Exhibit
10.1


 


form of BORROWER REGISTRATION AGREEMENT


 


 


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


 


1.  Registration as a Prosper Borrower. You are
registering as a borrower in the Prosper credit marketplace, so that you may be
eligible to post loan requests or “listings” for display on the Prosper website
to people who may be interested in bidding against one another in a competitive
auction format to purchase your loan after it is made and funded by Prosper. For
the sake of simplicity, Prosper refers to the people who bid on listings as
“Lenders” even though loans are made by Prosper and sold to the winning bidder
or bidders. You agree to comply with the terms and provisions of this Agreement,
the Terms of Use of the Prosper website, and the Prosper Policies, as those
guidelines may be amended from time to time by Prosper in its sole discretion
(collectively, the “Prosper Terms and Conditions”).


 


Prosper reserves the right to restrict access
to the Prosper marketplace to individuals who meet minimum credit guidelines
and other criteria, as determined by Prosper in its sole discretion.


 


2.  Authorization to Obtain Credit Report. You authorize
Prosper to obtain a credit report from the Experian consumer credit reporting
agency. Prosper uses the credit report (i) for authentication purposes, to make
sure you are who you say you are, (ii) to determine how much non-mortgage debt
you currently have, in order to determine your debt-to-income ratio, (iii) to
obtain your Experian Scorex PLUSsm credit score and assign you a
Prosper Credit Grade based on that score, and (iv) to identify and display
certain information and characteristics from your credit profile, including but
not limited to the number, age, type and status of the credit lines currently
being reported, public records (such as bankruptcies and judgments) and
mortgage loans appearing on your credit report, and the number of your recent
requests for credit. Information from your credit report will be displayed on
the Prosper website with your listings. You authorize Prosper to verify
information in your credit report, and you agree that Prosper may contact third
parties to verify any such information. Prosper will obtain your credit report
each time you post a listing, except that Prosper will not obtain a new credit
report when you post listings within thirty (30) days following the posting of
an earlier listing.


 


3.  Listings. You may request a loan from
Prosper (“Loan”) by posting a listing on the Prosper website. You may request a
Loan in the amount of $25,000 or less, subject to a minimum Loan amount; the
minimum Loan amount is governed by the laws of the State where you reside, and
normally ranges from $1,000 to $3,000. The minimum Loan amounts are posted in
the States & Licenses section of the
Prosper website, and are subject to change by Prosper at any time without
notice. To post a listing, you must provide the amount of the Loan you are
requesting, the maximum interest rate you are willing to pay, and the duration
of your listing. At the time you post a listing you must also provide your
annual income, occupation and employment status. The following information
based on your credit file with Experian will be displayed with your listing:


 


	
  (i)

  	
   

  	
  Your
  Prosper credit grade;

  
	
  (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;

  
	
  (vi)

  	
   

  	
  The
  number of 90+ days past due delinquencies on your credit report in the last 7
  years;

  



 


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  (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 your first recorded credit line (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.

  



 


Listings also
display your self-reported occupation, employment status and range of income. If you are a
member of a Prosper group when you post a listing, the listing will also
identify your group; however, you do not have to be a member of a group to post
a listing. You may also create a network of Prosper friends, and when you post
a listing, you may also obtain endorsements of your listing from your group
leader or your designated Prosper friends. Endorsements from your group leader
or Prosper friends will be displayed with your listing. Group leaders and
Prosper friends do not guarantee payments on your Loan, and an endorsement of
your listing from a group leader or Prosper friend does not obligate the
individual making the endorsement to guarantee or make any payments on your
Loan. An endorsement of your listing from a group leader or Prosper friend is
not required in order to post a listing.


 


You may not include any personally
identifying information, including, without limitation, your name, address, phone number, email address, Social
Security number or driver’s license number, or your bank account or credit card
numbers in your listing or on your Prosper member web page, or elsewhere on
the Prosper website. Listings that include this information are subject to
cancellation by Prosper, or deletion or redaction by Prosper of the personally
identifying information, although Prosper is under no obligation to take such
actions and you include such information solely at your own risk.


