Document:

ex10_3.htm

    
      

    

    EXHIBIT
      10.3

     

    AGREEMENT
      OF EMPLOYMENT

    THIS
      AGREEMENT OF EMPLOYMENT (“Agreement”) is made and entered into in duplicate this
      11th_ day of July 2007, by and between PERFORMANCE CAPITAL MANAGEMENT, LLC,
      a
      Limited Liability Company (“Employer”), and David J. Caldwell
      (“Executive”).

     

    RECITALS

     

    A.        Employer
      is a Limited Liability Company duly organized and validly existing pursuant
      to
      the laws of the State of California.

    

    B.        Employer
      is in the business of acquiring, processing, servicing and collecting commercial
      and consumer indebtedness.

    

    C.        Employer
      desires to employ Executive, subject to the terms and conditions specified
      in
      this Agreement.

    

    D.        Executive
      hereby accepts employment with Employer as Chief Operations Officer of Employer,
      subject to the terms and conditions specified in this Agreement.

    

    NOW,
      THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL BE DEEMED
      TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS, PROMISES,
      UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN THIS
      AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY
      OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED LEGALLY AND
      EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE, REPRESENT AND WARRANT
      AS FOLLOWS:

     

    ARTICLE
      I

    

    TERM
      OF EMPLOYMENT

    

    Section1.1
      Specified Term.  Employer hereby employs Executive and
      Executive hereby accepts employment with Employer for a period of five (5)
      years
      commencing on the date of execution and delivery of this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

    

    DUTIES
      AND OBLIGATIONS OF EXECUTIVE

    

    Section
      2.1 General Duties.  Executive shall serve as Chief
      Operations Officer of PERFORMANCE CAPITAL MANAGEMENT, LLC, a California Limited
      Liability Company.  In Executive’s capacity as the chief Operations
      Officer of Employer, Executive shall do and perform all services, acts, or
      things necessary or appropriate to manage and conduct the financial and fiscal
      affairs of Employer, subject at all times to the policies, directives and rules
      established by the Board of Directors of Employer (“Board”), and to the consent
      of the Board when required.  The duties to be performed by Executive
      shall be determined from time to time by the Board.

    

    Section
      2.2  Devotion to Employer’s Business.

    

    A.                
      Exclusive Services. During his employment by the Employer, the Executive shall
      not, without the express prior written consent of the Board of Directors, engage
      directly or indirectly in any outside employment or consulting of any kind,
      whether or not the Executive receives remuneration for such services, or in
      any
      other activity that relates to any line of business in which the Employer is
      at
      that time engaged or plans to engage in, or that would otherwise conflict with
      the Executive’s employment obligations, contractual duties, or fiduciary
      obligations to the Employer

    

    Section
      2.3  Competitive Activities.  During the term of
      this Agreement Executive shall not, directly or indirectly, whether as an
      employee, employer, consultant, agent, principal, partner, stockholder,
      corporate officer, director, or in any other individual or representative
      capacity, engage or participate in any business that is in competition in any
      manner whatsoever with the business of Employer.   This provision
      is intended by the Parties to be interpreted broadly and includes the array
      of
      activities carried out in the debt buying and collection industries, including
      collecting as a third-party agency.

     

    ARTICLE
      III

    

    OBLIGATIONS
      OF EMPLOYER

    

    Section
      3.1  General Description.  Employer shall provide
      Executive with the compensation, incentives and benefits specified elsewhere
      in
      this Agreement.

    

    Section
      3.2  Office and Staff.  Employer shall provide
      Executive with equipment, supplies, facilities and services, suitable to
      Executive’s position and adequate for the performance of Executive’s duties
      created by the provisions of this Agreement.

    

    Section
      3.3  Reimbursement of Business Expenses.  Executive
      is authorized to incur reasonable business expenses for promoting the business
      of Employer, including expenditures for entertainment, and travel in accordance
      with the policies and practices of Employer then in
      effect.  Reimbursement shall be paid within two weeks of presentation
      of expense statements or vouchers and such other supporting information as
      Employer may reasonably require.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      Section
        3.4  Indemnification.  Employer shall indemnify
        Executive, if Executive is made a party to or threatened to be made a party
        to,
        or otherwise involved in, any proceeding commenced during the employment
        term,
        or after the employment term, because Executive is or was an employee or
        agent
        of Employer.  The indemnification contemplated by the provisions of
        this Section 3.4 shall include any and all expenses, judgments, fines,
        penalties, settlements, and other amounts, actually and reasonably incurred
        by
        Executive in connection with the defense or settlement of any such proceeding;
        provided, however, Executive shall have acted in good faith and in a manner
        that
        Executive reasonably believed to be in the best interests of
        Employer.  In the event the dispute involves a claim of criminal
        activity,  Executive must have had no reasonable cause to believe that
        Executive’s conduct was unlawful.  It is agreed and understood that a
        conflict of interest may arise between the parties.  It is agreed that
        the Employer is entitled to participate in good faith in the selection of
        Executive’s separate legal counsel, which Employer will pay for, if it is
        determined that Executive is entitled to indemnification pursuant to this
        section.  Executive agrees to cooperate with Employer in all strategy
        and settlement decisions.  Any dispute arising under this section,
        including the settlement of any action either jointly or severally shall
        be
        subject to the arbitration provisions of Section 8.1.

    

     

    Section
      3.5  Advances of Expenses.  Any and all expenses,
      including, but not limited to, filing fees, costs of investigation, attorney’s
      fees, messenger and delivery expenses, postage, court reporters’ fees and
      similar fees and expenses, incurred by Executive in any proceeding for which
      Executive is reasonably entitled to indemnification shall be advanced by
      Employer prior to the final disposition of such proceeding.  The
      obligation to advance such expenses at the written request of Executive is
      subject to considerations of reasonableness, Prior to any payments Executive
      shall agree to repay such advances unless and to the extent that it is
      ultimately determined that Executive is entitled to
      indemnification.

    

    Section
      3.6  Indemnification Not Exclusive.  The
      indemnification contemplated by the provisions of this Agreement shall not
      be
      deemed exclusive of any other rights to which Executive may be entitled pursuant
      to the provisions of the Articles of Incorporation or Bylaws of Employer, or
      any
      agreement, vote of shareholders, or disinterested directors, the General
      Corporation Law of the State of California, or otherwise as to action in his
      official capacities as an employee or agent of Employer.  The
      indemnification contemplated by the provisions of this Agreement shall continue
      as to the Executive although he may have ceased to be an employee or agent
      of
      Employer and shall inure to the benefit of the heirs and personal
      representatives of Executive, including the estate of Executive.

     

    ARTICLE
      IV

    

    COMPENSATION
      OF EXECUTIVE

    

    Section
      4.1  Annual Salary.  As compensation for the
      services to be rendered by Executive pursuant to provisions of this Agreement,
      Employer shall pay Executive or cause Executive to be paid (by an affiliate
      of
      Employer) an annual salary in the amount of Two Hundred  Twenty
      Thousand dollars ($220,000.00), payable in equal semi-monthly installments
      of
      Nine Thousand One Hundred Sixty-six dollars and Sixty-seven cents
      ($9,166.67).  Executive salary increases during the term of this
      agreement maybe made at the discretion of the Employer’s Board of
      Directors.  Any such changes shall be incorporated as Addenda to this
      agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      4.2  Profit Bonuses.  Executive profit bonuses, if
      any, shall be at the discretion of the Employer’s Board of
      Directors.  The Board of Directors may in its discretion set up a
      specific bonus program for a predetermined length of time.  Any such
      program will be communicated to the Executive in writing prior to the
      commencement of the program.

