Exhibit 10.2


 


LENDER REGISTRATION AGREEMENT


(Note Commitment, Purchase and Sale Agreement)


 


This
Lender Registration Agreement is made and entered into between you and Prosper
Marketplace, Inc. (“Prosper”, “we”, or “us”). This Agreement will govern all purchases of Borrower Payment Dependent
Notes that you may, from time to time, purchase from Prosper.


 


Prosper has filed with the U.S. Securities and
Exchange Commission a registration statement on Form S 1 (No.                         )
(as amended from time to time, the “Registration Statement”) to register the
continuous offering and sale of Notes issued by Prosper. The Registration
Statement includes a prospectus related to the offering of the Notes by Prosper
dated                         
(as supplemented from time to time, the “Prospectus”). The Registration
Statement became effective on                             
pursuant to the rules and regulations of the U.S. Securities and Exchange
Commission under the Securities Act of 1933, as amended. You acknowledge that
the Registration Statement has been delivered to you. You should read the
Prospectus carefully and retain a copy for your records.


 


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 listings displayed on Prosper’s online auction marketplace (the
“platform”) and purchase from Prosper Borrower Payment Dependent Notes (“Notes”)
issued by Prosper that are dependent for payment on payments we receive on the
corresponding borrower loans described in the listings (“borrower loans”). 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, as
may be amended from time to time by Prosper in its sole discretion
(collectively, the “Prosper Terms and Conditions”).


 


Your
role as a Prosper “lender” is that of a purchaser of Notes issued by Prosper,
and your rights and obligations as a purchaser or prospective purchaser of Notes
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, acting as an investor and making
purchase commitments for Notes and purchasing Notes from Prosper, that are
dependent for payment on payments we receive on borrower loans. Prosper uses
the term “lender” instead of “investor” in this Agreement and on Prosper’s
website for the convenience of Prosper users who appropriately view Prosper as
a marketplace for connecting individuals who wish to borrow money, with people
who have money and the desire to have loans funded to other individuals.


 


2.  Posting of Bids. Upon registration, you may post bids on listings
displayed on the Prosper website. “Listings” are Prosper borrowers’ loan
requests, or descriptions of existing borrower loans that are offered for sale
by financial institutions registered with Prosper (referred to below as “originators”),
that are displayed on the Prosper website along with desired loan amount or sales
price, offered interest rate or yield percentage, and other information,
including but not limited to, borrower credit grade, non-housing debt-to-income
ratio, credit information from the borrower’s credit report, the borrower’s group
affiliation (if any), the borrower’s self-reported (unless otherwise indicated)
annual income range, occupation and employment status, and collateral (if any)
securing the borrower loan. Borrowers are identified by a Prosper user name but
are not able to disclose their identity or contact information to lenders.


 


On listings posted by Prosper borrowers, Prosper lenders may ask
borrowers questions about their loan listings and borrowers may, but are not
required to, respond to such questions. 
Borrowers who elect to respond to a lender’s question may respond
privately, or they may elect to have the question and answer posted publicly in
the listing. Lenders’ questions are not posted in the listing or displayed
elsewhere on our website unless the borrower elects to answer the question and
elects to make the question and answer publicly available, in which case the
question and answer appears in the listing. We do not verify any borrowers’
responses to lender members’ questions.


 


A
bid by a lender on a listing is the lender’s commitment to purchase from
Prosper a Note in the principal amount of the lender’s winning bid, provided
that the listing has received bids totaling the full amount requested in the
listing. Lenders “bid” the amount they are willing to commit to the purchase of
a Note that is dependent for payment on payments we receive on the 


 


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corresponding
borrower loan, 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). Once a bid is placed, it is irrevocable, and during
the time a bid is a “winning” bid on the listing, the amount of the bid is not
permitted to be withdrawn from the lender’s Prosper funding account.  Lender bids become “winning” bids if such
bids are in the group of bids for Notes that, in the aggregate, correspond to
the principal amount or amount offered for of the corresponding borrower loan
and are in the lowest interest rate among all bids placed against the listing.


