Exhibit 10.3


 


Executed: 04/14/2008


 


CONFIDENTIAL
TREATMENT REQUESTED BY PROSPER MARKETPLACE, INC.


 


WEBBANK


 


and


 


PROSPER MARKETPLACE, INC.


 


LOAN ACCOUNT PROGRAM AGREEMENT


 


Dated as of April 14, 2008


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  PROGRAM
  MARKETING AND SERVICES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  EXTENSION
  OF CREDIT

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  CONSUMER
  DOCUMENTS AND CREDIT POLICY

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  LOAN
  ACCOUNT PROCESSING AND ORIGINATION

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  FUNDING
  LOANS; PAYMENT OF SERVICING FEE

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  OTHER
  RELATIONSHIPS WITH BORROWERS

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  INDEMNIFICATION

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  TERM
  AND TERMINATION

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  CONFIDENTIALITY

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  PROPRIETARY
  MATERIAL

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  RELATIONSHIP
  OF PARTIES

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  EXPENSES

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  EXAMINATION

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  INSPECTION;
  REPORTS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  GOVERNING
  LAW; WAIVER OF JURY TRIAL

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  SEVERABILITY

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  ASSIGNMENT

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  THIRD
  PARTY BENEFICIARIES

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  NOTICES

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  AMENDMENT
  AND WAIVER

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  ENTIRE
  AGREEMENT

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  COUNTERPARTS

  	
   

  	
  15

  



 

















 


	
  25.

  	
   

  	
  INTERPRETATION

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  AGREEMENT
  SUBJECT TO APPLICABLE LAWS

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  FORCE
  MAJEURE

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
   

  	
  JURISDICTION;
  VENUE

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  29.

  	
   

  	
  INSURANCE

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
   

  	
  COMPLIANCE
  WITH APPLICABLE LAWS; PROGRAM COMPLIANCE MANUAL

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31.

  	
   

  	
  PROHIBITION
  ON TIE-IN FEES

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  32.

  	
   

  	
  NOTICE
  OF CONSUMER COMPLAINTS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  33.

  	
   

  	
  HEADINGS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  34.

  	
   

  	
  PRIVACY
  LAW COMPLIANCE

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  35.

  	
   

  	
  MANNER
  OF PAYMENTS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  36.

  	
   

  	
  REFERRALS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  37.

  	
   

  	
  AUDITED
  FINANCIAL STATEMENTS

  	
   

  	
  18

  



 

















 


SCHEDULES AND EXHIBITS


 


	
  SCHEDULE
  1

  	
   

  	
  Definitions

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  A

  	
   

  	
  The
  Program Website

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  B

  	
   

  	
  Credit
  Policy

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  C

  	
   

  	
  Form of
  Application

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  D

  	
   

  	
  Loan
  Account Documentation

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  E

  	
   

  	
  Sample
  Funding Statement

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  F

  	
   

  	
  Insurance
  Requirements

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  G

  	
   

  	
  Program
  Compliance Manual

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  H

  	
   

  	
  Third-Party
  Service Contractors

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  I

  	
   

  	
  Bank
  Secrecy Act Policy

  



 

















 


THIS LOAN ACCOUNT
PROGRAM AGREEMENT (this “Agreement”), dated as of April 14, 2008
(“Effective Date”), is made by and between WEBBANK, a Utah-chartered industrial
bank having its principal location in Salt Lake City, Utah (“Bank”), and
PROSPER MARKETPLACE, INC., a Delaware corporation, having its principal
location in San Francisco, California (“Company”).


 


WHEREAS, Company
is in the business of providing certain services necessary for the origination
of consumer installment loans;


 


WHEREAS, Bank is in the business
of originating various types of consumer loans, including installment loans;
and


 


WHEREAS, the Parties
desire to develop a program pursuant to which Company shall market and provide
an online interface and certain operations services in connection with, and
Bank shall originate, installment loans for qualifying consumers identified by
Company.


 


NOW, THEREFORE, in
consideration of the foregoing and the terms, conditions and mutual covenants
and agreements herein contained, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Bank and Company
mutually agree as follows:


 


1.                                       Definitions.
The terms used in this Agreement shall be defined as set forth in Schedule 1.


 


2.                                       Program
Marketing and Services.


 


(a)                                Bank hereby retains Company to serve as
Bank’s marketing and operations vendor for the Program. As such, Company shall
perform the following services for Bank and the Program:


 


(1)                                  Company shall promote and otherwise
market the Program and the Loan Accounts at Company’s own cost and in its sole
discretion. In performing such promotion and other marketing services, Company
may use any form of media and may devote such monetary and other resources as
it deems appropriate in its sole discretion. Company’s promotion and marketing
efforts shall not be required to produce any minimum number of Loan Accounts or
other benefits to the Program during the Term of this Agreement or any year,
month, or other period under this Agreement. Company may refer to Bank and the Program
in promotional and marketing materials, including marketing scripts, upon the
condition that any references to Bank and/or the Program in any such materials
must receive the prior written approval of Bank, which approval shall not to be
unreasonably withheld or delayed. Company shall ensure that all promotional and
marketing materials shall be accurate and not misleading in all material
respects. Company shall ensure that all promotional and marketing materials and
strategies comply with Applicable Laws.


 


(2)                                  Company shall host and maintain the
Program Website and provide customer support, regulatory compliance,
administrative, and other operational services to support Bank’s origination of
Loan Accounts and the Program generally. Company shall provide such services in
a manner consistent with Company obligations specified in this Agreement and as
the Parties may mutually agree in writing from time to time.