 


Borrowers’ listings are displayed on the
Prosper website. This means that people who visit the Prosper website will be
able to view your listing, and see your Prosper credit grade, your debt-to
income ratio and other information, provided, however, that certain information
concerning your credit history will only be viewable by registered Prosper
Lenders. Upon your submission of a listing, you authorize Prosper to display
the listing on the Prosper website. To facilitate bids for your listing,
Prosper may forward your listing by email to third parties, including but not
limited to registered Prosper Lenders, and may display your listing in
promotional, advertising and marketing materials, and you authorize Prosper to
do so.


 


You authorize Prosper to verify your
residence, income, occupation 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
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. For example, if, while your listing is displayed on the
Prosper website, your state of residence changes or the annual income amount
you provided to Prosper when you submitted your listing decreases materially,
you must either notify Prosper of the change, or withdraw the listing. If you
elect to withdraw your listing as a result of a change, you may (but are not
required to) post a new listing containing the updated information. You cannot
edit or amend your listing once it is posted on the Prosper website; however,
you have the right to withdraw your listing at any time prior to expiration of
the listing, and you may post another listing if you desire. Prosper reserves
the right, in its sole discretion, to limit the number of listings you post or
attempt to post on the Prosper website.


 


 


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Each listing you post on the Prosper website
is both a request for a Loan and a commitment to borrow.


 


Loan Request. Your listing
is a request for a Loan in the amount specified in the listing, at an interest
rate equal to the maximum interest rate set forth in your listing. If your
listing is matched, the interest rate on your Loan may be lower than the
maximum rate you specified, but it will never be higher. You will not receive a
Loan in an amount less than the amount specified in your listing, even if one
or more bids match a portion of your requested Loan amount. In order to post a listing on the Prosper website you must have a good
faith intent to obtain and repay your Loan and your listing must be consistent
with that intent.


 


Commitment to Borrow. Each listing
you post on the Prosper website is a commitment and promise to obtain a Loan
from Prosper, for purchase by the person or persons whose bid or bids are
matched with your listing. You have the right to withdraw your listing at any
time prior to expiration of the listing.
If your listing receives a Lender bid in, or Lender bids totaling, the amount
of your requested Loan, you will receive a Loan from Prosper in the amount
you requested, subject to Prosper’s right to verify information you provided in
connection with your listing and your registration as a Prosper user and
Prosper’s other rights as described in Section 4 below.


 


AT THE TIME YOU SUBMIT YOUR LISTING, YOU ARE
COMMITTING TO OBTAIN A LOAN IN THE AMOUNT SPECIFIED IN YOUR LISTING, AT THE
MAXIMUM INTEREST RATE SET FORTH IN YOUR LISTING, SHOULD YOUR LISTING BE MATCHED WITH A BID IN, OR BIDS TOTALING, THE AMOUNT OF YOUR REQUESTED LOAN. YOU HAVE THE
RIGHT TO WITHDRAW YOUR LISTING AT ANY TIME PRIOR TO EXPIRATION OF YOUR LISTING;
HOWEVER, YOU HAVE NO RIGHT TO RESCIND ANY LOAN.


 


Number of Listings. You may post
as many listings as you desire; however, Prosper reserves the right, in its
sole discretion, to limit the number of listings you post or attempt to post on
the Prosper website. You may have only one listing outstanding at a time.


 


Duration of Listings. When you post
a listing, you specify how long your listing will be displayed on the Prosper
website, subject to a maximum duration of ten (10) days. However, if your listing receives a Lender bid in, or Lender bids totaling, the full amount
of your requested Loan prior to expiration of your listing, you may elect to
end your listing early — you need not wait until your listing expires. You may
also designate your listing for “automatic funding,” in which case your listing
will end and no further bids on your listing will be accepted toward your
listing as soon as your listing receives
a bid or bids totaling the full amount of your requested Loan. Prosper
reserves the right to make the automatic funding feature available only to
certain credit grades. When you post a listing, it will be displayed on the
Prosper website along with all other listings until you end the listing or the
listing expires, or until the listing is withdrawn by you or by Prosper as
provided in Section 4 below.


