Exhibit
10.2


 


FORM OF
LENDER* REGISTRATION AGREEMENT


(Loan
Commitment, Sale and Servicing Agreement)


 


 


* Note: Your role as a Prosper “Lender” is
that of a loan purchaser, and your rights and obligations as a purchaser or
prospective purchaser of Prosper loans are set forth below. Although you are
referred to in this Agreement and on the Prosper website as a “Lender,” you are
not actually lending your money directly to Prosper borrowers, but are,
instead, making loan purchase commitments and purchasing promissory notes
representing loans made by Prosper to borrowers. All loans originated through
Prosper are made to borrowers by Prosper Marketplace, Inc. from its own funds,
and then sold and assigned by Prosper to the winning bidder or bidders on the
listing without recourse to Prosper. Prosper is the originating lender for
licensing and regulatory reasons and is licensed in all states where licensing
is required given Prosper’s current lending criteria, which may change from
time to time in its discretion.  Prosper
uses the term “Lender” instead of “loan purchaser” for the sake of brevity and
simplicity.


 


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


 


1.  Registration as a Prosper Lender. You are
registering as a Lender in the Prosper marketplace, so that you may be eligible
to post bids on the Prosper website and purchase promissory notes evidencing
loans made by Prosper following the matching of your bids with listings
(collectively “Notes”). You agree to comply with the terms and provisions of
this Agreement, the Terms of Use of the Prosper website, and the policies
posted on the Prosper website (the “Prosper Policies”), as may be amended from
time to time by Prosper in its sole discretion (collectively, the “Prosper
Terms and Conditions”).


 


2.  Posting of Bids. Upon
registration, you may post bids on borrower listings on the Prosper website. “Listings”
are Prosper borrowers’ loan requests that are displayed on the Prosper website along
with desired loan amount, offered interest rate, borrower credit grade,
non-housing debt-to-income ratio, and other credit information from the
borrower’s credit report, and group affiliation (if any). Listings also display
the borrower’s self-reported annual income, occupation and employment status.
Borrowers are identified by a Prosper user name but are not allowed to disclose
their identity or contact information to Lenders.


 


A bid by a Lender is the Lender’s commitment
to purchase a Note in the principal amount of the Lender’s bid, representing a
loan to be made by Prosper to the Borrower, should the listing receive an
amount of bids totaling the amount of the Borrower’s requested loan. Lenders “bid”
the amount they are willing to commit to the purchase of a loan to the Borrower
and the minimum interest rate they are willing to receive. Lenders must have
funds in the amount of the bid on deposit in the Prosper Funding Account
(described below), and the funds must remain on deposit for as long as
the bid is a “winning” bid on the listing. Lender bids
become “winning” bids if such bids are in the group of bids that total the
amount of the requested loan and have the lowest interest rate among all bids
placed against the listing. Once a bid is made by a Lender, it is irrevocable.


 


Types of Bids. You can bid
selectively by browsing through listings and placing a bid on the listing or
listings that you choose. You can also bid by making a “standing order” by
indicating the aggregate amount of funds to be bid on listings that meet
specified borrower criteria, the maximum amount that may be bid on one borrower
listing, the minimum interest rate you are willing to receive, and the specific
borrower criteria such as his or her credit grade, credit characteristics,
group affiliation or debt-to-income ratio. You may have 


 


 


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more than one standing order in place at one
time, and you may bid selectively while one or more standing orders are in
place.


 


Availability of Funds. At the time you
place a bid you must have funds on deposit with Prosper (“Funds”) in at least
the amount of your bid, and you are not permitted to withdraw those Funds for
so long as your bid is “winning” as described in Section 3 below. Your Funds
will be placed in an FDIC-insured non-interest bearing account at Wells Fargo
Bank, N. A. (the “Prosper Funding Account”) separate from Prosper’s own
funds.  At the time you register as a
Lender, you must provide your deposit account information to facilitate electronic
transfers of Funds to and from the Prosper Funding Account and your deposit
account. You will not earn interest on Funds in the Prosper Funding Account.
All of your Funds in the Prosper Funding Account that are not committed to
winning bids are available for further bidding. You may at any time request
that your uncommitted Funds in the Prosper Funding Account be returned to you,
in which case Prosper will promptly return the remaining Funds to your deposit
account.


 


Your Loan Purchase
Commitment. Whether you bid selectively or by placing a
standing order, each bid you post on the Prosper website is a commitment and
promise to purchase each Note that results from all or a portion of your bid
being matched with the listing you select or with the listing or listings
meeting the criteria specified in your standing order. Once you place a bid,
you may not cancel or withdraw the bid or reduce the amount of the bid, to the
extent your bid has been matched with one or more listings. 


 


AT THE TIME YOU SUBMIT A BID ON A LISTING,
YOU ARE COMMITTING TO PURCHASE THE NOTE THAT RESULTS FROM ALL OR A PORTION OF
YOUR BID BEING MATCHED WITH THAT LISTING. AT THE TIME YOU SUBMIT A STANDING
ORDER, YOU ARE COMMITTING TO PURCHASE EACH NOTE THAT RESULTS FROM BIDS BEING PLACED
ON YOUR BEHALF ON BORROWER LISTINGS MEETING THE CRITERIA SPECIFIED IN YOUR
STANDING ORDER.