 


Types of Listings. Two types of listings may be
posted on the platform: (1) listings posted by Prosper borrowers requesting
a loan (“Prosper borrower listings”), and (2) listings posted by originators
describing existing loans owned by the originator and offered for sale on the
platform (“open market listings”). All loans to borrowers resulting from Prosper
borrower listings will be made to borrowers by WebBank, a Utah-chartered industrial
bank (“WebBank”) from its own funds and then subsequently sold and assigned by
WebBank to Prosper.  Borrower loans described
in open market listings are existing loans that are owned by the originator that
posted the listing, whether or not such originator originally made the loan,
and may include secured or unsecured loans.


 


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
“portfolio plan” by indicating the aggregate amount of your funds to be bid on
listings that meet your specified criteria, the maximum amount that may be bid
on one listing, the type of listing, the minimum interest rate you are willing
to receive, and the specific borrower or loan criteria (for example, borrower
credit grade, borrower income or employment characteristics, group affiliation,
debt-to-income ratio, etc.) for the listings on which you wish to bid. You may
also select from one of Prosper’s portfolio plans designed to bid on listings
that reflect specific loss rates, or a range of loss rates, based on historical
loan repayment performance of Prosper
borrowers on loans originated through the Prosper marketplace. You may have
more than one portfolio plan in place at one time, and you may bid selectively
while one or more portfolio plans are in place.


 


Availability of Funds. At the time you place a bid you must have funds on deposit with Prosper
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 using the Automated Clearing House (“ACH”) network.


 


Your Note Purchase Commitment. Whether you bid selectively or by making a portfolio plan, each bid
you post on the platform is a commitment and promise to purchase a Note issued
by Prosper, with the proceeds of the sale of the Note used by Prosper to
purchase the specific borrower loan described in the listing on which the bid
was made. 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 A NOTE ISSUED
BY PROSPER IN THE AMOUNT OF YOUR BID, THAT IS DEPENDENT FOR ITS PAYMENT ON
PAYMENTS WE RECEIVE ON THE BORROWER LOAN DESCRIBED IN THE LISTING, IN THE EVENT
THE LISTING RECIEVES BIDS TOTALING THE FULL AMOUNT REQUESTED BY THE BORROWER OR
ORIGINATOR THAT POSTED THE LISTING.


 


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Limits on Bids.
Lenders may bid the entire amount requested by the borrower or originator that
posted the listing, or may bid a lesser amount, subject to a minimum bid amount
of $50. If you make a portfolio plan, you can achieve risk diversification by
designing your portfolio plan to bid your available funds in increments as low
as $50 and designating in your portfolio plan 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 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.
In order to bid on a listing, you must bid an amount equal to or less than the
current auction interest rate for the listing. If you bid by making a portfolio
plan, Prosper’s auction platform will automatically match your bids with any
listings that offer an interest rate higher than your minimum acceptable
interest rate, and otherwise meet your designated criteria. Unless you specify
a different bid order, bids will be matched first with listings with the least
time left for bidding.


 


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 requested by the borrower or financial institution that posted
the listing. Your bid remains outstanding on a listing until you are outbid, or
until the listing is withdrawn by the borrower or originator that posted the
listing or removed by Prosper in accordance with Section 10 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
requested in the listing for the
borrower loan, the bids that are winning bids at the time the listing expires are considered
the winning bids for the listing.


 


d.
Prosper does not warrant or guaranty that your bids will be become winning bids
against any listings. In the event some, but not all, of the funds you bid become
winning bids against a listing (for example, when you are the last winning
bidder on a listing), you are committed to purchasing a Note issued by Prosper
in the amount of the portion of your funds that is a winning bid against 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.
In most instances a listing is matched with more than one bid, and you will be
one of several lenders who purchase a Note in a series of Notes that correspond
to the borrower loan described in the listing. 
Each series of Notes will correspond to a single borrower loan, as 


 


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described
in the listing, originated to a borrower or offered for sale through our
platform by an originator. Payments to the lenders who purchase the Notes are
dependent on payments received on the corresponding borrower loan.


 


f.
To safeguard your privacy rights and those of your borrowers, on all Notes and
promissory notes evidencing borrower 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 screen name will appear on listings, borrower loans and Notes for you
to see, and only your Prosper screen name will appear with your bids.


