Exhibit 10.1

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Borrower Registration Agreement
[prosperlogo3.jpg] 

This Borrower Registration Agreement (this "Agreement") is made and entered into
between you and Prosper Marketplace, Inc. ("Prosper").
The Prosper marketplace is a person-to-person online credit platform (the
"platform") operated by Prosper. All loans originated through the platform are
made by WebBank, a Utah-chartered industrial bank ("WebBank"). Prosper provides
services to WebBank in connection with the origination of such loans and Prosper
services all loans made through the platform. The following Agreement describes
those services as well as your rights and obligations should you elect to
register as a borrower on the platform. Prosper and WebBank are collectively
referred to in this Agreement as "we" or "us."
1. Registration as a Prosper Borrower. You are registering with Prosper as a
borrower so that you can post loan requests or "listings" for display on the
platform. In entering into this Agreement, you are agreeing to comply with the
Terms of Use for the platform as well as any other rules or policies set forth
on Prosper's website (www.prosper.com), any of which may be amended from time to
time by Prosper in its sole discretion (collectively, as amended, the "Prosper
Terms and Conditions"). The Prosper Terms and Conditions are accessible via a
link marked "Policies" at the bottom of each page of Prosper's website.
We reserve the right to restrict access to the platform to individuals who meet
minimum credit guidelines and other criteria, as determined by us in our sole
discretion.
2. Authorization to Obtain Credit Report. By registering on the platform as a
borrower, you authorize us to obtain a credit report from one or more consumer
credit reporting agencies. We may use the credit report for any purpose that
would be authorized by applicable law in connection with a credit transaction
involving you and involving the extension of credit to you or review or
collection of your account, including but not limited to (i) for authentication
purposes, to make sure you are who you say you are, (ii) to make credit
decisions; (iii) to administer the sale of Borrower Payment Dependent Notes
("Notes") associated with your loan; (iv) to determine how much debt you
currently have, in order to determine your debt-to-income ratio, (v) to obtain
your credit score and assign you a Prosper Rating based in part on that score,
(vi) to obtain and display information and characteristics from your credit
report from one or more consumer credit reporting agencies, and (vii) to obtain
and display on the Folio Investing Note Trader platform certain information and
characteristics from your credit report from one or more consumer credit
reporting agencies at any time or times that a Note corresponding to your loan
is offered for sale by lenders holding such Notes. Information from your credit
report will be

 
 

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displayed on the Prosper website with your listing. You authorize us to verify
information in your credit report and your listing, and you agree that Prosper
or WebBank may contact third parties without further notice to you to verify any
such information. We may obtain your credit report each time you create a
listing and at any other time that we deem it necessary in our sole discretion.
3. Listings. The platform connects individuals who wish to obtain loans with
persons who wish to help fund them. To receive a loan, a borrower member must
post a loan listing on the platform. The listing is a request by the borrower
member for a loan in the amount and at the interest rate specified in the
listing. In order to post a listing on the platform, you must have a good faith
intent to obtain and repay your loan, and your listing must be consistent with
that intent.
Once a listing is posted, our lender members can make commitments to help fund
all or a portion of the loan. Each commitment is an agreement by the lender
member to purchase a Note issued and sold by Prosper that is dependent for
payment on the payments made by the borrower on the loan requested. If the
listing receives commitments equal to or exceeding the minimum amount required
for the loan to fund, WebBank will originate a loan to the borrower member in an
amount equal to the total amount of those commitments, and Prosper will sell a
Note to each lender member in the amount of that lender member's commitment.
Lender members may resell Notes they purchase to other lender members on our
secondary trading platform (the "Note Trader platform").
Information Included in Listings. To post a listing, you must provide the amount
of the loan you are requesting as well as your annual income, occupation and
employment status. The minimum and maximum loan amounts you may request are
posted on the Prosper website and are subject to change by us at any time
without notice. We reserve the right to restrict the posting of listings on the
platform to individuals who meet minimum credit guidelines and other criteria,
as determined by us in our sole discretion.
You authorize and agree that we may display in your listing any information from
the credit report we obtain pursuant to Section 2 above, including but not
limited to the following information:
(i) Your Prosper Rating, which is calculated by Prosper but based on information
from your credit report;
(ii) Your debt-to-income ratio, expressed as a percentage, reflecting the ratio
between the amount of your monthly non-mortgage debt, as compared to the amount
of monthly income that you indicated when completing your listing;
(iii) Whether you own a home;
(iv) The number of accounts on which you are currently late on a payment;
(v) The total past-due amount you owe on all delinquent and charged-off
accounts;

 
 

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(vi) The number of 90+ days past due delinquencies on your credit report;
(vii) The number of negative public records (e.g., bankruptcies, liens, and
judgments) on your credit report over the last 12 months, and over the last 10
years;
(viii) The month and year the oldest account on your credit report (e.g.,
revolving, installment, or mortgage credit) was opened;
(ix) The total number of credit lines appearing on your credit report, along
with the number that are open and current;
(x) The total balance on all of your open revolving credit lines;
(xi) Your bankcard utilization ratio, expressed as a percentage, reflecting the
ratio of the total balance used, to the aggregate credit limit on, all of your
open bankcards; and
(xii) The number of inquiries made by creditors to your credit report in the
last six months.
In addition, you authorize and agree that we may display any of the above
information in a listing for a Note corresponding to your loan on the Note
Trader platform, and that we may display updated information from your credit
report, as well as information about the payment history and status of your
loan, in any such listing.
Listings on either platform may also display any information we ask you to
provide, including, without limitation, your self-reported occupation,
employment status and range of income. You authorize Prosper to verify your
residence, income, employment and any other information you provide in
connection with a listing or your registration as a borrower, and you agree that
Prosper may contact third parties to verify information you provide. If any such
information changes after you post a listing but before the listing expires, you
must either (i) promptly notify Prosper of the change, or (ii) withdraw your
listing.
In creating your listing, or posting content on your Prosper member web page or
anywhere else on Prosper's website, you may not include (i) any personally
identifiable information, including, without limitation, your name, address,
phone number, email address, Social Security number, driver's license number,
bank account number or credit card number, (ii) any information that reveals
your race, color, religion, national origin, sex, marital status, age, sexual
orientation, military status, source of income, or plans for having a family,
and (iii) any information that is inconsistent with your obligations to refrain
from engaging in any Prohibited Activities (as defined below) (any information
of the type described in parts (i), (ii) or (iii) being, "Prohibited
Information"). Prosper may take remedial action with respect to any Prohibited
Information you post on Prosper's web site, including without limitation
canceling any listing containing Prohibited Information or deleting or modifying
all or any portion of a listing description or other content that contains
Prohibited Information; provided, however, that Prosper is under no obligation
to take any such action, and any posting of Prohibited Information by you on
Prosper's web site is done solely at your own risk.