 


Limits on Bids.  Lenders may bid
the entire amount of the loan being requested, or may bid a lesser amount,
subject to a minimum bid amount of $50. If you make a standing
order, you can achieve risk diversification by designing your standing order to
bid your available Funds in increments as low as $50 and designating in your
standing order that the incremental amount is the maximum amount that may be
bid on any one listing. The aggregate amount of all of your bids, when added to
the amount outstanding on all of your Prosper Notes, must not exceed five
million dollars ($5,000,000) for individual Lenders, or fifty million dollars
($50,000,000) for corporate or institutional Lenders. Subject to these dollar
limits, there is no limit on the amount of Funds you may commit to bids on
listings.


 


YOU AGREE THAT WHEN MAKING BIDS YOU WILL NOT
DISCRIMINATE AGAINST ANY BORROWER OR GROUP ON THE BASIS OF RACE, COLOR,
RELIGION, NATIONAL ORIGIN, SEX, MARITAL STATUS, AGE, SEXUAL ORIENTATION,
MILITARY STATUS, THE BORROWER’S SOURCE OF INCOME, OR ANY OTHER BASIS PROHIBITED
BY AN APPLICABLE FEDERAL, STATE OR LOCAL FAIR LENDING LAW, INCLUDING WITHOUT
LIMITATION THE EQUAL CREDIT OPPORTUNITY ACT.


 


3.  Matching of Bids and Listings.


 


a. When you bid on a
listing, you must bid an amount equal to or less than the current auction
interest rate for the listing in order for all or portion of your bid to be
matched with the 


 


 


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listing. If you bid by making a standing
order, Prosper’s auction platform will automatically match your bids with any
borrower listings that offer an interest rate higher than your minimum
acceptable interest rate, and otherwise meet your designated criteria. Borrower
listings with the highest current auction interest rates above your minimum
interest rate will be matched first, and thereafter your bid will be matched to
borrower listings with incrementally lower current auction interest rates (but
still at or above your minimum acceptable interest rate) until all of your
Funds committed to the standing order  are placed.


 


b. When you place a bid on a
listing, your bid will be compared to other Lender bids placed against the listing,
and will be considered to be “winning” to the extent the interest rate
specified in your bid is (i) lower than existing bids against the listing, or
(ii) equal to existing bids against the listing, provided the listing has not
already received a bid or bids totaling the full amount of
the borrower’s requested loan. Your bid remains outstanding on a listing
until you are outbid, or until the listing is withdrawn by the borrower or
removed by Prosper in accordance with Section 9 below. If you are outbid, or if
the listing is withdrawn or removed, your bid will be cancelled, and your Funds
that were committed to your bid will be available for further bidding.


 


c. If a listing gets a bid or bids in an
amount totaling the amount of the borrower’s requested loan, the bids that are
winning bids at the time the listing expires are matched with the listing, and Prosper will make a loan in the requested
loan amount to the borrower who posted the listing, subject to Prosper’s right
to verify information as described in Section 9 below. Each loan to the
borrower is made from Prosper’s own funds, and will be evidenced by a Note or Notes, in
the form set forth on the attached Exhibit A, naming Prosper as the payee, in
the amount of each winning bid on the listing. On the day following the date
loan proceeds are disbursed to the borrower, a Note in the amount of each
winning bidder’s bid will be sold and assigned to the winning bidder in
accordance with Section 5 below, and Funds of each winning
bidder in the amount of the bid will be transferred from the bidder’s Prosper Funding Account to Prosper. By making a bid, you
agree that if you are the winning bidder or are among the winning bidders on a
listing that results in a loan, you will purchase a Note in the amount of your
winning bid.


 


d. Prosper does not warrant
or guaranty that your bids will be matched with any listings. In the event
some, but not all, of the Funds you bid are matched with a listing, you are
committed to purchasing the Note that results from the portion of your Funds
being matched with the listing, and the remainder of your Funds (i.e., the
unmatched Funds) will remain in your Prosper Funding Account, available for
further bidding.


 


e. To safeguard your privacy
rights and those of your borrowers, on all Notes evidencing Prosper loans, the
identity and address of the borrower will be shielded from your view, and your
identity as the purchaser and owner of Notes will be shielded from the
borrowers. Only the borrower’s Prosper user name will appear on listings and
Notes for you to see, and only your Prosper user name will appear with your
bids.


 


4.  Multiple Lenders.  A borrower’s listing may be matched with more
than one bid, and therefore you may be one of several Lenders who purchase a
Note resulting from multiple bids being matched with a listing. In these
instances, your Note is separate and distinct from the Notes of the other
Lenders, and is enforceable in accordance with its terms.


