Exhibit 10.1


 


BORROWER REGISTRATION AGREEMENT


 


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


 


The Prosper
marketplace is a person-to-person online credit auction platform (the “platform”)
operated by Prosper for the registration of borrowers, lenders and group
leaders, the receipt, display and matching of listings and bids for loans and
the origination, sale, servicing and collection of principal of and interest
and other charges payable on loans. All loans obtained by Prosper borrowers
through the platform are made by WebBank, a Utah-chartered industrial bank (“WebBank”). 
Prosper provides services to WebBank in connection with the origination of such
loans and Prosper services all loans made to Prosper borrowers through the
platform. The following Agreement describes the services and your rights
and obligations should you elect to register as a borrower on the platform. Prosper and WebBank are collectively
referred to in this Agreement as “we” or “us.”


 


1. 
Registration as a Prosper Borrower. You are
registering as a borrower in the Prosper marketplace, so that you may be
eligible to post loan requests or “listings” for display on the platform to
people who may be interested in bidding against one another in a competitive
auction format to facilitate the funding of a loan to you by WebBank. We refer to the people who bid on listings as “lenders”
even though all loans to Prosper borrowers obtained through the platform are
made by WebBank. 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”).


 


We reserve the right to restrict access to the platform to individuals
who meet minimum credit guidelines and other criteria, as determined by us in
our sole discretion.


 


2. 
Authorization to Obtain Credit Report. You
authorize us to obtain a credit report from a consumer credit reporting agency.
We may use the credit report for any lawful purpose, including but not limited
to (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 credit
score and assign you a Prosper Rating based in part 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 us to verify
information in your credit report, and you agree that Prosper may contact third
parties to verify any such information. We will obtain your credit report each
time you post a listing, except that we 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 WebBank
by posting a listing on the Prosper website. The minimum and maximum loan amounts
you may request are posted on the Prosper website and are subject to change by
us at any time without notice. To post a listing, you must provide the amount
of the loan you are requesting and the maximum interest rate you are willing to
pay. At the time you post a listing you must also provide your annual income,
occupation and employment status. You authorize and agree that we may display
in your listing any information from your credit file with the consumer credit
reporting agency, including but not limited to the following information:


 


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  (i)

  	
  Your Prosper Rating;

  
	
  (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;

  
	
  (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 may 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 if one or more of your
Prosper friends or your fellow group members bid on your listing, your listing
will reflect that the bid was made by a fellow group member or a Prosper
friend. Your Prosper friends who bid on your listing may also write a recommendation
that will be displayed in your listing. Prosper friends do not guarantee
payments on your loan, and bids and recommendations of your listing from your
Prosper friends do not obligate the individual making the bid or recommendation
to guarantee or make any payments on your loan.


 


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.


 


Prosper lenders may ask you questions about your loan listing and you
may, but are not required to, respond to such questions.  If you do elect to respond to a lender’s
question you may respond privately, or you 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 you elect to answer the question and elect to make the
question and answer publicly available, in which case the question and answer
appears in the listing.


 


Borrower 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 Rating, 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 for purposes of
obtaining a loan and for enabling Prosper lenders who own Borrower Payment
Dependent Notes (described in Section 5 below) corresponding to your loan to offer
such Notes for sale to other lenders at any time while your loan is
outstanding. You authorize and agree that Prosper may obtain and display
updated information from your credit file with one or more consumer credit
reporting agencies, as well as information about the payment history and status
of your loan, on the Prosper website at any time or times that a Borrower
Payment Dependent Note corresponding to your loan is offered for sale by
lenders holding such Notes. To facilitate bids for your listing or for listings
posted by lenders offering to sell a Borrower Payment Dependent Note
corresponding to your loan. To facilitate bids for your listing, Prosper may
forward the listing by email to third parties, including but not limited to
registered Prosper lenders, and may display the 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 


 


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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.


 


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 with lender bids totaling the amount of your requested loan,
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 WebBank. 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 be entitled to receive a loan
from WebBank in the amount you requested, subject to our right to verify
information you provided in connection with your listing and your registration
as a Prosper user and our 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, your listing will be displayed on the platform for
seven (7) days or for such other time period that we may in our sole
discretion establish and amend from time to time. 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. We reserve the right to make the automatic
funding feature available only to borrowers with certain Prosper Ratings or
other credit characteristics. When you post a listing, it will be displayed on
the platform along with all other listings until you end the listing or the
listing expires, or until the listing is withdrawn by you or by us as provided
in Section 4 below.


