreement for
convenience by:




(a) Providing PFSC with one hundred twenty (120) calendar days’ prior written notice
(the “Early Termination Notice”) of its intention to terminate the Agreement prior to
its stated Initial Term or any Renewal Term; and




(b) Paying to PFSC a fee equal to (i) the sum of all invoices for Services billed by
PFSC to Client for the preceding four (4) month period immediately prior to delivery of
the Early Termination Notice (the “Early Termination Fee”). If the Early Termination
Notice is given within four (4) months of the date on which this Agreement would
otherwise expire, the Early Termination Fee shall be pro-rated for the time remaining
until this Agreement would otherwise expire. The Early Termination Fee is due and
payable at such time as the Early Termination Notice is delivered to PFSC, and the
notice period shall not commence until such Early Termination Fee has been received by
PFSC in readily collectible U.S. Dollars.




5.2.4 Early Termination by PFSC for Convenience. PFSC shall not terminate this
Agreement for convenience.



6. Termination and Expiration.




6.1 Return of Confidential Information. Within fifteen (15) days after termination or
expiration of this Agreement for any reason, including the expiration of the Initial Term or of
any Renewal Term, and upon Client’s payment to PFSC of any and all amounts due under this
Agreement, PFSC shall return to Client or destroy (and certify as to the destruction thereof,
without retaining any copies) all originals and duplicates of any Confidential Information, as
defined in Section 16.1, in any form or medium. Upon request by Client, PFSC shall promptly
send such materials as Client may specify in the manner and format
reasonably requested by Client to Client and to any third party designated by Client.


 


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6.2 Payment upon Termination. Prior to PFSC’s delivery of final Client Portfolio data,
Client shall prepay to PFSC the expected fees of the Services and all expenses for the final
month that PFSC provides the Services. Client shall also pay PFSC for all out-of-pocket costs
and expenses incurred by PFSC in connection with the transfer of Client’s files, books, and
records and of servicing of the Client Portfolio, including those costs and expenses incurred
after termination and expiration. Without limiting the generality of the foregoing, Client
shall pay PFSC’s hourly rate of $150.00 per hour for any programming or IT support and $105.00
per hour for all other administrative support services requested by Client in connection with
Client’s request for the return of documents or files and transition assistance in connection
with the transfer of Client’s files, books, and records and of servicing of the Client
Portfolio. Within thirty (30) calendar days after the termination date, PFSC shall provide
Client with a final accounting of fees and expenses and shall either invoice Client for any
remaining charges or refund the necessary amount to the Client, as appropriate.



7. Representations and Warranties of PFSC. PFSC represents and warrants the following:




7.1 Business Entity; Authority. PFSC is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware, and is authorized to conduct
business in the State of Oregon and has obtained all necessary licenses and approvals in all
jurisdictions where failure to be so qualified and in good standing would have a material
adverse effect on PFSC’s business and operations or its ability to provide the Services
contemplated by this Agreement.




7.2 Authorization; Binding Agreement. The execution, delivery, and performance of this
Agreement have been duly authorized by all necessary action by PFSC. This Agreement has been
duly and validly executed and delivered on behalf of PFSC and is binding upon and enforceable
against PFSC in accordance with its terms, except as enforceability may be limited or affected
by applicable bankruptcy, insolvency, reorganization, or other laws of general application
relating to or affecting the rights of creditors, and except as enforceability may be limited by
equitable principles including specific performance and injunctive relief (whether sought in a
proceeding in equity or at law).




7.3 No Adverse Consequences. The execution and delivery of this Agreement by PFSC, the
consummation of the transactions contemplated hereby, and the provision of the Services will
not (i) violate any applicable law, judgment, order, decree, regulation, or ruling of any
governmental authority or violate any provision of the Articles of Incorporation of PFSC, or
(ii) either alone or with the giving of notice or the passage of time or both, conflict with,
constitute grounds for termination of, or result in the breach of the terms, conditions, or
provisions of or constitute a default under any agreement, instrument, license, or permit to
which PFSC is a party or by which it is bound.




7.4 FCPA. PFSC is aware of and familiar with the provisions of the Foreign Corrupt Practices
Act of 1977, as amended, (“FCPA”) and will act in compliance with and take no action and make
no payment in violation of or which might cause it or Client and each of
their respective directors, officers, employees, or agents to be in violation of the FCPA.


