Document:

Exhibit
10.3

 

FORM OF GROUP LEADER REGISTRATION AGREEMENT

 

This Group Leader Registration Agreement is
made and entered into between you and Prosper Marketplace, Inc. (“Prosper”).

 

1.  Registration as a Prosper Group Leader. You are
registering as a group leader on the Prosper website, so that you may be the
head of a group of prospective Prosper borrowers. You agree to comply with the
terms and provisions of this Agreement, the Terms of Use of the Prosper
website, and the Prosper Policies, as those guidelines may be amended from time
to time by Prosper in its sole discretion (collectively, the “Prosper Terms and
Conditions”).

 

2.  Group Leader’s Services.  You agree to do the following:

 

a.               Set up a group
home page on the Prosper website, describing your group;

 

b.              Become familiar
with how Prosper works, and invite your group members to the Prosper
marketplace;

 

c.               Act as the
liaison between your group and Prosper;

 

d.              Consider
requests from individuals to join your group, and allow individuals who meet
your group’s eligibility criteria to join your group; and

 

e.               Do your best to
monitor, protect and promote the integrity and reputation of your group.

 

THE PROSPER MARKETPLACE IS INTENDED TO FOSTER
IDEALS OF COMMUNITY SERVICE, CONNECTION AND RESPONSIBILITY.  YOU AGREE THAT YOU WILL NOT DISCRIMINATE
AGAINST ANY INDIVIDUAL REQUESTING TO JOIN YOUR GROUP OR ANY GROUP MEMBER ON THE
BASIS OF RACE, COLOR, RELIGION, NATIONAL ORIGIN, SEX, MARITAL STATUS, AGE,
SEXUAL ORIENTATION, MILITARY STATUS, THE BORROWER’S SOURCE OF INCOME, OR ANY
OTHER BASIS PROHIBITED BY AN APPLICABLE FEDERAL, STATE OR LOCAL FAIR LENDING
LAW, INCLUDING WITHOUT LIMITATION THE EQUAL CREDIT OPPORTUNITY ACT.

 

3.  Compensation.  Group leaders are not entitled to receive,
and do not receive, any compensation for serving as a group leader, except that
with respect to loans resulting from listings posted prior to September 13,
2007. For loans that resulted from listings posted prior to September 13, 2007,
group leaders may receive a finder’s fee in accordance with the provisions of
the remainder of this Section 3.

 

For each loan resulting from a listing posted
by a member of your group prior to September 13, 2007, Prosper will pay you an
amount equal to a percentage of the interest portion of each monthly loan
payment made by each borrower in your group (the “Finder’s Payment Reward”),
provided that no loan payment on the loan is more than thirty (30) days past
due. The portion of each loan payment you will receive was established at the
time the loan was made and will remain unchanged for the duration of the loan.
You are only entitled to receive Finder’s Payment Rewards on loans that
resulted from your group member’s listings for which you specified that such
Finder’s Payment Rewards are applicable.

 

The Finder’s Payment Reward will be paid to
you monthly, within thirty (30) days after Prosper’s receipt of the applicable
monthly payment. Finder’s Payment Rewards will be paid to you by automated
deposit into an FDIC-insured non-interest bearing account at Wells Fargo Bank,
N. A. (the “Prosper Funding Account”) separate from Prosper’s own funds. You
will not earn interest on funds in the Prosper Funding Account. You may at any
time request that your uncommitted funds in the Prosper Funding Account be
returned to you, in which case Prosper will promptly return the remaining funds
to your designated deposit account. You will not receive any Finder’s 

 

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Payment Rewards at a time when any payment on
the loan is more than thirty (30) days past due. If a loan that is more than
thirty (30) days past due later becomes current in its payments, you will
resume receiving the monthly Finder’s Payment Reward for as long as the loan
remains current. You will also not receive any Finder’s Payment Rewards during
the time the interest rate on a loan is reduced in accordance with the Federal
Servicemembers Civil Relief Act, which places limits on interest rates on
credit obligations during the time members of the military are on active duty
under certain circumstances.