 


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Additional Loans.
Subject to eligibility requirements that we may in our 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 have a record of on-time monthly loan payment
performance, within such guidelines as may be established and amended from time
to time by us in our sole discretion. You may not post a listing for a second loan
until a specified number of months has elapsed since the date you obtained your
existing loan. The guidelines and eligibility requirements for second loans are
posted on the Prosper website and are subject to change by us in our sole
discretion at any time without notice.


 


Prohibited Activities.
You agree that you will not, in connection with any listings, bids, loans or
other transactions involving or potentially involving Prosper or WebBank, (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, recommendation, or offer or
agreement to bid on or recommend your
listing; or (iv) represent yourself to any person, as a director, officer
or employee, of Prosper or WebBank, unless you are such director, officer or
employee.


 


4. 
Right to Verify Information and Cancel Funding.


 


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


 


b.
In the event we determine, prior to funding a loan, 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, we may refuse
to post the listing or, if the listing has already been posted, remove the
listing from the platform 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, we may conduct a “pre-funding” review prior to
funding the loan. Loan funding occurs
when loan proceeds are disbursed into the borrower’s designated deposit account. We may, at
any time and in our sole discretion, delay funding of a loan in order to enable
us 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. We may cancel or proceed with funding the loan,
depending on the results of our pre-funding review. If funding is cancelled,
the listing will be removed from the platform and all bids against the listing
will be cancelled, and each bidder’s 


 


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funds
will be returned to the Prosper funding account, available for further bidding.
In the event we cancel funding of a loan, Prosper will notify the borrower,
group leader (if any), and all bidders for the listing of our determination to
cancel funding of the loan.


 


5. 
Matching of Bids and Listings; Loan Funding.


 


a. Registered Prosper lenders will be able to review your listing and
may commit funds to purchase, in various amounts, Borrower Payment Dependent
Notes (“Notes”) that Prosper may issue to lenders who, as winning bidders for
your listing, commit funds to facilitate the funding of your borrower
loan.  The Notes Prosper issues to these
lenders will be dependent for payment on payments we receive from you on your
loan.  This means that the Prosper
lenders who facilitated the funding of your loan will receive payments on their
Notes only to the extent you make payments on your loan.  You acknowledge and agree that a lender’s
commitment to purchase a Note corresponding to all or a portion of your loan
from us does not confer any rights to you. You also acknowledge and agree that
Prosper lenders make their own decisions whether to commit funds toward your
loan.


 


b. 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. 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. Most listings are matched with
multiple lender bids.


 


c. A match of your listing with one or more bids in the full amount of
your requested loan results in a loan from WebBank to you, subject to our right
to verify information as provided in this Agreement. The loan will be evidenced
by a Promissory Note in the form set forth on the attached Exhibit A. Loan proceeds
are disbursed into your designated deposit account. After loan funding, the loan will be sold
by WebBank to Prosper, and Prosper will service the loan.


 


d. We do not warrant or guaranty that your listing 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.


 


e. 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 Notes dependent for payment on payments we receive
from you on your loan. Only your Prosper screen name will appear on listings
and Promissory Notes, and only the screen name of the bidders will appear with
bids.


 


6. 
Compensation.  If you receive a loan, you must pay WebBank an
origination fee. The current fee amounts are posted in the Fees and
Charges section of the Prosper website, and are subject to change by
us at any time without notice. The
transaction fee is paid by the borrower out of the loan proceeds at the time a loan
is funded, so that the net amount of loan proceeds you receive will be less than the full amount of your loan.


 


7. 
Making Your Loan Payments.  At the time you register as a borrower, you
must provide your deposit account information to facilitate transfers of funds
to and from your deposit account. You agree to make your loan payments by
automated withdrawals from your designated account, or by the use of bank
drafts drawn on your designated account. At the time you create your listing,
you will be asked to choose the method of making your loan payments, and your loan
payments will be made by the payment method you choose. Prosper will act as the
servicer for all loans you obtain from WebBank through the platform, and all
communications regarding your loan must be made to Prosper.


 


8. Authorization to Contact Your Group
Leader. You acknowledge and agree that if you obtain a
loan through the platform 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 the platform, 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 


 


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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.


 


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


 


10.  No
Guarantee. NEITHER PROSPER NOR WEBBANK WARRANTS OR
GUARANTEES (1) THAT YOUR LISTING WILL BE MATCHED WITH ANY 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.