 


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7.5 No Ownership Interest by PFSC. PFSC does not have any ownership or other interest in
the underlying assets, payment streams, equipment, legal documents, or other tangible or
intangible assets of the Client Portfolio. All materials delivered by Client to PFSC in
connection with the Services shall be the property of Client, and Client shall have good and
clear title to all such materials.




7.6 Preservation of Security Interests. PFSC will defend the Client Portfolio against
all persons, claims, and demands whatsoever. PFSC shall not assign, sell, pledge, or exchange,
or in any way encumber or otherwise dispose of the Client Portfolio, except as permitted under
this Agreement and only with permission of Client.




7.7 Obligations with Respect to Loans. PFSC shall use commercially reasonable efforts
to duly fulfill and comply with all obligations on the part of Client or its assigns in
connection with each loan or note that comprises the Client Portfolio.



8. Representations and Warranties of Client. Client represents and warrants the following:




8.1 Business Entity; Authority. Client is a duly organized, validly existing corporation
or limited liability company and in good standing under the laws of the state of its
organization and has obtained all necessary licenses and approvals in all jurisdictions where
failure to be so qualified and in good standing would have a material adverse effect on Client’s
business and operations or on PFSC’s ability to provide the Services contemplated by this
Agreement.




8.2 Authorization; Binding Agreement. The execution, delivery, and performance of this
Agreement have been duly authorized by all necessary corporate action by Client and its
directors and shareholders. This Agreement has been duly and validly executed and delivered on
behalf of Client and is binding upon and enforceable against Client in accordance with its
terms, except as enforceability may be limited or affected by applicable bankruptcy, insolvency,
reorganization, or other laws of general application relating to or affecting the rights of
creditors, and except as enforceability may be limited by equitable principles including
specific performance and injunctive relief (whether sought in a proceeding in equity or at law).




8.3 No Adverse Consequences. Neither the execution and delivery of this Agreement by
Client nor the consummation of the transactions contemplated hereby will (i) violate any
applicable law, judgment, order, decree, regulation, or ruling of any governmental authority or
violate any provision of the Articles of Incorporation of Client, or (ii) either alone or with
the giving of notice or the passage of time or both, conflict with, constitute grounds for
termination of, or result in the breach of the terms, conditions, or provisions of or constitute
a default under any agreement, instrument, license, or permit to which Client is a party or by
which it is bound.




8.4 FCPA. Client is aware of and familiar with the provisions of the FCPA, and will act
in compliance with and take no action and make no payment in violation of or which might
cause it or PFSC and each of their respective directors, officers, employees, or agents to be
in violation of the FCPA.


 


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9. Compliance with Laws. In connection with the performance of this Agreement and its
performance and provision of the Services, PFSC and Client shall comply with all applicable
federal, state, and local laws, regulations, and rules (“Applicable Law”). PFSC is solely
responsible for (i) monitoring, interpreting and complying with Applicable Law, (ii) determining
the particular actions, disclosures, notices, formulas, calculations, and procedures required to
ensure the Services are provided in compliance with Applicable Law, (iii) maintaining an ongoing
program for compliance with Applicable Law, and (iv) maintaining all necessary state licenses,
bonds and business registrations for each state in which the Services are offered or provided. For
the avoidance of doubt, if Client is subject to a provision of or an amendment to Applicable Law,
compliance with which requires a certain procedure or process be employed by PFSC, PFSC shall duly
comply. PFSC shall modify its procedures as necessary to keep them in compliance with any changes
to Applicable Law. PFSC shall implement such changes as soon as reasonably practicable.



10. [Reserved]




11. [Reserved]




12. Independent Contractor. PFSC is an independent contractor and shall perform the
Services hereunder as such, and not as the agent, employee, or servant of Client. PFSC and Client
shall remain fully responsible for their respective employee’s actions, salaries, benefits, taxes,
worker’s compensation, unemployment insurance, and any other employee costs or benefits. Nothing
in this Agreement shall create a partnership or joint venture between PFSC and Client. Client does
not have and shall not acquire any ownership interest or any other rights whatsoever in any of
PFSC’s assets, including without limitation PFSC’s computer systems (hardware and software),
electronic and written reports or other data, web sites or URLs, telecommunications systems,
toll-free phone numbers, policies, procedures, process and flow charts, business practices, trade
names, trademarks, depository accounts, post office boxes, or any other tangible or intangible
asset of PFSC. Any computer programming, reporting customization, or other business practices,
improvements, or work adopted for the benefit of Client shall at all times remain the exclusive
property of PFSC, regardless of whether Client compensated PFSC for such practices, improvements,
or work.