 
 

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If you are a member of a Prosper group when you post your listing, the listing
will also identify your group. You do not have to be a member of a group to post
a listing, however. You may also create a network of Prosper friends, and if one
or more of your Prosper friends or your fellow group members commits to help
fund your listing, your listing will reflect that the commitment was made by a
fellow group member or a Prosper friend. Your Prosper friends who commit to help
fund your listing may also write a recommendation that will be displayed in your
listing. Prosper friends do not guarantee payments on your loan, and commitments
to help fund your listing or recommendations of your listing from your Prosper
friends do not obligate the individual making the commitment or recommendation
to guarantee or make any payments on your loan.
Any person who visits the Prosper website will be able to view your listing and
see your Prosper Rating as well as certain information about the loan you have
requested; provided, however, that information from your credit report will only
be viewable by lender members.
Partial Funding. When creating a loan listing, Prosper may elect in its sole
discretion to give you a a partial funding option, which means your loan will be
funded if it receives commitments totaling less than the full amount of your
requested loan but equal to or exceeding 70% of that amount (subject to the loan
size minimum). Each loan listing related to a borrower who was offered the
partial funding option will indicate whether the borrower member has opted for
partial funding as well as the minimum amount required for the loan to fund. The
current percentage threshold for partial funding is 70%, but Prosper may change
that threshold from time to time. Any such change will only affect listings
created after the change is made.
Duration of Listings. A listing will expire on the earlier of (a) the first day
in which it has received commitments equal to the full amount of the loan
requested or (b) 14 days after being posted, unless the listing is withdrawn by
you or cancelled by us prior to either of those events.
WITHDRAWAL OF LISTINGS. IF YOU POST A LISTING, YOU HAVE THE RIGHT TO WITHDRAW IT
AT ANY TIME PRIOR TO The EXPIRATION OF THE LISTING PERIOD AS DESCRIBED ABOVE.
AFTER THE LISTING PERIOD EXPIRES, YOU WILL NO LONGER HAVE THE RIGHT TO WITHDRAW
YOUR LISTING. IF A LOAN IS MADE TO YOU, YOU DO NOT HAVE ANY RIGHT TO RESCIND THE
LOAN.
If you elect to withdraw your listing, you may (but are not required to) post a
new listing containing the updated information. Prosper reserves the right, in
its sole discretion, to limit the number of listings you post or attempt to post
on the platform.
Additional Loans. The guidelines and eligibility requirements for additional
loans are posted on the Prosper website and are subject to change by us in our
sole discretion at any time without notice. Subject to these requirements, you
may have up to two loans outstanding at any one time, provided that the
aggregate outstanding principal balance of your loans does not exceed

 
 

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the maximum loan amount then in effect. You may not post a listing for a second
loan unless you meet the eligibility requirements then in effect as of the date
of such posting.
Prohibited Activities. You agree that you will not, in connection with any
listings, lender commitments, loans or other transactions involving or
potentially involving Prosper or WebBank, (i) make any false, misleading or
deceptive statements or omissions of material fact; (ii) misrepresent your
identity, or describe, present or portray yourself as a person other than
yourself; (iii) give to or receive from, or offer or agree to give to or receive
from, any Prosper lender or other person any fee, bonus, additional interest,
kickback or thing of value of any kind, including in exchange for such person's
commitment, recommendation, or offer or agreement to recommend or make a
commitment with respect to your listing; (iv) represent yourself to any person
as a director, officer or employee of Prosper or WebBank, unless you are such
director, officer or employee; or (v) use any loan proceeds for postsecondary
educational expenses (i.e., tuition, fees, required equipment or supplies, or
room and board) at a college/university/vocational school, as the term
"postsecondary educational expenses" is defined in Federal Reserve Board
Regulation Z, 12 C.F.R. § 226.26(b)(3).
4. Right to Verify Information and Cancel Funding.
a. We reserve the right to verify the accuracy of all information provided by
borrowers, lenders and group leaders in connection with listings, lender
commitments and loans. We also reserve the right to determine in our sole
discretion whether a registered user is using, or has used, the Prosper website
illegally or in violation of any order, writ, injunction or decree of any court
or governmental instrumentality, for purposes of fraud or deception, or
otherwise in a manner inconsistent with the Prosper Terms and Conditions or any
agreement between Prosper or WebBank and such user. We may conduct our review at
any time - before, during or after the posting of a listing, or before or after
the funding of a loan. You agree to respond promptly to our requests for
information in connection with any such review by Prosper.
b. In the event we determine, prior to funding a loan, that a listing, or a
lender commitment for the listing, contains materially inaccurate information
(including but not limited to unintended inaccuracies, inaccuracies resulting
from errors by Prosper, or inaccuracies resulting from changes in the borrower's
income, residence or credit profile between the date a listing is posted and the
date the listing is to be funded) or was posted illegally, in violation of any
order, writ, injunction or decree of any court or governmental instrumentality,
for purposes of fraud or deception, or otherwise in a manner inconsistent with
the Prosper Terms and Conditions or any member agreement, we may refuse to post
the listing or, if the listing has already been posted, remove the listing from
the platform and cancel all lender commitments with respect to the listing.
c. When a listing receives commitments equal to or exceeding the minimum amount
required for the loan to fund, we may conduct a "pre-funding" review prior to
funding the loan. Loan funding