     

    Section
      4.3 Equity Participation.  If during the term of this contract the
      Board takes action to bring liquidity to all PCM unit holders (as, for example,
      by selling or taking the company public), the Board intends to compensate the
      Executives, provided they remain in the employ of the company at the time.
      They
      will have the option of receiving 1) a sum equal to the total of their annual
      salaries divided by the total number of Executives employed by employer at
      the
      time of the action; or 2) 10% of the payment in kind actually distributed to
      the
      unit holders divided by the total number of Executives employed by Employer
      at
      the time of the action.

    

    Section
      4.4  Tax Withholding.  Employer shall have the
      right to deduct or withhold from the compensation due and payable to Executive
      pursuant to the provisions of this Agreement any and all amounts required for
      federal income and Social Security taxes and all state or local taxes now
      applicable or which may be enacted and may become applicable in the
      future.

     

    ARTICLE
      V.

     

    EXECUTIVE
      BENEFITS

    

    Section
      5.1  Annual Vacation.   During the employment
      term, Executive shall be entitled to an annual vacation leave, of three weeks
      without loss of compensation.  Executive may take his vacation from
      time to time unless specifically requested not to do so by
      Employer.  In the event that Executive is unable for any reason to
      take the total amount of vacation time authorized herein during any year, except
      at the specific request of the Employer, Executive at his option, may elect
      to
      be paid out up to one week’s vacation or carry it over into the first quarter up
      to one week’s vacation. Any additional vacation benefit will be forfeited. Other
      than one carryover week that must be used within the first quarter of the
      succeeding year, there will be no accrual of vacation time. The three weeks
      of
      vacation pay will vest on January 1 of each calendar year such that Executive
      will be entitled to take up to three weeks off with pay during that
      year.  In the event this employment relationship is terminated,
      executive will be entitled to be compensated only for the prorated portion
      of
      vacation, including reimbursing Employer for used but unearned
      vacation.   Proration will be based on the assumption that a week
      of vacation is earned as of February 15, June 15 and October 15 of each
      year.

    

    Section
      5.2  Paid Holidays. During the employment term, Executive
      shall be entitled to a holiday with full pay on each New Year’s Day, President’s
      Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
      Day during the term of this Agreement, and such other days as Employer currently
      provides other employees.

    

    Section
      5.3 Health Care Benefits.  During the employment term,
      Employer shall include Executive and his dependents in the hospital, surgical,
      medical and dental benefit plan adopted and maintained by Employer for senior
      executives. Executive shall be entitled to sick days/personal days as Employer
      currently provides other employees.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      5.4 Other Benefits.  During the employment term, Employer
      shall provide the Executive such other benefits as Employer, in its sole and
      absolute discretion, may determine to be necessary or appropriate.

     

    ARTICLE
      VI

    

    TERMINATION
      OF EMPLOYMENT

    

    Section
      6.1 Termination.   Either party shall have the right to
      terminate this Agreement with or without Cause before the expiration of the
      Term
      or any Renewal Term, as provided below.  Whatever the circumstances of
      the termination may be, the Executive shall continue to be bound after
      termination by Articles 7 and 8 of this Agreement.

    

    Section
      6.2 Termination for Cause.

    

    A.                 Employer
      reserves the right to terminate this Agreement if Executive willfully breaches
      or habitually neglects the duties which he is required to perform pursuant
      to
      the provisions of this Agreement; or commits such acts of dishonesty, fraud,
      misrepresentation or other acts of moral turpitude as would prevent the
      effective performance of his duties.

    

    B.                 Employer,
      at its option, may terminate this Agreement for the reasons stated in this
      section by giving written notice of termination to Executive without prejudice
      to any other remedy to which Employer may be entitled either at law, in equity,
      or pursuant to the provisions of this Agreement.

    

    C.                 The
      notice of termination required by this section shall specify the ground for
      the
      termination and shall be supported by a statement of relevant
      facts.

    

    D.                 Termination
      pursuant to this section shall be considered “for cause” for the purposes of
      this Agreement.

    

    E.                 If
      the Employer terminates the Executive’s employment for Cause, the Employer shall
      pay to the Executive any compensation due under Article 4 of this Agreement,
      including any unused vacation, prorated through the date of termination, and
      the
      Employer shall have an option to purchase all the ownership interest of the
      Executive, if any, in accordance with the agreement creating such interest,
      at
      fair market value, to be determined by the Board. The Executive shall have
      no
      right to receive any further compensation or benefits otherwise payable under
      any other provision of this Agreement.

    

    F.                 Termination
      by Executive.  Executive may terminate his obligations pursuant to
      this Agreement by giving Employer at least thirty (30) days written
      notice.  The time shall run from the date the notice is received by
      the Chair or Co-Chairs of the Board of Directors.  In the event
      Executive terminates his obligations said termination shall be treated as for
      cause.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      6.3 Termination Without Cause.

    

    A.                 This
      Agreement shall be terminated upon the death of Executive.

    

    B.                 Employer
      reserves the right to terminate this Agreement not less than three (3) months
      after Executive suffers any physical or mental disability that would prevent
      the
      performance of his essential duties with or without reasonable accommodation,
      pursuant to the provisions this Agreement.  Such a termination shall
      be effected by giving thirty (30) days’ written notice of termination to
      Executive.  Executive agrees to submit to and cooperate fully with an
      independent medical examination by medical professionals selected by
      Employer.

    

    C.                 Termination
      pursuant to this section shall not be considered “for cause” for the purposes of
      this Agreement.

    

    D.                 Payment
      upon Termination. Notwithstanding any provision of this
      Agreement, if Employer terminates this Agreement without cause, it shall pay
      Executive an amount equal to six (6) months salary. However, in the event
      Executive accepts employment with another Debt Buyer, Employer’s obligation to
      continue to pay severance shall terminate.  All other provisions of
      this agreement shall remain in full force and effect including the provisions
      of
      Article VII relating to protection of Employer’s confidential information and
      non-solicitation.

    

    Section
      6.4 Effect of Merger, Transfer of Assets, or Dissolution.

    

    A.                 This
      Agreement shall not be terminated by any voluntary or involuntary dissolution
      of
      Employer resulting from either a merger or consolidation in which Employer
      is
      not the consolidated or surviving corporation, or a transfer of all or
      substantially all of the assets of Employer.

    

    B.                 In
      the event of any such merger or consolidation or transfer of assets, Employer’s
      rights, benefits, and obligations hereunder may be assigned to the surviving
      or
      resulting corporation or the transferee of Employer’s assets.

    

    C.                 In
      the event any such merger or consolidation or transfer of assets results in
      Executive’s termination, such termination shall be considered without
      cause.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
         

        ARTICLE
          VII

        

        CONFIDENTIALITY
          AND NON-SOLICITATION

         

      

      Section
        7.1 Nondisclosure.  The executive acknowledges that in the
        course of employment with the Employer, the Executive will have access to
        confidential information.  Confidential information includes, but is
        not limited to, information about either the Employer’s clients, the terms and
        conditions under which the Employer or its affiliates deals with clients,
        pricing information for the purchase or sale of assets, customer lists, research
        materials, manuals, computer programs, formulas for analyzing asset portfolios,
        techniques, data, marketing plans, and tactics, technical information, lists
        of
        asset sources, the processes and practices of the Employer, all information
        contained in electronic or computer files, all financial information, salary
        and
        wage information, and any other information that is designated by the Employer
        or its affiliates as confidential or that the executive knows or should know
        is
        confidential, information provided by third parties that the Employer or
        its
        affiliates are obligated to keep confidential, and all other proprietary
        information of the Employer or its affiliates. The executive acknowledges
        all
        confidential information is and shall continue to be the exclusive property
        of
        the Employer or its affiliates, whether or not prepared in whole or in part
        by
        the Executive and whether or not disclosed to or entrusted to the Executive
        in
        connection with employment by the Employer.  The Executive agrees not
        to disclose confidential information, directly or indirectly, under any
        circumstances or by any means, to any third persons without the prior written
        consent of the Employer.  The Executive agrees that he will not copy,
        transmit, reproduce, summarize, quote, or make any commercial or other use
        whatsoever of confidential information, except as may be necessary to perform
        work done by the Executive for the Employer.  The executive agrees to
        exercise the highest degree of care in safeguarding confidential information
        against loss, theft or other inadvertent disclosure and agrees generally
        to take
        all steps necessary or requested by the Employer to ensure maintenance of
        the
        confidentiality of the confidential information.