 


4. 
Funding and Sale of Borrower Loans.  Once a lender has committed to purchase a
Note that is dependent for payment on the corresponding borrower loan and the
listing for such borrower loan receives bids from lenders totaling the amount
requested in the listing for the borrower loan, we proceed with the funding or
sale of the corresponding borrower loan, and with the issuance and sale of
Notes to the lenders who were the winning bidders on the listing. You must
commit to the purchase of a Note through the platform before we will proceed
with funding or sale of the borrower loan that corresponds to the Note you are
committing to purchase.


 


Prosper Borrower Listings.
With respect to Prosper borrower listings, funding occurs when loan proceeds
are disbursed into the borrower’s designated deposit account. All borrower
loans resulting from Prosper borrower listings will be made to Prosper
borrowers by WebBank from WebBank’s own funds, and will be evidenced by a
promissory note, in the form set forth on the attached Exhibit B, naming
WebBank as the payee, in the amount of the requested loan. Following
disbursement of loan proceeds to the borrower, the loan will be sold and
assigned by WebBank to Prosper without recourse to WebBank. As described in
Section 5 below, Prosper uses the proceeds of the sale of each series of Notes
to purchase the corresponding borrower loan. 



 


Open Market Listings.
With respect to open market listings, the loan offered for sale by originators
as described in an open market listings will be sold and assigned by the
originator to Prosper, without recourse to the originator, at the end of the
auction bidding period.  As described in
Section 5 below, Prosper uses the proceeds of the sale of each series of Notes
to purchase the corresponding borrower loan from the originator.


 


5.  Purchase and Sale of Notes. At the time a borrower loan is funded and
purchased by Prosper, we proceed with the issuance and sale of Notes to the
lenders who were the winning bidders on the listing. The purchase price for
any Notes you purchase from Prosper through the platform will be the principal
amount of the Notes that you commit to purchase. The Notes shall be issued
pursuant to an indenture (the “Indenture”) between Prosper and a trustee. Funds in the principal amount of each Note
are transferred from each lender’s Prosper funding account to Prosper, as
payment of the purchase price for the Note. Prosper will use the proceeds of
the sale of each series of Notes to purchase the corresponding borrower loan
from WebBank or from the originator, depending on the type of listing involved.


 


Terms
of the Notes. The Notes shall have the terms and conditions described
in the Prospectus, the Indenture and the Note. The Indenture and the Note are
reproduced in Exhibit A to this Agreement, and Prospectus is available for
you to review on the Prosper website. The form of promissory note evidencing
borrower loans is reproduced in Exhibit B to this Agreement. The specific interest
rate, maturity and other terms of the corresponding borrower loans are
described 


 


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in the listings on the Prosper website, and in the
promissory notes signed by the borrowers on the corresponding borrower loans. Subject
to the servicing standard set forth in Section 6 below, you understand and
agree that we may in our sole discretion, at any time and from time to time,
amend or waive any term of a borrower loan, and we may in our sole discretion charge
off any borrower loan that we deem uncollectible.


 


PAYMENT ON THE NOTES, IF ANY, DEPENDS ENTIRELY ON
THE RECEIPT OF PAYMENTS BY PROSPER IN RESPECT OF THE CORRESPONDING BORROWER LOAN.
PROSPER DOES NOT WARRANT OR GUARANTEE IN ANY MANNER THAT YOU WILL RECEIVE ALL
OR ANY PORTION OF THE PRINCIPAL OR INTEREST YOU EXPECT TO RECEIVE ON ANY NOTE
OR REALIZE ANY PARTICULAR OR EXPECTED RATE OF RETURN. THE AMOUNT YOU RECEIVE ON
YOUR NOTE, IF ANY, IS SPECIFICALLY RESTRICTED TO PAYMENTS MADE BY US EQUAL TO
THE PAYMENTS MADE BY THE BORROWER UNDER A BORROWER LOAN TO WHICH YOU COMMITTED
NET OF OUR SERVICING FEE ON ALL BORROWER PAYMENTS. PROSPER DOES NOT MAKE ANY
REPRESENTATIONS AS TO A BORROWER’S ABILITY TO PAY AND DOES NOT ACT AS A
GUARANTOR OF ANY CORRESPONDING BORROWER LOAN PAYMENT OR PAYMENTS BY ANY
BORROWER.


 


YOU UNDERSTAND AND AGREE THAT BORROWERS MAY DEFAULT
ON THEIR PAYMENT OBLIGATIONS UNDER THE BORROWER LOANS AND THAT SUCH DEFAULTS
WILL REDUCE THE AMOUNTS, IF ANY, YOU MAY RECEIVE UNDER THE TERMS OF ANY
NOTES YOU HOLD THAT CORRESPOND TO THOSE BORROWER LOANS.