 
 

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 occurs when loan proceeds are disbursed to or at the direction of the borrower.
We may, at any time and in our sole discretion, delay funding of a loan (i) in
order to enable us to verify the accuracy of information provided by borrowers,
lenders and group leaders in connection with the listing or lender commitments
made with respect to the listing; (ii) to determine whether there are any
irregularities with respect to the listing or the lender commitments; or (iii)
if we become aware of information concerning the borrower member or the listing
during our pre-funding review, as a result of which we determine, in our sole
discretion, that the likelihood of the borrower not making payments on the loan
is materially greater than would be expected based on the assigned Prosper
Rating. We may cancel or proceed with funding the loan, depending on the results
of our pre-funding review. If funding is cancelled, the listing will be removed
from the platform and all lender commitments against the listing will be
cancelled. In the event we cancel funding of a loan, Prosper will notify the
borrower, group leader (if any), and all lenders who made commitments with
respect to the listing of such cancellation.
5. Matching of Lender Commitments and Listings; Loan Funding.
a. Prosper lender members will be able to view your listing and commit funds to
purchase Notes issued by Prosper, the payments on which will be dependent on
payments Prosper receives on your loan. In other words, the Prosper lenders who
committed funds will receive payments on their Notes only to the extent you make
payments on your loan.
b. A match of your listing with one or more lender commitments equal to or
exceeding the minimum amount required for the loan to fund, will result in a
loan from WebBank to you, subject to our right to verify information as
described above. The loan will be evidenced by a Promissory Note in the form set
forth on the attached Exhibit A. Depending on the loan product you receive, loan
proceeds are disbursed into your designated deposit account or they are paid
directly to a merchant in satisfaction of your purchase of goods and/or services
from that merchant . The loan will be sold by WebBank to Prosper, and Prosper
will service the loan.
c. We do not warrant or guaranty that your listing will be matched with any
lender commitments. Your listing must receive one or more lender commitments
equal to or exceeding the minimum amount required for the loan to fund in order
for a loan to be made.
d. To safeguard your privacy rights, your name and address will not be included
in your listing. Only your Prosper screen name will appear on your listing, and
only the screen name of the lenders will appear with lender commitments.
e. IF YOUR LISTING RECEIVES SUFFICIENT LENDER COMMITMENTS TO FUND, AND YOU DO
NOT WITHDRAW YOUR LISTING PRIOR TO EXPIRATION OF THE LISTING PERIOD, YOU HEREBY
AUTHORIZE PROSPER TO ACT AS YOUR AUTHORIZED AGENT TO EXECUTE A PROMISSORY NOTE
ON YOUR BEHALF IN THE FORM SET FORTH ON THE ATTACHED EXHIBIT A IN FAVOR OF
WEBBANK.

 
 

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6. Compensation. If you receive a loan, you must pay WebBank a non-refundable
origination fee. The amount of the estimated origination fee is stated in the
disclosures provided to you at the time you apply. This amount will decline if
you?ve been offered a partial funding option and your loan is not 100% funded.
Notwithstanding the foregoing, no amount of the finally determined fee is
refundable. The finally determined fee will be stated in your Truth in Lending
disclosure. This fee will be deducted from your loan proceeds, so the loan
proceeds delivered to you or at your direction will be less than the full amount
of your issued loan. You acknowledge that the origination fee will be considered
part of the principal on your loan and is subject to the accrual of interest..
7. Making Your Loan Payments. At the time you register as a borrower, you must
provide your deposit account information to facilitate transfers of funds to and
from your deposit account. You agree to make your loan payments by automated
withdrawals from your designated account, or by the use of bank drafts drawn on
your designated account. At the time you create your listing, you will be asked
to choose the method of making your loan payments, and your loan payments will
be made by the payment method you choose. Prosper will act as the servicer for
all loans you obtain through the platform, and all communications regarding your
loan must be made to Prosper.
8. Group Membership. Groups on Prosper may be rated according to the collective
payment performance of the group's members. Therefore, if you are a member of a
group, your failure to make loan payments when due, or the failure of another
group member to make loan payments when due, may have a negative effect on your
group's rating.
9. Collection & Reporting of Delinquent Loans. In the event you do not make your
loan payments on time, WebBank or any subsequent owner of the loan will have all
remedies authorized or permitted by the Promissory Note and applicable law. In
addition, if you fail to make timely payments on your loan, your loan may be
referred to a collection agency for collection. Prosper may report loan payment
delinquencies in excess of thirty (30) days to one or more credit reporting
agencies in accordance with applicable law. Subject to limitations of applicable
law, you authorize and agree that Prosper or a collection agency may contact you
at any or all of the telephone numbers you provide to Prosper at or after
registration, or any of your other telephone numbers.
10. No Guarantee. NEITHER PROSPER NOR WEBBANK WARRANTS OR GUARANTEES (1) THAT
YOUR LISTING WILL BE MATCHED WITH ANY LENDER COMMITMENTS, OR (2) THAT YOU WILL
RECEIVE A LOAN AS A RESULT OF POSTING A LISTING.
11. Restrictions on Use. Restrictions on Use. You are not authorized or
permitted to use the Prosper website to obtain, or attempt to obtain, a loan for
someone other than yourself. You must be an owner of the deposit account you
designate for electronic transfers of funds, with