 


5.  Sale and Servicing of Notes.


 


Purchase and Sale of
Notes. Prosper agrees to sell and you agree to purchase, from time to time,
without recourse, all Notes resulting from the matching of your bids with
listings on the Prosper marketplace. Prosper agrees that after making loans to
borrowers evidenced by such Notes, Prosper will sell, transfer, assign, set
over and convey to you, and you will purchase, all of 


 


 


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Prosper’s right, title and interest in and to
the Notes; provided, however, that Prosper will retain the Servicing Rights (as
defined below) with respect to the loans. Although Prosper will retain the
Servicing Rights to all loans, you will hold title to, and ownership of, the
Notes until the Notes are paid in full or sold as provided in Section 6.f
below. You may not sell, transfer, assign, set over and convey your right,
title and interest in and to the Notes except through the Prosper website and
only in accordance with the Prosper Terms and Conditions, or as otherwise
provided for in this Agreement. Prosper undertakes to establish and maintain a
platform as part of its website pursuant to which outstanding Notes may be
offered for sale to other registered Lenders on the platform, but Prosper
assumes no obligation to assure the availability of any such platform. During
the time you own the Notes you are entitled to all payments of principal,
interest and late fees received from borrowers on the Notes, subject to
servicing compensation and collection expenses as provided in this Agreement.


 


Servicing Rights. The Servicing
Rights retained by Prosper include: (a) any and all rights to service the
Notes; (b) any payments to or monies received by Prosper for servicing the
Notes; (c) any returned check fees, fees incurred as a result of failed
automated loan payments or returned checks or
bank drafts  due to insufficient funds in
a borrower’s account or for other reasons (“NSF fees”), penalties or similar
servicing costs incurred with respect to the Notes; (d) all agreements or
documents creating, defining or evidencing any such servicing rights and all
rights of Prosper under those agreements or documents; (e) all accounts and
other rights to payment related to the Notes; and (f) any and all documents,
files, records, servicing files, servicing documents, servicing records, data
tapes, computer records, or other information pertaining to the Notes or
pertaining to the past, present or prospective servicing of the Notes
(collectively, “Servicing Rights”). Prosper acknowledges that you are relying
upon Prosper’s servicing facilities, personnel, records, processes, procedures
and infrastructure to administer the sale and servicing of the Notes, and
consequently, except as described in this Agreement, Prosper shall not assign
the servicing rights to any third party nor resign from the obligations and
duties hereby imposed on it except upon the merger, conversion, consolidation,
or sale or other disposition of all or substantially all of Prosper’s business
or assets. Prosper may, however, utilize subcontractors or other third parties
to perform some or all of the servicing duties and functions, provided that
servicing is performed in accordance with the servicing standard set forth in
the following paragraph. If for any reason Prosper is unable to service your
Notes, Prosper will assign and transfer the Servicing Rights to an unaffiliated
third party loan servicer with at least three (3) years’ experience servicing
receivables similar to the Notes. If Prosper fails or becomes insolvent and is unable
to assign the Servicing Rights to a suitable third party loan servicer, Prosper
will assign and transfer the Servicing Rights to P2P Servicing LLC, an entity
to be managed by employees of Prosper experienced in the Platform’s operations
to provide back-up loan servicing for the remaining term of the Notes.


 


Servicing Standard.  Prosper, as independent contractor servicer,
shall service and administer the Notes in accordance with their terms and
provisions, applicable law and the terms and provisions of this Agreement. In
servicing the Notes, Prosper shall use the same care, skill, prudence and
diligence with which prudent lending institutions service similar assets, and
Prosper shall seek to maximize the timely recovery of principal and interest on
the Notes. Prosper shall have full power and authority to do or cause to be
done any and all things that it may reasonably deem necessary or desirable in
connection with such servicing and administration of the Notes on your behalf,
and you agree to cooperate with Prosper in the performance of its servicing and
other obligations under this Agreement. However, Prosper shall not permit any
modification with respect to any Note that would change the interest rate,
defer or forgive the payment of principal or interest, reduce or increase the
outstanding principal balance, or change the final maturity date on the Note.


 


Servicing Compensation.  As compensation for servicing the Notes,
Prosper shall be entitled to retain from monthly payments on the Notes a
servicing fee (the “Servicing Fee”). The current Servicing Fee amounts are
posted in the Prosper  Fees
section of the Prosper website, and are subject to change by Prosper at any
time without notice. The Servicing Fee on each of your Notes will be the amount
of the Servicing Fee in effect at the time the loan evidenced by your Note is
made, and will remain unchanged for the term of the Notes. With respect to each
Note you purchase from Prosper, the Servicing Fee is payable only upon Prosper’s
receipt of the full monthly payment from the borrower on such loan no later
than thirty (30) days after the due date of the payment. Prosper shall retain
as additional servicing compensation, NSF fees and similar fees, except for
late charges, which will be paid to you. Prosper shall also retain as
additional servicing compensation additional amounts payable by borrowers in
respect of the discount foregone by borrowers as a result of 


 


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the borrower’s withdrawal of authorization or
other termination of authority for loan payments to be made by automatic
withdrawals, as provided in Paragraph 7 of the Note.


 


Servicing Account.  Borrowers agree to make loan payments by
automated withdrawals directly from the borrower’s designated account, or by
bank drafts drawn on the account, into a collection account maintained by
Prosper for your benefit (the “Servicing Account”). Loan payments made in
another manner will be deposited into the Servicing Account upon receipt. No
interest will accrue on funds in the Servicing Account. You agree to provide
Prosper with account information and authorization to enable Prosper to make
automated transfers of funds directly from the Servicing Account into your
designated account. All immediately available collections of principal,
interest and late fees, less fees incurred as a result of failed automated loan
payments, group leaders’ Finder’s Payment Rewards (as discussed below) and our
Servicing Fee deducted from each loan payment, will be delivered via automated
transfer from the Servicing Account into your designated account at the end of
each business day. Prosper will maintain electronic records of loan
disbursements and borrowers’ payments.


