Exhibit 4.2


 


PROSPER MARKETPLACE, INC.


 


BORROWER PAYMENT DEPENDENT NOTES


 


INDENTURE


 


DATED AS OF [      , 2009]


 


                                                                                      ,

AS TRUSTEE


 

















 


CROSS REFERENCE TABLE(1)


 


	
  TIA

  	
   

  	
  INDENTURE

  
	
  SECTION

  	
   

  	
  SECTION

  
	
  310

  	
  (a)(1)

  	
  6.8; 6.10

  
	
   

  	
  (a)(2)

  	
  6.10

  
	
   

  	
  (a)(3)

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
  6.10

  
	
   

  	
  (b)

  	
  6.8; 6.10

  
	
   

  	
  (c)

  	
  N.A.

  
	
  311

  	
  (a)

  	
  6.11

  
	
   

  	
  (b)

  	
  6.11

  
	
   

  	
  (c)

  	
  N.A.

  
	
  312

  	
  (a)

  	
  2.6

  
	
   

  	
  (b)

  	
  9.3

  
	
   

  	
  (c)

  	
  9.3

  
	
  313

  	
  (a)

  	
  6.6

  
	
   

  	
  (b)

  	
  6.6

  
	
   

  	
  (c)

  	
  6.6; 9.2

  
	
   

  	
  (d)

  	
  6.6

  
	
  314

  	
  (a)

  	
  3.2; 9.2

  
	
   

  	
  (b)

  	
  N.A.

  
	
   

  	
  (c)(1)

  	
  9.4

  
	
   

  	
  (c)(2)

  	
  9.4

  
	
   

  	
  (c)(3)

  	
  N.A.

  
	
   

  	
  (d)

  	
  N.A.

  
	
   

  	
  (e)

  	
  9.6

  
	
   

  	
  (f)

  	
  3.3

  
	
  315

  	
  (a)

  	
  6.1

  
	
   

  	
  (b)

  	
  6.5; 9.2

  
	
   

  	
  (c)

  	
  6.1

  
	
   

  	
  (d)

  	
  6.1

  
	
   

  	
  (e)

  	
  5.11

  
	
  316

  	
  (a)(1)(A)

  	
  5.5

  
	
   

  	
  (a)(1)(B)

  	
  5.4

  
	
   

  	
  (a)(2)

  	
  N.A.

  
	
   

  	
  (b)

  	
  5.7

  
	
   

  	
  (c)

  	
  N.A.

  
	
  317

  	
  (a)(1)

  	
  5.8

  
	
   

  	
  (a)(2)

  	
  5.9

  
	
   

  	
  (b)

  	
  2.5

  
	
  318

  	
  (a)

  	
  9.1

  



 






N.A. means not applicable. 


 


(1)   Note: This Cross Reference
Table shall not, for any purpose, be deemed to be part of the Indenture.


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  I

  	
  DEFINITIONS
  AND INCORPORATION BY REFERENCE

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.2

  	
  OTHER DEFINITIONS

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 1.3

  	
  INCORPORATION BY
  REFERENCE OF TRUST INDENTURE ACT

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 1.4

  	
  RULES OF CONSTRUCTION

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  	
  THE
  SECURITIES

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  FORMS GENERALLY

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 2.2

  	
  TITLE, TERMS AND
  DENOMINATIONS

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 2.3

  	
  EXECUTION,
  AUTHENTICATION, DELIVERY AND DATING

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 2.4

  	
  REGISTRAR AND PAYING
  AGENT

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 2.5

  	
  PAYING AGENT TO HOLD
  MONEY AND SECURITIES IN TRUST

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 2.6

  	
  SECURITYHOLDER LISTS

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 2.7

  	
  TRANSFER

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 2.8

  	
  OUTSTANDING SECURITIES;
  DETERMINATIONS OF HOLDERS’ ACTION

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 2.9

  	
  CANCELLATION

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 2.10

  	
  PAYMENTS

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 2.11

  	
  PERSONS DEEMED OWNERS

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 2.12

  	
  CUSIP NUMBERS

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  	
  COVENANTS

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  PAYMENT OF SECURITIES

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 3.2

  	
  SEC REPORTS

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 3.3

  	
  COMPLIANCE CERTIFICATE;
  STATEMENT BY OFFICERS AS TO DEFAULT

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 3.4

  	
  FURTHER INSTRUMENTS AND
  ACTS

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 3.5

  	
  MAINTENANCE OF OFFICE
  OR AGENCY

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 3.6

  	
  BORROWER LOAN SERVICING

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  	
  SUCCESSOR
  CORPORATION

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  WHEN COMPANY
  MAY MERGE OR TRANSFER ASSETS

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V 

  	
  DEFAULTS
  AND REMEDIES

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  EVENTS OF DEFAULT

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 5.2

  	
  ACCELERATION

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 5.3

  	
  OTHER REMEDIES

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 5.4

  	
  WAIVER OF PAST DEFAULTS

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 5.5

  	
  CONTROL BY MAJORITY

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 5.6

  	
  LIMITATION ON SUITS

  	
  13

  
				



 


i

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 5.7

  	
  RIGHTS OF HOLDERS TO
  RECEIVE PAYMENT

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 5.8

  	
  COLLECTION SUIT BY
  TRUSTEE

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 5.9

  	
  TRUSTEE MAY FILE
  PROOFS OF CLAIM

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 5.10

  	
  PRIORITIES

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 5.11

  	
  UNDERTAKING FOR COSTS

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 5.12

  	
  WAIVER OF STAY,
  EXTENSION OR USURY LAWS

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI 

  	
  TRUSTEE

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  DUTIES OF TRUSTEE

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 6.2

  	
  RIGHTS OF TRUSTEE

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 6.3

  	
  INDIVIDUAL RIGHTS OF
  TRUSTEE, ETC.

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 6.4

  	
  TRUSTEE’S DISCLAIMER

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 6.5

  	
  NOTICE OF DEFAULTS

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 6.6

  	
  REPORTS BY TRUSTEE TO
  HOLDERS

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 6.7

  	
  COMPENSATION AND
  INDEMNITY

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 6.8

  	
  REPLACEMENT OF TRUSTEE

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 6.9

  	
  SUCCESSOR TRUSTEE BY
  MERGER

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 6.10

  	
  ELIGIBILITY;
  DISQUALIFICATION

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 6.11

  	
  PREFERENTIAL COLLECTION
  OF CLAIMS AGAINST COMPANY

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII 

  	
  SATISFACTION
  AND DISCHARGE

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  DISCHARGE OF LIABILITY
  ON SECURITIES

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 7.2

  	
  REPAYMENT TO THE
  COMPANY

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII 

  	
  SUPPLEMENTAL
  INDENTURES

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  SUPPLEMENTAL INDENTURES
  WITHOUT CONSENT OF HOLDERS

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 8.2

  	
  SUPPLEMENTAL INDENTURES
  WITH CONSENT OF HOLDERS

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 8.3

  	
  COMPLIANCE WITH TRUST
  INDENTURE ACT

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 8.4

  	
  REVOCATION AND EFFECT
  OF CONSENTS, WAIVERS AND ACTIONS

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 8.5

  	
  NOTATION ON OR EXCHANGE
  OF SECURITIES

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 8.6

  	
  TRUSTEE TO SIGN
  SUPPLEMENTAL INDENTURES

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 8.7

  	
  EFFECT OF SUPPLEMENTAL
  INDENTURES

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX 

  	
  MISCELLANEOUS

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  TRUST INDENTURE ACT CONTROLS

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 9.2

  	
  NOTICES

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 9.3

  	
  COMMUNICATION BY
  HOLDERS WITH OTHER HOLDERS

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 9.4

  	
  CERTIFICATE AND OPINION
  AS TO CONDITIONS PRECEDENT

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 9.5

  	
  FORM OF DOCUMENTS
  DELIVERED TO TRUSTEE

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 9.6

  	
  STATEMENTS REQUIRED IN
  CERTIFICATE OR OPINION

  	
  24

  
				



 


ii

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 9.7

  	
  SEPARABILITY CLAUSE

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 9.8

  	
  RULES BY TRUSTEE,
  PAYING AGENT AND REGISTRAR

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 9.9

  	
  LEGAL HOLIDAYS

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 9.10

  	
  GOVERNING LAW AND
  JURISDICTION; WAIVER OF JURY TRIAL

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 9.11

  	
  NO RECOURSE AGAINST
  OTHERS

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 9.12

  	
  SUCCESSORS

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 9.13

  	
  EFFECT OF HEADINGS AND
  TABLE OF CONTENTS

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 9.14

  	
  BENEFITS OF INDENTURE

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 9.15

  	
  MULTIPLE ORIGINALS

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 9.16

  	
  FORCE MAJEURE

  	
  25

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  A - FORM OF SECURITY

  	
  A-1

  



 


iii

















 


INDENTURE dated as of
[      ], 2009, by and between Prosper Marketplace, Inc.,
a Delaware corporation (“Company”), and
                                                                    ,
a national banking association incorporated and existing under the laws of the
United States of America, as trustee (“Trustee”).


 


RECITALS OF THE COMPANY


 


The Company has duly authorized the execution
and delivery of this Indenture to provide for the issuance from time to time of
special limited obligations of the Company referred to as Borrower Payment
Dependent Notes (herein called the “Securities”) to be issued in series
as in this Indenture provided.


 


For and in consideration of the premises and
the purchase of the Securities by the Holders thereof, it is mutually
covenanted and agreed, for the equal and ratable benefit of the Holders of the
Securities or each series thereof as follows:


 


ARTICLE I


 


DEFINITIONS AND INCORPORATION BY
REFERENCE


 


Section 1.1             DEFINITIONS.


 


“ACH System” means the Automated
Clearing House system of the U.S. Federal Reserve Board or a successor system
providing electronic funds transfers between banks.


 


“Affiliate” of any specified person
means any other person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified person.  For the purposes of this definition, “Control”
when used with respect to any specified person means the power to direct or
cause the direction of the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms “Controlling” and “Controlled” have meanings
correlative to the foregoing.


 


“Board of Directors” means the board
of directors of the Company or any committee of such board authorized with
respect to any matter to exercise the powers of the Board of Directors of the
Company.


 


“Board Resolution” means a copy of a
resolution certified by the Secretary or an Assistant Secretary of the Company
to have been duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, and delivered to the Trustee.


 


“Borrower
Loan” means a loan to an individual borrower loan originated or sold
through the Company’s platform on its website www.prosper.com or any successor
website, but only to the extent such Borrower Loan has been financed or
purchased by the Company with the proceeds of the sale of Securities.  For the avoidance of doubt, the term
“Borrower Loans” does not include any portion of an individual borrower loan
originated or sold through the Company’s platform that has been financed or
purchased by the Company from other sources of funding, or a portion of an
borrower loan that has not been purchased by the Company with the proceeds of
the sale of Securities and is retained by the financial institution offering
the borrower loan for sale.