 


6. 
Servicing and Collection of Borrower Loans. In
servicing borrower loans Prosper will use commercially reasonable efforts to
service and collect the borrower loans in accordance with industry standards
customary for loans of the same general type and character as the borrower
loans.  We may, in our sole discretion
and subject to the servicing standard set forth in this Section, refer a
borrower loan to a collection agency at any time, or elect to initiate legal
action to collect a borrower loan or sell a borrower loan to a third party debt
buyer at any time.


 


Existing borrower loans offered for sale on the platform in open market
listings will be serviced, both before and after default, by the
originator.  In servicing borrower loans
the originator will use commercially reasonable efforts to service and collect
the borrower loans in accordance with industry standards customary for loans of
the same general type and character as the borrower loans.  The originator may, in its sole discretion
and subject to the servicing standard set forth in this Section, refer a
borrower loan to a collection agency at any time, or elect to initiate legal
action to collect a borrower loan, repossess or foreclose upon any collateral
securing a borrower loan, or sell a borrower loan to a third party debt buyer
at any time. Any amounts received from borrowers will be forwarded to Prosper
by the originator. In servicing borrower loans the originator may, in its discretion,
utilize affiliated or unaffiliated third party loan servicers, repossessors,
collection agencies or other agents or contractors.


 


7.  Representations and
Warranties as to Notes Sold.  Prosper makes the following representations
and warranties to you, 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 has complied in all material respects with applicable federal, state
and local laws in connection with the offer and sale of the Note.


 


b.
The Note has been duly authorized and, following payment of the purchase price
by you and electronic execution, authentication and delivery to you, will
constitute valid and binding obligations of Prosper enforceable against Prosper
in accordance with their terms, except as the enforcement of the Note may be
limited by applicable bankruptcy, insolvency or similar laws;


 


c.
The proceeds of the borrower loan corresponding to the Note sold have been
fully disbursed to the borrower or the borrower’s designated payee prior to
your purchase of the Note.


 


d.
Prosper or, with respect to open market listings, the originator has made
commercially reasonable efforts to authenticate and verify the identity of the
borrower obligated on the borrower loan that correspond to the Note.


 


e.
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 


 


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will
repurchase the Note by crediting your Prosper funding account with the
remaining unpaid principal balance of the Note. The determination of whether
verifiable identity theft has occurred shall be in Prosper’s sole discretion. We
may require proof of the identity theft, such as a copy of a police report
filed by the person whose identity was wrongfully used to obtain the
fraudulently-induced borrower loan, an identity theft affidavit or a bank
verification letter (or all of the above) in order to determine that verifiable
identity theft has occurred. 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 its sole discretion elect to repurchase a Note at
an earlier time. You agree that repurchase of your Note by Prosper is the sole
remedy you will have with respect to any such Notes.


 


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 breach, if the breach 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 nonpayment of the Note), damages,
expenses, legal fees, costs and judgments resulting from any claim, demand or
defense that arising as a result of the breach. The decision whether a breach 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 remaining outstanding principal
balance of the Note as of the date of repurchase. 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 you authorize and agree that Prosper may execute any endorsements
or assignments necessary to effectuate the transfer and assignment of the Note to
Prosper. Prosper’s obligation to cure or repurchase a Note or indemnify you for
a  breach of the foregoing
representations and warranties 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. No Advisory Relationship. You acknowledge
and agree that (i) the purchase and sale of the Notes pursuant to this
Agreement is an arms-length transaction between you and Prosper; (ii) in
connection with the purchase and sale of the Notes, Prosper is not acting as
your agent or fiduciary; (iii) Prosper assumes no advisory or fiduciary
responsibility in your favor in connection with the purchase and sale of the
Notes; (iv) Prosper has not provided you with any legal, accounting,
regulatory or tax advice with respect to the Notes; and (v) you have
consulted your own legal, accounting, regulatory and tax advisors to the extent
you have deemed it appropriate.


 


10.  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, originators 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 borrower loan or sale of a Note. You agree to respond promptly to
Prosper’s requests for information in connection with your bid, accounts, or
your registration with Prosper.