13. Insurance. PFSC at its sole expense agrees to maintain the following insurance
coverage during the Term:



(a) All insurance coverage required by federal, state, or local law and statute, including
Worker’s Compensation Insurance; and




(b) Employer’s general liability insurance of $2,000,000 per claim and in the aggregate; and




(c) Errors & Omissions insurance of $2,000,000 per claim and in the aggregate.


 


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14. Employee
Non-Solicitation. During the Term and for a period of eighteen (18) months
thereafter, neither party shall directly, or indirectly through the use of third parties, hire or
solicit for purposes of employment the other party’s employees.



15. Access to Information.




15.1 Client. Upon giving at least two (2) business days’ written notice, PFSC shall give
Client and its counsel, accountants, and other representatives reasonable access, during normal
business hours, to all of PFSC’s files, books, and records (including computer records) relating
to the Client Portfolio, the Services, and any amounts PFSC charged and collected from Client or
deducted from payments made to Client’s lender members.




15.2 Regulatory Agency. Upon a request for information made by a regulatory authority
with jurisdiction over a party to either party, the party receiving such request shall promptly
inform the other party. Each party shall cooperate fully with the requesting regulatory
authority, to the extent permitted by Applicable Law, including (i) making available to the
requesting regulatory authority any and all information relating to such Party’s compliance
with the regulatory requirements; and (ii) if so requested, allowing the requesting regulatory
authority to visit and inspect the facilities of a party for purposes of evaluating compliance
with any regulatory requirements.



16. Confidentiality.





16.1 Confidential Information. All information disclosed by a party to the other party
in the course of performing under this Agreement or to which a party gains access in connection
with this Agreement, including, without limitation, any information concerning the customers,
trade secrets, methods, processes, or procedures, or any other confidential, financial, or
business information of the other party which it learns during the course of its performance of
this Agreement, shall be deemed to be the property of the disclosing party and confidential
(such information hereinafter referred to as “Confidential Information”). Confidential
Information shall include all information which is disclosed, made available, or as to which
access is provided verbally, electronically, visually, or in a written, graphic or machine
readable, via computer or electronic media, or other tangible form or otherwise, whether
directly or indirectly, whether or not identified as confidential or proprietary, obtained by a
recipient or any person on its behalf. Confidential Information shall also include all
personal, financial, and account information of Client’s borrower and lender members (“Client
Portfolio Information”).




16.2 Treatment of Confidential Information. Confidential Information shall be treated
as strictly confidential by the receiving party. Confidential Information may not be used
except as necessary to carry out obligations of the receiving party and shall not be disclosed
to any third party. Notwithstanding any other provision of this Agreement, Client may file this
Agreement with the U.S. Securities and Exchange Commission and any state securities regulator.
In addition, this Agreement imposes no obligation upon the parties with respect to Confidential
Information which either party can establish by legally sufficient evidence: (a) was



 


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in the possession
of, or was rightfully known by the receiving party without an
obligation to maintain its confidentiality prior to receipt from the other party; (b) is or becomes
generally known to the public without violation of this Agreement; (c) is obtained by the receiving
party in good faith from a third party having the right to disclose it without an obligation of
confidentiality; (d) is independently developed by the receiving party without the participation of
individuals who have had access to the Confidential Information; or (e) is required to be disclosed
by Applicable Law, provided notice is promptly given to the other party and provided further that
diligent efforts are undertaken to limit disclosure. With regard to disclosures under (e), where
disclosure is required by law, by a court or administrative body of competent jurisdiction, or by
any regulatory body which regulates the conduct of receiving party, or is required in defense of
any claims or causes of action asserted against it, provided that, to the extent permitted,
receiving party shall: (i) give the other party as much notice as is practicable of any such
requirement so that a protective order or other appropriate remedy may be sought; attempt to obtain
the other party’s consent to such disclosure; not disclose any more Confidential Information than
is reasonably necessary in the circumstances; assist and cooperate in any appropriate action which
the other party may decide to take in an effort to limit the nature and scope of any required
disclosure of Confidential Information. Notwithstanding the above exceptions, PFSC shall not
disclose Client Portfolio Information except under the circumstances described in subsection (e).