 

The amount, if any, you receive as a monthly
Finder’s Payment Reward is based on the number and amount of timely loan
payments made by your group’s borrowers on each of their Prosper loans. Finder’s
Payment Rewards are paid to you by Prosper, and not from any Prosper borrower
or lender. No Prosper borrower or lender is obligated to pay you any Finder’s
Payment Rewards, and you have no right under this Agreement or the Prosper
Terms and Conditions to bring any legal action against any Prosper borrower or
lender, or against any other person, to collect any Finder’s Payment Reward.
You are not a third party beneficiary of, and you have no rights as a third
party beneficiary under, any promissory note, registration agreement or other
agreement between Prosper and any borrower, or any registration agreement or
other agreement between Prosper and any registered Prosper lender.

 

FINDER’S PAYMENT REWARDS ARE WHOLLY
CONTINGENT UPON EACH OF YOUR GROUP’S BORROWERS MAKING TIMELY MONTHLY PAYMENTS
ON THEIR PROSPER LOANS, AND YOU UNDERSTAND AND AGREE THAT PROSPER DOES NOT
WARRANT OR GUARANTEE THAT YOU WILL RECEIVE ANY MINIMUM AMOUNT OF FINDER’S
PAYMENT REWARDS, OR ANY FINDER’S PAYMENT REWARDS AT ALL, ON ANY PROSPER LOANS. 

 

4.  No Loan Guarantees.  Group leaders do not guarantee payments on
any loan, and you are not required or obligated in any way to guarantee any
loan obtained through the Prosper website by any member of your group, or by
any other person. Prosper does not guarantee any loans and does not act as a
guarantor of any loan payment or payments by any Prosper borrower. Prosper
allows borrowers to create a network of Prosper friends, and obtain
endorsements of listings from one or more of the borrower’s designated Prosper
friends. Endorsements from the borrowers’ Prosper friends are displayed with
borrower’s listings. Prosper friends do not guarantee payments on any loan, and
an endorsement of a listing from a borrower’s Prosper friend does not obligate
the individual making the endorsement to guarantee or make any payments on any
loan.

 

5.  Prohibited Activities.  Group leadership in the Prosper marketplace
does not confer upon you authority to perform any of the activities described
below. You agree that you will not do the following in connection with any
listings, bids, loans or other transactions involving or potentially involving
Prosper:

 

	
  a.

  	
  Represent yourself to any
  group member or other person, as a representative, employee, or agent of
  Prosper, or purport to speak to any person on behalf of Prosper;

  
	
   

  	
   

  
	
  b.

  	
  Charge, or attempt to
  charge, any Prosper borrower any fee in connection with your role as a
  Prosper group leader, or propose or agree to accept any fee, bonus,
  additional interest, kickback or thing of value of any kind, in connection
  with your role as a Prosper group leader;

  
	
   

  	
   

  
	
  c.

  	
  Give, or offer or agree to
  give, to any Prosper lender or other person any fee, bonus, additional
  interest, kickback or thing of value of any kind in exchange for such
  person’s bid, or offer or agreement to bid, on any listing, including without
  limitation a listing posted or proposed to be posted by a member of your
  group;

  
	
   

  	
   

  
	
  d.

  	
  Represent yourself as or
  engage in any services as a financial advisor, tax advisor, or financial or
  credit analyst unless you are licensed, certified, registered or otherwise
  authorized to provide such services under applicable law;

  
	
   

  	
   

  

 

2

 

	
  e.

  	
  Engage
  in any activities that require a license as a loan broker, credit services
  organization, credit counselor, credit repair organization, lender or other
  regulated entity, including but not limited to soliciting loans or loan
  applications, quoting loan terms and rates, counseling borrowers on credit
  issues or loan options, or underwriting of loans, in connection with any
  Prosper loan;

  
	
   

  	
   

  
	
  f.

  	
  Take
  any action on your own to collect, or attempt to collect, any amount from any
  borrower on any Prosper loans to members of your group, or engage in any
  activities that require a license as a debt collector, loan servicer, or
  credit counselor, including but not limited to collection calls or
  correspondence, and receipt of payments with regard to any Prosper loans to
  members of your group;

  
	
   

  	
   

  
	
  g.