 


“Borrower
Loan Net Payments,” with respect to a Borrower Loan, means all Borrower
Loan Payments net of all applicable Servicing Fees.


 


“Borrower
Loan Payments,” with respect to a Borrower Loan, means all amounts received
by the Company, and not reversed through the ACH System or by virtue of checks
returned unpaid due to insufficient funds or for other reasons, in connection
with the repayment of such Borrower Loan, including without limitation, all
payments or prepayments of principal and interest, any late fees and any
amounts received by the Company upon collection efforts; provided, however,
that Borrower Loan Payments shall not include any Non-sufficient Funds Fees or
fees charged to the borrower for making payments in a manner other than as
provided in the Borrower Loan received by the Company or by a third-party
collection agency in respect of such Borrower Loan, attorneys’ fees or any
collection fees imposed in connection with collection efforts on a delinquent
Borrower Loan by the Company or by a third-party collection agency.


 


“Business Day” means, except as
otherwise specified as contemplated by Section 2.2(c), with respect to any
Place of Payment or any other particular location referred to in this Indenture
or in the Securities, each Monday, Tuesday, Wednesday, Thursday and Friday that
is (1) not a day on which the ACH System is closed and (2) not a day
on which banking institutions are authorized or obligated by law or executive
order to close in San Francisco, California or New York, New York.


 


“Capital Stock” for any corporation
means any and all shares, interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated)
stock issued by that corporation.


 


“Company” means the party named as the
“Company” in the first paragraph of this Indenture until a successor replaces
it pursuant to the applicable provisions of this Indenture and, thereafter,
shall mean such successor.


 


“Company Request” or “Company Order”
means a written request or order signed in the name of the Company (i) by
its Chairman of the Board, a Vice Chairman, its Chief Executive Officer, its
President or a Vice President, and (ii) by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee or, with respect to Sections 2.1, 2.2(c), 2.3, and 6.2, any other
employee of the Company named in an Officers’ Certificate delivered to the
Trustee.


 

















 


“Default” means any event which is, or
after notice or passage of time or both would be, an Event of Default.


 


“Dollar” or “$” means a dollar
or other equivalent unit in such coin or currency of the United States as at
the time shall be legal tender for the payment of public and private debts.


 


“Exchange Act” means the Securities
Exchange Act of 1934, as amended.


 


“Final Maturity” means the date on
which the Initial Maturity Date may be extended, as provided in any Security.


 


“Holder” or “Securityholder,”
when used with respect to any Security, means, the person in whose name a
Security is registered on the Registrar’s books.


 


“Indenture” means this Indenture, as
amended or supplemented from time to time in accordance with the terms hereof
and shall include the terms of a particular series of Securities established as
contemplated in Section 2.2(c).


 


“Initial Maturity Date” means the
scheduled due date on which the final installment of principal and interest is
payable in any Security.


 


“Interest Payment Date,” when used
with respect to any Security, means the Stated Maturity of an installment of
interest on such Security.


 


“Maturity,” when used with respect to
any Security, means the date on which an installment of Principal thereof or
interest thereon becomes due and payable as therein or herein provided, whether
at the Stated Maturity, Initial Maturity or Final Maturity, by declaration of
acceleration, or otherwise.


 


“Non-sufficient Funds Fees” means any
fee imposed by the Company or a third-party collection agency in respect of a
Borrower Loan when the Company’s payment request is denied for any reason,
including but not limited to non-sufficient funds in the borrower’s bank
account or the closing of such bank account.


 


“Officer” means the Chairman of the
Board, any Vice Chairman, the Chief Executive Officer, the President, any Vice
President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.


 


“Officers’ Certificate” means a
written certificate containing the information specified in Sections 9.4
and 9.6, signed in the name of the Company (i) by its Chairman of the
Board, a Vice Chairman, its Chief Executive Officer, its President or a Vice
President, and (ii) by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.


 


“Opinion of Counsel” means a written
opinion containing the information specified in Sections 9.4 and 9.6, from
legal counsel who is acceptable to the Trustee. 
The counsel may be an employee of, or counsel to, the Company or the Trustee.


 


2
















 


“Payment Date” means any Principal
Payment Date or Interest Payment Date.


 


“Person” means any individual,
corporation, partnership, joint venture, association, joint-stock company,
limited liability company, trust, unincorporated organization, or government or
any agency or political subdivision thereof.


 


“Place of Payment,” when used with
respect to the Securities of any series, means the place or places where,
subject to the provisions of Section 3.5, the Principal of and any
interest on the Securities of that series are payable as specified as
contemplated by Section 2.2(c).


 


“Platform”
means the Company’s online auction-style marketplace for loans that facilitates
loans to borrowers, and sales of previously-funded loans, with interest rates
set through auction-style competitive bidding among individuals or institutions
who become eligible to bid in the marketplace by registering with the Company.


 


“Principal” or “Principal Amount”
of a Security, except as otherwise specifically provided in this Indenture,
means the outstanding principal of the Security.


 


“Principal Payment Date,” when used
with respect to any Security, means the Stated Maturity of an installment of
Principal on such Security.


 


“Record Date” for the amounts payable
on any Payment Date on the Securities of any series means the date specified
for that purpose as contemplated by Section 2.2(c).


 


“SEC” means the Securities and
Exchange Commission.


 


“Security” or “Securities” means the
special limited obligations of the Company referred to as Borrower Paymentr
Dependent Notes to be issued in series and authenticated and delivered under
this Indenture.


 


“Securities Act” means the Securities
Act of 1933, as amended.


 


“Securityholder” or “Holder,”
when used with respect to any Security, means a person in whose name a Security
is registered on the Registrar’s books.


 


“Servicing
Fee” means, with respect to any Borrower Loan, an annualized rate of 1%, or
such other percentage as specified by the Company with respect to a series of
Securities, of the outstanding principal balance of the Borrower Loan.


 


“Stated Maturity,” when used with
respect to any installment of Principal thereof or interest thereon, means the
date specified in such Security as the fixed date on which an amount equal to
such installment of Principal thereof or interest thereon is due and payable.


 


“Subsidiary” means, with respect to
any person, a corporation of which a majority of the Capital Stock having
voting power under ordinary circumstances to elect a majority of the board of
directors of such corporation is owned by (i) such person, (ii) such
person and one or more Subsidiaries or (iii) one or more Subsidiaries of
such person.


 


“TIA” means the Trust Indenture Act of
1939 as in effect on the date of this Indenture, except as provided in Section 8.3.


 


“Trust Officer” means, when used with
respect to the Trustee, any officer within the corporate trust department of
the Trustee, including any vice president, assistant vice president, trust
officer or any other officer of the Trustee who customarily performs functions
similar to those performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of such person’s knowledge of and familiarity with the particular subject
and who shall have direct responsibility for the administration of this
Indenture.


 


“Trustee” means the party named as the
“Trustee” in the first paragraph of this Indenture until a successor replaces
it pursuant to the applicable provisions of this Indenture and, thereafter,
shall mean such successor.


 


3

















 


“United States” means the United
States of America, its territories, its possessions (including the Commonwealth
of Puerto Rico), and other areas subject to its jurisdiction.


 


Section 1.2                                      OTHER
DEFINITIONS.


 


	
  Term

  	
   

  	
  Defined in Section

  
	
  “Bankruptcy
  Law”

  	
   

  	
  5.1

  
	
  “Custodian”

  	
   

  	
  5.1

  
	
  “Defaulted
  Payment”

  	
   

  	
  2.10

  
	
  “Event
  of Default”

  	
   

  	
  5.1

  
	
  “Legal
  Holiday”

  	
   

  	
  9.9

  
	
  “Notice
  of Default”

  	
   

  	
  5.1

  
	
  “Outstanding”

  	
   

  	
  2.8

  
	
  “Paying
  Agent”

  	
   

  	
  2.4

  
	
  “Registrar”

  	
   

  	
  2.4

  



 


Section 1.3                                      INCORPORATION
BY REFERENCE OF TRUST INDENTURE ACT. 
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.  The following TIA terms used in this
Indenture have the following meanings:


 


“Commission” means the SEC.


 


“Indenture Securities” means the
Securities.


 


“Indenture Security Holder” means a
Holder or Securityholder.


 


“Indenture to be Qualified” means this
Indenture.


 


“Indenture Trustee” or “Institutional
Trustee” means the Trustee.


 


“Obligor” on the indenture securities
means the Company.


 


All other TIA terms used in this Indenture
that are defined by the TIA, defined by TIA reference to another statute or
defined by SEC rule have the meanings assigned to them by such
definitions.


 


Section 1.4                                      RULES OF
CONSTRUCTION.  Unless the context
otherwise requires:


 


(a)                                  a
term has the meaning assigned to it;


 


(b)                                 an
accounting term not otherwise defined has the meaning assigned to it in accordance
with generally accepted accounting principles in the United States as in effect
from time to time;


 


(c)                                  “or”
is not exclusive;


 


(d)                                 “including”
means including, without limitation; and


 


(e)                                  words
in the singular include the plural, and words in the plural include the
singular.


 


ARTICLE II


 


THE SECURITIES


 


Section 2.1                                      FORMS
GENERALLY.  The Securities of each
series and the certificate of authentication in respect thereof shall be in
substantially the form set forth on Exhibit A as shall be established
by delivery to the Trustee of a Company Order, in each case with such
appropriate insertions, omissions, substitutions 


 


4

















 


and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the Officers executing such Securities
as evidenced by their execution of the Securities.  The Securities shall be in fully registered
form only and shall be printed, lithographed, engraved, word processed or
evidenced in electronic form or produced by any combination of these methods or
may be produced in any other manner, all as determined by the Officers executing
such Securities as evidenced by their execution of such Securities.


 


Section 2.2                                      TITLE, TERMS
AND DENOMINATIONS.


 


(a)                                  The
aggregate Principal Amount of Securities that may be authenticated and
delivered under this Indenture shall be unlimited.


 


(b)                                 To
the extent provided in, and except as otherwise permitted by, this Indenture, (1) the
Securities shall be special limited obligations of the Company and (2) no
payments of Principal and interest on the Securities of any series shall be
payable unless the Company has received Borrower Loan Payments in respect of
the Borrower Loan corresponding to such series, and then shall be payable
equally and ratably on the Securities of such series only to the extent of the
Borrower Loan Net Payments related to the Borrower Loan corresponding to such
series.  No Holder of a Security shall
have any recourse against the Company unless and then only to the extent that
the Company (1) has failed to pay such Holder the Borrower Loan Net
Payments in respect of the Borrower Loan corresponding to such Holder’s
Security or (2) has otherwise breached a covenant in this Indenture.