16.3 Protection of Information. The receiving party agrees and understands that it is
obligated to protect the other party’s Confidential Information. The receiving party will maintain
appropriate internal, technical, security and physical safeguards and other reasonably appropriate
measures to protect the security, confidentiality and integrity of Confidential Information
against unauthorized or unlawful access and accidental destruction or loss.



16.4 Security Event. If a party learns or has reason to believe that the other party’s
Confidential Information has been disclosed or accessed by an unauthorized party (each, a
“Security Event”), such party will immediately give notice of such event to the other party to the
extent permitted by law or law enforcement authorities. In such notification, the party will
report on the nature of the incident, the estimated impact on the other and investigative action
taken or planned. Security Events shall include, without limitation, violations of Applicable Law.
Notwithstanding anything in this provision, each party will also comply fully with all federal,
state or local laws applicable to security breaches. Except as may be required by law or law
enforcement authorities, to the extent the breach involves Client Portfolio Information, PFSC will
not notify any of Client’s customers or potential customers of unauthorized access of such
Security Event without Client’s express consent or upon Client’s specific instruction. The party
that experiences the Security Event will be responsible for the costs of any required
notifications.



16.5 Security Commitments. Each party shall take all reasonable steps to ensure that no
unauthorized persons have access to Confidential Information, and to ensure that no persons
authorized to have such access take any action which would be in violation of this Agreement. Such
steps shall include, but shall not be limited to, imposing strong password restrictions on systems
containing Confidential Information, securing networks through which Confidential Information will
be accessed from outside intrusion, preventing the
making of unauthorized copies of Confidential Information, and closely administering and
monitoring use of Confidential Information.


 


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16.6 Additional PFSC Security Commitments.




(a) PFSC shall maintain a written information security program applicable to the
performance of the Services reasonably designed to (i) ensure the security and
confidentiality of Confidential Information; (ii) protect against any anticipated threats
or hazards to the security or integrity of such information; (iii) protect against
unauthorized access to or use of such information that could result in substantial harm or
inconvenience to any customer; and (iv) ensure the proper disposal of Confidential
Information.




(b) PFSC shall maintain a designated individual to coordinate its information security
program. Such individual shall ensure that regular risk assessments are conducted
concerning each relevant area of operations concerning the Services, and that appropriate
internal and external controls are established to mitigate risks identified.




(c) PFSC shall regularly test and monitor the effectiveness of the controls established by
its information security program and shall modify such controls to reflect the results of
such testing and monitoring to enhance the security of the Confidential Information.




16.7 Reporting. PFSC shall promptly report to Client any actual or suspected violation
of Section 16 hereof and shall take such further steps as may reasonably be requested by to
prevent or remedy any such violation.



17. Ad Hoc Requests. During the Term, Client may make requests of PFSC that are not
included in the scope of Services set forth in this Agreement. In such instances, all requests
must be made by Client in writing, and PFSC shall respond to such requests in writing with a time
and cost estimate to fulfill Client’s request. Only after obtaining Client’s written approval to
the time and cost estimate will PFSC fulfill Client’s request and invoice Client for the
agreed-upon amount.



18. Indemnity.




18.1 Indemnity by Client. Client shall defend, indemnify, and hold PFSC, and its
shareholders, directors, affiliates, assignees, agents, and employees, harmless from and
against any and all claims, counterclaims, liabilities, losses, damages, court costs,
attorneys’ fees, and other expenses arising from or connected in any way with any third-party
claim (the “Claims”) concerning in any way the Services, but excepting Claims arising from, or
connected in any way to, PFSC’s gross negligence, willful misconduct, or breach of this
Agreement.




18.2 Indemnity by PFSC. PFSC shall defend, indemnify, and hold Client and its
shareholders, directors, affiliates, assignees, agents, and employees harmless from and against
any and all Claims arising from, or connected in any way to, PFSC’s gross
negligence, willful misconduct, or breach of this Agreement.