       

    

    Section
      7.2  Exclusions.  Section 7.1 shall not apply to
      the following information:

    

    (a)  information
      now and hereafter voluntarily disseminated by the Employer to the public or
      which otherwise becomes part of the public domain through lawful
      means;  (b) information already known to the Executive as documented
      by written records which predate the Executive’s employment with the Employer;
      (c) information subsequently and rightfully received from third parties and
      not
      subject to any obligation of confidentiality; and (d) information independently
      developed by the Executive after termination of his employment.  In
      relation to part (b) of this section, the date of Executive’s employment shall
      be considered to be the date on which Executive was first employed with
      Employer, including Employer’s predecessors in interest.  That
      operative date is January 15, 1998.

    

    Section
      7.3  Subpoenas; Cooperation in Defense of the
      Employer.  If the Executive, during employment or thereafter,
      is served with any subpoena or other compulsory judicial or administrative
      process calling for production of confidential information or if the Executive
      is otherwise required by law or regulation to disclose confidential information,
      the Executive will immediately, before making any such production or disclosure,
      notify the Employer and provide it with such information as may be necessary
      for
      the Employer to take such action as the Employer deems necessary to protect
      its
      interests.  The Executive agrees to cooperate reasonably with the
      Employer, whether during employment or thereafter, in the prosecution or defense
      of all threatened claims or actual litigation in which the Employer is or may
      become a party, whether now pending or hereafter brought, in which the Executive
      has knowledge or relevant facts or issues.  The Executive shall be
      reimbursed for his reasonable expenses for travel time due to cooperating with
      the prosecution or defense of any litigation for the Employer.

    

    Section
      7.4  No Unfair Competition.  The Executive hereby
      acknowledges that the sale or unauthorized use or disclosure of any of the
      Employer’s confidential material obtained by the Executive by any means
      whatsoever, at any time before, during, or after the Term or any Renewal term,
      shall constitute unfair competition.  The Executive shall not engage
      in any unfair competition with the Employer or its affiliates either during
      the
      Term, any Renewal Term, or at any time thereafter.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      7.5  Non-Solicitation of Employees.  During the
      period of six (6) months following the Termination Date, the Executive shall
      not
      directly or indirectly solicit for employment or for independent contractor
      work
      any employee of the Employer, and shall not encourage any such employee to
      leave
      the employment of the Employer.

    

    Section
      7.6  Non-Solicitation of Customers.  During the
      period of six months following the Termination Date, the Executive shall not
      directly or indirectly (a) solicit for business any customers of the Employer,
      (b) encourage any such customers to stop using the facilities or services of
      the
      Employer, or (c) encourage any such customers to use the facilities or services
      of any competitor of the Employer.  For the purposes of this section,
“customers” include; original creditors, debt brokers, business partners and
      other individuals from whom Employer has purchased debt portfolios.

     

    ARTICLE
      VIII

    

    GENERAL
      PROVISIONS

    

    Section
      8.1  Arbitration.  Any controversy, dispute or
      claim (“Claim”) whatsoever between Executive on the one hand, and the Employer,
      or any of its employees, officers, and agents (collectively “Employer Parties”)
      on the other hand, arising out of this Agreement or in any way connected with
      Executive’s employment or the termination of his employment shall be settled by
      binding arbitration at the request of either party.  The parties shall
      agree on an arbitrator and, if no agreement is reached, either party may
      petition to the Superior Court for the selection of an
      arbitrator.  The arbitrator shall apply California substantive law and
      the California Evidence Code to the proceeding unless otherwise
      agreed.  The demand for arbitration must be in writing and must be
      made by the aggrieved party within the applicable statute of limitations
      period.  The arbitration shall take place in Orange County,
      California.  The parties shall be entitled to conduct reasonable
      discovery, including conducting depositions, propounding interrogatories, and
      requesting documents.  The arbitrator shall have the authority to
      determine what constitutes reasonable discovery and may, among other things,
      limit the number of depositions a party may take, the number of interrogatories
      a party may propound, and the number and nature of documents a party may
      request.  The arbitrator shall prepare in writing and provide to the
      parties a decision and award which includes factual findings and the reasons
      upon which the decision is based.  The decision of the arbitrator
      shall be binding and conclusive on the parties and not reviewable for error
      of
      law or legal reasoning other than abuse of discretion by the arbitrator, the
      arbitrator’s failure to disclose relevant relationships past or present, or the
      grant of a remedy outside the general authority of an
      arbitrator.  Judgment upon the award rendered by the arbitrator may be
      entered in any court having proper jurisdiction.  The fees for the
      arbitrator shall be paid by the Employer. Each party shall bear its own
      attorney’s fees, and the arbitrator may award reasonable attorney’s fees and
      costs to the prevailing party pursuant to California law.  Both the
      Employer and the Executive understand and agree that by using arbitration to
      resolve any Claims between the Executive and the Employer or any or
      all of
      the Employer Parties, they are giving up any right that they may have to have
      the dispute resolved through the process of a civil trial with regard to those
      Claims.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Section
      8.2  Governmental Rules and Regulations.  The
      provisions of this Agreement are subject to any and all present and future
      orders, rules and regulations of any duly constituted authority having
      jurisdiction of the relationship and transactions contemplated by the provisions
      of this Agreement.

    

    Section
      8.3  Notices.  All notices, requests, demands or
      other communications pursuant to this Agreement shall be in writing, by telex
      or
      facsimile transmission or courier and shall be deemed to have been duly given
      (i) on the date of service if delivered in person or by telex or facsimile
      transmission (with the telex or facsimile confirmation of transmission receipt
      acting as confirmation of service when sent and provide telexed or telecopied
      notices are also mailed by first class, certified or registered mail, postage
      prepaid); or (ii) seventy-two (72) hours after mailing by first class,
      registered or certified mail, postage prepaid, and properly addressed as
      follows:

    

    
      	 	
              If
                to Executive:

            	 	
              David
                J. Caldwell

            
	 	 	 	
              14252
                Culver Drive, #133

            
	 	 	 	
              Irvine,
                California 92605

            
	 	 	 	 
	 	
              If
                to Employer:

            	 	
              Performance
                Capital Management, LLC

            
	 	 	 	
              7001
                Village Drive, Suite 255

            
	 	 	 	
              Buena
                Park, California 90621

            

    

    

    or
      at
      such other address as the party affected by designate in a written notice to
      such other party in compliance with this section.