 
 

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authority to direct that loan payments be made from the account. Your designated
account will be the account from which loan payments will be made. Although you
are registering as a borrower, you may also register and participate on the
platform as a lender or as a group leader. If you participate on the platform as
a lender, any amounts in your Prosper funding account are subject to set-off
against any delinquent amounts owing on any loans you obtain as a Prosper
borrower. You will not receive further notice in advance of our exercising our
right to set-off amounts in your Prosper funding account against any delinquent
amounts owing on any loans you obtain. If you obtain a loan and fail to pay your
loan in full, whether due to default, bankruptcy or other reasons, you will not
be eligible to post any further listings or re-register with Prosper as a
borrower, lender or group leader. Prosper may in its sole discretion, with or
without cause and with or without notice, restrict your access to the Prosper
website or platform.
12. Authority. You warrant and represent that you have the legal competence and
capacity to execute and perform this Agreement.
13. Termination of Registration. Prosper may, in its sole discretion, with or
without cause, terminate this Agreement at any time by giving you notice as
provided below. In addition, upon Prosper's determination that you committed
fraud or made a material misrepresentation in connection with a listing, lender
commitment or loan, performed any prohibited activity, or otherwise failed to
abide by the terms of this Agreement or the Prosper Terms and Conditions,
Prosper may, in its sole discretion, immediately and without notice, take one or
more of the following actions: (i) terminate or suspend your right to post
listings or otherwise participate on the platform; or (ii) terminate this
Agreement and your registration with Prosper. Upon termination of this Agreement
and your registration with Prosper, any listings you have posted on the platform
shall be cancelled, and will be removed from the platform immediately. Any loans
you obtain prior to the effective date of termination resulting from listings
you had placed on the platform shall remain in full force and effect in
accordance with their terms.
14. Prosper's Right to Modify Terms. Prosper has the right to change any term or
provision of this Agreement or the Prosper Terms and Conditions. Prosper will
give you notice of material changes to this Agreement, or the Prosper Terms and
Conditions, in the manner set forth in Section 16. You authorize Prosper to
correct obvious clerical errors appearing in information you provide to Prosper,
without notice to you, although Prosper expressly undertakes no obligation to
identify or correct such errors. This Agreement, along with the Prosper Terms
and Conditions, represents the entire agreement between you and Prosper
regarding your participation as a borrower on the platform, and supersedes all
prior or contemporaneous communications, promises and proposals, whether oral,
written or electronic, between you and Prosper with respect to your involvement
as a borrower on the platform.
15. Member Web Page Display and Content. You may, but are not required to,
maintain a "Prosper member web page" on the Prosper website, where you can post
content, logos or links

 
 

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to websites. If you elect to do so, you authorize Prosper to display on the
Prosper website all such material you provide to Prosper. Any material you
display on your member page must conform to the Prosper Terms and Conditions,
and material you display or link to must not (i) infringe on Prosper's or any
third party's copyright, patent, trademark, trade secret or other proprietary
rights or right of publicity or privacy; (ii) violate any applicable law,
statute, ordinance or regulation; (iii) be defamatory or libelous; (iv) be lewd,
hateful, violent, pornographic or obscene; (v) violate any laws regarding unfair
competition, anti-discrimination or false advertising; (vi) promote violence or
contain hate speech; or (vii) contain viruses, trojan horses, worms, time bombs,
cancelbots or other similar harmful or deleterious programming routines. You may
not include or display any personally identifying information of any Prosper
member on your Prosper member web page or elsewhere on the Prosper website,
including, without limitation, any Prosper member's name, address, phone number,
email address, Social Security number,, driver's license number, bank account
number or credit card number.
16. Notices. All notices and other communications hereunder shall be given by
email to your registered email address or will be posted on the Prosper website,
and shall be deemed to have been duly given and effective upon transmission or
posting. You can contact us by sending an email to support@prosper.com or
calling us toll-free at (866) 615-6319. You agree to notify Prosper if your
registered email address changes, and you agree to update your registered
residence address, mailing address and telephone number on the Prosper website
if any of those items changes.
17. No Warranties. EXCEPT FOR THE REPRESENTATIONS CONTAINED IN THIS AGREEMENT,
PROSPER DOES NOT MAKE ANY REPRESENTATIONS OR WARRANTIES TO YOU OR ANY OTHER
PARTY WITH REGARD TO YOUR USE OF THE PROSPER WEBSITE OR THE PLATFORM, INCLUDING,
BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
18. Limitation on Liability. IN NO EVENT SHALL ANY PARTY TO THIS AGREEMENT BE
LIABLE TO ANY OTHER PARTY FOR ANY LOST PROFITS OR SPECIAL, EXEMPLARY,
CONSEQUENTIAL OR PUNITIVE DAMAGES, EVEN IF INFORMED OF THE POSSIBILITY OF SUCH
DAMAGES. FURTHERMORE, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO ANY
OTHER PARTY REGARDING THE EFFECT THAT THE AGREEMENT MAY HAVE UPON THE FOREIGN,
FEDERAL, STATE OR LOCAL TAX LIABILITY OF THE OTHER.
19. Miscellaneous. You may not assign, transfer, sublicense or otherwise
delegate your rights under this Agreement to another person without Prosper's
prior written consent. Any such assignment, transfer, sublicense or delegation
in violation of this Section shall be null and void. This Agreement shall be
governed by federal law and, to the extent that state law applies, the laws of
the State of Utah. Any waiver of a breach of any provision of this Agreement
will not be

 
 