 


Additional Loans. Subject to
eligibility requirements that Prosper may in its sole discretion establish and
amend from time to time, 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 the maximum Loan amount for your state of residence. To be eligible
to post a listing for a second Loan, you must be current on your existing Loan,
and you must not have been delinquent in making your last two monthly Loan
payments. You may not post a listing for a second Loan within (6) months
following the date of origination of your existing Loan. You may not obtain a
Loan from the Prosper marketplace to pay off an existing Prosper Loan.


 


 


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Prohibited Activities. You agree that
you will not, in connection with any listings, bids, Loans or other
transactions involving or potentially involving Prosper, (i) make any false,
misleading or deceptive statements or omissions of material fact in your
listing; (ii) misrepresent your identity, or describe, present or portray
yourself as a person other than yourself, whether in a narrative description or
a photo in your listing; (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 in connection with
a requested or existing Loan or in exchange for such person’s bid, or offer or
agreement to bid, on your listing; or (iv) represent yourself to any person, as
a representative, employee, or agent of Prosper, or purport to speak to any
person on behalf of Prosper.


 


4.  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 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
registration agreement between Prosper and such user. Prosper may conduct its
review at any time — before, during or after the posting of a listing, or
before or after the funding of a Loan. You agree to respond promptly to Prosper’s
requests for information in connection with your listing, accounts, or your
registration with Prosper.


 


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


 


c.
When a listing ends or expires with a bid or bids totaling the amount of a
borrower’s requested Loan, Prosper may conduct a “pre-funding” review prior to
funding 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.


 


5.  Matching of Bids and Listings.


 


a. Prosper’s auction
platform will automatically match your listing with any bids that specify a
minimum interest rate equal to or below the maximum interest rate you would
accept. 


 


 


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Bids are first matched with borrower listings
with the highest offered interest rates above the bidder’s minimum interest
rate, and thereafter the bids are matched to borrower listings with
incrementally lower offered interest rates.


 


b. A match of your listing
with one or more bids in the full amount of your requested Loan results in a
Loan from Prosper to you, subject to Prosper’s right to verify information as
provided in this Agreement. Each Loan will be evidenced by a Promissory Note in
the form set forth on the attached Exhibit A. Notwithstanding anything to the
contrary in the Terms of Use, you authorize Prosper to act as your authorized
agent to sign a Promissory Note on your behalf in favor of Prosper in the
principal amount of each Lender’s bid that is matched with your listing.


 


c. Prosper does not warrant
or guaranty that your listings will be matched with any bids. Your listing must
receive a bid in, or bids totaling, the entire amount of your requested Loan in
order for a Loan to be made. You will not receive a Loan if, prior to
withdrawal or expiration of your listing, only a portion (even a substantial
portion) of your requested Loan amount is matched with a bid or bids.


 


d. To safeguard your privacy
rights, on listings your name and address will be shielded from the view of
bidders and prospective bidders, and your identity as the borrower on the
Promissory Note will be shielded from the winning bidders who purchase your
Loan. Only your Prosper user name will appear on listings and Promissory Notes,
and only the user name of the bidders will appear with bids.


 


6.  Prosper’s Compensation.  If you receive a Loan, you must pay Prosper a
fee to compensate Prosper for services rendered, and for reimbursement of our
expenses, in connection with providing and maintaining the Prosper marketplace,
including without limitation the authentication of borrowers, the
administration of the auction platform, and the funding and sale of Loans.  The current 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 transaction fee is paid by the borrower
out of, or contemporaneously with disbursement of, the Loan proceeds at the
time a Loan is funded, so that the net amount of Loan proceeds you receive will be less
that the full amount of your Loan. The
amount and method of charging the transaction fee is subject to adjustment to
the extent required by applicable state law. For example, if applicable
state law limits the fee to a lesser amount, you will be charged the
lesser amount.


 


7.  Listings Matched with Multiple Bids.  Your listing may be matched with more than
one bid. If that happens, you agree to enter into separate Promissory Notes in
the amount of each bid, with the aggregate principal amount of the Notes equal
to your requested Loan amount. Each Promissory Note will be in the form of the
Promissory Note attached as Exhibit A, and will have identical interest rates
and, monthly payment due dates. Your monthly payment amount will be the
aggregate monthly payment amount under the Promissory Notes, and the payments you make on your Loan are allocated pro rata
to the respective Note owners based
on the principal amount of each Lender’s Promissory Note with respect to the Loan. As used in this Agreement,
the term “Loan” shall include your total indebtedness as evidenced by all Notes
resulting from your listing being matched with multiple bids.