 


Reporting.  Prosper will administer your Lender account
and provide you with monthly statements in electronic format reflecting
payments received on your Notes, itemizing any fees or charges incurred, and
our Servicing Fees. Prosper will report loan payments and delinquencies to the
credit reporting agencies without displaying your identity as the owner of the
Note.


 


Servicing Indemnification. Prosper will
indemnify and hold you harmless from any claims, losses, damages or penalties
that you may sustain in any way related to Prosper’s failure to perform its
duties and service the Notes in compliance with the terms of this Agreement and
applicable law. Notwithstanding the foregoing, neither Prosper nor any of
Prosper’s officers, employees or agents shall be liable to you for any
reasonable action taken or for refraining from the taking of any reasonable
action in good faith pursuant to this Agreement, or for reasonable errors in
judgment made in good faith. If a claim is made by a third party with respect
to Prosper’s servicing obligations under this Agreement, Prosper will assume
the defense of any such claim and pay all expenses in connection with any such
claim.


 


6.  Collection of Delinquent Loans.  As part of the registration process, you will
be asked, among other things, to select from among two or more unaffiliated
collection agencies and designate which collection agency Prosper is to use in
the event a borrower fails to make payments when due under a Note. In the event
a monthly payment on a Note is not received on or before the due date for the
payment, you agree that in servicing such Note Prosper will take the following
steps:


 


a. During the first ten days
after the due date, Prosper will do the following:


 


(1)          Contact and
remind the borrower of his or her obligation to make the payment; and


 


(2)          Prosper will
make a second attempt to complete an automated withdrawal from the borrower’s
account to make the delinquent payment; if payments are to be made by bank
draft, the draft will be redeposited.


 


b. When a payment becomes
fifteen (15) days past due, Prosper will notify the borrower’s group leader of
the delinquent payment. Prosper will continue to contact and remind the
borrower of his or her obligation to make the payment.


 


c. When a payment becomes
thirty (30) days past due, Prosper will assign the loan account to the
collection agency you selected at the time of registration. If there are
multiple Lenders on a 


 


 


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loan to a borrower, and one or more of the
other Lenders selects a collection agency different from the one you selected,
you agree that Prosper will use the selected collection agency common to the
Lender or Lenders who have the greatest ownership interest
in the loan. In the event of a tie among the Lenders as to their
choice of a collection agency, the agency will be selected at random by Prosper.
The borrower’s identity, contact information and other personally
identifiable information will be provided to the collection agency to which the
delinquent Note is assigned for collection, but you will not be provided with
any such borrower information.


 


d. Upon receipt of the
account, the collection agency will attempt to collect the delinquent
amount and have the borrower bring the account current as soon as possible.
The collection agency is not authorized to forgive any amount owing, permit any
modification with respect to any Note that would change the interest rate,
defer or forgive the payment of principal or interest, reduce or increase the
outstanding principal balance, or change the final maturity date on any Note.


 


e.
The collection agency will receive a percentage of any amounts collected by the
agency, and the collection agency’s percentage share will be deducted from the
delinquent payments collected by the agency. At any time a Note is more than
thirty (30) days past due, the group leader’s compensation in the form of
Finder’s Payment Rewards (if any) relating to the loan evidenced by the Note is
suspended, and the portion of the loan payment that would otherwise accrue to
the group leader is reallocated and paid to you.  The collection agency will deposit the net
amounts collected into the Servicing Account for the benefit of you and the
other Lenders as applicable.


 


f. Except in the case of borrower bankruptcy, Notes that become over 120
days past due are charged off and offered
for sale to an unaffiliated debt buyer
authorized and willing to purchase consumer loans. You authorize Prosper to
offer for sale and sell your Notes that become over 120 days past due to a debt
buyer in accordance with this Section. Because
debt purchasers buy many past-due Notes at once, Notes that are in default
might not be offered for sale at the point at which they are exactly 120 days
past due, but may remain unsold for some period after they are 120 days past
due. Collection efforts will continue until the Note is actually sold to a debt
purchaser. Proceeds, if any, from the sale of your Notes, less expenses of sale,
will be paid to you. No portion of
the proceeds of a defaulted Note sale will be paid to any group leader. PROSPER
DOES NOT GUARANTEE THAT A NOTE WILL BE SOLD AT A DEBT SALE, OR THAT YOU WILL
RECEIVE ANY PROCEEDS FROM A DEBT SALE OF YOUR NOTE.


 


g. Late fees and NSF fees
will be charged after any required grace period, to the extent such fees are
authorized or permitted by the promissory note and applicable law. In the event
your Note is sold at a debt sale, any
accrued but unpaid NSF fees on the loan that would otherwise be retained by
Prosper will be waived so that as much of the debt sale proceeds as possible
can be recovered by you.


 


h. If Prosper receives
notice that a borrower has filed for protection under the federal bankruptcy
laws, or has become the subject of an involuntary bankruptcy petition, no
further automated debit transfers or bank drafts for payment of monthly loan
payments will be initiated, and any collection activity on the account will
cease.  If requested by the bankruptcy
court, Prosper will file a proof of claim with the bankruptcy court in the
amount of the total outstanding balance owed on the borrower’s loan as of the date
the bankruptcy petition is filed. Prosper
will forward any amounts received on a loan in bankruptcy to the Lenders who
own the Notes on a pro rata basis. Notes of Borrowers that are
in bankruptcy will not be offered for sale to a debt buyer and will be charged
off.