    

    Section
      8.4  Entire Agreement.  This Agreement is the final
      written expression and the complete and exclusive statement of all the
      agreements, conditions, promises, representations, warranties, and covenants
      between the parties with respect to the subject matter of this Agreement, and
      this Agreement supersedes all prior or contemporaneous agreements, negotiations,
      representations, warranties, covenants, understandings and discussions by and
      between and among the parties, their respective representatives, and any other
      person with respect to the subject matter specified in this
      Agreement.  This Agreement may be amended only by an instrument in
      writing which expressly refers to this Agreement and specifically states that
      such instrument is intended to amend this Agreement and is signed by each of
      the
      parties.  Each of the parties represents, warrants and covenants that
      in executing this Agreement that such party has (i) relied solely on the terms,
      conditions and provisions specified in this Agreement and (ii) placed no
      reliance whatsoever on any statement, representation, warranty, covenant or
      promise of any other party, or any other person, not specified expressly in
      this
      Agreement, or upon the failure of any party or any other person to make any
      statement, representation, warranty, covenant or disclosure of any nature
      whatsoever.  The parties have included this section to preclude (i)
      any claim that any party was in any manner whatsoever induced fraudulently
      to
      enter into, execute and deliver this Agreement, and (ii) the introduction of
      parol evidence to vary, interpret, supplement or contradict the terms,
      conditions and provisions of this Agreement.

    

    Section
      8.5  Severability.  In the event any part of the
      Agreement, for any reason, is declared to be invalid, such decision shall not
      affect the validity of any remaining portion of
      this
      Agreement, which remaining portion shall remain in complete force and effect
      as
      if this Agreement had been executed with the invalid portion of the Agreement
      eliminated, and it is hereby declared the intention of the parties that the
      parties would have executed the remaining portion of this Agreement without
      including any such part, parts or portion which, for any reason, hereafter
      may
      be declared invalid.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      8.6  Captions and Interpretation.   Captions
      of the sections of this Agreement are for convenience and reference only, and
      the words contained in those captions shall in no way be held to explain,
      modify, amplify or aid in the interpretation, construction or meaning of the
      provisions of this Agreement.  The language in all parts to this
      Agreement, in all cases, shall be construed in accordance with the fair meaning
      of that language was prepared by all parties and not strictly for or against
      any
      party.

    

    Section
      8.7  Further Assurances.  Each party shall take any
      and all action necessary, appropriate or advisable to execute and discharge
      such
      party’s responsibilities and obligations created by the provisions of this
      Agreement and to further effectuate and carry out the intents and purposes
      of
      this Agreement and the relationship contemplated by the provisions of this
      Agreement.

    

    Section
      8.8  Number and Gender.  Whenever the singular
      number is used in this Agreement, and when required by the context, the same
      shall include the plural, and vice versa; the masculine gender shall include
      the
      feminine and the neuter genders, and vice versa; and the word “person” shall
      include corporation, firm, trust, estate, municipality, governmental agency,
      sole proprietorship, political subdivision, fraternal order, club, league,
      society, organization, joint stock company, association partnership or other
      form of entity.

    

    Section
      8.9  Successors and Assigns.  This Agreement shall
      inure to the benefit of and obligate the undersigned parties and their
      respective successors and assigns.  Whenever, in this Agreement, a
      reference to any party is made, such reference shall be deemed to include a
      reference to the successors and assigns of such party.  The provisions
      of this section notwithstanding, no provision of this section shall be construed
      or interpreted as consent to the assignment or delegation by any party of such
      party’s respective rights and obligation created by the provisions of this
      Agreement.

    

    Section
      8.10  Reservation of Rights.  The failure of any
      party at any time hereafter to require strict performance by the other party
      of
      any of the warranties, representations, covenants, terms, conditions and
      provisions specified in this Agreement shall not waive, affect or diminish
      any
      right of such party failing to require strict performance to demand strict
      compliance and performance therewith and with respect to any other provisions,
      warranties, terms and conditions specified in this Agreement, and any waiver
      of
      any default shall not waive or affect any other default, whether prior or
      subsequent thereto, and whether the same or of a different type.  None
      of the representations, warranties, covenants, conditions, provisions and terms
      specified in this Agreement shall be deemed to have been waived by any act
      or
      knowledge of either party or such party’s agents, officers or employees, and any
      such waiver shall be made only by an instrument in writing, signed by the
      waiving party and directed to the non-waiving party specifying such
      waiver.  Each party reserves such party’s rights to insist upon strict
      compliance with the provisions of this Agreement at all times.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      8.11 No Breach of Existing Agreements.  Each party hereby
      represents, warrants and covenants, upon the execution of this Agreement, such
      party is not a party to any oral or written agreement which may be breached
      by
      such party’s execution of this Agreement.

    

    Section
      8.12  Concurrent Remedies.  No right or remedy
      specified in this Agreement conferred on or reserved to the parties is exclusive
      of any other right or remedy specified in this Agreement or by law or equity
      provided or permitted; but each such right and remedy shall be cumulative of,
      and in addition to, every other right and remedy specified in this Agreement
      or
      now or hereafter existing at law or in equity or by statute or otherwise, and
      may be enforced concurrently therewith or from time to time.  The
      termination of this Agreement for any reason whatsoever shall not prejudice
      any
      right or remedy which either party may have, either at law, in equity or
      pursuant to the provisions of this Agreement.

    

    Section
      8.13  Time.  Time is of the essence of this
      Agreement and each and all of the provisions of this Agreement.

    

    Section
      8.14  Choice of Law and Consent to
      Jurisdiction.  This Agreement shall be deemed to have been
      entered into in the County of Orange, State of California, and all questions
      concerning the validity, interpretation or performance of any of the terms,
      conditions and provisions of this Agreement or of any of the rights or
      obligations of the parties, shall be governed by, and resolved in accordance
      with, the laws of the State of California.  Any and all actions or
      proceedings, at law or in equity, to enforce or interpret the provisions of
      this
      Agreement shall be litigated in courts having situs within the County of Orange,
      State of California, and each party hereby consents to the jurisdiction of
      any
      local, state or federal court located within the County of Orange, State of
      California and consents any service of process in such action or proceeding
      may
      be made by personal service upon such party wherever such party may be then
      located, or by certified or registered mail directed to such party at such
      party’s last known address.

    

    Section
      8.15  Assignability.  Neither party shall sell,
      assign, transfer, convey or encumber this Agreement or any right or interest
      in
      this Agreement or pursuant to this Agreement, or suffer or permit any such
      sale,
      assignment, transfer or encumbrance to occur by operation of law without the
      prior written consent of the other party.  In the event of any sale,
      assignment, transfer or encumbrance consented to by such other party, the
      transferee or such transferee’s legal representative shall agree with such other
      party in writing to assume personally, perform and be obligated by the
      covenants, obligations, terms, conditions, and provisions specified in this
      Agreement.

    

    Section
      8.16  Consent to Agreement.  By executing this
      Agreement, each party, for himself, represents such party has read or caused
      to
      be read this Agreement in all particulars, and consents to the rights,
      conditions, duties and responsibilities imposed upon such party as specified
      in
      this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF the parties have executed this Agreement of Employment in
      duplicate, each of which shall have the force and effect of an original, on
      the
      date specified in the preamble of this Agreement.

    

    

    
      	 	
              “EMPLOYER’

            	 	
              “Executive”

            	 
	 	 	 	 	 
	 	
              PERFORMANCE
                CAPITAL MANAGEMENT, LLC

            	 	 	 
	 	
              A
                California Limited Liability Company

            	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              By:

            	
              /s/
                Lester Bishop

            	 	
              /s/
                David J. Caldwell

            	 
	 	
              Lester
                Bishop

            	 	 	 
	
              Its:

            	
              Co-Chair
                Person of the Board

            	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              By:

            	
              /s/
                Larisa Gadd

            	 	
              David
                J. Caldwell

            	 
	 	
              Larisa
                Gadd

            	 	 	 
	
              Its:

            	
              Co-Chair
                Person of the Boardex10_4.htm

    
      

    

    EXHIBIT
      10.4

     

    AGREEMENT
      OF EMPLOYMENT

     

    THIS
      AGREEMENT OF EMPLOYMENT (“Agreement”) is made and entered into in duplicate
      this      11th     
       day of
      July           ,
      2007, by and between PERFORMANCE CAPITAL MANAGEMENT, LLC, a Limited Liability
      Company (“Employer”), and Darren S. Bard (“Executive”).