  	
  Contact
  a borrower or take any action to collect, or attempt to collect, any amount
  from any of the borrower’s Prosper friends or any individual that provided an
  endorsement of a listing relating to any Prosper loans, or take any action
  that directly or indirectly suggests that any borrower’s Prosper friend is
  obligated in any way on any loan.

  
	
   

  	
   

  
	
  h.

  	
  Contact
  any collection agency or law firm to which a loan of one of your group’s
  members has been referred for collection;

  
	
   

  	
   

  
	
  i.

  	
  Include
  or display any personally identifying information, including, without
  limitation, name, address, phone number, email address, Social
  Security number or driver’s license number, or bank account or credit card
  numbers of any
  Prosper member on your Prosper member web page, or elsewhere on the Prosper
  website;

  
	
   

  	
   

  
	
  j.

  	
  Harass
  any borrowers or other Prosper members, or solicit or seek to persuade any
  member of a Prosper group to leave their group or to join a different group;

  
	
   

  	
   

  
	
  k.

  	
  Discriminate
  against or exclude any individual requesting to join your group or any group
  member on the basis of race, color, religion, national origin, sex, marital
  status, age, sexual orientation, military status, the borrower’s source of
  income, or any other basis prohibited by an applicable federal, state or
  local fair lending law; or

  
	
   

  	
   

  
	
  l.

  	
  Engage
  in any activities that violate applicable federal, state or local laws,
  including without limitation, the Truth in Lending Act, Fair Credit Reporting
  Act, Fair Debt Collection Practices Act, Federal Trade Commission Act,
  federal or state consumer privacy laws, state usury or loan fee statutes,
  state licensing laws, or state unfair and deceptive trade practices statutes.

  

 

6.  Marketing. 
Prosper may, from time to time, make marketing materials available to
you for distribution or display to group members. You may not revise, alter or
otherwise modify any such marketing materials without Prosper’s express written
consent.

 

7.  Reporting by Prosper.  Prosper will administer your account and
provide you with online monthly statements reflecting Finder’s Payment Rewards
that accrue to your account. With respect to all outstanding Prosper loans to
members of your group, Prosper will notify you of any loan payment that becomes
fifteen (15) days past due.

 

8.  Restrictions on Use.  You are not authorized or permitted to serve
as a group leader on Prosper, or otherwise use Prosper for someone other than
yourself. In order to register as a group leader, you must be registered in the
Prosper marketplace as a borrower or a lender, and you must have designated a
deposit account for electronic transfers of funds. You must be the owner of the
deposit account you designate, with sole authority to direct that funds be
transferred 

 

 

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to or from the account. If you participate on
Prosper as a lender, you may bid on listings of any registered Prosper
borrowers, including members of your group. Prosper may in its sole discretion,
with or without cause and with or without notice, restrict your access to the
Prosper website or marketplace.

 

9.  Prosper’s Right to Verify Information and
Cancel Funding.

 

a.
Prosper reserves the right to verify the accuracy of all information provided
by borrowers, lenders and group leaders in connection with listings, bids and
loans. Prosper also reserves the right to determine in its reasonable
discretion whether a registered user is using, or has used, the Prosper website
illegally or in violation of any order, writ, injunction or decree of any court
or governmental instrumentality, for purposes of fraud or deception, or
otherwise in a manner inconsistent with the Prosper Terms and Conditions or any
registration agreement between Prosper and such user.  Prosper may conduct its review at any time —
before, during or after the posting of a listing, or before or after the
funding of a loan. You agree to respond promptly to Prosper’s requests for
information in connection with your listing, accounts, or your registration
with Prosper.

 

b.
In the event Prosper, prior to funding a loan, reasonably determines that a
listing, or a bid for the listing, contains materially inaccurate information
(including but not limited to unintended inaccuracies, inaccuracies resulting
from errors by Prosper, or inaccuracies resulting from changes in the borrower’s
income, residence or credit profile between the date a listing is posted and
the date the listing is to be funded) or was posted illegally or in violation
of any order, writ, injunction or decree of any court or governmental
instrumentality, for purposes of fraud or deception, or otherwise in a manner
inconsistent with the Prosper Terms and Conditions or any registration
agreement, Prosper may refuse to post the listing or, if the listing has
already been posted, remove the listing from the Prosper marketplace and cancel
all bids against the listing.