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a waiver of any other breach. Failure or delay by either party to enforce any
term or condition of this Agreement will not constitute a waiver of such term or
condition. If any part of this Agreement is determined to be invalid or
unenforceable under applicable law, then the invalid or unenforceable provision
will be deemed superseded by a valid enforceable provision that most closely
matches the intent of the original provision, and the remainder of the Agreement
shall continue in effect. WebBank is not a party to this Agreement, but you
agree that WebBank is a third-party beneficiary and is entitled to rely on the
provisions of this Agreement, including without limitation your representations,
covenants and agreements herein. There are no third party beneficiaries to this
Agreement other than WebBank.
20. Arbitration. RESOLUTION OF DISPUTES: I HAVE READ THIS PROVISION CAREFULLY,
AND UNDERSTAND THAT IT LIMITS MY RIGHTS IN THE EVENT OF A DISPUTE BETWEEN YOU
AND US. I UNDERSTAND THAT I HAVE THE RIGHT TO REJECT THIS PROVISION, AS PROVIDED
IN PARAGRAPH (i) BELOW.
(a) In this Resolution of Disputes provision:
(i) "You" and "your" mean the individual entering into this Agreement, as well
as any person claiming through such individual;
(ii) "We" and "us" mean WebBank and Prosper Marketplace, Inc. and each of their
respective parents, subsidiaries, affiliates, predecessors, successors, and
assigns, as well as the officers, directors, and employees of each of them;
(iii) "Claim" means any dispute, claim, or controversy (whether based on
contract, tort, intentional tort, constitution, statute, ordinance, common law,
or equity, whether pre-existing, present, or future, and whether seeking
monetary, injunctive, declaratory, or any other relief) arising from or relating
to this Note or the relationship between us and you (including claims arising
prior to or after the date of the Agreement, and claims that are currently the
subject of purported class action litigation in which you are not a member of a
certified class), and includes claims that are brought as counterclaims, cross
claims, third party claims or otherwise, as well as disputes about the validity
or enforceability of this Agreement or the validity or enforceability of this
Section 20.
(b) Any Claim shall be resolved, upon the election of either us or you, by
binding arbitration administered by the American Arbitration Association or
JAMS, under the applicable arbitration rules of the administrator in effect at
the time a Claim is filed ("Rules"). Any arbitration under this Agreement will
take place on an individual basis; class arbitrations and class actions are not
permitted. If you file a claim, you may choose the administrator; if we file a
claim, we may choose the administrator, but we agree to change to the other
permitted administrator at your request (assuming that the other administrator
is available). You can obtain the Rules and other information about initiating
arbitration by contacting the American Arbitration Association at 1633 Broadway,
10th Floor, New York, NY 10019, (800) 778-7879, www.adr.org; or by

 
 

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contacting JAMS at 1920 Main Street, Suite 300, Irvine, CA 92614, (949)
224-1810, www.jamsadr.com. The address for serving any arbitration demand or
claim on us is WebBank, c/o Prosper Marketplace, Inc., 111 Sutter Street, 22nd
Floor, San Francisco, CA 94104, Attention: Legal Department.
(c) Claims will be arbitrated by a single, neutral arbitrator, who shall be a
retired judge or a lawyer with at least ten years experience. We agree not to
invoke our right to elect arbitration of an individual Claim filed by you in a
small claims or similar court (if any), so long as the Claim is pending on an
individual basis only in such court.
(d) We will pay all filing and administration fees charged by the administrator
and arbitrator fees up to $1,000, and we will consider your request to pay any
additional arbitration costs. If an arbitrator issues an award in our favor, you
will not be required to reimburse us for any fees we have previously paid to the
administrator or for which we are responsible. If you receive an award from the
arbitrator, we will reimburse you for any fees paid by you to the administrator
or arbitrator. Each party shall bear its own attorney's, expert's and witness
fees, which shall not be considered costs of arbitration; however, if a statute
gives you the right to recover these fees, or fees paid to the administrator or
arbitrator, then these statutory rights will apply in arbitration.
(e) Any in-person arbitration hearing will be held in the city with the federal
district court closest to your residence, or in such other location as you and
we may mutually agree. The arbitrator shall apply applicable substantive law
consistent with the Federal Arbitration Act, 9 U.S.C. § 1-16, and, if requested
by either party, provide written reasoned findings of fact and conclusions of
law. The arbitrator shall have the power to award any relief authorized under
applicable law. Any appropriate court may enter judgment upon the arbitrator's
award. The arbitrator's decision will be final and binding except that: (1) any
party may exercise any appeal right under the FAA; and (2) any party may appeal
any award relating to a claim for more than $100,000 to a three-arbitrator panel
appointed by the administrator, which will reconsider de novo any aspect of the
appealed award. The panel's decision will be final and binding, except for any
appeal right under the FAA. Unless applicable law provides otherwise, the
appealing party will pay the appeal's cost, regardless of its outcome. However,
we will consider any reasonable written request by you for us to bear the cost.
(f) YOU AND WE AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN OUR
INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED
CLASS OR REPRESENTATIVE PROCEEDING. Further, unless both you and we agree
otherwise in writing, the arbitrator may not consolidate more than one person's
claims. The arbitrator shall have no power to arbitrate any Claims on a class
action basis or Claims brought in a purported representative capacity on behalf
of the general public, other borrowers, or other persons similarly situated. The
validity and effect of this paragraph (f) shall be determined exclusively by a
court, and not by the administrator or any arbitrator.