    

    RECITALS

    

    A.  Employer
      is a Limited Liability Company duly organized and validly existing pursuant
      to
      the laws of the State of California.

    

    B.  Employer
      is in the business of acquiring, processing, servicing and collecting commercial
      and consumer indebtedness.

    

    C.  Employer
      desires to employ Executive, subject to the terms and conditions specified
      in
      this Agreement.

    

    D.  Executive
      hereby accepts employment with Employer as Chief Information Officer of
      Employer, subject to the terms and conditions specified in this
      Agreement.

    

    NOW,
      THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL BE DEEMED
      TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS, PROMISES,
      UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN THIS
      AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY
      OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED LEGALLY AND
      EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE, REPRESENT AND WARRANT
      AS FOLLOWS:

     

    ARTICLE
      I

     

    TERM
      OF EMPLOYMENT

    

    Section1.1
      Specified Term.  Employer hereby employs Executive and
      Executive hereby accepts employment with Employer for a period of five (5)
      years
      commencing on the date of execution and delivery of this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

     

    DUTIES
      AND OBLIGATIONS OF EXECUTIVE

    

    Section
      2.1 General Duties.  Executive shall serve as Chief
      Information Officer of PERFORMANCE CAPITAL MANAGEMENT, LLC, a California Limited
      Liability Company.  In Executive’s capacity as the Chief Information
      Officer of Employer, Executive shall do and perform all services, acts, or
      things necessary or appropriate to manage and conduct the financial and fiscal
      affairs of Employer, subject at all times to the policies, directives and rules
      established by the Board of Directors of Employer (“Board”), and to the consent
      of the Board when required.  The duties to be performed by Executive
      shall be determined from time to time by the Board.

    

    Section
      2.2  Devotion to Employer’s Business.

    

    A.  Exclusive
      Services. During his employment by the Employer, the Executive shall not,
      without the express prior written consent of the Board of Directors, engage
      directly or indirectly in any outside employment or consulting of any kind,
      whether or not the Executive receives remuneration for such services, or in
      any
      other activity that relates to any line of business in which the Employer is
      at
      that time engaged or plans to engage in, or that would otherwise conflict with
      the Executive’s employment obligations, contractual duties, or fiduciary
      obligations to the Employer

    

    Section
      2.3  Competitive Activities.  During the term of
      this Agreement Executive shall not, directly or indirectly, whether as an
      employee, employer, consultant, agent, principal, partner, stockholder,
      corporate officer, director, or in any other individual or representative
      capacity, engage or participate in any business that is in competition in any
      manner whatsoever with the business of Employer.   This provision
      is intended by the Parties to be interpreted broadly and includes the array
      of
      activities carried out in the debt buying and collection industries, including
      collecting as a third-party agency.

     

    ARTICLE
      III

     

    OBLIGATIONS
      OF EMPLOYER

    

    Section
      3.1  General Description.  Employer shall provide
      Executive with the compensation, incentives and benefits specified elsewhere
      in
      this Agreement.

    

    Section
      3.2  Office and Staff.  Employer shall provide
      Executive with equipment, supplies, facilities and services, suitable to
      Executive’s position and adequate for the performance of Executive’s duties
      created by the provisions of this Agreement.

    

    Section
      3.3  Reimbursement of Business Expenses.  Executive
      is authorized to incur reasonable business expenses for promoting the business
      of Employer, including expenditures for entertainment, and travel in accordance
      with the policies and practices of Employer then in
      effect.  Reimbursement shall be paid within two weeks of presentation
      of expense statements or vouchers and such other supporting information as
      Employer may reasonably require.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      Section
        3.4  Indemnification.  Employer shall indemnify
        Executive, if Executive is made a party to or threatened to be made a party
        to,
        or otherwise involved in, any proceeding commenced during the employment
        term,
        or after the employment term, because Executive is or was an employee or
        agent
        of Employer.  The indemnification contemplated by the provisions of
        this Section 3.4 shall include any and all expenses, judgments, fines,
        penalties, settlements, and other amounts, actually and reasonably incurred
        by
        Executive in connection with the defense or settlement of any such proceeding;
        provided, however, Executive shall have acted in good faith and in a manner
        that
        Executive reasonably believed to be in the best interests of
        Employer.  In the event the dispute involves a claim of criminal
        activity,  Executive must have had no reasonable cause to believe that
        Executive’s conduct was unlawful.  It is agreed and understood that a
        conflict of interest may arise between the parties.  It is agreed that
        the Employer is entitled to participate in good faith in the selection of
        Executive’s separate legal counsel, which Employer will pay for, if it is
        determined that Executive is entitled to indemnification pursuant to this
        section.  Executive agrees to cooperate with Employer in all strategy
        and settlement decisions.  Any dispute arising under this section,
        including the settlement of any action either jointly or severally shall
        be
        subject to the arbitration provisions of Section 8.1.

       

    

    Section
      3.5  Advances of Expenses.  Any and all expenses,
      including, but not limited to, filing fees, costs of investigation, attorney’s
      fees, messenger and delivery expenses, postage, court reporters’ fees and
      similar fees and expenses, incurred by Executive in any proceeding for which
      Executive is reasonably entitled to indemnification shall be advanced by
      Employer prior to the final disposition of such proceeding.  The
      obligation to advance such expenses at the written request of Executive is
      subject to considerations of reasonableness, Prior to any payments Executive
      shall agree to repay such advances unless and to the extent that it is
      ultimately determined that Executive is entitled to
      indemnification.

    

    Section
      3.6  Indemnification Not Exclusive.  The
      indemnification contemplated by the provisions of this Agreement shall not
      be
      deemed exclusive of any other rights to which Executive may be entitled pursuant
      to the provisions of the Articles of Incorporation or Bylaws of Employer, or
      any
      agreement, vote of shareholders, or disinterested directors, the General
      Corporation Law of the State of California, or otherwise as to action in his
      official capacities as an employee or agent of Employer.  The
      indemnification contemplated by the provisions of this Agreement shall continue
      as to the Executive although he may have ceased to be an employee or agent
      of
      Employer and shall inure to the benefit of the heirs and personal
      representatives of Executive, including the estate of Executive.

     

    ARTICLE
      IV

     

    COMPENSATION
      OF EXECUTIVE

    

    Section
      4.1  Annual Salary.  As compensation for the
      services to be rendered by Executive pursuant to provisions of this Agreement,
      Employer shall pay Executive or cause Executive to be paid (by an affiliate
      of
      Employer) an annual salary in the amount of One Hundred Fifty Thousand dollars
      ($150,000.00), payable in equal semi-monthly installments of Six Thousand Two
      Hundred Fifty dollars ($6,250.00)).  Executive salary increases during
      the term of this agreement maybe made at the discretion of the Employer’s Board
      of Directors.  Any such changes shall be incorporated as Addenda to
      this agreement.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      4.2  Profit Bonuses.  Executive profit bonuses, if
      any, shall be at the discretion of the Employer’s Board of
      Directors.  The Board of Directors may in its discretion set up a
      specific bonus program for a predetermined length of time.  Any such
      program will be communicated to the Executive in writing prior to the
      commencement of the program.