 


(c)                                  For
each series of Securities there shall be established and, subject to Section 2.3,
set forth, or determined in the manner provided, in a Company Order:


 


(i)                                     the
title of the Securities of the series (which shall distinguish the Securities
of the series from all other Securities);


 


(ii)                                  the
limit upon the aggregate Principal Amount of the Securities of the series which
may be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of Securities of the
series pursuant to Sections 2.7 or 8.5);


 


(iii)                               the Borrower Loan that
corresponds to Securities of the series;


 


(iv)                              the
Stated Maturity and Payment Dates of the Securities of the series and the
Record Date for any amounts payable on any Payment Date;


 


(v)                                 the
stated rate at which the Securities of the series shall bear interest;


 


(vi)                              the
place or places where, subject to the provisions of Section 3.5, the
Principal of and or interest on Securities of the series shall be payable, any
Securities of the series may be surrendered for registration of transfer and
notices and demands to or upon the Company in respect of the Securities of the
series and this Indenture may be served;


 


(vii)                           any restrictions on the
transfer or transferability of Securities of the series;


 


(viii)                        the obligation, if any, of the
Company to redeem Securities of the series at the option of a Holder thereof,
the conditions, if any, giving rise to such obligation, and the period or
periods within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be purchased, in whole or in part;


 


(ix)                                the
denominations in which any Securities of the series shall be issuable;


 


5

















 


(x)                                   any
addition to or change in the Events of Default which apply to any Securities of
the series and any change in the right of the Trustee or the requisite Holders
of such Securities to declare the principal amount thereof due and payable
pursuant to Section 5.2;


 


(xi)                                any
addition to or change in the covenants set forth in Article III which
apply to Securities of the series;


 


(xii)                             any other terms of the
series (which terms shall not be inconsistent with the provisions of this
Indenture, except as permitted by Section 8.1(g)); and


 


(xiii)                          any
endorsement reflecting the transfer of any Borrower Payment Dependent Note upon
resale of such Borrower Payment Dependent Note.


 


All Securities of a series shall be
substantially identical except as to denomination and except as may otherwise
be provided in or pursuant to a Company Order pursuant to this Section 2.2(c) or
in any indenture supplemental hereto.


 


(d)                                 Prior
to the issuance of the initial series of Securities under this Indenture, a
copy of the Board Resolution authorizing the execution, delivery and
performance of this Indenture, shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of an Officers’ Certificate setting forth the general terms of the
Securities.  Such Board Resolution and
Officers’ Certificate shall provide general terms for Securities and provide
either that the specific terms of each series shall be specified in a Company
Order or that such terms shall be determined by the Company, or one or more of
the Company’s agents designated in an Officers’ Certificate, in accordance with
the Company Order as contemplated by Section 2.3.


 


Section 2.3                                      EXECUTION,
AUTHENTICATION, DELIVERY AND DATING. 
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, one of its Vice Chairmen, its President or one of its
Vice Presidents, or the Treasurer or any Assistant Treasurer.  The signature of any of these officers on the
Securities may be electronic, manual or facsimile.


 


Securities bearing the electronic, manual or
facsimile signatures of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of such
Securities.


 


At any time and from time to time after the
execution and delivery of this Indenture (and subject to delivery of the Board
Resolution and Officers’ Certificate as set forth in Section 2.2 prior to
the issuance of the initial series of Securities), the Company may authenticate
and deliver Securities of any series and upon such authentication and delivery
shall promptly provide a record of all such Securities executed and
authenticated by the Company to the Trustee, together with a copy of the
Company Order authorizing the authentication and delivery of such Securities;


 


In addition, prior to the issuance of the
initial series of Securities, the Trustee shall receive, and shall be fully
protected in conclusively relying upon, an Opinion of Counsel stating:


 


(a)                                  that
the forms of such Securities have been, and the terms of such Securities (when
established in accordance with such procedures as may be specified from time to
time in a Company Order, all as contemplated by and in accordance with a Board
Resolution pursuant to Section 2.2(d), as the case may be) will have been,
duly authorized by the Company and established in conformity with the
provisions of this Indenture;


 


(b)                                 that
such Securities, when (1) executed by the Company, (2) completed,
authenticated and delivered by the Company in accordance with this Indenture,
and (3) issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms, subject
to customary exceptions; and


 


6

















 


(c)                                  that
all laws and requirements in respect of the execution and delivery by the
Company of such Securities have been complied with.


 


The Trustee may conclusively rely, as to the
authorization by the Company of any series of Securities, the form and terms
thereof and the legality, validity, binding effect and enforceability thereof,
upon the Opinion of Counsel and other documents delivered pursuant to
Sections 2.1, 2.2(c) and 2.2(d) and this Section, as applicable,
at or prior to the time of the first authentication of Securities of the
initial series of Securities unless and until it has received written
notification that such opinion or other documents have been superseded or
revoked.  In connection with the
authentication and delivery of Securities, the Trustee shall be entitled to
assume, unless it has received written notice to the contrary or any of its
Trust Officers has actual knowledge to the contrary, that the Company’s
authentication and delivery such Securities do not violate any rules,
regulations or orders of any governmental agency or commission having
jurisdiction over the Company.


 


Each Security shall be dated the date of its
authentication.


 


The Company may appoint an authenticating
agent acceptable to the Trustee to authenticate Securities.  Unless otherwise provided in the appointment,
an authenticating agent may authenticate Securities whenever the Company may do
so.  Each reference in this Indenture to
authentication by the Company includes authentication by such agent.


 


No Security shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose unless there
appears on such Security a certificate of authentication substantially in the
form provided for herein duly executed by the Company by electronic or manual
signature of an authorized signatory, and such certificate upon any Security
shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.  The Company’s certificate of authentication
shall be in substantially the following form:


 


This is one of the Securities of the series
designated therein referred to in the within-mentioned Indenture.


 


	
   

  	
  PROSPER
  MARKETPLACE, INC.

  
	
   

  	
  as
  Authenticating Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Section 2.4                                      REGISTRAR AND
PAYING AGENT.  The Company shall
maintain, with respect to each series of Securities, an office or agency where
such Securities may be presented for registration of transfer or for exchange (“Registrar”)
and an office or agency where such Securities may be presented for purchase or
payment (“Paying Agent”).  The
Registrar shall keep a register of the Securities and of their transfer and
exchange.  The Company may have one or
more co-registrars and one or more additional paying agents.  The term Paying Agent includes any additional
paying agent.


 


The Company shall enter into an appropriate
agency agreement with respect to each series of Securities with any Registrar,
Paying Agent or co-registrar.  The
agreement shall implement the provisions of this Indenture that relate to such
agent.  The Company shall notify the
Trustee of the name and address of any such agent.  The Company or any Subsidiary or an Affiliate
of either of them may act as Paying Agent, Registrar or co-registrar.


 


The Company initially will serve as the
Registrar and Paying Agent in connection with such Securities.


 


Section 2.5                                      PAYING AGENT
TO HOLD MONEY AND SECURITIES IN TRUST. 
Except as otherwise provided herein, prior to or on each due date of
payments in respect of any series of Securities, the Company shall deposit with
the Paying Agent with respect to such Securities a sum of money sufficient to
make such payments when so becoming due. 
The Company shall require each Paying Agent (other than the Trustee or
the 


 


7

















 


Company) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Holders or the Trustee all money held by
such Paying Agent for the making of payments in respect of the Securities of
such series and shall notify the Trustee in writing of any default by the
Company in making any such payment.  At any
time during the continuance of any such default, a Paying Agent shall, upon the
written request of the Trustee, forthwith pay to the Trustee all money so held
in trust with respect to such Securities. 
If the Company, a Subsidiary or an Affiliate of either of them acts as
Paying Agent for a series of Securities, it shall segregate the money held by
it as Paying Agent with respect to such Securities and hold it as a separate
trust fund.  The Company at any time may
require a Paying Agent for a series of Securities to pay all money held by it
with respect to such Securities to the Trustee and to account for any money
disbursed by it.  Upon doing so, such
Paying Agent shall have no further liability for the money.


 


Section 2.6                                      SECURITYHOLDER
LISTS.  The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Holders of each series of Securities.  The Company shall cause to be furnished to
the Trustee at least monthly on the first business day of each month a listing
of Holders of each series of Securities dated within 15 days of the date
on which the list is furnished and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders of each series
of Securities.


 


Section 2.7                                      TRANSFER.  Subject to any limitations on transferability
set forth in a Security, upon surrender for registration of transfer of such
Security at the office or agency of the Company designated pursuant to Section 3.5
for such purpose in a Place of Payment, the Company shall execute, authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Securities of any authorized denomination or denominations of a like
aggregate Principal Amount and tenor. 
The Company may (1) impose a reasonable service fee for any
registration of transfer or exchange, which service fee shall be described on
the Company’s website www.prosper.com and may be changed or waived from time to
time and (2) the Company may require payment of a sum sufficient to pay
all taxes, assessments or other governmental charges that may be imposed in
connection with the transfer of the Securities from the Securityholder
requesting such transfer.


 


All Securities issued upon any registration
of transfer of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer.


 


Every Security presented or surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar duly executed,
by the Holder thereof or his attorney duly electronically or in writing.


 


Section 2.8                                      OUTSTANDING
SECURITIES; DETERMINATIONS OF HOLDERS’ ACTION.  Securities of any series “Outstanding” at any
time are, as of the date of determination, all the Securities of such series
theretofore authenticated by the Company for such series except for those
cancelled by it, those delivered to it for cancellation and those described in
this Section 2.8 as not outstanding. 
A Security does not cease to be “Outstanding” because the Company or an
Affiliate thereof is the Holder of the Security; provided, however,
that in determining whether the Holders of the requisite Principal Amount of
Outstanding Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any Affiliate of the Company shall be disregarded and deemed
not to be outstanding, except that, in determining whether the Trustee shall be
protected in conclusively relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Trust Officer of
the Trustee actually knows to be so owned shall be so disregarded.  Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee’s right so to act with respect to such
Securities and that the pledgee is not the Company or any Affiliate of the
Company.  Subject to the foregoing, only
Securities outstanding at the time of such determination shall be considered in
any such determination.


 


If the Paying Agent (other than the Company)
holds, in accordance with this Indenture, on the final Stated Maturity, money
sufficient to pay Securities payable on that date in full, then on and after
that date such Securities shall cease to be Outstanding.


 


8

















 


Section 2.9                                      CANCELLATION.  All Securities surrendered for payment, or
registration of transfer, shall, if surrendered to any person other than the
Company, be delivered to the Company and all Securities so delivered shall be
promptly cancelled by it.  The Company
may at any time cancel any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever and may
cancel any Securities previously authenticated hereunder that the Company has
not issued and sold.  The Company may not
reissue, or issue new Securities to replace, Securities it has cancelled.


 


No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted in the form of Securities for any particular
series or as permitted by this Indenture.


 


Section 2.10                                PAYMENTS.  Payment of Principal and interest on any
Security which is payable, and is punctually paid or duly provided for, on any
Payment Date shall be paid to the person in whose name that Security is
registered at the close of business on the Record Date for such Payment Date.