 
 

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(g) If any portion of this Section 20 is deemed invalid or unenforceable for any
reason, it shall not invalidate the remaining portions of this section. However,
if paragraph (f) of this Section 20 is deemed invalid or unenforceable in whole
or in part, then this entire Section 20 shall be deemed invalid and
unenforceable. The terms of this Section 20 will prevail if there is any
conflict between the Rules and this section.
(h) YOU AND WE AGREE THAT, BY ENTERING INTO THIS AGREEMENT, THE PARTIES ARE EACH
WAIVING THE RIGHT TO A TRIAL BY JURY OR TO PARTICIPATE IN A CLASS ACTION. YOU
AND WE ACKNOWLEDGE THAT ARBITRATION WILL LIMIT OUR LEGAL RIGHTS, INCLUDING THE
RIGHT TO PARTICIPATE IN A CLASS ACTION, THE RIGHT TO A JURY TRIAL, THE RIGHT TO
CONDUCT FULL DISCOVERY, AND THE RIGHT TO APPEAL (EXCEPT AS PERMITTED IN
PARAGRAPH (e) OR UNDER THE FEDERAL ARBITRATION ACT).
(i) You understand that you may reject the provisions of this Section 20, in
which case neither us nor you will have the right to elect arbitration.
Rejection of this Section 20 will not affect the remaining parts of this
Agreement. To reject this Section 20, you must send us written notice of your
rejection within 30 days after the date that this Agreement was made. You must
include your name, address, and account number. The notice of rejection must be
mailed to WebBank, c/o Prosper Marketplace, Inc., 111 Sutter Street, 22nd Floor,
San Francisco, CA 94104, Attention: Legal Department. This is the only way that
you can reject this Section 20.
(j) You and I acknowledge and agree that the arbitration agreement set forth in
this Section 20 is made pursuant to a transaction involving interstate commerce,
and thus the Federal Arbitration Act shall govern the interpretation and
enforcement of this Section 20. This Section 20 shall survive the termination of
this Agreement.

 
 

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EXHIBIT A
 

PROMISSORY NOTE
 

Borrower Address: ______________________________________________.
1. Promise to Pay. In return for a loan I have received, I promise to pay
WebBank, a Utah-chartered Industrial Bank ("you") the principal sum of
___________________ Dollars ($__________), together with interest thereon
commencing on the date of funding at the rate of ____ percent (____%) per annum
simple interest. I understand that references in this Promissory Note ("Note")
to you shall also include any person to whom you transfer this Note.
2. Payments. This Note is payable in ___ monthly installments of $___________
each, consisting of principal and interest, commencing on the ________ day of
_____________, and continuing until the final payment date of
__________________, which is the maturity date of this Note. The final payment
shall consist of the then remaining principal, unpaid accrued interest and other
charges due under this Note. All payments will be applied first to any unpaid
fees incurred as a result of failed automated payments or returned bank drafts
or checks, as provided in Paragraph 11; then to any charges for making payments
other than as provided in this Note; then to any late charges then due; then to
any interest then due; and then to principal. No unpaid interest or charges will
be added to principal.
3. Interest. Interest will be charged on unpaid principal until the full amount
of principal has been paid. Interest under this Note will accrue daily, on the
basis of a 365-day year. If payments are made on time, my final payment will be
in the amount of a regular monthly payment. Because of the daily accrual of
interest and the effect of rounding, my final payment may be more or less than
my regular payment. I acknowledge that, if I make my payments after the
scheduled due date, this Note will not amortize as originally scheduled, which
may result in a substantially higher final payment amount. The interest rate I
will pay will be the rate I will pay both before and after any default.
4. Late Charge. If the full amount of any monthly payment is not made by the end
of fifteen (15) calendar days after its due date, I will pay you a late charge
of______________. I will pay this late charge promptly but only once on each
late payment.
5. Waiver of Defenses. Except as otherwise provided in this Note, you are not
responsible or liable to me for the quality, safety, legality, or any other
aspect of any property or services purchased with the proceeds of my loan. If I
have a dispute with any person from whom I have purchased such property or
services, I agree to settle the dispute directly with that person.

 
 

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6. Certification; Exception to Waiver. I certify that the proceeds of my loan
will not be applied in whole or in part to postsecondary educational expenses
(i.e., tuition, fees, required equipment or supplies, or room and board) at a
college/university/vocational school, as the term "postsecondary educational
expenses" is defined in Federal Reserve Board Regulation Z, 12 C.F.R. §
226.26(b)(3). I further certify that, to my knowledge, the proceeds of my loan
will not be applied in whole or part to purchase property or services from any
person to whom any interest in this Note may be assigned. If, notwithstanding
the preceding sentence, any person from whom I have purchased such property
acquires any interest in this Note, then Paragraph 5 will not apply to the
extent of that person's interest, even if that person later assigns that
person's interest to another person.
7. Method of Payment. I will pay the principal, interest, and any late charges
or other fees on this Note when due. Those amounts are called "payments" in this
Note. To ensure that my payments are processed in a timely and efficient manner,
you have given me the choice of making my monthly payments (i) by automated
withdrawal from an account that I designate using an automated clearinghouse
(ACH) or other electronic fund transfer, or (ii) by bank drafts drawn by you on
my behalf on my account each month; and I have chosen one of these methods. If I
close my account or if my account changes or is otherwise inaccessible such that
you are unable to withdraw my payments from that account or draw bank drafts on
the account, I will notify you at least three (3) days prior to any such
closure, change or inaccessibility of my account, and authorize you to withdraw
my payments from, or draw bank drafts on, another account that I designate.
With regard to payments made by automatic withdrawals from my account, I have
the right to (i) stop payment of a preauthorized automatic withdrawal, or (ii)
revoke my prior authorization for automatic withdrawals with regard to all
further payments under this Note, by notifying the financial institution where
my account is held, orally or in writing at least three (3) business days before
the scheduled date of the transfer. I agree to notify you orally or in writing,
at least three (3) business days before the scheduled date of the transfer, of
the exercise of my right to stop a payment or to revoke my prior authorization
for further automatic withdrawals.
8. Default and Remedies. If I fail to make any payment when due in the manner
required by Paragraph 7, I will be in default and you may at your option
accelerate the maturity of this Note and declare all principal, interest and
other charges due under this Note immediately due and payable. If you exercise
the remedy of acceleration you will give me at least thirty (30) days prior
notice of acceleration.
9. Prepayments. I may prepay this Note in full or in part at any time without
penalty.
10. Waivers. You may accept late payments or partial payments, even though
marked "paid in full," without losing any rights under this Note, and you may
delay enforcing any of your rights

