Debt Recovery Procedure


1.1    The purpose of these debt collection procedures (hereinafter referred to as "the Procedure") of the UAB "E Finance" Crowdinglab (hereinafter referred to as" Platform ") is to establish the principles, tools and procedures that the Platform applies to Project Owners in the timely manner of its obligations to Investors.
1.2.     Terms used in the procedure are understood as defined by the Law on Crowdfunding of the Republic of Lithuania and other related legal acts, unless otherwise explicitly stated in the Procedure.
1.3.     The procedure was prepared in accordance with the provisions of the Law on Crowdfunding of the Republic of Lithuania, the Civil Code of the Republic of Lithuania, the Code of Civil Procedure of the Republic of Lithuania and other applicable legal acts.


2.1    The platform, in performing its debt recovery procedures, follows the principles of prevention, debt recovery, recovery, legality, economy and efficiency, and accountability principles:
2.1.1.     DEBT PREVENTION PRINCIPLE - the platform takes objective measures to prevent the emergence of bad debts. For this purpose, the Platform, prior to the publication of the Project on the Platform, analyzes and evaluates, inter alia, the creditworthiness of the Project owner, its economic status, its credit history, its debts and other objective circumstances that help to assess whether the Project owner can fulfill its obligations to Investors in a timely manner. Contracts must be concluded by providing clear and precise obligations of the Project owner to the Investors, the conditions and procedure for their execution, liability for non-performance of contractual obligations, the way of fulfilling obligations and other conditions guaranteeing proper performance of the contract, which are not in conflict with the applicable laws. The platform continuously monitors the execution of contracts and promptly responds to any circumstance that may or may not determine the obligations of Investors.
2.1.2.     COMPULSARY DEBT RECOVERY - debt collection procedures for the platform are compulsory. The Platform must in all cases be required to take measures to ensure that the Project Owner fulfills his obligations to the Investors to the maximum extent possible. Neither one of the Project's owners may be granted exclusive benefits or discounts due to untimely fulfillment of obligations if the interests of Investors are substantially violated. Project Owner cannot be exempted from the obligations to Investors.
2.1.3.     THE PRINCIPLE OF LEGALITY - the recovery actions carried out by the platform can not conflict with applicable laws, must be executed in accordance with the procedures provided for in the agreements and in the legal acts.
2.1.4.     THE PRINCIPLE OF ECONOMY AND EFFICIENCY - the platform must take steps to recover debt from the project owner quickly, efficiently and at the lowest possible cost in the shortest possible time. The Platform, acting in the best interests of the Investors, has the discretion to choose the most effective means and procedures for the recovery of debts from the Project owner, which it considers to be most effective for investors.
2.1.5.     ACCOUNTABILITY PRINCIPLE - the platform informs the Investor in detail about the actions taken by the owner of the recovery from the project.
2.2.     The Platform chooses the tools and procedures that the Platform applies in a timely manner to its obligations to Investors in good faith, care, fairness, professionalism and best terms and interests.