 


Any payments on any Security of any series
which is payable, but is not punctually paid or duly provided for, on any
Payment Date (herein called “Defaulted Payment”) shall forthwith cease
to be payable to the Holder on the relevant Record Date, and such Defaulted
Payment may be paid by the Company to the Holder of the Security on a record
date chosen by the Company and in any lawful manner, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this paragraph,
such manner of payment shall be deemed practicable by the Trustee.


 


Subject to the foregoing provisions of this Section and
Section 2.7, each Security delivered under this Indenture upon
registration of transfer of any other Security shall carry the rights to
payments, which were carried by such other Security.


 


Section 2.11                                PERSONS DEEMED
OWNERS.  Prior to due presentment of
a Security for registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the person in whose name such Security
is registered as the owner of such Security for the purpose of receiving
payment of Principal of and interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.


 


Section 2.12                                CUSIP NUMBERS.  The Company in issuing the Securities may use
“CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP”
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.  The Company will promptly notify the Trustee
in writing of any change in the “CUSIP” numbers.


 


ARTICLE III


 


COVENANTS


 


Section 3.1                                      PAYMENT OF
SECURITIES.  The Company shall
promptly make all payments in respect of each series of Securities in lawful
money of the United States on the dates and in the manner provided in the
Securities but solely from the sources provided pursuant to Section 2.2(b) and,
to the extent not otherwise so provided, pursuant to this Indenture.  The Company shall have no liability or
obligation with respect to the payment of the purchase price of any Securities
except to the extent of the Borrower Loan Net Payments in respect of the
Borrower Loan corresponding to such series. 
At the Company’s option, payments of Principal or interest may be made
by check or by transfer into an account administered by the Company “for the
benefit of” the payee or to an account maintained by the trustee.


 


Section 3.2                                      SEC REPORTS.  The Company shall file with the Trustee,
within 15 days after it files such annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual 


 


9

















 


report and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act.  The Company also shall comply with the other
provisions of TIA Section 314(a).


 


Section 3.3                                      COMPLIANCE
CERTIFICATE; STATEMENT BY OFFICERS AS TO DEFAULT.  The Company shall deliver to the Trustee
within 120 days after the end of each fiscal year (beginning with the
fiscal year ending on December 31, 2009) an Officers’ Certificate, one of
the signers of which shall be the principal executive officer, principal
financial officer or principal accounting officer of the Company, stating
whether or not the signers know of any Default that occurred during such
period.  If they do, such Officers’
Certificate shall describe the Default and its status.


 


The Company shall deliver to the Trustee, as
soon as possible and in any event within five days after the Company becomes
aware of the occurrence of any Event of Default or an event which, with notice
or the lapse of time or both, would constitute an Event of Default, an Officers’
Certificate setting forth the details of such Event of Default or default and
the action which the Company proposes to take with respect thereto.


 


Section 3.4                                      FURTHER
INSTRUMENTS AND ACTS.  Upon request
of the Trustee, the Company will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purposes of this Indenture.


 


Section 3.5                                      MAINTENANCE OF
OFFICE OR AGENCY.  The Company will
maintain in each Place of Payment for such series an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served.  The office of the Company at 111 Sutter
Street, 22nd Floor, San Francisco, California 94104 shall
be such office or agency for all of the aforesaid purposes unless the Company
shall maintain some other office or agency for such purposes and shall give
prompt written notice to the Trustee of the location, and any change in the
location, of such other office or agency.


 


The Company may also from time to time
designate one or more other offices or agencies where the Securities of one or
more series may be presented or surrendered for any or all such purposes and
may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in accordance with the
requirements set forth above for Securities of any series for such
purposes.  The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.


 


Section 3.6                                      BORROWER LOAN
SERVICING.


 


(a)                                  With
respect to each series of Securities, the Company shall use commercially
reasonable efforts to service and collect the Borrower Loan corresponding to
such series, in good faith, accurately and in accordance with industry
standards customary for servicing loans such as the Borrower Loans.  Notwithstanding the generality of the
foregoing, (1) referral of a delinquent Borrower Loan to a collection
agency on the 31st day of its delinquency shall be deemed to
constitute commercially reasonable servicing and collection efforts; and (2) the
Company shall have the right, at any time and from time to time, to amend or
waive any term of such Borrower Loan, or in the case of a Borrower Loan that is
more than 120 days delinquent, to write off and cancel such Borrower Loan
without the consent of any Holder of any Securities of the series corresponding
to such Borrower Loan.


 


(b)                                 With
respect to each series of Securities, the Company shall use commercially
reasonable efforts to maintain backup servicing arrangements providing for the
Borrower Loan corresponding to such series to be serviced and collected in good
faith, accurately and in accordance with industry standards customary for
servicing loans such as the Borrower Loans.


 


10
















 


ARTICLE IV


 


SUCCESSOR CORPORATION


 


Section 4.1                                      WHEN COMPANY MAY MERGE OR TRANSFER
ASSETS.  The Company shall not consolidate with or
merge with or into any other person or convey, transfer or lease its properties
and assets substantially as an entirety to any person, unless:


 


(a)                                  either (1) the Company shall be the
continuing corporation or (2) the person (if other than the Company)
formed by such consolidation or into which the Company is merged or the person
which acquires by conveyance, transfer or lease the properties and assets of
the Company substantially as an entirety (i) shall be a corporation,
limited liability company, partnership or trust organized and validly existing
under the laws of the United States or any state thereof or the District of Columbia
and (ii) shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
of the obligations of the Company under the Securities and this Indenture;


 


(b)                                 immediately after giving effect to such
transaction, no Default shall have occurred and be continuing; and


 


(c)                                  the Company shall have delivered to the
Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture, comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been satisfied.


 


The successor person formed
by such consolidation or into which the Company is merged or the successor
person to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of the Company
under this Indenture with the same effect as if such successor had been named
as the Company herein; and thereafter, except in the case of a lease of its
properties and assets substantially as an entirety, the Company shall be
discharged from all obligations and covenants under this Indenture, and the
Securities.


 


ARTICLE V


 


DEFAULTS AND REMEDIES


 


Section 5.1                                      EVENTS OF DEFAULT. 
Unless otherwise specified as contemplated by Section 2.2(c) with
respect to any series of securities, an “Event of Default” occurs, with
respect to each series of the Securities individually, if:


 


(a)                                  the Company defaults, subject in each case,
to the limitations set forth in Sections 2.2(b) and 3.1 and in the
Securities in the payment of any Principal of, or interest upon, any Security
of such series when the same becomes due and payable and continuance of such
default for a period of 30 days;


 


(b)                                 the Company fails to comply with any of its
agreements in the Securities or this Indenture (other than those referred to in
clause (a) above and other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with or which has been expressly included in this Indenture solely for
the benefit of a series of Securities other than such series) and such failure
continues for 90 days after receipt by the Company of a Notice of Default;
provided, however, that if the Company shall proceed to take
curative action which, if begun and prosecuted with due diligence, cannot be
completed within a period of 90 days, then such period shall be increased
to such extent as shall be necessary to enable the Company diligently to
complete such curative action;


 


(c)                                  there shall have been the entry by a court of
competent jurisdiction of (i) a decree or order for relief in respect of
the Company in an involuntary case or proceeding under any applicable
Bankruptcy Law or (ii) a decree or order adjudging the Company bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment


 


11

















 


or composition of or in
respect of the Company under any applicable federal or state law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or of any substantial part of its property, or
ordering the wind up or liquidation of its affairs, and any such decree or
order for relief shall continue to be in effect, or any such other decree or
order shall be unstayed and in effect, for a period of 60 consecutive days;


 


(d)                                 (i) the Company commences a voluntary
case or proceeding under any applicable Bankruptcy Law or any other case or
proceeding to be adjudicated bankrupt or insolvent, (ii) the Company
consents to the entry of a decree or order for relief in respect of the Company
in an involuntary case or proceeding under any applicable Bankruptcy Law or to
the commencement of any bankruptcy or insolvency case or proceeding against it,
(iii) the Company files a petition or answer or consent seeking reorganization
or substantially comparable relief under any applicable federal state law, (iv) the
Company (1) consents to the filing of such petition or the appointment of,
or taking possession by, a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial part of
its property, (2) makes an assignment for the benefit of creditors or (3) admits
in writing its inability to pay its debts generally as they become due or (v) the
Company takes any corporate action in furtherance of any such actions in this
clause (d); or


 


(e)                                  any other Event of Default provided with
respect to Securities of that series.


 


“Bankruptcy Law”
means Title 11, United States Code, or any similar federal or state law for the
relief of debtors.  “Custodian”
means any receiver, trustee, assignee, liquidator, custodian or similar
official under any Bankruptcy Law.


 


A Default under clause (b) above
is not an Event of Default until the Trustee notifies the Company, or the
Holders of at least 25% in aggregate Principal Amount of the Outstanding
Securities of all series for which such Default exists notify the Company and
the Trustee, of the Default and the Company does not cure such Default within
the time specified in clause (b) above after receipt of such notice.  Any such notice must specify the Default,
demand that it be remedied and state that such notice is a “Notice of
Default.”


 


Section 5.2                                      ACCELERATION.  If
an Event of Default specified in Section 5.1(c) or (d) occurs
and is continuing, the Principal (or portion thereof) of all the Securities
shall become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Securityholders, notwithstanding
the second sentence of Section 3.1 hereof and without respect to whether
there are or will be Borrower Loan Net Payments in respect of the Borrower
Loans corresponding to the Securities. 
The Holders of a majority in aggregate Principal Amount of all
Outstanding Securities, by notice to the Trustee (and without notice to any
other Securityholder) may rescind an acceleration and its consequences if (a) the
rescission would not conflict with any judgment or decree, and (b) all
Events of Default specified in Section 5.1(c) or (d) have been
cured or waived.  No such rescission
shall affect any subsequent Default or impair any right consequent
thereto.  For avoidance of doubt, there
shall be no acceleration of the Principal (or portion thereof) of any
Securities upon the occurrence of and Event of Default other than an Event of
Default specified in Section 5.1(c) or (d).


 


Section 5.3                                      OTHER REMEDIES.  If
an Event of Default with respect to a series of Outstanding Securities occurs
and is continuing, the Trustee may pursue any available remedy to (a) collect
the payment of the whole amount then due and payable on such Securities for
Principal and interest, with interest upon the overdue Principal and, to the
extent that payment of such interest shall be legally enforceable, upon overdue
installments of interest from the date such interest was due, at the rate or
rates prescribed therefor in such Securities and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including amounts due the Trustee under Section 6.7 or (b) enforce
the performance of any provision of the Securities or this Indenture.


 


The Trustee may maintain a
proceeding even if the Trustee does not possess any of the Securities or does
not produce any of the Securities in the proceeding.  A delay or omission by the Trustee or any
Securityholder in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of, or
acquiescence in, the Event of Default. 
No remedy is exclusive of any other remedy.  All available remedies are cumulative.