 


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b.
In the event Prosper or WebBank, prior to the funding of a borrower loan,
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 and WebBank 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 requested
for the borrower loan, Prosper may conduct a “pre-funding” review prior to the funding
of the borrower loan. Prosper may, at any time and in its sole discretion,
delay funding of a borrower loan in order to enable Prosper to verify the
accuracy of information provided by borrowers, lenders, originators 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 borrower 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 borrower loan, Prosper will notify the
borrower, originator (as applicable), group leader (if any), and all bidders
for the listing of Prosper’s determination to cancel funding of the loan.


 


d.
In most instances, Prosper and WebBank do 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 and WebBank 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 verification by Prosper or WebBank. Prosper and WebBank do not verify any
statements by borrowers as to how loan proceeds are to be used and does not
confirm after borrower 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 or
WebBank; if the report reflects an active mortgage loan, the borrower is
presumed to be a homeowner. In connection with Prosper’s and WebBank’s identity
and anti-fraud verification of borrowers, Prosper verifies the borrower’s deposit
account to determine that the borrower is a holder of record of the account.
The information in open market listings
describing the borrower loan for sale is provided by the originator and is not
verified by Prosper or WebBank.


 


11.  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 BORROWER
LOANS CORRESPONDING TO YOUR NOTES. PROSPER DOES NOT GUARANTEE ANY BORROWER LOANS
OR NOTES OBTAINED, PURCHASED OR SOLD THROUGH THE PLATFORM AND DOES NOT ACT
AS A GUARANTOR OF ANY LOAN PAYMENT OR PAYMENTS BY ANY BORROWER.


 


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


 


12.  Restrictions on Use. Except as provided in Section 14 below,
you are not authorized or permitted to use Prosper to bid or purchase Notes for
someone other than yourself. You must be an owner of the deposit account you
designate for electronic transfers of funds, with 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.
If you obtain one or more borrower loans through the platform, amounts in your
funding account are subject to set-off against any delinquent amounts owing on
your loans. Prosper may in its sole discretion, with or without cause and with
or without notice, restrict your access to the platform or the Prosper website.


 


13. Financial Suitability
Representations and Warranties. You represent and
warrant that you satisfy the applicable minimum financial suitability standards
and maximum investment limits, established for the trading platform (or as set
forth in a supplement to the Prospectus for residents of the state in which you
reside), and you agree to provide any additional documentation reasonably
requested by us, as may be required by the securities administrators of certain
states, to confirm that you meet such minimum financial suitability standards
and maximum investment limits. You understand that the Notes will not be listed
on any securities exchange, that there may be no, or only a limited, trading
platform for the Notes, that any trading of Notes must be conducted in
accordance with federal and applicable state securities laws and that Note
purchasers should be prepared to hold the Notes they purchase until the Notes
mature.


 


14.  Your Other Representations
and Warranties. You
warrant and represent to Prosper, as of the date of this Agreement and as of any
date that you commit to purchase Notes,  that (i) you have
received the Prospectus, the Indenture, and the form of the Note; (ii) you have the legal competence and capacity to
execute and perform this Agreement and that you have duly authorized,
executed and delivered this
Agreement; and (iii) in connection with this Agreement you have complied in
all material respects with applicable federal, state and local laws. In addition, 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.


 


15.  Prosper’s Representations and Warranties. Prosper
represents and warrants to you, as of the date of this Agreement and as of any
date that you commit to purchase Notes, that: (a) it is duly organized and
is validly existing as a corporation in good standing under the laws of
Delaware and has corporate power to enter into and perform its obligations
under this Agreement; (b) this Agreement has been duly authorized,
executed and delivered by Prosper; (c) the Indenture has been duly
authorized by Prosper and qualified under the Trust Indenture Act of 1939 and
constitutes a valid and binding agreement of Prosper, enforceable against
Prosper in accordance 


 


8

















 


with its terms, except as the enforcement thereof
may be limited by applicable bankruptcy, insolvency or similar laws.


 


16.  Recommendations from Prosper
Friends.  Prosper allows borrowers to create a network of Prosper friends, and obtain
bids and recommendations of listings from one or more of the borrower’s designated
Prosper friends. Recommendations accompanying bids from borrowers’ Prosper
friends are displayed with borrowers’ listings. Prosper friends do not
guarantee payments on any Note or on any corresponding borrower loan, and a bid
or recommendation from a borrower’s Prosper friend does not obligate the
individual making the bid or recommendation to guarantee or make any payments
on any Note or on any corresponding borrower loan.