3.1.     In each specific case, the Platform decides on the debt to recover from the Project owner measure related to it, including, but not limited to, the intention of the Project Owner to act in good faith in order to fulfill its obligations to the Investors, the expected extent of the execution of obligations, and the objective ability to continue to fulfill its obligations to Investors , economic situation and other circumstances.
3.2.     If the Project owner fails to fulfill his obligations to Investors in due time, the Platform shall contact the Project owner with an invitation to fulfill his outstanding obligations to the Investors (hereinafter referred to as the Call).
3.3.     A platform makes at least three Calls to the Project Owner that does not comply with the obligations, if the actual situation does not require otherwise:
3.3.1.     Project owner, who does not fulfill his obligations to Investors, will be contacted and informed by phone call and SMS to fulfill overdue contractual obligations to Investors within 10 calendar days from the first date of delay;
3.3.2.     In the absence of a response from the Project Owner to the Call for Proposals specified in Clause 3.3.1, and / or the Project Owner has failed to fulfill its obligations to Investors, the Platform will send ‘Request” e-mail with a short message as a reminder to fulfill the overdue obligations to Investor no later than within 5 calendar days from the date of receipt of the Call;
3.3.3.     In the absence of a positive response from the Project Owner to the Call for Proposals specified in Clause 3.3.2 and / or the Project Owner's default on Investors, the Platform will contact the Project Owner by lwgal notice via curier mail requesting to fulfill past due obligations within 5 calendar days from the date of receipt of the Call (after clause 3.3.2).
3.4.    In addition to the information specified in paragraph 3.3 of this Procedure, the Call shall indicate (unless otherwise required by the actual situation or circumstances) an indefinite commitment to the Investors, indicating the rights and obligations of the Project owner in relation to the non-fulfillment of obligations to the Investors, the consequences of failure to fulfill their obligations, including legal measures the platform may take if the overdue obligations to Investors will not be fulfilled. The request may also set a deadline for the Project Owner to provide explanations, indicating the circumstances that led or predetermines the default for the Investors, as well as when and to what extent and / or in what ways the Project Owner intends to fulfill its obligations to the Investors.
3.5.     The platform seeks to ensure that obligations to the Investors shall be fulfilled in the most prompt and economical way possible under the will of the project owner. In order to achieve this, the Platform may negotiate with the Project Owner due to the order, terms and conditions for fulfilling the obligations.
3.6.     If, in the opinion of the Platform, all possibilities to find an agreement with the Project Owner on terms and conditions to fulfill obligations are exhausted or there are other circumstances, which makes it possible to conclude that the obligations to Investors will not be fulfilled or will be discharged under unfavorable conditions, the Platform, acting on behalf of the Investors, has the right to satisfy the Investor's requirements for the value of the items pledged by the Project Holder for the benefit of the Investor.
3.7    The Operator has the right to demand satisfaction of its claim secured by the mortgage prior the expiry of the terms and apply to the notary with a request to issue executive record if:
3.7.1    the grounds set forth by the article 4.196 of the Civil Code of the Republic of Lithuania exist;
3.7.2.    the Project Owner breaches the terms of the Agreement and the Operator terminates/ acquires the right of termination of the Agreement in cases set forth in paragraph 3.3.
3.8    Unless otherwise specified in the Agreement with the Project Owner and / or the Investor, the Platform, at the sole discretion and at the maximum extent permitted by law, initiate a forced debt recovery by any combination of these or several methods permitted by law acts:
3.8.1.     A pledged property is sold at a public auction;
3.8.2.     The pledged property is sold to a third party chosen by the Project owner, provided that prior written agreement of the platform has been received (the Platform may refuse to give consent only if the selling price of the pledged item is not sufficient to cover all amounts payable to Investors or related to them and / or Platform is not convinced that the buyer is paying. The burden of proving compliance with the above conditions is the responsibility of the Project owner);
3.8.3.    by transferring the legal title to the mortgaged property to the Operator;
3.8.4.    by taking possession and (or) sale of the mortgaged property without using the auction procedure, i.e. by organizing the sale of the mortgaged property according to the rules established and/ or chosen by the Operator;
3.8.5.    in any other manner permitted by applicable law.
3.9.    In case the legal title to the mortgaged property is transferred to the Operator, however the Parties does not agree on the value of mortgaged property the value of mortgaged property is not obvious considering the nature of the mortgaged property, the value of mortgaged property is established by an independent property assessor chosen by the Operator (subject to assessed market value of the mortgaged property).   
3.10.    The Platform is entitled to deduct the Platform's remuneration from the Project Owner and (or) third parties for the services provided by it in connection with the recovery of the debt from the Project Owner, including the services rendered by the Platform, in pursuance of the rights of the collateral taker or mortgage lender and other direct costs related to the recovery of debts from the Project owner (for example, fees for notarial services, enforcement costs, etc.). The remaining funds and / or other assets are transferred by the Platform to the Investors.
3.11.     If the funds and / or other assets received from the Project owner and (or) third parties are not enough to fully cover all the obligations of the Project owner to the Investors, the funds received, or other assets shall be distributed to the Investors proportionally, considering the amount of investment of each Investor (pro rata).
3.12.     If not stated otherwise in the agreement, Platform may transfer the execution of debt recovery procedures rights and other related functions to third parties.
3.13.     If, at any time during the recovery of a debt, it is determined that the actions of the Project Owner are indicative of a criminal activity, the platform's collection of information will be transmitted to the relevant law enforcement authorities.


4.1.    These procedures enter into force from its approval and valid until amendments, replacement, addition or cancellation.
4.2.    The procedures can only be changed and completed unilateral decision of the Head of the Company. Amendments and additions to the procedure shall come into force from the date of their approval, unless otherwise stated in the amendments and supplements themselves.
4.3.    In all aspects of Debt Recovery the Platform Operator (Crowding Lab) will keep in mind the interests of the Investors First.

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