 


11. 
Restrictions on Use. You are not authorized or
permitted to use the Prosper website to obtain, or attempt to obtain, a loan
for someone other than yourself. You must be an owner of the deposit account
you designate for electronic transfers of funds, with 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 on the platform as a lender or as a group leader. If you
participate on the platform as a lender any amounts in your Prosper funding
account are subject to set-off against any delinquent amounts owing on any loan
or loans you obtain as a Prosper borrower. If you obtain a loan and fail to pay
your loan in full, whether due to default, bankruptcy or other reasons, you
will not be eligible to post any further listings or re-register with Prosper
as a borrower, lender or group leader. Prosper may in its sole discretion, with
or without cause and with or without notice, restrict your access to the
Prosper website or platform.


 


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


 


13. 
Termination of Registration. Prosper may in its
sole discretion, with or without cause, terminate this Agreement at any time by
giving you notice as provided below.  In
addition, upon Prosper’s determination that you committed fraud or made a
material misrepresentation in connection with a listing, 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 post listings or otherwise
participate on the platform; (ii) terminate this Agreement and your
registration with Prosper. Upon termination of this Agreement and your
registration with Prosper, any listings you have posted on the 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.


 


14. 
Prosper’s Right to Modify Terms.  Prosper
has the right to change any term or provision of this Agreement or the Prosper
Terms and Conditions, 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 of material changes to this Agreement, or the Prosper Terms and
Conditions, in the 


 


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manner set forth in Section 17. 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 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 borrower on the platform.


 


15. 
Member Web Page Display and Content.  You may, but are not required to, maintain a “Prosper
member web page” on the Prosper website, where you can post 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; 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.


 


16. 
Notices.  All notices and other communications hereunder
shall be given by email to your registered email address or will be posted on the Prosper website, and shall be
deemed to have been duly given and effective upon transmission or posting. You can contact us by sending an email to
support@prosper.com or calling us toll-free at (866) 615-6319. You also agree
to notify Prosper if your registered email address changes, and you agree to
update your registered residence address, mailing address and telephone number
on the Prosper website if your address or telephone number changes.


 


17.  No
Warranties. 
EXCEPT FOR THE REPRESENTATIONS CONTAINED IN THIS AGREEMENT, PROSPER DOES
NOT MAKE ANY REPRESENTATIONS OR WARRANTIES TO YOU OR ANY OTHER PARTY WITH
REGARD TO YOUR USE OF THE PROSPER WEBSITE AND THE PLATFORM, INCLUDING, BUT NOT
LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.


 


18. 
Limitation on Liability.  IN NO EVENT SHALL ANY PARTY TO THIS AGREEMENT
BE LIABLE TO ANY OTHER PARTY FOR ANY LOST PROFITS OR SPECIAL, EXEMPLARY,
CONSEQUENTIAL OR PUNITIVE DAMAGES, EVEN IF INFORMED OF THE POSSIBILITY OF SUCH
DAMAGES. FURTHERMORE, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO ANY
OTHER PARTY REGARDING THE EFFECT THAT THE AGREEMENT MAY HAVE UPON THE
FOREIGN, FEDERAL, STATE OR LOCAL TAX LIABILITY OF THE OTHER.


 


19. 
Miscellaneous. You may not assign, transfer,
sublicense or otherwise delegate your rights under this Agreement to another
person without Prosper’s prior written consent. Any such assignment, transfer,
sublicense or delegation in violation of this Section shall be null and
void. This Agreement shall be governed by federal
law and, to the extent that state law applies, the laws of the State of
Utah. Any waiver of a breach of any provision of this Agreement will not be 


 


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a waiver of any other 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. WebBank is not a party to this Agreement,
but you agree that WebBank is a third-party beneficiary and is entitled to rely
on your representations and authorizations, and other provisions of this
Agreement. There are no other third party beneficiaries to this
Agreement.


 


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EXHIBIT A


 


PROMISSORY NOTE


 


Borrower Address:
                                                                                            .


 


1.  Promise to Pay.  In return for a loan I have received, I
promise to pay WebBank, a
Utah-chartered Industrial Bank (“you”) the principal sum of 
                                      
Dollars
($                    ),
together with interest thereon commencing on the date of funding at the rate of
         percent
(        %) per annum simple interest.
I understand that references in this 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 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 without my
permission. Unless prohibited by applicable law, you may do so without telling
me.  


 


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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.


 


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(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 


 


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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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