    

    Section
      4.3 Equity Participation.  If during the term of this contract the
      Board takes action to bring liquidity to all PCM unit holders (as, for example,
      by selling or taking the company public), the Board intends to compensate the
      Executives, provided they remain in the employ of the company at the time.
      They
      will have the option of receiving 1) a sum equal to the total of their annual
      salaries divided by the total number of Executives employed by employer at
      the
      time of the action; or 2) 10% of the payment in kind actually distributed to
      the
      unit holders divided by the total number of Executives employed by Employer
      at
      the time of the action.

    

    Section
      4.4  Tax Withholding.  Employer shall have the
      right to deduct or withhold from the compensation due and payable to Executive
      pursuant to the provisions of this Agreement any and all amounts required for
      federal income and Social Security taxes and all state or local taxes now
      applicable or which may be enacted and may become applicable in the
      future.

     

    ARTICLE
      V.

     

    EXECUTIVE
      BENEFITS

    

    Section
      5.1  Annual Vacation.   During the employment
      term, Executive shall be entitled to an annual vacation leave, of three weeks
      without loss of compensation.  Executive may take his vacation from
      time to time unless specifically requested not to do so by
      Employer.  In the event that Executive is unable for any reason to
      take the total amount of vacation time authorized herein during any year, except
      at the specific request of the Employer, Executive at his option, may elect
      to
      be paid out up to one week’s vacation or carry it over into the first quarter up
      to one week’s vacation. Any additional vacation benefit will be forfeited. Other
      than one carryover week that must be used within the first quarter of the
      succeeding year, there will be no accrual of vacation time. The three weeks
      of
      vacation pay will vest on January 1 of each calendar year such that Executive
      will be entitled to take up to three weeks off with pay during that
      year.  In the event this employment relationship is terminated,
      executive will be entitled to be compensated only for the prorated portion
      of
      vacation, including reimbursing Employer for used but unearned
      vacation.   Proration will be based on the assumption that a week
      of vacation is earned as of February 15, June 15 and October 15 of each
      year.

    

    Section
      5.2  Paid Holidays. During the employment term, Executive
      shall be entitled to a holiday with full pay on each New Year’s Day, President’s
      Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
      Day during the term of this Agreement, and such other days as Employer currently
      provides other employees.

    

    Section
      5.3 Health Care Benefits.  During the employment term,
      Employer shall include Executive and his dependents in the hospital, surgical,
      medical and dental benefit plan adopted and maintained by Employer for senior
      executives. Executive shall be entitled to sick days/personal days as Employer
      currently provides other employees.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Section
      5.4 Other Benefits.  During the employment term, Employer
      shall provide the Executive such other benefits as Employer, in its sole and
      absolute discretion, may determine to be necessary or appropriate.

     

    ARTICLE
      VI

     

    TERMINATION
      OF EMPLOYMENT

    

    Section
      6.1 Termination.   Either party shall have the right to
      terminate this Agreement with or without Cause before the expiration of the
      Term
      or any Renewal Term, as provided below.  Whatever the circumstances of
      the termination may be, the Executive shall continue to be bound after
      termination by Articles 7 and 8 of this Agreement.

    

    Section
      6.2 Termination for Cause.

    

    A.  Employer
      reserves the right to terminate this Agreement if Executive willfully breaches
      or habitually neglects the duties which he is required to perform pursuant
      to
      the provisions of this Agreement; or commits such acts of dishonesty, fraud,
      misrepresentation or other acts of moral turpitude as would prevent the
      effective performance of his duties.

    

    B.  Employer,
      at its option, may terminate this Agreement for the reasons stated in this
      section by giving written notice of termination to Executive without prejudice
      to any other remedy to which Employer may be entitled either at law, in equity,
      or pursuant to the provisions of this Agreement.

    

    C.  The
      notice of termination required by this section shall specify the ground for
      the
      termination and shall be supported by a statement of relevant
      facts.

    

    D.  Termination
      pursuant to this section shall be considered “for cause” for the purposes of
      this Agreement.

    

    E.  If
      the
      Employer terminates the Executive’s employment for Cause, the Employer shall pay
      to the Executive any compensation due under Article 4 of this Agreement,
      including any unused vacation, prorated through the date of termination, and
      the
      Employer shall have an option to purchase all the ownership interest of the
      Executive, if any, in accordance with the agreement creating such interest,
      at
      fair market value, to be determined by the Board. The Executive shall have
      no
      right to receive any further compensation or benefits otherwise payable under
      any other provision of this Agreement.

    

    F.  Termination
      by Executive.  Executive may terminate his obligations pursuant to
      this Agreement by giving Employer at least thirty (30) days written
      notice.  The time shall run from the date the notice is received by
      the Chair or Co-Chairs of the Board of Directors.  In the event
      Executive terminates his obligations said termination shall be treated as for
      cause.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      6.3 Termination Without Cause.

    

    A.  This
      Agreement shall be terminated upon the death of Executive.

    

    B.  Employer
      reserves the right to terminate this Agreement not less than three (3) months
      after Executive suffers any physical or mental disability that would prevent
      the
      performance of his essential duties with or without reasonable accommodation,
      pursuant to the provisions this Agreement.  Such a termination shall
      be effected by giving thirty (30) days’ written notice of termination to
      Executive.  Executive agrees to submit to and cooperate fully with an
      independent medical examination by medical professionals selected by
      Employer.

    

    C.  Termination
      pursuant to this section shall not be considered “for cause” for the purposes of
      this Agreement.

    

    D.  Payment
      upon Termination. Notwithstanding any provision of this
      Agreement, if Employer terminates this Agreement without cause, it shall pay
      Executive an amount equal to six (6) months salary. However, in the event
      Executive accepts employment with another Debt Buyer, Employer’s obligation to
      continue to pay severance shall terminate.  All other provisions of
      this agreement shall remain in full force and effect including the provisions
      of
      Article VII relating to protection of Employer’s confidential information and
      non-solicitation.

     

    Section
      6.4 Effect of Merger, Transfer of Assets, or Dissolution.

    

    A.  This
      Agreement shall not be terminated by any voluntary or involuntary dissolution
      of
      Employer resulting from either a merger or consolidation in which Employer
      is
      not the consolidated or surviving corporation, or a transfer of all or
      substantially all of the assets of Employer.

    

    B.  In
      the
      event of any such merger or consolidation or transfer of assets, Employer’s
      rights, benefits, and obligations hereunder may be assigned to the surviving
      or
      resulting corporation or the transferee of Employer’s assets.

    

    C.  In
      the
      event any such merger or consolidation or transfer of assets results in
      Executive’s termination, such termination shall be considered without
      cause.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
         

        ARTICLE
          VII

         

        CONFIDENTIALITY
          AND NON-SOLICITATION

         

      

      Section
        7.1 Nondisclosure.  The executive acknowledges that in the
        course of employment with the Employer, the Executive will have access to
        confidential information.  Confidential information includes, but is
        not limited to, information about either the Employer’s clients, the terms and
        conditions under which the Employer or its affiliates deals with clients,
        pricing information for the purchase or sale of assets, customer lists, research
        materials, manuals, computer programs, formulas for analyzing asset portfolios,
        techniques, data, marketing plans, and tactics, technical information, lists
        of
        asset sources, the processes and practices of the Employer, all information
        contained in electronic or computer files, all financial information, salary
        and
        wage information, and any other information that is designated by the Employer
        or its affiliates as confidential or that the executive knows or should know
        is
        confidential, information provided by third parties that the Employer or
        its
        affiliates are obligated to keep confidential, and all other proprietary
        information of the Employer or its affiliates. The executive acknowledges
        all
        confidential information is and shall continue to be the exclusive property
        of
        the Employer or its affiliates, whether or not prepared in whole or in part
        by
        the Executive and whether or not disclosed to or entrusted to the Executive
        in
        connection with employment by the Employer.  The Executive agrees not
        to disclose confidential information, directly or indirectly, under any
        circumstances or by any means, to any third persons without the prior written
        consent of the Employer.  The Executive agrees that he will not copy,
        transmit, reproduce, summarize, quote, or make any commercial or other use
        whatsoever of confidential information, except as may be necessary to perform
        work done by the Executive for the Employer.  The executive agrees to
        exercise the highest degree of care in safeguarding confidential information
        against loss, theft or other inadvertent disclosure and agrees generally
        to take
        all steps necessary or requested by the Employer to ensure maintenance of
        the
        confidentiality of the confidential information.