 


Authority to Act as Agent
to Sign Promissory Notes. YOU AUTHORIZE PROSPER TO ACT
AS YOUR AUTHORIZED AGENT TO SIGN A PROMISSORY NOTE, IN THE FORM SET FORTH ON
THE ATTACHED EXHIBIT A, ON YOUR BEHALF IN FAVOR OF EACH LENDER WHOSE BID IS
MATCHED WITH YOUR LISTING.


 


 


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8.  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 the Prosper Funding Account and 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 Prosper
marketplace, and all communications regarding your Loan must be made to
Prosper. To the extent authorized or permitted by applicable law, you agree to
pay all any fees incurred as a result of failed automated Loan payments due to
insufficient funds in your account or for other reasons, returned check fees,
penalties or similar servicing costs incurred by Prosper or the owner or owners
of your Loan.


 


9.
Authorization to Contact Your Group Leader. You acknowledge and agree
that if you obtain a Loan through Prosper as a member of a group registered
with Prosper, and your Loan payment becomes fifteen (15) days past due, Prosper
may notify your group leader of the delinquent payment. You also acknowledge
and agree that if you obtain a Loan through Prosper, in the event your loan
payment becomes fifteen (15) days past due, Prosper may notify all of your
designated Prosper friends who were winning bidders on your Loan listing of
your delinquent payment. Groups on Prosper are rated according to the
collective payment performance of the group’s members, so your failure to make
Loan payments when due may have a negative effect on your group’s rating. If
you borrow as a member of a group, you must remain a member of that group, and
you may not change groups, as long as your Loan is outstanding.


 


10.  Collection & Reporting of Delinquent
Loans. In the event you do not make your Loan payments on time, Prosper or any
subsequent owner of the Loan will have all remedies authorized or permitted by
the Promissory Note and applicable law. In addition, when a monthly payment
becomes thirty (30) days past due, your Loan will be referred to a collection
agency for collection. Prosper will report Loan payment delinquencies in excess
of 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.


 


11.  No Guarantee. PROSPER DOES NOT WARRANT OR
GUARANTEE (1) THAT YOUR LISTING WILL BE MATCHED WITH ANY BIDS, (2) THAT YOU
WILL RECEIVE A LOAN AS A RESULT OF POSTING A LISTING, OR (3) THAT IF YOUR
LISTING IS MATCHED YOU WILL RECEIVE A LOAN WITH AN INTEREST RATE LESS THAN THE
MAXIMUM RATE SPECIFIED IN YOUR LISTING.


 


12.  Restrictions on Use. You are not
authorized or permitted to use Prosper to obtain, or attempt to obtain, a Loan
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 Loan payments be made from the account. Your designated account will be
the account into which Loan proceeds will be deposited, and from which Loan
payments will be made. Although you are registering as a borrower, you may also
register and participate in the Prosper marketplace as a Lender or as a group
leader. If you obtain a Loan and have your Loan written off as a result of your
default, your registration will immediately expire, and 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
marketplace.


 


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


 


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14.  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, 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 post listings 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 listings you have placed on the Prosper website shall terminate,
and will be removed from the Prosper website immediately. Any Loans you obtain
prior to the effective date of termination resulting from listings you had
placed on the Prosper website shall remain in full force and effect in
accordance with their terms.


 


15.  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 Promissory Note evidencing a Loan to which you are a
party 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 borrower 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 borrower with
Prosper.


 


16.  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; 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, 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.


 


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


 


18.  No Warranties.  EXCEPT FOR THE REPRESENTATIONS CONTAINED IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES TO THE OTHER
PARTY, INCLUDING, BUT NOT LIMITED TO, ANY 


 


 


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IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.


 


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


 


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


 


 


 


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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 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 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. 


 


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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 past due, and you will give me at least 30 days prior notice
of acceleration; provided, however, 


 


 


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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.


 


 


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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]


 


 


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