 

c. When a listing ends or
expires with a bid or bids totaling the amount of a borrower’s requested loan,
Prosper may conduct a “pre-funding” review prior to funding of the loan. Loan funding occurs when Prosper funds a loan and disburses loan
proceeds into the borrower’s designated deposit account. Prosper may,
at any time and in its sole discretion, delay funding of a loan in order to
enable Prosper to verify the accuracy of information provided by borrowers,
lenders and group leaders in connection with the listing or bids against the
listing, and to determine whether there are any irregularities with respect to
the listing or the bids against the listing. Prosper may cancel or proceed with
funding the loan, depending on the results of Prosper’s pre-funding review. If
funding is cancelled, the listing will be removed from the Prosper marketplace
and all bids against the listing will be cancelled, and each bidder’s funds
will be returned to the Prosper Funding Account, available for further bidding.
In the event Prosper cancels funding of a loan, Prosper will notify the
borrower, group leader (if any), and all bidders for the listing of Prosper’s
determination to cancel funding of the loan.

 

10.  Authority. You warrant and represent
that you have the legal competence and capacity to execute and perform this
Agreement.

 

11.  Confidentiality. To safeguard
the privacy of your group members, you agree not to provide the name, email
address, telephone number, identity or other personally identifiable
information  of any borrower
or group member to any lender or other person, or disclose or display such
information publicly or on any forum or medium viewable by third parties.

 

12.  Termination of Registration; Suspension.  Prosper may in its sole discretion, with or
without cause, terminate this Agreement by giving you notice as provided below.
In addition, upon Prosper’s reasonable determination that you committed fraud
or made a material misrepresentation in connection with a listing, bid, loan or
group member, performed any 

 

 

4

 

prohibited activity, or otherwise failed to
abide by the terms of this Agreement or the Prosper Terms and Conditions, Prosper
may, in its sole discretion, immediately and without notice, take one or more
of the following actions: (i) suspend your right to add new members to your
group; (ii) remove your group from the Prosper marketplace; or (iii) terminate
this Agreement and your registration with Prosper. Upon termination of this
Agreement and your registration with Prosper, you are no longer entitled to
receive any Finder’s Payment Rewards that have accrued or would otherwise
accrue on outstanding group member loans, and Prosper may, in its sole
discretion, either remove your group web page or replace you as group leader.

 

13.  Indemnification. In addition to
your indemnification obligations set forth in Prosper’s Terms of Use, you agree
to indemnify, defend, protect and hold harmless Prosper and its officers,
directors, shareholders, employees and agents against all claims, liabilities,
actions, costs, damages, losses, demands and expenses of every kind, known or
unknown, contingent or otherwise, (i) resulting from any material breach of any
obligation you undertake in this Agreement, including without limitation,
obligations to comply with any applicable laws; (ii) arising out of or relating
to the development, operation, maintenance, management and contents of your
Prosper group web page, your group, or your website or business;
(iii) resulting from your acts, omissions and representations (and those
of your employees, agents or representatives) relating to Prosper; or (iv)
asserted by third parties against Prosper alleging that the trademarks, trade names,
logos or branding you use, display or advertise infringes upon the intellectual
property rights of any such third party. Your obligation to indemnify Prosper
shall survive termination of this Agreement, regardless of the reason for
termination.

 

Prosper agrees to indemnify, defend and
protect you and hold you harmless against all claims, liabilities, actions,
costs, damages, losses, demands and expenses of every kind, known or unknown,
contingent or otherwise, asserted by Prosper borrowers, lenders or other third
parties against you relating directly to your activities as a Prosper group
leader, except to the extent any such claims are based on, or result from, (i)
your failure to comply with any provision of this Agreement, or (ii) your acts
or omissions outside of your role as a Prosper group leader. Prosper’s
obligation to indemnify you shall survive termination of this Agreement, unless
termination is due to your failure to comply with the terms of this Agreement,
in which case Prosper’s obligation to indemnify you shall terminate
immediately.