 


 


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You agree that the foregoing collection
process shall be the exclusive method of servicing and collecting delinquent
Notes.


 


7.  Representations and Warranties as to Notes
Sold.  Prosper makes the following
representations and warranties to you that, with respect to each Note sold to
you under this Agreement, as of the date the Note is sold, assigned and
transferred to you:


 


a.  Prosper
complied in all material respects with applicable federal, state and local
laws, including usury, truth-in-lending, equal credit opportunity, fair credit
reporting, licensing or other similar laws, in originating the loan evidenced
by the Note.


 


b. The proceeds
of the loan evidenced by the Note sold have been fully
disbursed to the borrower or the borrower’s designated payee by Prosper from
its own funds prior to your purchase of the Note.


 


c. Prosper has
made commercially reasonable efforts to authenticate and verify the identity of
the borrower on the loan evidenced by the Note. Based
on such authentication and verification, to the best of Prosper’s knowledge:
(i) the borrower had full legal capacity to execute and deliver the Note, and (ii)
each Note sold to you by Prosper is the legal, valid and binding obligation of
the borrower, and is enforceable in accordance with its terms.


 


d. In the event of a
material default under a Note you purchase from Prosper under this Agreement
that is the result of verifiable identity theft of the named borrower’s
identity, Prosper will repurchase the Note for the remaining unpaid principal
balance. The determination of whether verifiable identity theft has occurred
shall be in Prosper’s sole discretion. Prosper shall not be required to
repurchase a Note under this subsection until such Note is at least 120 days
past-due, provided, however, that Prosper may in it’s sole discretion elect to
repurchase a Note at an earlier time.


 


8.  Remedies; Cure and
Repurchase of Loans.  In the event of
a breach by Prosper of any of the foregoing representations and warranties that
materially and adversely affects your interest in a Note sold to you under this
Agreement, Prosper shall either (i) cure the defect in the Note, if the
defect  is susceptible to cure, (ii)
repurchase the Note from you, or (iii) indemnify and hold you harmless against
all losses (including losses resulting from the delinquency or nonpayment of
the loan), damages, expenses, legal fees, costs and judgments resulting from
any claim, demand or defense that arising as a result of the defect in the
Note. The decision whether a defective Note is susceptible to cure, or whether
Prosper shall cure or repurchase a Note or indemnify you with respect to the
Note, shall be in Prosper’s sole discretion. Upon discovery by Prosper of any
such breach of the foregoing representations and warranties, Prosper shall give
you notice of the breach, and of Prosper’s election to cure or repurchase the
Note, no later than ninety (90) days after our discovery of the breach. In the
event Prosper repurchases a Note, Prosper will pay you a repurchase price equal
to the outstanding principal balance of the Note as of the date of repurchase,
plus any accrued but unpaid interest on the principal balance as of the date of
repurchase at interest rate set forth in the Promissory Note; provided,
however, that (i) in the event Prosper repurchases a Note within three (3) days
of disbursement of loan proceeds to the borrower, no interest will be deemed to
have accrued, and therefore no interest will be paid to you, and (ii) in the
event Prosper repurchases a Note due to identity theft as provided in Section
7.d above, no interest will be paid to you. The repurchase price will be paid
to you by remittance into the Prosper Funding Account, and those funds will be
available to you for further bidding. Upon any such repurchase, the Note shall
be transferred and assigned by you to Prosper, in each case without recourse,
and Prosper in its capacity as servicer of the Note on your behalf shall
execute any endorsements or assignments necessary to effectuate the transfer
and assignment of the Note to Prosper. Upon repurchase of a Note, Prosper may
exercise any remedies authorized or 


 


 


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permitted under the Note and applicable law.
Prosper’s obligation to cure or repurchase a Note or indemnify you for a
defective Note pursuant to this Section is your sole remedy with respect to a
breach of Prosper’s representations and warranties set forth in Section 7
above.


 


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


 


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


 


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


 


c.
If, after a loan is funded, Prosper makes such a determination of irregularity
with regard to the listing that resulted in the loan, a bid for the listing, or
a loan resulting from the listing, Prosper may, in its discretion, exercise its
remedies of indemnification or cure or repurchase of the Note evidencing the
loan as provided under Section 8 above.


 


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


 


e. In most instances,
Prosper does not verify the income, employment and occupation or other
information provided by borrowers in listings. The borrower’s income,
employment and occupation are self-reported, and the borrower’s non-housing
debt-to-income ratio is determined by Prosper from a combination of the
borrower’s self-reported income and information from the borrower’s credit
report. The credit data that appears in listings
is taken directly from a credit report obtained on the borrower from a credit
reporting agency, without any review or 


 


 


8

















 


verification
by Prosper. Prosper does not verify any statements by borrowers
as to how loan proceeds are to be used and does not confirm after loan funding
how loan proceeds were used.  In most
instances homeownership status is derived from the borrower’s credit report,
but is not verified by Prosper; if the report reflects an active mortgage loan,
the borrower is presumed to be a homeowner. In
connection with Prosper’s identity and anti-fraud verification of borrowers,
Prosper verifies the borrower’s deposit account to determine that the borrower
is the holder of record of the account.