 
 

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under this Note without losing them. You do not have to (a) demand payment of
amounts due (known as "presentment"), (b) give notice that amounts due have not
been paid (known as "notice of dishonor"), or (c) obtain an official
certification of nonpayment (known as "protest"). I hereby waive presentment,
notice of dishonor and protest. Even if, at a time when I am in default, you do
not require me to pay immediately in full as described above, you will still
have the right to do so if I am in default at a later time. Neither your failure
to exercise any of your rights, nor your delay in enforcing or exercising any of
your rights, will waive those rights. Furthermore, if you waive any right under
this Note on one occasion, that waiver will not operate as a waiver as to any
other occasion.
11. Insufficient Funds Charge. If I attempt to make a payment, whether by
automated withdrawal from my designated account or by other means, and the
payment cannot be made due to (i) insufficient funds in my account, (ii) the
closure, change or inaccessibility of my account without my having notified you
as provided in Paragraph 7, or (iii) for any other reason (other than an error
by you), I will pay you an additional fee of $______ for each returned or failed
automated withdrawal, bank draft or other item, unless prohibited by applicable
law.
12. Attorneys' Fees. To the extent permitted by law, I am liable to you for your
legal costs if you refer collection of my loan to a lawyer who is not your
salaried employee. These costs may include reasonable attorneys' fees as well as
costs and expenses of any legal action.
13. Loan Charges. If a law that applies to my loan and sets maximum loan charges
is finally interpreted so that the interest or other loan charges collected or
to be collected in connection with my loan exceed the permitted limits, then:
(a) any such loan charge shall be reduced by the amount necessary to reduce the
charge to the permitted limit; and (b) any sums already collected from me that
exceeded permitted limits will be refunded to me. You may choose to make this
refund by reducing the principal I owe under this Note or by making a direct
payment to me.
14. Assignment. I may not assign any of my obligations under this Note without
your written permission. You do not have to give me your permission. You may
assign this Note at any time without my permission. Unless prohibited by
applicable law, you may do so without telling me. My obligations under this Note
apply to all of my heirs and permitted assigns. Your rights under this Note
apply to each of your successors and assigns.
15. Notices. All notices and other communications hereunder shall be given in
writing and shall be deemed to have been duly given and effective (i) upon
receipt, if delivered in person or by facsimile, email or other electronic
transmission, or (ii) one day after deposit prepaid for overnight delivery with
a national overnight express delivery service. Except as expressly provided
otherwise in this Note, notices to me may be addressed to my registered email
address or to my address set forth above unless I provide you with a different
address for notice by giving notice pursuant to this Paragraph, and notices to
you must be addressed to WebBank

 
 

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at support@prosper.com or c/o Prosper Marketplace, Inc., 111 Sutter Street, 22nd
Floor, San Francisco, CA 94104, Attention: Customer Service.
16. Governing Law. This Note is governed by federal law and, to the extent that
state law applies, the laws of the State of Utah.
17. Miscellaneous. No provision of this Note shall be modified or limited except
by a written agreement signed by both you and me. The unenforceability of any
provision of this Note shall not affect the enforceability or validity of any
other provision of this Note.
18. Arbitration. RESOLUTION OF DISPUTES: I HAVE READ THIS PROVISION CAREFULLY,
AND UNDERSTAND THAT IT LIMITS MY RIGHTS IN THE EVENT OF A DISPUTE BETWEEN YOU
AND ME. I UNDERSTAND THAT I HAVE THE RIGHT TO REJECT THIS PROVISION, AS PROVIDED
IN PARAGRAPH (i) BELOW.
(a) In this Resolution of Disputes provision:
(i) "I," "me" and "my" mean the promisor under this Note, as well as any person
claiming through such promisor;
(ii) "You" and "your" mean WebBank, any person servicing this Note for WebBank,
and any subsequent holders of this Note or any interest in this Note, and each
of their respective parents, subsidiaries, affiliates, predecessors, successors,
and assigns, as well as the officers, directors, and employees of each of them;
and
(iii) "Claim" means any dispute, claim, or controversy (whether based on
contract, tort, intentional tort, constitution, statute, ordinance, common law,
or equity, whether pre-existing, present, or future, and whether seeking
monetary, injunctive, declaratory, or any other relief) arising from or relating
to this Note or the relationship between you and me (including claims arising
prior to or after the date of the Note, and claims that are currently the
subject of purported class action litigation in which I am not a member of a
certified class), and includes claims that are brought as counterclaims, cross
claims, third party claims or otherwise, as well as disputes about the validity
or enforceability of this Note or the validity or enforceability of this Section
18.
(b) Any Claim shall be resolved, upon the election of either you or me, by
binding arbitration administered by the American Arbitration Association or
JAMS, under the applicable arbitration rules of the administrator in effect at
the time a Claim is filed ("Rules"). Any arbitration under this arbitration
agreement will take place on an individual basis; class arbitrations and class
actions are not permitted. If I file a claim, I may choose the administrator; if
you file a claim, you may choose the administrator, but you agree to change to
the other permitted administrator at my request (assuming that the other
administrator is available). I can obtain the Rules and other information about
initiating arbitration by contacting the American Arbitration Association at
1633 Broadway, 10th Floor, New York, NY 10019, (800) 778-7879, www.adr.org; or
by contacting JAMS at 1920 Main Street, Suite 300, Irvine, CA 92614, (949)
224-1810,

 
 