 


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19. Limitation of PFSC Liability and Limitation of Client’s Remedies. Neither PFSC nor any
of its directors, officers, members, partners, employees, auditors, accountants, or agents shall be
liable for any action taken, suffered, or omitted by it in good faith and believed to be authorized
or within the discretion, rights, or powers conferred upon it by this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect any such person against
liability which would otherwise be imposed on such person by reason of such person’s gross
negligence or willful misconduct. No liability shall accrue to PFSC when:




(a) PFSC takes any action, refrains from the taking of any action, or offers any advice or
suggested course of action for Client or the Client Portfolio in accordance with customary
industry standards for servicing loans of the type which comprise the Client Portfolio pursuant
to this Agreement;




(b) Client fails to provide necessary, timely, or accurate information in order for PFSC to
fulfill the Services described in this Agreement; or




(c) PFSC relies, in good faith, on any document of any kind which, prima facie, is properly
provided by an appropriate person respecting any matters arising hereunder;



IN NO EVENT SHALL PFSC BE LIABLE TO CLIENT FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES,
OR ANY LOST REVENUES OR PROFITS, ARISING IN ANY WAY FROM THE PERFORMANCE, NON-PERFORMANCE, OR
BREACH OF THIS AGREEMENT, OR ARISING FROM ANY CLAIMS OF NEGLIGENCE, IN TORT OR ANY OTHER THEORY OF
RECOVERY BY CLIENT, INCLUDING, WITHOUT LIMITATION, ANY CLAIM OF LOSS OR DAMAGES RESULTING FROM ANY
LOSS OF DATA, REVENUE, OR PROFITS. IN NO EVENT SHALL PFSC BE LIABLE OR SUBJECT TO PUNITIVE DAMAGES
UNDER ANY THEORY OF RECOVERY BY CLIENT.



20. Force Majeure. No party to this Agreement shall be liable for any failure to perform
its obligations where such failure is a result of acts of nature (including fire, flood,
earthquake, storm, hurricane, or other natural disaster), war, invasion, act of foreign enemies,
hostilities (whether war is declared or not), civil war, rebellion, revolution, insurrection,
military or usurped power of confiscation, terrorist activities, nationalization, government
sanction, blockage, embargo, labor dispute, strike, lockout, or interruption or breakdown of public
or private or common carrier communications or transmission facilities or equipment failure, or the
failure of any financial institution or clearing house to execute properly-formatted instructions
provided by PFSC in the course of performing the Services.



21. Urgency. Time is of the essence for the provision of the Services by PFSC and Client’s
payment obligations under this Agreement.



22. Amendment. No modification, amendment, or waiver of any provision of, or consent
required by, this Agreement, nor any consent to any departure herefrom, shall be effective unless
it is in writing and signed by authorized officers of the parties hereto. Such modification,
amendment, waiver, or consent shall be effective only in the specific instance and for the purpose
for which given.


 


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23. No Assignment. Neither party may assign this Agreement or its rights hereunder, or
delegate its obligations hereunder, without the prior written consent of the other party. Subject
to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective permitted successors and assigns.



24. Waiver. No delay or omission on the part of any party in exercising any right
hereunder shall operate as a waiver of any such right or any other right. All waivers must be in
writing.



25. Severability. If any provisions of this Agreement are found to be unenforceable as to
any person or circumstance, such finding shall not render such a provision invalid or
unenforceable as to any other person or circumstance and shall not invalidate any other provision
or provisions of this Agreement. If feasible, the term or provision which is found to be invalid
or unenforceable shall be deemed to be modified to be within the limits of validity or
enforceability.



26. Choice of Law; Arbitration; Attorney Fees.




26.1 Choice of Law. This Agreement shall be governed, construed, and enforced in
accordance with the laws of the State of Oregon.




26.2 Arbitration. Any conflict, claim, or dispute between the parties arising under or
related in any way to this Agreement, or any breach of this Agreement, or any claim that any of
this Agreement is invalid, illegal, voidable, or void, or any other claim relating to either
party’s performance or non-performance of this Agreement, shall be subject to mandatory, binding
arbitration under the authority of the American Arbitration Association. The arbitration shall
be conducted before a panel of three arbitrators using the Commercial Arbitration Rules. The
location of the arbitration shall be in Portland, Oregon. The arbitrators’ award may be entered
in any court with jurisdiction. At the request of either party prior to the arbitration award,
the arbitrators shall make written findings of fact and conclusions of law as part of their
award. Each party shall pay all applicable fees and costs billed by the American Arbitration
Association prior to arbitration, including without limitation the arbitrators’ fees and
expenses.




26.3 Attorney Fees. The prevailing party as determined by the arbitrators shall be
entitled to an award against the non-prevailing party of the prevailing party’s reasonable
attorney fees, together with all other costs, fees, expert fees, deposition costs, or other
costs incurred in connection with the arbitration.



27. Survival. Sections 16, 18, 19, 23, 24, 26, and 27 shall survive the expiration,
cancellation, or other termination of this Agreement.