 


10.  No Guarantee of Returns or Payments.


 


A. PROSPER DOES NOT WARRANT
OR GUARANTEE THAT YOU WILL RECEIVE ANY RATE OF RETURN, OR ANY MINIMUM AMOUNT OF
PRINCIPAL OR INTEREST ON ANY NOTE, OR ANY PRINCIPAL OR INTEREST AT ALL. THE
AMOUNT YOU RECEIVE ON YOUR NOTES IS WHOLLY DEPENDENT UPON THE BORROWERS’
PAYMENT PERFORMANCE UNDER THE PROMISSORY NOTES EVIDENCING THE LOANS. PROSPER
DOES NOT GUARANTEE ANY LOANS OBTAINED THROUGH THE PROSPER WEBSITE AND DOES NOT
ACT AS A GUARANTOR OF ANY LOAN PAYMENT OR PAYMENTS BY ANY PROSPER BORROWER.


 


B. YOU FURTHER UNDERSTAND
AND ACKNOWLEDGE THAT BORROWERS MAY DEFAULT ON YOUR NOTES, AND THAT SUCH
DEFAULTS MAY NEGATIVELY AFFECT THE AMOUNT OF PRINCIPAL AND INTEREST YOU RECEIVE
ON YOUR NOTES.


 


11.  Restrictions on Use. Except as
provided in Section 12 below, you are not authorized or permitted to use
Prosper to bid or purchase Notes for someone other than yourself. You must be
the owner of the deposit account you designate for electronic transfers of
funds, with sole authority to direct that funds be transferred to or from the
account. Although you are registering as a Lender, you may also register and
participate in the Prosper marketplace as a borrower or a group leader. You may
bid on listings of any registered Prosper borrowers. If you choose to become a
member of a group, whether as a borrower or a group leader, you may bid on
listings of members of your group. Prosper may in its sole discretion, with or
without cause and with or without notice, restrict your access to the Prosper
web site or marketplace.


 


12.  Authority. You warrant and represent
that you have the legal competence and capacity to execute and perform this
Agreement. If you are entering into this Agreement on behalf of a corporation, partnership, limited liability
company or other entity (“institution”), you warrant and represent that
(i) you have all necessary power and
authority to execute and perform this Agreement on such institution’s
behalf; (ii) the execution and
performance of this Agreement will not violate any provision in the
institution’s charter documents, by-laws, indenture of trust or partnership
agreement, or other constituent agreement or instrument governing the formation
or administration of your institution; and (iii) the execution and performance of this Agreement will not
constitute or result in a breach or default under, or conflict with, any order,
ruling or regulation of any court or other tribunal or of any governmental
commission or agency, or any agreement or other undertaking to which the
institution is a party or by which it is bound.


 


13.  Acknowledgement of Group Leader Compensation;
Endorsements from Prosper Friends.


 


Group Leader Compensation.
Many borrowers who participate in the Prosper marketplace do so by
joining a group headed by a group leader. Group leaders invite prospective
borrowers to the Prosper marketplace and display their groups on the Prosper
website. Group leaders do not guarantee payments on any Note, and an
endorsement of a listing from a 


 


 


9

















 


borrower’s group leader does not obligate the
group leader to guarantee or make any payments on any Note. With respect to
certain loans resulting from listings that were posted prior to September 13,
2007, group leaders may receive compensation in the form of a Finder’s Payment
Reward equal to a percentage of the interest portion of the monthly loan
payments made on loans originated through the Prosper marketplace. With respect
to loans for which Finder’s Payment Rewards are payable to group leaders, the
following provisions apply.


 


a. You acknowledge that the
group leader on certain loans that resulted from listings that were posted
prior to September 13, 2007 may receive a percentage of the interest portion of
each monthly loan payment made by each borrower on your Notes, provided that no
loan payment is more than thirty (30) days past due. The portion of each loan
payment the group leader will receive depends on the credit grade of the
borrower, and is established at the time of creation of the listing that
resulted in the loan to the borrower, and remains unchanged for the life of the
loan.


 


b. The group leader will not
receive any Finder’s Payment Reward at a time when any payment on a Note is
more than thirty (30) days past due. With respect to loan payments received by
Prosper on a Note that is more than thirty (30) days past due, Prosper will pay
you, rather than the group leader, the entire amount of principal and interest
received on such Note. If a Note that is more than thirty (30) days past due
later becomes current in its payments, the group leader will resume receiving
the portion of the monthly payment that represents the Finder’s Payment Reward
for as long as the Note remains current.


 


c. The Finder’s Payment
Reward is added onto the interest rate you agreed to accept in your winning
bid. For example, if the Finder’s Payment Reward on a loan evidenced by one of
your Notes is 2.00%, and your winning bid on the listing that resulted in the
loan was 8.00%, the interest rate on the Note evidencing the loan will be 10.00%
(8.00% plus 2.00%). The borrower will pay 10.00% interest; you will be entitled
to receive 8.00% of the 10.00% (less the cost of the Servicing Fee and other
authorized servicing compensation), and the group leader would receive 2.00% of
the 10.00% interest, provided that the Note is not more than 30 days past due.