       

      Section
        7.2  Exclusions.  Section 7.1 shall not apply to
        the following information:

    

    

    (a)  information
      now and hereafter voluntarily disseminated by the Employer to the public or
      which otherwise becomes part of the public domain through lawful
      means;  (b) information already known to the Executive as documented
      by written records which predate the Executive’s employment with the Employer;
      (c) information subsequently and rightfully received from third parties and
      not
      subject to any obligation of confidentiality; and (d) information independently
      developed by the Executive after termination of his employment.  In
      relation to part (b) of this section, the date of Executive’s employment shall
      be considered to be the date on which Executive was first employed with
      Employer, including Employer’s predecessors in interest.  That
      operative date is April 6, 1998.

    

    Section
      7.3  Subpoenas; Cooperation in Defense of the
      Employer.  If the Executive, during employment or thereafter,
      is served with any subpoena or other compulsory judicial or administrative
      process calling for production of confidential information or if the Executive
      is otherwise required by law or regulation to disclose confidential information,
      the Executive will immediately, before making any such production or disclosure,
      notify the Employer and provide it with such information as may be necessary
      for
      the Employer to take such action as the Employer deems necessary to protect
      its
      interests.  The Executive agrees to cooperate reasonably with the
      Employer, whether during employment or thereafter, in the prosecution or defense
      of all threatened claims or actual litigation in which the Employer is or may
      become a party, whether now pending or hereafter brought, in which the Executive
      has knowledge or relevant facts or issues.  The Executive shall be
      reimbursed for his reasonable expenses for travel time due to cooperating with
      the prosecution or defense of any litigation for the Employer.

    

    Section
      7.4  No Unfair Competition.  The Executive hereby
      acknowledges that the sale or unauthorized use or disclosure of any of the
      Employer’s confidential material obtained by the Executive by any means
      whatsoever, at any time before, during, or after the Term or any Renewal term,
      shall constitute unfair competition.  The Executive shall not engage
      in any unfair competition with the Employer or its affiliates either during
      the
      Term, any Renewal Term, or at any time thereafter.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      7.5  Non-Solicitation of Employees.  During the
      period of six (6) months following the Termination Date, the Executive shall
      not
      directly or indirectly solicit for employment or for independent contractor
      work
      any employee of the Employer, and shall not encourage any such employee to
      leave
      the employment of the Employer.

    

    Section
      7.6  Non-Solicitation of Customers.  During the
      period of six months following the Termination Date, the Executive shall not
      directly or indirectly (a) solicit for business any customers of the Employer,
      (b) encourage any such customers to stop using the facilities or services of
      the
      Employer, or (c) encourage any such customers to use the facilities or services
      of any competitor of the Employer.  For the purposes of this section,
“customers” include; original creditors, debt brokers, business partners and
      other individuals from whom Employer has purchased debt portfolios.

     

    ARTICLE
      VIII

     

    GENERAL
      PROVISIONS

    

    Section
      8.1  Arbitration.  Any controversy, dispute or
      claim (“Claim”) whatsoever between Executive on the one hand, and the Employer,
      or any of its employees, officers, and agents (collectively “Employer Parties”)
      on the other hand, arising out of this Agreement or in any way connected with
      Executive’s employment or the termination of his employment shall be settled by
      binding arbitration at the request of either party.  The parties shall
      agree on an arbitrator and, if no agreement is reached, either party may
      petition to the Superior Court for the selection of an
      arbitrator.  The arbitrator shall apply California substantive law and
      the California Evidence Code to the proceeding unless otherwise
      agreed.  The demand for arbitration must be in writing and must be
      made by the aggrieved party within the applicable statute of limitations
      period.  The arbitration shall take place in Orange County,
      California.  The parties shall be entitled to conduct reasonable
      discovery, including conducting depositions, propounding interrogatories,
      and requesting documents.  The arbitrator shall have the authority to
      determine what constitutes reasonable discovery and may, among other things,
      limit the number of depositions a party may take, the number of interrogatories
      a party may propound, and the number and nature of documents a party may
      request.  The arbitrator shall prepare in writing and provide to the
      parties a decision and award which includes factual findings and the reasons
      upon which the decision is based.  The decision of the arbitrator
      shall be binding and conclusive on the parties and not reviewable for error
      of
      law or legal reasoning other than abuse of discretion by the arbitrator, the
      arbitrator’s failure to disclose relevant relationships past or present, or the
      grant of a remedy outside the general authority of an
      arbitrator.  Judgment upon the award rendered by the arbitrator may be
      entered in any court having proper jurisdiction.  The fees for the
      arbitrator shall be paid by the Employer. Each party shall bear its own
      attorney’s fees, and the arbitrator may award reasonable attorney’s fees and
      costs to the prevailing party pursuant to California law.  Both the
      Employer and the Executive understand and agree that by using arbitration to
      resolve any Claims between the Executive and the Employer or any or all of
      the
      Employer Parties, they are giving up any right that they may have to have the
      dispute resolved through the process of a civil trial with regard to those
      Claims.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      8.2  Governmental Rules and Regulations.  The
      provisions of this Agreement are subject to any and all present and future
      orders, rules and regulations of any duly constituted authority having
      jurisdiction of the relationship and transactions contemplated by the provisions
      of this Agreement.

    

    Section
      8.3  Notices.  All notices, requests, demands or
      other communications pursuant to this Agreement shall be in writing, by telex
      or
      facsimile transmission or courier and shall be deemed to have been duly given
      (i) on the date of service if delivered in person or by telex or facsimile
      transmission (with the telex or facsimile confirmation of transmission receipt
      acting as confirmation of service when sent and provide telexed or telecopied
      notices are also mailed by first class, certified or registered mail, postage
      prepaid); or (ii) seventy-two (72) hours after mailing by first class,
      registered or certified mail, postage prepaid, and properly addressed as
      follows:

    

    
      	 	
              If
                to Executive:

            	 	
              Darren
                S. Bard

            
	 	 	 	
              4880
                Copper Road

            
	 	 	 	
              Chino
                Hills, California 91709

            
	 	 	 	 
	 	
              If
                to Employer:

            	 	
              Performance
                Capital Management, LLC

            
	 	 	 	
              7001
                Village Drive, Suite 255

            
	 	 	 	
              Buena
                Park, California 90621

            

    

    

    or
      at
      such other address as the party affected by designate in a written notice to
      such other party in compliance with this section.