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www.jamsadr.com. Your address for serving any arbitration demand or claim is
WebBank, c/o Prosper Marketplace, Inc., 111 Sutter Street, 22nd Floor, San
Francisco, CA 94104, Attention: Legal Department.
(c) Claims will be arbitrated by a single, neutral arbitrator, who shall be a
retired judge or a lawyer with at least ten years experience. You agree not to
invoke your right to elect arbitration of an individual Claim filed by me in a
small claims or similar court (if any), so long as the Claim is pending on an
individual basis only in such court.
(d) You will pay all filing and administration fees charged by the administrator
and arbitrator fees up to $1,000, and you will consider my request to pay any
additional arbitration costs. If an arbitrator issues an award in your favor, I
will not be required to reimburse you for any fees you have previously paid to
the administrator or for which you are responsible. If I receive an award from
the arbitrator, you will reimburse me for any fees paid by me to the
administrator or arbitrator. Each party shall bear its own attorney's, expert's
and witness fees, which shall not be considered costs of arbitration; however,
if a statute gives me the right to recover these fees, or fees paid to the
administrator or arbitrator, then these statutory rights will apply in
arbitration.
(e) Any in-person arbitration hearing will be held in the city with the federal
district court closest to my residence, or in such other location as you and we
may mutually agree. The arbitrator shall apply applicable substantive law
consistent with the Federal Arbitration Act, 9 U.S.C. § 1-16, and, if requested
by either party, provide written reasoned findings of fact and conclusions of
law. The arbitrator shall have the power to award any relief authorized under
applicable law. Any appropriate court may enter judgment upon the arbitrator's
award. The arbitrator's decision will be final and binding except that: (1) any
party may exercise any appeal right under the FAA; and (2) any party may appeal
any award relating to a claim for more than $100,000 to a three-arbitrator panel
appointed by the administrator, which will reconsider de novo any aspect of the
appealed award. The panel's decision will be final and binding, except for any
appeal right under the FAA. Unless applicable law provides otherwise, the
appealing party will pay the appeal's cost, regardless of its outcome. However,
you will consider any reasonable written request by me for you to bear the cost.
(f) YOU AND I AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN OUR
INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED
CLASS OR REPRESENTATIVE PROCEEDING. Further, unless both you and I agree
otherwise in writing, the arbitrator may not consolidate more than one person's
claims. The arbitrator shall have no power to arbitrate any Claims on a class
action basis or Claims brought in a purported representative capacity on behalf
of the general public, other borrowers, or other persons similarly situated. The
validity and effect of this paragraph (f) shall be determined exclusively by a
court, and not by the administrator or any arbitrator.

 
 

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(g) If any portion of this Section 18 is deemed invalid or unenforceable for any
reason, it shall not invalidate the remaining portions of this section. However,
if paragraph (f) of this Section 18 is deemed invalid or unenforceable in whole
or in part, then this entire Section 18 shall be deemed invalid and
unenforceable. The terms of this Section 18 will prevail if there is any
conflict between the Rules and this section.
(h) YOU AND I AGREE THAT, BY ENTERING INTO THIS NOTE, THE PARTIES ARE EACH
WAIVING THE RIGHT TO A TRIAL BY JURY OR TO PARTICIPATE IN A CLASS ACTION. YOU
AND I ACKNOWLEDGE THAT ARBITRATION WILL LIMIT OUR LEGAL RIGHTS, INCLUDING THE
RIGHT TO PARTICIPATE IN A CLASS ACTION, THE RIGHT TO A JURY TRIAL, THE RIGHT TO
CONDUCT FULL DISCOVERY, AND THE RIGHT TO APPEAL (EXCEPT AS PERMITTED IN
PARAGRAPH (e) OR UNDER THE FEDERAL ARBITRATION ACT).
(i) I understand that I may reject the provisions of this Section 18, in which
case neither you nor I will have the right to elect arbitration. Rejection of
this Section 18 will not affect the remaining parts of this Note. To reject this
Section 18, I must send you written notice of my rejection within 30 days after
the date that this Note was made. I must include my name, address, and account
number. The notice of rejection must be mailed to WebBank, c/o Prosper
Marketplace, Inc., 111 Sutter Street, 22nd Floor, San Francisco, CA 94104,
Attention: Legal Department. This is the only way that I can reject this Section
18.
(j) You and I acknowledge and agree that the arbitration agreement set forth in
this Section 18 is made pursuant to a transaction involving interstate commerce
and thus the Federal Arbitration Act shall govern the interpretation and
enforcement of this Section 18. This Section 18 shall survive the termination of
this Note and the repayment of any or all amounts borrowed thereunder.
19. Preservation of Claims and Defenses. NOTICE ANY HOLDER OF THIS CONSUMER
CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD
ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED WITH THE PROCEEDS
HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE
DEBTOR HEREUNDER.
Arizona Residents: Notice: I understand that I may request that the initial
disclosures prescribed in the Truth in Lending Act (15 United States Code
sections 1601 through 1666j) be provided in Spanish before signing any loan
documents.
Aviso Para Prestatarios En Arizona: Puedo solicitar que las divulgaciones
iniciales prescritas en la Ley Truth in Lending Act (15 Código de los Estados
Unidos secciones 1601 hasta 1666j) sean proporcionadas en español antes de
firmar cualesquiera documentos de préstamos.
Missouri Residents: Oral agreements or commitments to loan money, extend credit
or to forbear from enforcing repayment of a debt, including promises to extend
or renew such debt, are not

 
 

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enforceable. To protect me (borrower) and you (creditor) from misunderstanding
or disappointment, any agreements we reach covering such matters are contained
in this writing, which is the complete and exclusive statement of the agreement
between us, except as we may later agree in writing to modify it.
By signing this Note, I acknowledge that I (i) have read and understand all
terms and conditions of this Note, (ii) agree to the terms set forth herein, and
(iii) acknowledge receipt of a completely filled-in copy of this Note.
Date: _______________
_________________________________ [Borrower]
Last Updated: Mar 23, 2012

 
 
 

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