 


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28. Notices. All notices, requests, demands, or other communications given hereunder shall
be in writing and shall be deemed to have been duly given (i) when deposited in the United States
mail, postage prepaid, as registered or certified mail, (ii) when sent by courier service, or (iii)
when sent by facsimile, to the parties at their addresses or phone numbers set forth in this
Agreement or to such other addresses or phone numbers as the parties may designate by written
notice to the other party in accordance with this section. If such notice, demand, or other
communication is given by mail, it shall be conclusively deemed given seventy-two (72) hours after
the deposit thereof in the United States mail addressed to the party to whom such notice, demand,
or other communication is to be given. If such notice, demand, or other communication is provided
by courier service, it shall be conclusively deemed made at the time of delivery of such service to
the party’s designated address. If such notice, demand or other communication is provided by
facsimile, it shall be conclusively deemed made at the time of receipt by the sender of an
electronic receipt indicating successful transmission.



29. Further Assurances. Each of the parties hereto shall execute and deliver any and all
additional papers, documents, and other assurances, and shall do any and all acts and things
reasonably necessary in connection with the performance of its duties and obligations hereunder
and to carry out the intent of the parties hereto.



30. Entire
Agreement. This Agreement contains the entire understanding of, and supersedes
all prior or contemporaneous agreements not specifically referred to herein among, the parties
with respect to the subject matter hereof. The Servicing Agreement between the parties dated April
1, 2008, and any associated amendments or understandings
(collectively, the “Prior Agreement”), is
hereby expressly terminated and of no further force or effect.



31. Remedies Cumulative. All of a party’s remedies for a breach of this Agreement shall be
cumulative and the exercise of one or more remedies shall not be deemed an election or waiver of
any other remedy.



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



(Signature page immediately follows)




 


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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.



Client:




LENDINGCLUB CORPORATION




	 	 	 	 	 
	 	By:  	/s/
John Donovan  	 
	 	 	Print Name:  	 John Donovan 	 
	 	 	Title: 	COO 	 



PFSC:




PORTFOLIO FINANCIAL SERVICING COMPANY




	 	 	 	 	 
	 	By:  	   /s/    John Enyart 	 
	 	 	Print Name:  	 John Enyart 	 
	 	 	Title:  	President 	 



 


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Schedule 1




Preparation, Stand-by and Servicing





Preparation: Within sixty (60) days of the Effective Date, PFSC shall provide the following
Services to prepare for assuming the function of servicer on the Client Portfolio:



1. PFSC shall perform any necessary reformatting, conversion, or other manipulation of files and
file formats necessary to service the Client Portfolio on its systems, including without limitation
mapping and converting all existing borrower and lender member data required to perform the
Services. This information shall include, without limitation, bank account information necessary to
perform ACH debit and credit transactions for all of Client’s existing borrower and lender members
in the Client Portfolio. Client shall provide all necessary information and assistance to PFSC in
order to fulfill these duties.



2. PFSC shall establish a comparable servicing process and procedures to that of Client on its
systems in readiness to assume the servicing of the Client Portfolio on five business days written
notice.



3. PFSC shall establish secure connectivity or other means of secure access to data updates of the
Client Portfolio from Client.



4. PFSC shall formulate a contingency plan designed to execute a transition of Client’s
service-related activities to PFSC and ready itself to receive and process data as if it were
currently acting as servicer.



Stand-by: Commencing upon completion of the preparation for servicing the Client Portfolio,
but in no event later than sixty (60) days following the execution of this Agreement, PFSC shall
provide the following Services during the remaining Term, except to the extent PFSC is actually
providing the servicing:



1. On a monthly basis, PFSC shall obtain from client updated borrower and lender member
information. This information shall include, without limitation, bank account information
necessary to perform ACH debit and credit transactions for the Client Portfolio.



2. On a monthly basis, PFSC shall map and convert any new borrower and lender member data to PFSC’s systems.



3. On a monthly basis, PFSC shall perform a quality control test of randomly selected data from
accounts in the Client Portfolio to ensure such data are valid and servicing can commence to and
from such accounts.



4. On a monthly basis, PFSC shall evaluate its readiness to provide the Services.



5. PFSC shall issue monthly verification reports to Client, certified by PFSC, which shall
include a report on items 1-4 above.