 


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


 


a.
Represent yourself to any person, as a director, officer or employee of
Prosper, or WebBank, unless you are such director, officer or employee;


 


b.
Charge, or attempt to charge, any Prosper borrower any fee in exchange for your
agreement to bid on or recommend 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 or recommend a borrower’s
listing;


 


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, directly or
through any third party, any
amount from any borrower on any of the borrower loans that correspond to your
Notes;


 


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


 


f.
Contact borrowers on any borrower loans corresponding to your Notes without the
borrower’s consent;


 


g.
Contact any collection agency or law firm to which any borrower loan
corresponding to 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 or off of the Prosper website, including but not
limited to on any forum, blog or 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 that provided a recommendation of a listing relating to any borrower
loans corresponding to your Notes, or take any action that directly or
indirectly suggests that any borrower’s group leader or Prosper friend is
obligated in any way on a borrower loan corresponding to any Note; or


 


9

















 


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.


 


18.  Tax Treatment.  The parties
agree that the Notes are intended to be indebtedness of Prosper for U.S.
federal income tax purposes. You agree that you will not take any position
inconsistent with such treatment of the Notes for tax, accounting, or other
purposes, unless required by law. You further acknowledge that the Notes will
be subject to the original issue discount rules of the Internal Revenue
Code of 1986, as amended, as described in the Prospectus. You acknowledge that
you are prepared to bear the risk of loss of your entire purchase price for any
Notes you purchase.


 


19.  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) terminate or 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 shall
remain in full force and effect in accordance with their terms.


 


20.  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 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,
link to 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.


 


21.  Prosper’s Right to Modify
Terms.  Prosper has the right to change any term or
provision of this Agreement or the Prosper Terms and Conditions. Prosper will
give you notice of material changes to this Agreement, or the Prosper Terms and
Conditions, in the manner set forth in Section 23. 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 Indenture,
Notes and Prosper Terms and Conditions, represent the entire agreement between
you and Prosper regarding your participation as a lender on the platform, 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 on the platform.


 


10
















 


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


 


23.  Notices.  All
notices and other communications hereunder shall be given by email to your
registered email address or will be posted on the Prosper website, and shall be deemed to have been duly given and
effective upon transmission or posting. All notices, required disclosures and other
communications from the trustee under the Indenture for the Notes to you will
be transmitted to you by e-mail to your
registered e-mail address. You can
contact us by sending an email to support@prosper.com or calling us toll-free
at (866) 615-6319. You also agree to notify us if your registered email address
changes, and you agree to update your registered residence address on the
Prosper website if you change your residence.


 


24.  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.


 


25.  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.


 


26.  Miscellaneous. The parties acknowledge that there are no third
party beneficiaries to this Agreement. 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 New York. 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. The parties agree to execute and deliver such
further documents and information as may be reasonably required in order to
effectuate the purposes of this Agreement.


 


11

















 


EXHIBIT A


 


INDENTURE


 


12

















 


EXHIBIT B


 


PROMISSORY NOTE


 


Borrower Address:                                                                                             .


 


1.  Promise to Pay.  In
return for a loan I have received, I promise to pay WebBank, a Utah-chartered
Industrial Bank (“you”) the principal sum of 
                                      
Dollars ($                    ),
together with interest thereon commencing on the date of funding at the rate of
         percent (        %)
per annum simple interest. I understand that references in this Note to you
shall also include any person to whom you transfer this Note.


 


2.  Payments.  This
Note is payable in monthly installments of $                      
each, consisting of principal and interest, commencing on the                 
day of                           ,
and continuing until the final payment date of                                     ,
which is the maturity date of this Note. The final payment shall consist of the
then remaining principal, unpaid accrued interest and other charges due under
this Note.  All payments will be applied
first to any unpaid fees incurred as a result of failed automated payments or
returned checks or bank drafts as provided in Paragraph 11, then to any late
charges then due, 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 paid
after the scheduled due date, 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 


 


13

















 


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 orally or in writing, at least
three (3) business days before the scheduled date of the transfer, of the
exercise of my right to stop a payment or to revoke my prior authorization for
further automatic withdrawals.