 


d. You have no right under
this Agreement or the Prosper Terms and Conditions to bring any legal action
against any Prosper group leader, or against any other person, to collect any
Finder’s Payment Reward. You are not a third party beneficiary of, and you have
no rights as a third party beneficiary under, any agreement between Prosper and
any borrower, group leader or other Prosper Lender.


 


                Endorsements from Prosper Friends. Prosper allows borrowers
to create a network of Prosper friends, and obtain endorsements of listings
from one or more of the borrower’s designated Prosper friends. Endorsements
from the borrowers’ Prosper friends are displayed with borrower’s listings.
Prosper friends do not guarantee payments on any Note, and an endorsement of a
listing from a borrower’s Prosper friend does not obligate the individual
making the endorsement to guarantee or make any payments on any Note.


 


14.  Prohibited Activities. You agree that
you will not do the following, in connection with any listings, bids,
loans or other transactions involving or potentially involving
Prosper:


 


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


 


b. Charge, or attempt to
charge, any Prosper borrower any fee in exchange for your agreement to bid on a
borrower’s listing, or propose or agree to accept any fee, bonus, additional
interest, kickback or thing of value of any kind, in exchange for your
agreement to bid on a borrower’s listing;


 


 


10

















 


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


 


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


 


e. Bring a lawsuit or other
legal proceeding against any borrower on any or your Notes;


 


f. Contact borrowers on any
of your Notes without the borrower’s consent;


 


g. Contact any collection
agency or law firm to which your Note has been referred for collection;


 


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


 


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


 


j. Violate any applicable
federal, state or local laws, including but not limited to, the Equal Credit
Opportunity Act and other fair lending laws, Truth in Lending Act, Fair Credit
Reporting Act, Fair Debt Collection Practices Act, Federal Trade Commission
Act, federal or state consumer privacy laws, state usury or loan fee statutes,
state licensing laws, or state unfair and deceptive trade practices statutes.


 


15.  Termination of Registration.  Prosper may in its sole discretion, with or
without cause, terminate this Agreement by giving you notice as provided below.
In addition, upon our reasonable determination that you committed fraud or made
a material misrepresentation in connection with a listing, bid 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) suspend your right to bid or otherwise participate in the Prosper
marketplace; (ii) terminate this Agreement and your registration with Prosper.
Upon termination of this Agreement and your registration with Prosper, any bids
you have placed on the Prosper website shall terminate, and will be removed
from the Prosper website immediately. Any Notes you purchase from Prosper prior
to the effective date of termination resulting from bids you have placed on the
Prosper website shall remain in full force and effect in accordance with their
terms, subject to repurchase, indemnification or cure as provided in Section 8
above.


 


16.  Indemnification.  In addition to your indemnification
obligations set forth in Prosper’s Terms and Conditions, you agree to
indemnify, defend, protect and hold harmless Prosper and its officers,
directors, shareholders, employees and agents against all claims, liabilities,
actions, costs, damages, losses, demands and expenses of every kind, known or
unknown, contingent or otherwise, (i) resulting from any material breach of any
obligation you undertake in this 


 


 


11

















 


Agreement, including but not limited to your
obligation to comply with any applicable laws; (ii) relating to the contents of
your Prosper member web page, your own website or your business;
(iii) resulting from your acts, omissions and representations (and those
of your employees, agents or representatives) relating to Prosper; or (iv)
asserted by third parties against Prosper alleging that the trademarks, trade
names, logos or branding you use, display or advertise infringes upon the
intellectual property rights of any such third party. Your obligation to
indemnify Prosper shall survive termination of this Agreement, regardless of
the reason for termination.


 


17.  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; provided,
however, that Prosper does not have the right to change any term or provision
of a Note you purchase from Prosper under this Agreement except as authorized
in the Promissory Note. Prosper will give you notice, which may be by email or in the form of
a posting on the Prosper website, of material changes to this
Agreement, or the Prosper Terms and Conditions. You authorize Prosper to
correct obvious clerical errors appearing in information you provide to
Prosper, without notice to you, although Prosper expressly undertakes no
obligation to identify or correct such errors. This Agreement, along with the
Prosper Terms and Conditions, represent the entire agreement between you and
Prosper regarding your participation as a Lender in the Prosper credit
marketplace, and supersede all prior or contemporaneous communications,
promises and proposals, whether oral, written or electronic, between you and
Prosper with respect to your involvement as a Lender with Prosper.


 


18.  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 photos, content, logos
or links 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, as amended from time to time, and must not (i) infringe on any
third party’s copyright, patent, trademark, trade secret or other proprietary
rights or right of publicity or privacy; (ii) violate any applicable law,
statute, ordinance or regulation; (iii) be defamatory or libelous; (iv) be
lewd, hateful, violent, pornographic or obscene; (v) violate any laws regarding
unfair competition, anti-discrimination or false advertising; (vi) promote
violence or contain hate speech; (vii) contain viruses, trojan horses, worms,
time bombs, cancelbots or other similar harmful or deleterious programming
routines.


 


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


 


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


 


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


 


 


12

















 


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


 


 


 


13
















EXHIBIT
A


 


PROMISSORY
NOTE


 


 


 


 


 


Borrower Address:                                                                                                                


 


1.  Promise to Pay.  In return for a loan I have received, I
promise to pay to the order of Prosper Marketplace, Inc. (“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 Note to you shall also include any person to
whom you transfer this Note.