 


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Servicing: Upon initiation of the servicing of the Client Portfolio, PFSC shall
perform the following Services commencing within five business days of written notification:



1. General: PFSC shall:




	 	•	 	Update the Client Portfolio information on its systems with the latest data available
from Client;

	 
	 	•	 	Service and collect all amounts due under borrower notes in the Client Portfolio by ACH
into a single-purpose clearing account controlled by PFSC in trust for the lender members
of Client. PFSC shall not commingle any funds of PFSC with the funds in the clearing
account but shall have the right to charge the clearing account for its servicing fees.

	 
	 	•	 	Remit payments due to Client’s lender members in the Client Portfolio by ACH in a
single monthly payment aggregating all the amounts due such lender members in a given month
based on payments actually received from the borrowers with loans of the series associated
with the notes held by the lender members. Such activities will be facilitated utilizing
systems made accessible to PFSC by Client.

	 
	 	•	 	Monitor all ACH transfers.

	 
	 	•	 	Process and contest chargebacks.

	 
	 	•	 	Correspond and communicate with Client borrower members, lender members, and their
banks concerning the activity in the respective accounts affected by the Services.

	 
	 	•	 	Provide email statements showing the status and activity of Client borrower and lender
member accounts. Such statements will be facilitated utilizing systems made accessible to
PFSC by Client.

	 
	 	•	 	Upon receipt of notice from Client or Client’s designated indenture trustee, pay all
funds held by PFSC pending payment to Client’s lender members to the indenture trustee.

	 
	 	•	 	Upon request by Client, return to Client any funds held by PFSC due to Client’s lender
members that have not been able to be remitted to such lender members and remain unclaimed
for two years.

	 
	 	•	 	Provide monthly portfolio information to one or more of the three nationally recognized
consumer credit reporting agencies.






2. PFSC shall reconcile transfers, payment information and outstanding balances and take
appropriate action to resolve any discrepancies or disagreements with such information and make
corrective adjustments to records.



3. PFSC shall make commercially reasonable efforts to collect payments on loans in the Client
Portfolio that are from 1 to 30 days delinquent. On the 31st day of delinquency, PFSC shall refer
delinquent accounts to collection in accordance with the collection and charge-off policies and
agreements established by Client and transfer payments received in accordance with those same
policies and agreements to the appropriate lender members.




 


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4. While providing the servicing of the Client Portfolio, PFSC shall provide to Client or its
designated representative monthly servicer reports that confirm:




	 	•	 	Monthly payments received from borrower members and remittances to lender members.







	 	•	 	General ledger entries







	 	•	 	Delinquent Accounts







	 	•	 	Maturing Loans







	 	•	 	Monthly Cash Receipts Journal







	 	•	 	That such report is complete on its face.







 


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Schedule 2




Compensation




Preparation




1. Client shall pay PFSC $1,500 per month until such time as PFSC certifies to Client in writing
that it is prepared to service the Client Portfolio. Client shall pay to PFSC a one-time
preparation fee of Ten Thousand Dollars ($10,000) upon execution of this Agreement.



Stand-by




1. Client shall pay PFSC $3,500 per month for each month that PFSC provides the standby portion of
the Services.



Servicing




1. Upon written notification that PFSC shall become the successor servicer, Client shall pay PFSC a
declaration fee of Fifteen Thousand Dollars ($15,000). During any period in which it services the
Client Portfolio, PFSC shall also have the right to deduct and retain a service charge. The service
charge will be applied by PFSC on a monthly basis against all open contracts prior to sending out
the related lender payments. The service charge will be billed to lenders as a percentage. That
percentage will be calculated on a monthly basis by multiplying the number of open contracts by a
flat fee of: $10.00 per contract, if less than 500 contracts; $7.50 per contract, if between 500
and 1,500 contracts; and, $5.50 per contract if greater than 1,500 contracts, and then taking that
sum and dividing it back into the dollar volume of payments received. This will provide PFSC with
the average percentage service charge which will be applied against all payments being sent to
Client’s lender members. PFSC can recalculate that percentage every month; provided,
however, that at no time the amount charged by PFSC exceeds 5.0% of the amount of any ACH
payment made to a Client lender member.



2. In the course of providing the servicing, PFSC shall charge and collect any other fees relating
to the servicing that Client is entitled to charge and collect, including, without limitation,
late fees and non-sufficient funds fees. PFSC shall retain such fees or remit them to the Client
lender member entitled to receive them in accordance with the policies and agreements applicable
to Client.




 


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