 

14.  Prosper’s Right to Modify Terms.  Prosper has the right to change any term or
provision of this Agreement or the Prosper Terms and Conditions. Prosper will
give you notice, which may be by email or in the form of a posting on the
Prosper website, of material changes to this Agreement or the Prosper Terms and
Conditions. You authorize Prosper to correct obvious clerical errors appearing
in information you provide to Prosper, without notice to you, although Prosper
expressly undertakes no obligation to identify or correct such errors. This
Agreement, along with the Prosper Terms and Conditions, represent the entire
agreement between you and Prosper regarding your participation as a group
leader in the Prosper credit marketplace, and supersedes all prior or
contemporaneous communications, promises and proposals, whether oral, written
or electronic, between you and Prosper with respect to your involvement as a
group leader with Prosper.

 

15.  Group Home Page Display and Content.  You authorize Prosper to display on the
Prosper website information you provide to Prosper regarding your group,
including, without limitation, photos, content, logos or links to websites. Any
material you display on your group home page site must conform to the Prosper
Terms and Conditions, as amended from time to time, and must not (i) infringe
on any third party’s copyright, patent, trademark, trade secret or other
proprietary rights or right of publicity or privacy; (ii) violate any applicable
law, statute, ordinance or regulation; (iii) be defamatory or libelous; (iv) be
lewd, hateful, violent, pornographic or obscene; (v) violate any laws regarding
unfair competition, anti-discrimination or false advertising; (vi) promote
violence or contain hate speech; (vii) contain viruses, trojan horses, worms,
time bombs, cancelbots or other similar harmful or deleterious programming 

 

 

5

 

routines. Prosper groups are not exclusive,
and there may be several groups of the same type posted on the Prosper website;
by becoming a Prosper group leader and posting a group home page on the Prosper
website you do not acquire any exclusive or proprietary rights to your group
type or any rights in addition to those you may have under existing law.

 

16.  Independent Contractors. The parties
to this Agreement are independent contractors, and this Agreement does not
create, and nothing contained in this Agreement will be deemed to establish, an
employment, agency, franchise, joint venture or partnership relationship
between the parties. Neither party shall have, nor make any representation that
it has, the power or authority to enter into any agreement for or on behalf of
the other party, or incur any obligation or liability of, or to otherwise bind
the other without the other party’s prior written consent.

 

17.  Notices.  All notices and other communications
hereunder shall be given by email to your registered email address, and shall
be deemed to have been duly given and effective upon transmission. If your
registered email address changes, you must notify by sending an email to
support@prosper.com or calling (800) 208-0103. You also agree to update your
registered residence address on the Prosper website if you change your
residence.

 

18.  No Warranties.  EXCEPT FOR THE REPRESENTATIONS CONTAINED IN
THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES TO THE
OTHER PARTY, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

19.  Limitation on Liability.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER PARTY FOR ANY LOST PROFITS OR SPECIAL, EXEMPLARY, CONSEQUENTIAL OR
PUNITIVE DAMAGES, EVEN IF INFORMED OF THE POSSIBILITY OF SUCH DAMAGES.
FURTHERMORE, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO THE OTHER
REGARDING THE EFFECT THAT THE AGREEMENT MAY HAVE UPON THE FOREIGN, FEDERAL,
STATE OR LOCAL TAX LIABILITY OF THE OTHER.

 

20.  Miscellaneous.  You may not assign, transfer, sublicense or
otherwise delegate your rights under this Agreement to another person without
Prosper’s prior written consent. Any such assignment, transfer, sublicense or
delegation in violation of this Section shall be null and void. This Agreement
shall be governed by the laws of the State of California. Any waiver of a
breach of any provision of this Agreement will not be a waiver of any other
subsequent breach.  Failure or delay by
either party to enforce any term or condition of this Agreement will not
constitute a waiver of such term or condition. If any part of this Agreement is
determined to be invalid or unenforceable under applicable law, then the
invalid or unenforceable provision will be deemed superseded by a valid
enforceable provision that most closely matches the intent of the original
provision, and the remainder of the Agreement shall continue in effect.

 

 

6Exhibit 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

 

2

 

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.

 

4

 

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

 

5

 

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

 

6

 

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

 

7

 

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,

 

8

 

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

 

9

 

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:

 

10

 

	
   

  	
  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

 

11

 

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]

 

12

 

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

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