 


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Section 5.4                                      WAIVER OF PAST DEFAULTS.  The
Holders of a majority in aggregate Principal Amount of the Outstanding
Securities of any series, by notice to the Trustee (and without notice to any
other Securityholder), may on behalf of the Holders of all the Securities of
such series waive an existing Default with respect to such series and its
consequences except (a) an Event of Default described in Section 5.1(a) with
respect to such series or (b) a Default in respect of a provision that
under Section 8.2 cannot be amended without the consent of the Holder of
each Outstanding Security of such series affected.  When a Default is waived, it is deemed cured,
but no such waiver shall extend to any subsequent or other Default or impair
any consequent right.


 


Section 5.5                                      CONTROL BY MAJORITY.  The
Holders of a majority in aggregate Principal Amount of the Outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or of exercising any trust or power
conferred on the Trustee with respect to the Securities.  However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or that the Trustee
determines in good faith is unduly prejudicial to the rights of other
Securityholders or would involve the Trustee in personal liability.


 


Section 5.6                                      LIMITATION ON SUITS.  A
Holder of any Security of any series may not pursue any remedy with respect to
this Indenture or the Securities unless:


 


(a)                                  the Holder gives to the Trustee written
notice stating that an Event of Default with respect to the Securities of that
series is continuing;


 


(b)                                 the Holders of at least 25% in aggregate
Principal Amount of the Outstanding Securities of that series make a written
request to the Trustee to pursue the remedy;


 


(c)                                  such Holder or Holders offer to the Trustee
security or indemnity satisfactory to it against any loss, liability or expense
satisfactory to the Trustee;


 


(d)                                 the Trustee does not comply with the request
within 60 days after receipt of the notice, the request and the offer of
security or indemnity; and


 


(e)                                  the Holders of a majority in aggregate
Principal Amount of the Outstanding Securities of that series do not give the
Trustee a direction inconsistent with such request during such 60-day period.


 


A Securityholder may not use
this Indenture to prejudice the rights of any other Securityholder or to obtain
a preference or priority over any other Securityholder (it being understood
that the Trustee does not have an affirmative duty to ascertain whether or not
such actions or forbearances are unduly prejudicial to such Holders).


 


Section 5.7                                      RIGHTS OF HOLDERS TO RECEIVE PAYMENT. 
Notwithstanding any other provision of this Indenture, the right, which
is absolute and unconditional, of any Holder of any Security to receive payment
of the Principal of and (subject to Section 2.10) interest on such
Security on the Stated Maturity or Maturities expressed in such Security held
by such Holder, on or after the respective due dates expressed in the
Securities, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected adversely
without the consent of each such Holder.


 


Section 5.8                                      COLLECTION SUIT BY TRUSTEE.  If
an Event of Default described in Section 5.1(1) with respect to
Securities of any series occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount owing with respect to such series of Securities and the
amounts provided for in Section 6.7.


 


Section 5.9                                      TRUSTEE MAY FILE PROOFS OF CLAIM.  In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the Principal of the Securities shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee


 


13

















 


shall have made any demand
on the Company for the payment of overdue Principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise,


 


(a)                                  to file and prove a claim for the whole
amount of Principal and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel and any other amount due the Trustee under Section 6.7) and of
the Holders of Securities allowed in such judicial proceeding,


 


(b)                                 to terminate the Company’s rights to service
the Borrower Loans and require the substitution of a backup servicer in place
of the Company, and


 


(c)                                  to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder of Securities to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders of Securities, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 6.7.


 


Nothing herein contained
shall be deemed to authorize the Trustee or the holders of Securities to
authorize or consent to or accept or adopt on behalf of any Holder of a
Security any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder of a Security in any
such proceeding.


 


Section 5.10                                PRIORITIES.  If the Trustee collects any
money pursuant to this Article V, it shall pay out the money in the
following order and, in case of the distribution of such money on account of
Principal or interest, upon presentation of the Securities, or both, as the
case may be, and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:


 


FIRST: to the Trustee for
amounts due under Section 6.7;


 


SECOND: to Securityholders
for amounts due and unpaid for the Principal and interest on the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for Principal and interest, respectively;
and


 


THIRD: the balance, if any,
to the Company.


 


The Trustee may fix a record
date and payment date for any payment to Securityholders pursuant to this Section 5.10.  At least 15 days before such record
date, the Company shall mail or electronically transmit to each Securityholder
and the Trustee a notice that states the record date, the payment date and
amount to be paid.


 


Section 5.11                                UNDERTAKING FOR COSTS.  In
any suit for the enforcement of any right or remedy under this Indenture or in
any suit against the Trustee for any action taken or omitted by it as Trustee,
a court in its discretion may require the filing by any party litigant (other
than the Trustee) in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees and expenses, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant.  This Section 5.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 5.7
or a suit by Holders of more than 10% in aggregate Principal Amount of the
Outstanding Securities of any series, or to any suit instituted by any Holder
of any Security or coupon for the enforcement of the payment of the Principal
of or interest on any Security or the payment of any coupon on or after the Stated
Maturity or Maturities expressed in such Security.


 


Section 5.12                                WAIVER OF STAY, EXTENSION OR USURY LAWS.  The
Company covenants (to the extent that it may lawfully do so) that it will not
at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law or any usury or other
law wherever enacted, now


 


14

















 


or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the Trustee,
but will suffer and permit the execution of every such power as though no such
law had been enacted.


 


ARTICLE VI


 


TRUSTEE


 


Section 6.1                                      DUTIES OF TRUSTEE.


 


(a)                                  If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.


 


(b)                                 Except during the continuance of an Event of Default
with respect to Securities of any series:


 


(i)                                     the Trustee need perform only those duties
that are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and


 


(ii)                                  in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture.  However, in the case of any
such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).


 


(c)                                  The Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct, except that:


 


(i)                                     this paragraph (c) does not limit the
effect of paragraph (b) of this Section 6.1;


 


(ii)                                  the Trustee shall not be liable for any error
of judgment made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and


 


(iii)                               the Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.5 or exercising any trust
or power conferred upon the Trustee under this Indenture.


 


(d)                                 Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a), (b), (c) and (e) of
this Section 6.1.


 


(e)                                  The Trustee may refuse to perform any duty or
exercise any right or power or extend or risk its own funds or otherwise incur
any financial liability unless it receives indemnity satisfactory to it against
any loss, liability or expense.


 


(f)                                    Money held by the Trustee in trust hereunder
need not be segregated from other funds except to the extent required by
law.  The Trustee shall not be liable for
any interest on any money received by it except as the Trustee may otherwise
agree in writing with the Company.


 


Section 6.2                                      RIGHTS OF TRUSTEE.


 


(a)                                  The Trustee may conclusively rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person.  The Trustee need not
investigate any fact or matter stated in the document.


 


15

















 


(b)                                 Before the Trustee acts or refrains from
acting, it may require an Officers’ Certificate or an Opinion of Counsel.  The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers’
Certificate or Opinion of Counsel.


 


(c)                                  The Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers.


 


(d)                                 The Trustee may conclusively rely and shall
be protected in acting or refraining from acting upon any resolution, Officers’
Certificate, Opinion of Counsel (or both), Company Order or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, bond, debenture, note, coupon, security or other paper believed to be
genuine and to have been signed or presented by the proper party or parties.


 


(e)                                  Any request, direction, order or demand of
the Company mentioned herein shall be sufficiently evidenced by an Officers’
Certificate (unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Directors may be evidenced to
the Trustee by a copy thereof certified by the secretary or an assistant
secretary of the Company.


 


(f)                                    The Trustee may consult with counsel of its
selection and any advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted to be taken by it hereunder in good faith and in reliance thereon in
accordance with such advice or Opinion of Counsel.


 


(g)                                 The Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Indenture at the
request, order or direction of any of the Securityholders pursuant to the provisions
of this Indenture, unless such Securityholders shall have offered to the
Trustee security or indemnity satisfactory to it against the costs, expenses
and liabilities which might be incurred therein or thereby.


 


(h)                                 Prior to the occurrence of an Event of
Default hereunder and after the curing or waiving of all Events of Default, the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond, debenture, note,
security or other paper or document unless requested in writing to do so by the
Holders of not less than a majority in the aggregate principal amount of the
Securities of such series then Outstanding; provided, that, if the payment
within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of any such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Indenture, the Trustee may require
indemnity satisfactory to it against such expense or liabilities as a condition
to proceeding; the reasonable expense of every such investigation shall be paid
by the Company or, if paid by the Trustee or any predecessor trustee, shall be
repaid by the Company upon demand.


 


(i)                                     The Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys not regularly in its employ and the Trustee shall
not be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care by it hereunder.


 


(j)                                     The Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Indenture.


 


(k)                                  In no event shall the Trustee be responsible
or liable for special, indirect, punitive or consequential loss or damage of
any kind whatsoever (including, but not limited to, loss of profit)
irrespective of whether the Trustee has been advised of the likelihood of such
loss or damage and regardless of the form of action.


 


(l)                                     The Trustee shall not be deemed to have
notice of any Default or Event of Default unless a Trust Officer of the Trustee
has actual knowledge thereof or unless written notice of any event which is in
fact such a default is received by the Trustee at the designated corporate
trust office of the Trustee, and such notice references the Securities and this
Indenture.


 


16

















 


(m)                               The rights, privileges, protections,
immunities and benefits given to the Trustee, including, without limitation,
its right to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder, and each agent, custodian and
other Person employed to act hereunder.


 


(n)                                 The Trustee shall not be required to give any
bond or surety in respect of the performance of its powers and duties
hereunder.


 


(o)                                 The Trustee may request that the Company
deliver a certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Indenture.


 


Section 6.3                                      INDIVIDUAL RIGHTS OF TRUSTEE, ETC.  The
Trustee in its individual or any other capacity may become the owner or pledgee
of Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee.  Any Paying Agent, Authenticating Agent,
Registrar or co-registrar or any other agent of the Company may do the same
with like rights.  However, the Trustee
must comply with Sections 6.10 and 6.11.


 


Section 6.4                                      TRUSTEE’S DISCLAIMER.  The
recitals contained herein and in the Securities shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.  The Trustee
makes no representation as to the validity or adequacy of this Indenture or the
Securities.  The Trustee shall not be
accountable for the Company’s use of the proceeds from the Securities and,
shall not be responsible for any statement in the registration statement for
the Securities under the Securities Act of 1933, as amended, or in the
Indenture or the Securities or for the determination as to which beneficial
owners are entitled to receive any notices hereunder.


 


Section 6.5                                      NOTICE OF DEFAULTS.  If a
Default with respect to the Securities of any series occurs and is continuing
and if it is known to the Trustee, the Trustee shall give to each Holder of
Securities of such series notice of such Default in the manner set forth in TIA
Section 315(b) within 90 days after it occurs.  Except in the case of a Default described in Section 5.1(a) with
respect to any Security of such series or a Default in the payment of any
sinking fund installment with respect to any Security of such series, the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of the Holders of Securities of such series.