 


8.  Default and
Remedies. If I fail
to make any payment when due in the manner required by Paragraph 7, I will be
in default and you may at your option accelerate the maturity of this Note and
declare all principal, interest and other charges due under this Note
immediately due and payable. If you exercise the remedy of acceleration you
will give me at least 30 days 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.  Attorneys’ Fees. To
the extent permitted by law, I am liable to you for your legal costs if you
refer collection of your loan to a lawyer who is not your salaried
employee.  These costs may include
reasonable attorneys’ fees as well as costs and expenses of any legal action.


 


13.  Loan Charges. 
If a law,
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.


 


14.
Assignment.  I may not assign any of my obligations under
this Note without your written permission.  You do not have to give me
your permission.  You may assign this Note at any time 


 


14

















 


without
my permission. Unless prohibited by applicable law, you may do so without
telling me.  My obligations under this Note apply to all of my heirs and
permitted assigns. Your rights under this Note apply to each of your successors
and assigns.


 


15.  Notices. 
All notices
and other communications hereunder shall be given in writing and shall be
deemed to have been duly given and effective (i) upon receipt, if
delivered in person or by facsimile, email or other electronic transmission, or
(ii) one day after deposit prepaid for overnight delivery with a national
overnight express delivery service.  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.


 


16.  Governing
Law.   This
Note is governed by federal law and, to the extent that state law applies, the
laws of the State of Utah.


 


17. 
Miscellaneous.   No provision of this Note shall be modified
or limited except by a written agreement signed by both you and me. The
unenforceability of any provision of this Note shall not affect the
enforceability or validity of any other provision of this Note.


 


18.  Arbitration. 
RESOLUTION OF DISPUTES: 
I HAVE READ THIS PROVISION CAREFULLY, AND UNDERSTAND THAT IT LIMITS MY RIGHTS IN
THE EVENT OF A DISPUTE BETWEEN YOU AND ME. 
I UNDERSTAND THAT I HAVE THE RIGHT TO REJECT THIS PROVISION, AS PROVIDED
IN PARAGRAPH (i) BELOW.


 


(a)   In this Resolution of Disputes provision:


 


(i)   “I,” “me” and “my” mean the borrower under
this Note, as well as any person claiming through the borrower;


 


(ii)   “You” and “your” mean WebBank, any person
servicing this Note for WebBank, and any subsequent holders of this Note or any
interest in this Note, and each of their respective parents, subsidiaries,
affiliates, predecessors, successors, and assigns, as well as the officers,
directors, and employees of each of them; and


 


(iii)   “Claim” means any dispute, claim, or
controversy (whether based on contract, tort, intentional tort, constitution,
statute, ordinance, common law, or equity, whether pre-existing, present, or
future, and whether seeking monetary, injunctive, declaratory, or any other
relief) arising from or relating to this Note or the relationship between you
and me (including claims arising prior to or after the date of the Note), and
includes claims that are brought as counterclaims, cross claims, third party
claims, or otherwise and disputes about the validity or enforceability of this
Agreement or the validity or enforceability of this Resolution of Disputes
provision.


 


(b)   Any Claim between you and me shall be
resolved, upon the election of either you or me, by binding arbitration
administered by the National Arbitration Forum (“NAF”), under its Code of
Procedure (“Rules”).  I can obtain the Rules and
other information about initiating arbitration by contacting the NAF at P.O. Box
50191, Minneapolis, MN 55405, or at www.adrforum.com.  Your address for serving any arbitration
demand or claim is WebBank, c/o Prosper Marketplace, Inc., 111 Sutter
Street, 22nd Floor,
San Francisco, CA 94104, Attention: Legal Department.


 


(c)   Claims will be arbitrated by a single,
neutral arbitrator, who shall be a retired judge or a lawyer with at least ten
years experience.  You agree not to
invoke your right to elect arbitration of an individual Claim filed by me in a
small claims or similar court (if any), so long as the Claim is pending on an
individual basis only in such court.