 


2.  Payments.  This Note is payable in 36 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 late charges then due, then to any unpaid fees incurred as a result of
failed automated payments or returned checks or bank drafts as provided in
Paragraph 11, then to 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. If payments are paid late,
a greater portion of the payment will be applied to accrued interest, a lesser
portion (if any) will be applied to principal reduction, and the loan will not
amortize as originally scheduled, resulting in a 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 the 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.


 


6.  Certification; Exception to Waiver.  I certify that, to my
knowledge, the proceeds of this loan will not be applied in whole or part to
purchase property or services from any person to whom any interest this loan
may be assigned. If, notwithstanding the preceding sentence, any person from
whom I have purchased such property acquires any interest in this loan, 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 loan 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 


 


 


14

















 


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 loan payments, 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 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.


 


I understand that if I have
elected to have my payments made by automatic withdrawals from my account:


 


                    a. The interest rate set forth
in this Note, and the Annual Percentage
Rate and related disclosures set forth in my Truth-in-Lending Disclosure
Statement include the one percent (1.00%) reduction in my interest
rate (the “Preferred Rate”) that I received as an incentive to make my payments
by preauthorized automatic withdrawals.


 


                    b. I will no longer be eligible
for the Preferred Rate, and I must make my monthly payments using bank drafts
drawn by you on my behalf on my account each month, if (i) I withdraw my
authorization to make payments by automatic withdrawals, (ii) I cancel or close
my account without establishing a new account at least three (3) days before
the next monthly payment due date, or (iii) on two occasions during the
term of this Note, my entire
monthly payment cannot be made by automatic withdrawal  from my account on the due date because of
insufficient funds in the account, or for any other reason (other than an error
by you).


 


                    c. If I become ineligible for
the Preferred Rate, you have the right to add one percent (1.00%) to the
interest rate on this Note. If
you exercise this right, the increased interest rate will become effective on
the due date of the next monthly payment due under this Note, and will continue
for the remainder of the term of the Note.
The increase in the interest rate on my Note
will result in a higher monthly payment amount, equal to the amount that would
be sufficient to repay in full the unpaid principal I owe as of the effective
date of the increased interest rate, on the maturity date at the increased
interest rate in substantially equal monthly payments. I must pay the higher
monthly payment amount beginning on the first monthly payment due date after
the increased interest rate becomes effective.


 


                    d. I understand that if the interest rate on my
Note is increased as set forth in this Paragraph, the Preferred Rate will not
be reinstated for any reason, even if I continue making my payments by
automatic withdrawals.


 


8.  Default and Remedies. If I fail to
make any payment when due in the manner required by Paragraph 7, or if
receivership or insolvency proceedings or any assignment for the benefit of
creditors is instituted by or against me; I die, I fail to keep any
promise or meet any other obligations in this Note, or I make a material
misrepresentation in connection with my loan, 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 not do so until one or more payments under this Note is
at least 120 days 


 


 


15

















 


past due, and you will give me at least 30
days prior notice of acceleration; provided, however, that if my default is the
result of a material misrepresentation you do not need to wait until one or
more payments is past due, and you do not need to give me any prior notice of
acceleration.


 


9.  Prepayments.  I may prepay this loan 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 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 monthly payment, whether by check or bank draft or by automated
withdrawal from my designated account, and the payment is unable to 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
check or bank draft returned or failed automated withdrawal, unless prohibited
by applicable law.


 


12.  Loan Charges. 
If a law, which applies to this loan and which sets maximum loan
charges, is finally interpreted so that the interest or other loan charges
collected or to be collected in connection with this 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 which 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.


 


13. 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.


 


14.  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. 
Such notices must be properly addressed to the parties at the addresses
set forth below unless a different address for notice is later provided in
writing by giving notice pursuant to this Paragraph.


 


15.  Governing Law.   Except as provided below, this Note is
governed by the laws of the State of my residence, as reflected in your
registration records, at the time this loan is made. I will promptly notify you
of any changes in my State of residence. For borrowers who are residents of
Alaska and Minnesota, this Note is entered into in California and is governed
by the laws of California, where Prosper Marketplace, Inc. is located.


 


 


16

















 


16.  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.


 


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 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.


 


Texas Residents: Prosper
Marketplace, Inc. is licensed and examined under the laws of the State of Texas
and by state law is subject to regulatory oversight by the Office of Consumer
Credit Commissioner. Any consumer wishing to file a complaint against the
Prosper Marketplace, Inc. should contact the Office of Consumer Credit
Commissioner through one of the means indicated below: In Person or U.S. Mail: 2601
North Lamar Boulevard, Austin, Texas 78705-4207. Telephone No.: 800/538-1579.
Fax No.: 512/936-7610. E-mail: consumer.complaints@occc.state.tx.us. Website:
www.occc.state.tx.us.


 


Wisconsin Residents:  If this loan is made for commercial purposes,
which are any purposes other than personal, family, or household purposes, this
loan shall be governed by the terms of the Consumer Loan Act, Wis. Stat.
chapters 421 to 427, including the provisions governing finance charges on
loans of $25,000 or less.


 


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]


 


 


17