 


Section 6.6                                      REPORTS BY TRUSTEE TO HOLDERS.  If
required by Section 313(a) of the TIA, within 60 days after each
May 15 beginning with the May 15 following the date of this
Indenture, the Trustee shall mail or transmit electronically to each Holder of
Securities a brief report dated as of such May 15 that complies with TIA Section 313(a).  The Trustee also shall comply with TIA Section 313(b) and
(c).


 


A copy of each report at the
time of its mailing or transmission to Holders of Securities shall be filed
with the SEC.


 


Section 6.7                                      COMPENSATION AND INDEMNITY.  The Company agrees:


 


(a)                                  to pay to the Trustee from time to time such
compensation as shall be agreed in writing between the Company and the Trustee
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust);


 


(b)                                 to reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses, advances and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or willful misconduct; and


 


(c)                                  to indemnify the Trustee for, and to hold it
harmless against, any and all loss, liability, damage, claim or expense
incurred without negligence or willful misconduct on its part, arising out of
or in connection with the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim


 


17

















 


(whether asserted by the
Company, a Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder.


 


To secure the Company’s
payment obligations in this Section 6.7, the Trustee shall have a lien
prior to the Securities on all money or property held or collected by the
Trustee, except that held in trust to pay the Principal of or interest, if any,
on particular Securities.


 


The Company’s obligations
pursuant to this Section 6.7 shall survive the discharge or other
termination of this Indenture or the resignation or removal of the
Trustee.  When the Trustee incurs
expenses after the occurrence of a Default specified in Section 5.1(c) or
(d), the expenses are intended to constitute expenses of administration under
any Bankruptcy Law.


 


Section 6.8                                      REPLACEMENT OF TRUSTEE.  The
Trustee may resign by so notifying the Company; PROVIDED, HOWEVER, no such
resignation shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 6.8. 
The Holders of a majority in aggregate Principal Amount of the
Outstanding Securities at the time outstanding may remove the Trustee with
respect to the Securities by so notifying the Trustee and may appoint a
successor Trustee, which successor Trustee shall, in the absence of an Event of
Default, be reasonably acceptable to the Company.  The Company shall remove the Trustee if:


 


(a)                                  the Trustee fails to comply with Section 6.10;


 


(b)                                 the Trustee is adjudged bankrupt or
insolvent;


 


(c)                                  a receiver or public officer takes charge of
the Trustee or its property; or


 


(d)                                 the Trustee otherwise becomes incapable of
acting.


 


If the Trustee resigns or is
removed or if a vacancy exists in the office of Trustee for any reason, with
respect to the Securities of one or more series, the Company shall promptly
appoint, by resolution of its Board of Directors, a successor Trustee with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one
or more or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any series).


 


In the case of the
appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company.  Thereupon, the resignation or removal of the
retiring Trustee shall become effective and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail or
electronically transmit a notice of its succession to Holders of Securities of
the particular series with respect to which such successor Trustee has been
appointed.  The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 6.7.


 


In case of the appointment
hereunder of a successor Trustee with respect to the Securities of one or more
(but not all) series, the Company, the retiring Trustee and each successor
Trustee with respect to the Securities of one or more series shall execute and
deliver an indenture supplemental hereto wherein each successor Trustee shall
accept such appointment and which (1) shall contain such provisions as
shall be necessary or desirable to transfer and confirm to, and to vest in,
each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates, (2) if the
retiring Trustee is not retiring with respect to all Securities, shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees as co-Trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such
supplemental


 


18

















 


indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates, subject,
nevertheless, to its lien, if any, provided for in Section 6.7.


 


If a successor Trustee with
respect to the Securities of any series does not take office within
30 days after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of a majority in aggregate Principal Amount
of the Outstanding Securities of such series at the time outstanding may
petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the Securities of
such series.


 


If the Trustee fails to
comply with Section 6.10, any Holder of a Security of such series may
petition any court of competent jurisdiction for the removal of such Trustee
and the appointment of a successor Trustee.


 


Section 6.9                                      SUCCESSOR TRUSTEE BY MERGER.  If
the Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.


 


Section 6.10                                ELIGIBILITY; DISQUALIFICATION.  The
Trustee shall at all times satisfy the requirements of TIA Section 310(a)(1) and
310(a)(5).  The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. 
The Trustee shall comply with TIA Section 310(b), including the
optional provision permitted by the second sentence of TIA Section 310(b)(9).  In determining whether the Trustee has
conflicting interests as defined in TIA Section 310(b)(1), the provisions
contained in the proviso to TIA Section 310(b)(1) shall be deemed
incorporated herein.


 


Section 6.11                                PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY.  The Trustee shall comply with TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b).  A Trustee who has resigned or been removed
shall be subject to TIA Section 311(a) to the extent indicated
therein.


 


ARTICLE VII


 


SATISFACTION AND DISCHARGE


 


Section 7.1                                      DISCHARGE OF LIABILITY ON SECURITIES.  This
Indenture shall upon Company Request cease to be of further effect as to all
Outstanding Securities or all Outstanding Securities of any series, as the case
may be (except as to any surviving rights of registration of transfer of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:


 


(a)                                  either


 


(i)                                     all Outstanding Securities or all Outstanding
Securities of any series, as the case may be, theretofore authenticated and
delivered, (other than Securities or Securities of such series, as the case may
be, for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section 7.2) have
been delivered to the Company or the Trustee for cancellation; or


 


(ii)                                  all such Securities not theretofore delivered
to the Company or the Trustee for cancellation,


 


(1)                                  have become due and payable, or


 


19

















 


(2)                                  will become due and payable at their Stated
Maturity within one year;


 


and the Company, in the case
of (1) or (2) above, has deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose, an amount sufficient to pay
and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee or the Company for cancellation, for principal and any
interest to the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity, as the case may be;


 


(b)                                 the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and


 


(c)                                  the Company has delivered to the Trustee an
Officers’ Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.


 


The Trustee shall join in
the execution of a document prepared by the Company acknowledging satisfaction
and discharge of this Indenture on demand of the Company accompanied by an
Officers’ Certificate and Opinion of Counsel and at the cost and expense of the
Company.


 


Notwithstanding the
satisfaction and discharge of this Indenture with respect to the Securities of
any series, the obligations of the Company to the Trustee with respect to the
Securities of that series under Section 6.7, the obligations of the
Company to any Authenticating Agent and, if money shall have been deposited
with the Trustee pursuant to clause (b) of this Section, Section 7.2
shall survive.  The Company shall pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the principal and interest received in respect thereof other
than any such tax, fee or other charge which by law is for the account of the
Holders of Outstanding Securities.


 


Section 7.2                                      REPAYMENT TO THE COMPANY.  The
Trustee and the Paying Agent shall return to the Company on Company Request any
money held by them for the payment of any amount with respect to the Securities
that remains unclaimed for two years. 
After return to the Company, Holders entitled to the money must look to
the Company for payment as general creditors with limited recourse as described
herein and in the Securities unless an applicable abandoned property law
designates another person.


 


ARTICLE VIII


 


SUPPLEMENTAL INDENTURES


 


Section 8.1                                      SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS.  Without the consent of any Holders of
Securities, the Company and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:


 


(a)                                  to evidence the succession of another
corporation to the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or


 


(b)                                 to add to the covenants, agreements and
obligations of the Company for the benefit of the Holders of all of the
Securities or any series thereof, or to surrender any right or power herein
conferred upon the Company; or


 


(c)                                  to establish the form or terms of Securities
of any series as permitted by Sections 2.1 and 2.2(c), respectively; or


 


(d)                                 to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the Securities of
one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 6.8; or


 


20
















 


(e)                                  to
cure any ambiguity, defect or inconsistency;


 


(f)                                    to amend restrictions on transferability of
any Securities on any series in any manner that does not adversely affect the
rights of any Securityholder in any material respect; or


 


(g)                                 to add to, change or eliminate any of the
provisions of this Indenture (which addition, change or elimination may apply
to one or more series of Securities), provided that any such addition, change
or elimination shall neither (i) apply to any Security of any series created
prior to the execution of such supplemental indenture and entitled to the
benefit of such provision nor (ii) modify the rights of the Holder of any
such Security with respect to such provision; or


 


(h)                                 to secure the Securities; or


 


(i)                                     to make any other change that does not
adversely affect the rights of any Securityholder in any material respect.


 


Section 8.2                                      SUPPLEMENTAL INDENTURES WITH CONSENT OF
HOLDERS.  With the written consent of the Holders of at
least a majority in aggregate Principal Amount of the Outstanding Securities of
each series affected by such supplemental indenture, the Company and the
Trustee may amend this Indenture or the Securities of any series or may enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of the Securities of such series and under this Indenture; provided,
however, that no such amendment or supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected thereby:


 


(a)                                  change the Stated Maturity of the Principal
of, or any installment of Principal or interest on, any such Security, or
reduce the Principal Amount thereof or the rate of interest thereon that would
be due and payable upon a declaration of acceleration of maturity thereof
pursuant to Section 5.2, or change the Place of Payment where, or change
the coin or currency in which, any installment of principal of or interest on,
any such Security is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof;


 


(b)                                 reduce the percentage in Principal Amount of
the Outstanding Securities of any series, the consent of whose Holders is
required for any such amendment or supplemental indenture, or the consent of
whose Holders is required for any waiver (of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences) with
respect to the Securities of such series provided for in this Indenture; or


 


(c)                                  modify any of the provisions of this Section,
Section 5.4 (clauses (a) and (b)) or 5.7, except to increase the
percentage of Outstanding Securities of such series required for such actions
to provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each Outstanding Security
affected thereby.


 


A supplemental indenture
which changes or eliminates any covenant or other provision of this Indenture
which has expressly been included solely for the benefit of one or more
particular series of Securities, or which modifies the rights of the Holders of
Securities of such series with respect to such covenant or other provision,
shall be deemed not to affect the rights under this Indenture of the Holders of
Securities of any other series.


 


It shall not be necessary
for the consent of the Holders under this Section 8.2 to approve the
particular form of any proposed amendment or supplemental indenture, but it
shall be sufficient if such consent approves the substance thereof.


 


After an amendment or
supplemental indenture under this Section 8.2 becomes effective, the
Company shall mail or electronically transmit to each Holder of the particular
Securities affected thereby a notice briefly describing the amendment.


 


21

















 


Section 8.3                                      COMPLIANCE WITH TRUST INDENTURE ACT. 
Every supplemental indenture executed pursuant to this Article shall
comply with the TIA as then in effect.