 


15

















 


(d)   You will pay all filing and administration
fees charged by the NAF and arbitrator fees up to $1,000, and you will consider
my request to pay any additional arbitration costs.  If an arbitrator issues an award in your
favor, I will not be required to reimburse you for any fees you have previously
paid to the NAF or for which you are responsible.  If I receive an award from the arbitrator,
you will reimburse me for the fees paid by me to the NAF.  Each party shall bear its own attorney’s,
expert’s and witness fees, which shall not be considered costs of arbitration;
however, if a statute gives me the right to recover these fees, or fees paid to
the NAF, then these statutory rights will apply in arbitration.


 


(e)   Any in-person arbitration hearing will be
held in the city with the federal district court closest to my residence, or in
such other location as the parties may mutually agree.  The arbitrator shall apply applicable
substantive law consistent with the Federal Arbitration Act, 9 U.S.C.
§ 1-16, and, if requested by either party, provide written reasoned
findings of fact and conclusions of law. 
The arbitrator shall have the power to award any relief authorized under
applicable law.  Any appropriate court
may enter judgment upon the arbitrator’s award. 
The arbitrator’s decision will be final and binding except that: (1) any
party may exercise any appeal right under the FAA; and (2) any party may
appeal any award relating to a claim for more than $100,000 to a
three-arbitrator panel appointed by the NAF, which will reconsider de novo any
aspect of the appealed award.  The panel’s
decision will be final and binding, except for any appeal right under the
FAA.  Unless applicable law provides
otherwise, the appealing party will pay the appeal’s cost, regardless of its
outcome.  However, you will consider any
reasonable written request by me for you to bear the cost.


 


(f)   Neither you nor I shall have the right to
participate as a representative or member of any class of claimants in
arbitration, and you and I further agree that claims of third parties shall not
be joined in any arbitration between you and me, without the express written
consent of both you and me.  Only the
claims of or against persons relating to a single Note or listing (such as
holders of Notes relating to a single listing) may be joined in a single
arbitration.  The validity and effect of
this paragraph (f) shall be determined exclusively by a court, and not by
the NAF or any arbitrator.  The
arbitrator shall have no power to arbitrate any Claims on a class action basis
or Claims brought in a purported representative capacity on behalf of the
general public, other borrowers, or other persons similarly situated.


 


(g)   If any portion of this Resolution of Disputes
provision is deemed invalid or unenforceable for any reason, it shall not
invalidate the remaining portions of this provision.  However, if paragraph (f) of this
Resolution of Disputes provision is deemed invalid or unenforceable in whole or
in part, then this entire Resolution of Disputes provision shall be deemed
invalid and unenforceable.  The terms of
this Resolution of Disputes provision will prevail if there is any conflict
between the Rules and this provision.


 


(h)   THE PARTIES
ACKNOWLEDGE AND AGREE THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS RESOLUTION OF
DISPUTES PROVISION, THEY ARE WAIVING ALL RIGHTS TO A TRIAL BY COURT OR JURY AS
A MEANS OF RESOLVING ANY DISPUTES ARISING OUT OF OR RELATING TO THIS
AGREEMENT.  THEY ACKNOWLEDGE THAT
ARBITRATION WILL LIMIT THEIR LEGAL RIGHTS, INCLUDING THE RIGHTS TO PARTICIPATE
IN A CLASS ACTION, THE RIGHT TO A JURY TRIAL, THE RIGHT TO CONDUCT FULL
DISCOVERY, AND THE RIGHT TO APPEAL (EXCEPT AS PERMITTED IN PARAGRAPH (e) OR
UNDER THE FEDERAL ARBITRATION ACT).


 


(i)   I understand that I may reject this
Resolution of Disputes provision, in which case neither you nor I will have the
right to elect arbitration.  Rejection of
this provision will not affect the remaining parts of this Agreement.  To reject this Resolution of Disputes
provision, I must send us written 


 


16

















 


notice
of my rejection within 30 days after the date that this Note was made.  I must include my name, address, and account
number.  The notice of rejection must be
mailed to WebBank, c/o Prosper Marketplace, Inc., 111 Sutter Street, 22nd Floor, San Francisco, CA 94104,
Attention: Legal Department.  This is the
only way that I can reject this Resolution of Disputes provision.


 


(j)   The parties acknowledge and agree that this
arbitration agreement is made pursuant to a transaction involving interstate
commerce and shall be governed by the Federal Arbitration Act.  This Resolution of Disputes provision shall
survive the termination of this Note and the repayment of any or all amounts
borrowed.


 


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.


 


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.


 


	
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