    

    Section
      8.4  Entire Agreement.  This Agreement is the final
      written expression and the complete and exclusive statement of all the
      agreements, conditions, promises, representations, warranties, and covenants
      between the parties with respect to the subject matter of this Agreement, and
      this Agreement supersedes all prior or contemporaneous agreements, negotiations,
      representations, warranties, covenants, understandings and discussions by and
      between and among the parties, their respective representatives, and any other
      person with respect to the subject matter specified in this
      Agreement.  This Agreement may be amended only by an instrument in
      writing which expressly refers to this Agreement and specifically states that
      such instrument is intended to amend this Agreement and is signed by each of
      the
      parties.  Each of the parties represents, warrants and covenants that
      in executing this Agreement that such party has (i) relied solely on the terms,
      conditions and provisions specified in this Agreement and (ii) placed no
      reliance whatsoever on any statement, representation, warranty, covenant or
      promise of any other party, or any other person, not specified expressly in
      this
      Agreement, or upon the failure of any party or any other person to make any
      statement, representation, warranty, covenant or disclosure of any nature
      whatsoever.  The parties have included this section to preclude (i)
      any claim that any party was in any manner whatsoever induced fraudulently to
      enter into, execute and deliver this Agreement, and (ii) the introduction of
      parol evidence to vary, interpret, supplement or contradict the terms,
      conditions and provisions of this Agreement.

    

    Section
      8.5  Severability.  In the event any part of the
      Agreement, for any reason, is declared to be invalid, such decision shall not
      affect the validity of any remaining portion of this Agreement, which remaining
      portion shall remain in complete force and effect as if this Agreement had
      been
      executed with the invalid portion of the Agreement eliminated, and it is hereby
      declared the intention of the parties that the parties would have executed
      the
      remaining portion of this Agreement without including any such part, parts
      or
      portion which, for any reason, hereafter may be declared invalid.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      8.6  Captions and Interpretation.   Captions
      of the sections of this Agreement are for convenience and reference only, and
      the words contained in those captions shall in no way be held to explain,
      modify, amplify or aid in the interpretation, construction or meaning of the
      provisions of this Agreement.  The language in all parts to this
      Agreement, in all cases, shall be construed in accordance with the fair meaning
      of that language was prepared by all parties and not strictly for or against
      any
      party.

    

    Section
      8.7  Further Assurances.  Each party shall take any
      and all action necessary, appropriate or advisable to execute and discharge
      such
      party’s responsibilities and obligations created by the provisions of this
      Agreement and to further effectuate and carry out the intents and purposes
      of
      this Agreement and the relationship contemplated by the provisions of this
      Agreement.

    

    Section
      8.8  Number and Gender.  Whenever the singular
      number is used in this Agreement, and when required by the context, the same
      shall include the plural, and vice versa; the masculine gender shall include
      the
      feminine and the neuter genders, and vice versa; and the word “person” shall
      include corporation, firm, trust, estate, municipality, governmental agency,
      sole proprietorship, political subdivision, fraternal order, club, league,
      society, organization, joint stock company, association partnership or other
      form of entity.

    

    Section
      8.9  Successors and Assigns.  This Agreement shall
      inure to the benefit of and obligate the undersigned parties and their
      respective successors and assigns.  Whenever, in this Agreement, a
      reference to any party is made, such reference shall be deemed to include a
      reference to the successors and assigns of such party.  The provisions
      of this section notwithstanding, no provision of this section shall be construed
      or interpreted as consent to the assignment or delegation by any party of such
      party’s respective rights and obligation created by the provisions of this
      Agreement.

    

    Section
      8.10  Reservation of Rights.  The failure of any
      party at any time hereafter to require strict performance by the other party
      of
      any of the warranties, representations, covenants, terms, conditions and
      provisions specified in this Agreement shall not waive, affect or diminish
      any
      right of such party failing to require strict performance to demand strict
      compliance and performance therewith and with respect to any other provisions,
      warranties, terms and conditions specified in this Agreement, and any waiver
      of
      any default shall not waive or affect any other default, whether prior or
      subsequent thereto, and whether the same or of a different type.  None
      of the representations, warranties, covenants, conditions, provisions and terms
      specified in this Agreement shall be deemed to have been waived by any act
      or
      knowledge of either party or such party’s agents, officers or employees, and any
      such waiver shall be made only by an instrument in writing, signed by the
      waiving party and directed to the non-waiving party specifying such
      waiver.  Each party reserves such party’s rights to insist upon strict
      compliance with the provisions of this Agreement at all times.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      8.11 No Breach of Existing Agreements.  Each party hereby
      represents, warrants and covenants, upon the execution of this Agreement, such
      party is not a party to any oral or written agreement which may be breached
      by
      such party’s execution of this Agreement.

    

    Section
      8.12  Concurrent Remedies.  No right or remedy
      specified in this Agreement conferred on or reserved to the parties is exclusive
      of any other right or remedy specified in this Agreement or by law or equity
      provided or permitted; but each such right and remedy shall be cumulative of,
      and in addition to, every other right and remedy specified in this Agreement
      or
      now or hereafter existing at law or in equity or by statute or otherwise, and
      may be enforced concurrently therewith or from time to time.  The
      termination of this Agreement for any reason whatsoever shall not prejudice
      any
      right or remedy which either party may have, either at law, in equity or
      pursuant to the provisions of this Agreement.

    

    Section
      8.13  Time.  Time is of the essence of this
      Agreement and each and all of the provisions of this Agreement.

    

    Section
      8.14  Choice of Law and Consent to
      Jurisdiction.  This Agreement shall be deemed to have been
      entered into in the County of Orange, State of California, and all questions
      concerning the validity, interpretation or performance of any of the terms,
      conditions and provisions of this Agreement or of any of the rights or
      obligations of the parties, shall be governed by, and resolved in accordance
      with, the laws of the State of California.  Any and all actions or
      proceedings, at law or in equity, to enforce or interpret the provisions of
      this
      Agreement shall be litigated in courts having situs within the County of Orange,
      State of California, and each party hereby consents to the jurisdiction of
      any
      local, state or federal court located within the County of Orange, State of
      California and consents any service of process in such action or proceeding
      may
      be made by personal service upon such party wherever such party may be then
      located, or by certified or registered mail directed to such party at such
      party’s last known address.

    

    Section
      8.15  Assignability.  Neither party shall sell,
      assign, transfer, convey or encumber this Agreement or any right or interest
      in
      this Agreement or pursuant to this Agreement, or suffer or permit any such
      sale,
      assignment, transfer or encumbrance to occur by operation of law without the
      prior written consent of the other party.  In the event of any sale,
      assignment, transfer or encumbrance consented to by such other party, the
      transferee or such transferee’s legal representative shall agree with such other
      party in writing to assume personally, perform and be obligated by the
      covenants, obligations, terms, conditions, and provisions specified in this
      Agreement.

    

    Section
      8.16  Consent to Agreement.  By executing this
      Agreement, each party, for himself, represents such party has read or caused
      to
      be read this Agreement in all particulars, and consents to the rights,
      conditions, duties and responsibilities imposed upon such party as specified
      in
      this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF the parties have executed this Agreement of Employment in
      duplicate, each of which shall have the force and effect of an original, on
      the
      date specified in the preamble of this Agreement.

    

    
      	 	
              “EMPLOYER’

            	 	
              “Executive”

            	 
	 	 	 	 	 
	 	
              PERFORMANCE
                CAPITAL MANAGEMENT, LLC

            	 	 	 
	 	
              A
                California Limited Liability Company

            	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              By:

            	
              /s/
                Lester Bishop

            	 	
              /s/
                Darren S. Bard

            	 
	 	
              Lester
                Bishop

            	 	 	 
	
              Its:

            	
              Co-Chair
                Person of the Board

            	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              By:

            	
              /s/
                Larissa Gadd

            	 	
              Darren
                S. Bard

            	 
	 	
              Larisa
                Gadd

            	 	 	 
	
              Its:

            	
              Co-Chair
                Person of the Board

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