 


Section 8.4                                      REVOCATION AND EFFECT OF CONSENTS, WAIVERS
AND ACTIONS.  Until an amendment or waiver with respect to
a series of Securities becomes effective, a consent to it or any other action
by a Holder of a Security of that series hereunder is a continuing consent by
the Holder and every subsequent Holder of that Security or portion of that
Security that evidences the same obligation as the consenting Holder’s
Security, even if notation of the consent, waiver or action is not made on the
Security.  However, any such Holder or
subsequent Holder may revoke the consent, waiver or action as to such Holder’s
Security or portion of the Security if the Trustee receives the notice of
revocation before the Company or an agent of the Company certifies to the
Trustee that the consent of the requisite aggregate Principal Amount of the
Securities of that series has been obtained. 
After an amendment, waiver or action becomes effective, it shall bind
every Holder of Securities of that series.


 


The Company may, but shall
not be obligated to, fix a record date for the purpose of determining the
Holders entitled to consent to any amendment or waiver with respect to a series
of Securities.  If a record date is
fixed, then notwithstanding the first two sentences of the immediately
preceding paragraph, those persons who were Holders of Securities of that
series at such record date (or their duly designated proxies), and only those
persons, shall be entitled to revoke any consent previously given, whether or
not such persons continue to be Holders after such record date.  No such consent shall be valid or effective
for more than 90 days after such record date.


 


Section 8.5                                      NOTATION ON OR EXCHANGE OF SECURITIES. 
Securities of any series authenticated and delivered after the execution
of any supplemental indenture with respect to such series pursuant to this Article may,
and shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture.  If the Company shall so determine, new
Securities of such series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared ,executed, authenticated and delivered by the Company in exchange for
outstanding Securities of that series.


 


Section 8.6                                      TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES.  The
Trustee shall sign any supplemental indenture authorized pursuant to this Article VIII
if the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee.  If it does,
the Trustee may, but need not, sign it. 
In signing such amendment, the Trustee shall receive, and shall be fully
protected in conclusively relying upon, an Officers’ Certificate and an Opinion
of Counsel stating that such amendment is authorized or permitted by this
Indenture.


 


Section 8.7                                      EFFECT OF SUPPLEMENTAL INDENTURES.  Upon
the execution of any supplemental indenture under this Article, this Indenture
shall be modified in accordance therewith, and such supplemental indenture
shall form a part of this Indenture for all purposes; and every Holder of
Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby, except to the extent otherwise set forth thereon.


 


ARTICLE IX


 


MISCELLANEOUS


 


Section 9.1                                      TRUST INDENTURE ACT CONTROLS.  If
any provision of this Indenture limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by the TIA,
the required provision shall control.


 


Section 9.2                                      NOTICES.  Any notice or communication
shall be in writing and delivered in person, mailed by first-class mail,
postage prepaid or transmitted electronically to any Holder at the registered
address maintained in the Company’s records; PROVIDED, that any notice or
communication by and among the Trustee and the Company may be made by telecopy
and shall be effective upon receipt thereof and shall be confirmed in writing,
mailed by first-class mail, postage prepaid, and addressed as follows:


 


22

















 


	
  if to the Company:

  
	
  Prosper
  Marketplace, Inc.

  
	
  111 Sutter Street, 22nd Floor

  
	
  San Francisco, CA 94104

  
	
  Attention: Chief Executive
  Officer

  
	
  Facsimile:

  	
  415-598-1471

  	
   

  
	
  Email:  compliance@prosper.com

  
	
   

  
	
  if to the Trustee:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  



 


The Company or the Trustee
by notice to the other may designate additional or different addresses for
subsequent notices or communications.


 


Any notice or communication
given to a Holder of Securities shall be transmitted electronically to or
mailed to such Securityholder at the Securityholder’s address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.


 


Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.


 


Failure to electronically
transmit or mail a notice or communication to a Securityholder or any defect in
it shall not affect its sufficiency with respect to other Holders of Securities
of the same series.  If a notice or
communication is electronically transmitted or mailed in the manner provided
above, it is duly given, whether or not received by the addressee.


 


If the Company
electronically transmits or mails a notice or communication to the Holders of
Securities of a particular series, it shall electronically transmit or mail a
copy to the Trustee and each Registrar, co-registrar or Paying Agent, as the
case may be, with respect to such series.


 


In case by reason of the
suspension of regular mail service or by reason of any other cause it shall be
impracticable to give notice to Holders of Securities as set forth above, then
such notification as shall be made with the acceptance of the Trustee shall
constitute a sufficient notification for every purpose hereunder.  In any case where notice to Holders of
Securities is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder of a Security shall
affect the sufficiency of such notice with respect to other Holders of
Securities.


 


Section 9.3                                      COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. 
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities.  The Company and the Trustee,
the Registrar or the Paying Agent with respect to a particular series of
Securities, and anyone else, shall have the protection of TIA Section 312(c).


 


Section 9.4                                      CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.  Upon any request or application by the
Company to the Trustee to take any action under this Indenture, the Company
shall furnish to the Trustee:


 


(a)                                  an Officers’ Certificate stating that, in the
opinion of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and


 


23

















 


(b)                                 an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent have been complied with.


 


Section 9.5                                      FORM OF DOCUMENTS DELIVERED TO TRUSTEE.  In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.


 


Any certificate or opinion
of an officer of the Company may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous.  Any such Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.


 


Section 9.6                                      STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.  Each
Officers’ Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:


 


(a)                                  statement that each person making such
Officers’ Certificate or Opinion of Counsel has read such covenant or
condition;


 


(b)                                 a brief statement as to the nature and scope
of the examination or investigation upon which the statements or opinions contained
in such Officers’ Certificate or Opinion of Counsel are based;


 


(c)                                  a statement that, in the opinion of each such
person, he has made such examination or investigation as is necessary to enable
such person to express an informed opinion as to whether or not such covenant
or condition has been complied with; and


 


(d)                                 a statement that, in the opinion of such
person, such covenant or condition has been complied with.


 


Section 9.7                                      SEPARABILITY CLAUSE.  In
case any provision in this Indenture or in the Securities shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.


 


Section 9.8                                      RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR.  With
respect to the Securities of a particular series, the Trustee with respect to
such series of Securities may make reasonable rules for action by or a
meeting of Holders of such series of Securities.  With respect to the Securities of a
particular series, the Registrar and the Paying Agent with respect to such
series of Securities may make reasonable rules for their functions.


 


Section 9.9                                      LEGAL HOLIDAYS.  A “Legal
Holiday” is any day other than a Business Day.  If any specified date (including an Interest
Payment Date or Stated Maturity of any Security, or a date for giving notice)
is a Legal Holiday at any Place of Payment or place for giving notice, then
(notwithstanding any other provision of this Indenture or of the Securities
other than a provision in the Securities of any series which specifically
states that such provision shall apply in lieu of this Section) payment of
interest or Principal need not be made at such Place of Payment, or such other
action need not be taken, on such date, but the action shall be taken on the
next succeeding day that is not a Legal Holiday at such Place of Payment with
the same force and effect as if made on the Interest Payment Date, or at the
Stated Maturity or such other date.


 


24

















 


Section 9.10                                GOVERNING LAW AND JURISDICTION; WAIVER OF
JURY TRIAL.  THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO ANY PRINCIPLE OF CONFLICTS OF LAW THAT WOULD REQUIRE OR
PERMIT THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.  THE COMPANY, THE TRUSTEE, AND EACH HOLDER OF
A SECURITY (BY ACCEPTANCE THEREOF) THEREBY, (I) SUBMITS TO THE EXCLUSIVE JURISDICTION
OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING RELATED
TO THIS INDENTURE, (II) IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION IN SUCH SUITS AND (III) IRREVOCABLY WAIVES TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING BROUGHT IN THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE
BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK AND THAT SUCH SUIT, ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.


 


EACH OF THE COMPANY AND THE
TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION
CONTEMPLATED HEREBY.


 


Section 9.11                                NO RECOURSE AGAINST OTHERS.  A
director, officer, employee or stockholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Securities or
this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  By
accepting a Security, each Holder of such Security shall waive and release all
such liability.  The waiver and release
shall be part of the consideration for the issue of the Securities.


 


Section 9.12                                SUCCESSORS.  All agreements of the Company
in this Indenture and the Securities shall bind its successor.  All agreements of the Trustee in this
Indenture shall bind its successor.


 


Section 9.13                                EFFECT OF HEADINGS AND TABLE OF CONTENTS.  The Article and
Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.


 


Section 9.14                                BENEFITS OF INDENTURE. 
Nothing in this Indenture or in the Securities, express or implied,
shall give to any person, other than the parties hereto and their successors
hereunder and the Holders of Securities, any benefits or any legal or equitable
right, remedy or claim under this Indenture.


 


Section 9.15                                MULTIPLE ORIGINALS.  The
parties may sign any number of copies of this Indenture.  Each signed copy shall be an original, but
all of them together represent the same agreement.  One signed copy is enough to prove this
Indenture.


 


Section 9.16                                FORCE MAJEURE.  In
no event shall the Trustee be responsible or liable for any failure or delay in
the performance of its obligations hereunder arising out of or caused by,
directly or indirectly, forces beyond its control, including, without
limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil
or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services; it being understood that the Trustee shall
use reasonable efforts which are consistent with accepted practices in the
banking industry to resume performance as soon as practicable under the
circumstances.


 


25

















 


	
   

  	
  PROSPER MARKETPLACE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					



 


26

















 


EXHIBIT A


Form of Security


 


	
  FOR PURPOSES OF SECTIONS
  1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS
  NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT BECAUSE PAYMENTS ON THE
  NOTE ARE DEPENDENT ON PAYMENTS ON THE CORRESPONDING BORROWER LOAN. THE ISSUE
  PRICE OF THE NOTE IS THE STATED PRINCIPAL AMOUNT OF THIS NOTE, AND THE ISSUE
  DATE IS THE ORIGINAL ISSUE DATE. UPON REQUEST, THE COMPANY WILL PROMPTLY MAKE
  AVAILABLE TO THE HOLDER THE AMOUNT OF OID AND YIELD TO MATURITY 

  
	
  OF THIS NOTE. A HOLDER
  SHOULD CONTACT PROSPER MEMBER SUPPORT AT (866) 615-6319 OR support@prosper.com.

  



 


 


ANY TRANSFER, PLEDGE OR
OTHER USE OF THIS NOTE FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
unless (1) such transfer is effected on a trading system that is
recognized by the Company, and (2) this Note has been presented by the
registered Holder (as defined below) to the Company or its agent for
registration of transfer.


 


BORROWER
PAYMENT DEPENDENT NOTE SERIES NO.                     (1)


PROSPER
MARKETPLACE, INC.


 


	
  No.

  	
   

  	
   

  	
   

  	
  [CUSIP
  

  	
   

  	
  ]

  



 


	
  HOLDER:

  	
   

  	
  (2)

  
	
   

  
	
  CORRESPONDING BORROWER
  LOAN: 

  	
   

  	
  (3)

  
	
   

  
	
  STATED PRINCIPAL AMOUNT OF
  THIS NOTE: U.S. $

  	
   

  	
  (4)

  
	
   

  
	
  AGGREGATE PRINCIPAL AMOUNT
  OF THIS SERIES OF NOTES: U.S. $

  	
   

  	
  (5)

  
	
   

  
	
  INTEREST RATE:

  	
   

  	
  (6)

  
	
   

  
	
  SERVICING FEE: AN
  ANNUALIZED RATE OF 1% OF OUTSTANDING PRINCIPAL AMOUNT OF THE BORROWER LOAN.

  
	
   

  
	
  ORIGINAL ISSUE DATE:

  	
   

  	
  (7)

  
	
   

  
	
  INITIAL MATURITY DATE:

  	
   

  	
  (8)

  
	
   

  
	
  FINAL MATURITY DATE:

  	
   

  	
  (9)

  
																	



 


EXTENSION OF MATURITY DATE:
Each Note will mature on the Initial Maturity Date, unless the maturity of the
Note is extended to the Final Maturity Date subject to conditions described
below.  In no event will the maturity of
the Notes be extended beyond the Final Maturity Date.


 


PAYMENT DATES: Subject to
the limitations on payment described below, the Company will make payments of
principal and interest on or before the fourth Business Day following receipt
of any Borrower Loan Net Payments by the Company in accordance with the payment
schedule for this Note, which is available on the Holder’s account page at
www.prosper.com, subject to prepayment at any time without penalty.


 






(1) Insert loan ID
number for Corresponding Borrower Loan.


(2) Insert lender
member’s screen name and member identification number.


(3) Insert description
of Corresponding Borrower Loan.


(4) Insert principal
amount of lender member’s Corresponding Borrower Loan.


(5) Insert aggregate
principal amount of Corresponding Borrower Loan.


(6) Insert coupon
stated on Corresponding Borrower Loan.


(7) Insert date
corresponding to date of funding of Corresponding Borrower Loan.


(8) Insert date
corresponding to stated maturity of Corresponding Borrower Loan.


(9) Insert date that is
the first anniversary of the stated maturity of Corresponding Borrower Loan.


 


A-1

















 


Prosper Marketplace, Inc.,
a corporation duly organized and existing under the laws of the State of
Delaware (herein called the “Company”), for value received, hereby
promises to pay to the person identified as the “Holder” above (the “Holder”),
principal and interest on this Note in U.S. dollars in an amount equal to the
Holder’s equal and ratable share of the Borrower Loan Net Payments on each
Payment Date (in accordance with the payment schedule for this Note, which is
available on the Holder’s account page at www.prosper.com and subject to
prepayment) until the Initial Maturity Date or, if the maturity of the Note has
been extended, until the Final Maturity Date. 
For the avoidance of doubt, (1) no payments of principal and
interest on this Note shall be payable unless the Company has received Borrower
Loan Payments, and then only to the extent of Borrower Loan Net Payments in
respect of those Borrower Loan Payments related to the Corresponding Borrower
Loan identified above that have been received by the Company, and (2) no
Holder of the Note shall have any recourse against the Company unless, and then
only to the extent that, the Company has failed to pay such Holder the Borrower
Loan Net Payments or otherwise breached a covenant in the Indenture described
below that is applicable to the series of Notes of which this Note forms a
part.  Subject to certain exceptions
provided in the Indenture referred to below, the principal and interest payable
on any Payment Date will be paid to the person in whose name this Note is
registered at the close of business on the Record Date next preceding such
Payment Date or maturity date.


 


“Record Date” shall
mean the second Business Day immediately preceding each Interest Payment Date.


 


“Business Day” shall
mean each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which the Automated Clearing House system operated by the U.S. Federal Reserve
Bank (the “ACH System”) is closed and (2) not a day on which
banking institutions are authorized or obligated by law or executive order to
close in San Francisco, California or New York, New York.


 


If, on the Initial Maturity
Date, any principal or interest payments in respect of the Corresponding
Borrower Loan remain due and payable to the Company, the maturity date of this
Note will be extended to the Final Maturity Date identified above.


 


If, on the Initial Maturity
Date, no principal or interest payments in respect of the Corresponding
Borrower Loan remain due and payable to the Company, the Note will mature on
the Initial Maturity Date and no Borrower Loan Net Payments that the Company
receives in respect of the Corresponding Borrower Loan after such Initial
Maturity Date shall be required to be paid to the Holder of the Note.


 


All payments of principal
and interest on this Note due to the Holder hereof shall be made in U.S.
dollars, in immediately available funds, by intra-institution book entry
transfer to the Holder’s designated sub-account in the trust account maintained
by the Company at
                                                                ,
or such alternate account of the Holder designated by the Trustee in accordance
with the Indenture.


 


All U.S. dollar amounts used
in or resulting from the calculation of amounts due in respect of this Note
shall be rounded to the nearest cent (with one-half cent being rounded upward).


 


This Note is one of a duly
authorized series of special limited obligations of the Company (hereinafter
called the “Securities”) all issued or to be issued under and pursuant to an
Indenture dated as of [                                        ,
2009] (hereinafter called the “Indenture”), duly executed and delivered
by the Company and                                                                   ,
as trustee (hereinafter called the “Trustee”), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description
of the rights, duties and immunities thereunder of the Trustee and the rights
thereunder of the holders of the Securities. 
The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939 (the “TIA”), as in effect on the date of the Indenture.  The Securities are subject to, and qualified
by, all such terms, certain of which are summarized hereon, and Holders are
referred to the Indenture and the TIA for a statement of such terms.  As provided in the Indenture, the Securities
may be issued in one or more separate series, which different series may be
issued in various aggregate principal amounts, mature at different times, bear
interest at different rates, be subject to different covenants and events of
default, and otherwise vary as provided or permitted in the Indenture.


 


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If an Event of Default
described in Section 5.1(3) or (4) of the Indenture occurs and
is continuing, the unpaid stated principal amount hereof will become and be
immediately due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.


 


The Indenture contains
provisions permitting the Company and the Trustee, with the consent of the
holders of not less than a majority in aggregate principal amount of each
series of Securities affected thereby, at the time Outstanding, evidenced as
provided in the Indenture, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any indenture supplemental thereto or modifying in any
manner the rights of the holders of this Note; provided, however,
that no such supplemental indenture shall (1) change the Stated Maturity
of the principal of, or any installment of principal or interest on, any
Security, or reduce the principal amount thereof or the rate of interest
thereon that would be due and payable upon a declaration of acceleration of
maturity thereof or change the place of payment where, or change the coin or
currency in which, any installment of principal and interest on any such
Security is payable or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof, (2) reduce
the percentage in principal amount of the Outstanding Securities, the consent
of whose Holders is required for any such amendment or supplemental indenture,
or the consent of whose Holders is required for any waiver (of compliance with
certain provisions of the Indenture or certain defaults thereunder and their
consequences) with respect to the Securities, or (3) modify any of the
provisions of Section 8.2, Section 5.4 (clauses (1) and (2)) or Section 5.7
of the Indenture, except to increase the percentage of Outstanding Securities
required for such actions to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the Holder of
each Outstanding Security affected thereby. 
The Indenture also contains provisions permitting the holders of a
majority in aggregate principal amount of the Securities of all affected series
at the time outstanding, on behalf of the holders of all the Securities of such
series, to waive, insofar as those series are concerned, compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. 
Any such consent by the Holder of this Note (unless revoked as provided
in the Indenture) shall be conclusive and binding upon such Holder and upon all
future holders and owners of this Note and any Notes which may be issued upon
the registration of transfer hereof or, irrespective of whether or not any
notation thereof is made upon this Note or other such Notes.


 


This Note is not entitled to
any sinking fund.  This Note is not
redeemable at the option of the Holder.  The
Company shall redeem all of the Outstanding Notes of the series of which this
Note forms a part for the remaining unpaid principal balance of such Note if
the Corresponding Borrower Loan has been obtained as a result of verifiable
identity theft on the part of the purported borrower member. The Company may,
in its reasonable discretion, 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 Corresponding 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. The Company shall not be
required to repurchase a Note until such Note is at least 120 days past-due,
provided, however, that the Company may in its sole discretion elect to
repurchase a Note at an earlier time.


 


The Notes are in registered
form without coupons in denominations of $1.00 to $25,000.  The Notes may not be transferred and the
transfer of Notes shall not be registered as provided in the Indenture unless
such transfer is effected on a trading system that is recognized by the
Company.  Upon due presentment for
registration of transfer of this Note at the office or agency of the Company in
San Francisco, California, a new Note or Notes in authorized denominations in
Dollars for an equal aggregate principal amount and like interest rate and
maturity will be issued to the transferee in exchange therefor, subject to the
limitations provided in the Indenture, without charge except for (1) any
stamp tax or other governmental charge imposed in connection therewith and (2) any
transfer charges associated with the Company’s trading platform as described on
its website at www.prosper.com.


 


The Company, the Trustee,
and any paying agent may deem and treat the registered Holder hereof as the
absolute owner of this Note at the Holder’s address as it appears on the
register books of the Company as kept by the Company or duly authorized agent
of the Company (whether or not this Note shall be overdue), for the purpose of
receiving payment of or on account hereof and for all other purposes, and
neither the Company nor the Trustee nor any paying agent shall be affected by
any notice to the contrary.  All payments
made to or upon the order of such registered Holder shall, to the extent of the
sum or sums paid, effectively satisfy and discharge liability for moneys payable
on this Note.


 


No recourse under or upon
any obligation, covenant or agreement contained in the Indenture or any
indenture supplemental thereto or in any Note, or because of any indebtedness
evidenced thereby, shall be had


 


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against any incorporator, or
against any past, present or future shareholder, officer or director, as such,
of the Company, either directly or through the Company, under any rule of
law, statute or constitutional provision or by the enforcement of any
assessment or penalty or otherwise, all such personal liability of every such
incorporator, shareholder, officer and director, as such, being expressly
waived and released by the acceptance hereof and as a condition of and as part
of the consideration for the issuance of this Note.


 


Unless otherwise defined
herein, terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.  To the extent that provisions contained in
this Note are inconsistent with the provisions set forth in the Indenture, the
provisions contained herein will apply.


 


This Note shall be governed
by and construed in accordance with the laws of the State of New York without
regard to any principle of conflict of laws that would require or permit the
application of the laws of any other jurisdiction.


 


This Note shall not be valid
or become obligatory for any purpose until the Certificate of Authentication
hereon shall have been signed by an authorized officer of the Company or its
duly authorized agent under the Indenture referred to above.


 


IN WITNESS
WHEREOF, Prosper
Marketplace, Inc. has caused this instrument to be signed by its duly
authorized officers.


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROSPER MARKETPLACE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  CERTIFICATE OF
  AUTHENTICATION

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  This is one of the
  Securities of the series of Securities designated therein referred to in the
  within-mentioned Indenture.

  
	
   

  	
   

  
	
  PROSPER MARKETPLACE, INC.

  	
   

  
	
  as Authenticating Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
								



 


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