 


1

















 


	
   

  	
   

  	
  (b)

  	
  Bank acknowledges and agrees that (i) pursuant
  to Section 12 of this Agreement, Company is licensing to Bank valuable
  Proprietary Material of Company for use in the marketing and operation of the
  Program, which includes but is not limited to use of the Program Website;
  (ii) because the value of such Proprietary Material may be affected by
  Bank’s lending activities under the Program, Company requires Bank to perform
  and Bank hereby agrees to perform Bank’s lending activities under the Program
  with due regard to Company’s interests in such Proprietary Material and in
  close coordination with Company as specified hereafter in this Agreement; and
  (iii) the compensation to be paid by Bank to Company under this
  Agreement is in consideration of Company’s licensing of such Proprietary
  Material to Bank as well as Company’s marketing and operational services to
  Bank and the Program under this Agreement.

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Extension of Credit. Company
  acknowledges that approval of an Application creates a creditor-borrower
  relationship between Bank and Borrower which involves, among other things,
  the disbursement of Loan Proceeds. Nothing in this Agreement shall obligate
  Bank to extend credit to an Applicant or disburse Loan Proceeds if Bank
  determines that doing so would be an unsafe or unsound banking practice or that
  such extension of credit would be in violation of the Credit Policy. Bank
  shall use reasonable commercial efforts to provide Company prior notice of a
  decision not to extend credit to an Applicant or disburse Loan Proceeds in
  reliance on the preceding sentence and, in all instances where Bank does not
  provide such prior notice, Bank shall provide Company prompt notice after
  making a decision not to extend credit to an Applicant or disburse Loan
  Proceeds in reliance on the preceding sentence.

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Consumer Documents and Credit Policy.
  The following documents, terms and procedures (“Consumer Finance Materials”)
  that have been approved by Bank and that will be used by Bank initially with
  respect to the Loan Accounts are attached to this Agreement: (i) the
  Program Website (screen shots of each page of the Program Website) as Exhibit A; (ii) Credit
  Policy as Exhibit B;
  (iii) form of Application, including disclosures required by Applicable
  Laws, as Exhibit C;
  and (iv) form of Loan Account Agreement, privacy policy and privacy
  notices, and all other Applicant and Borrower communications as Exhibit D. The Consumer Finance
  Materials shall not be changed without the prior written consent of both
  Parties, which consent shall not be unreasonably withheld or delayed;
  provided, however, that Bank may change the Consumer Finance Materials upon
  written notice provided to Company but without Company’s prior written
  consent, to the extent that such change is required by Applicable Laws or
  necessitated by safety and soundness concerns, provided that, as between Bank
  and Company, Bank shall be solely responsible for each such change and any
  adverse legal or other consequences arising from it. The Parties acknowledge
  that each Loan Account Agreement and all other documents referring to the
  creditor for the Program shall identify Bank as the creditor for the Loan
  Accounts. Company shall ensure that the Consumer Finance Materials comply
  with Applicable Laws.

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Loan Account Processing and Origination.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
  On behalf of Bank, Company shall process
  Applications received from Applicants via the Program Website (including
  retrieving credit reports) to determine whether the Applicant meets the
  eligibility criteria set forth in the Credit Policy and Bank’s “Know Your Customer”
  and anti-money laundering criteria (collectively, the “Bank Secrecy Act
  Policy”), which is attached hereto as Exhibit I, and which may be
  updated by Bank from time to time and such updates shall be effective upon
  notice to Company as set forth herein. Company shall respond to all inquiries
  from Applicants regarding the application

  



 


2

















 


	
   

  	
   

  	
  process.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Company shall forward to Bank mutually agreed
  information including name, address, social security number and date of
  birth, regarding Applicants who meet the eligibility criteria set forth in
  the Credit Policy. Company shall have no discretion to override the Credit
  Policy with respect to any Applications.

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Subject to the terms of this Agreement, Bank shall
  establish Loan Accounts with respect to Applicants who meet the eligibility
  criteria set forth in the Credit Policy.

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  Pursuant to procedures mutually agreed to by the
  Parties, Company shall deliver adverse action notices to Applicants who do
  not meet Credit Policy criteria or are otherwise denied by Bank.

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  Company shall deliver Program privacy notices and
  Loan Account Agreements to Borrowers.

  
	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  Company shall hold and maintain, as custodian for
  Bank, all documents of Bank pertaining to Loan Accounts. Company shall
  periodically provide to Bank copies of records required to be maintained
  under the Bank Secrecy Act Policy and such other documents regarding Loan
  Accounts as requested by Bank, at intervals mutually agreed to by the
  Parties, but no less frequently than monthly.

  
	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
  Company shall perform the obligations described in
  this Section 5 and deliver any customer communications to Applicants and
  Borrowers as necessary to carry on the Program, all at Company’s own cost and
  in accordance with Applicable Laws.

  
	
   

  	
   

  	
   

  
	
  (h)

  	
   

  	
  Pursuant to Section 16, as Bank reasonably
  requires and upon reasonable advance written notice to Company, Bank may
  periodically audit Company for compliance with the terms of this
  Section 5 and the Agreement as a whole, including compliance with the
  standards set forth herein for Loan Account origination.

  



 


6.                                       Funding
Loans; Payment of Servicing Fee.


 


	
  (a)

  	
   

  	
  Company shall provide a Funding Statement to Bank by
  e-mail or as otherwise mutually agreed by the Parties by 5:00 PM Mountain
  Time on the Business Day prior to each Funding Date. Each Funding Statement
  shall (i) identify those Applicants whose Applications satisfy the
  requirements of the Credit Policy and with respect to whom Company requests
  that Bank establish Loan Accounts, and (ii) provide the Funding Amount
  to be disbursed by Bank on such Funding Date. The Funding Statement shall be
  in the form of Exhibit E.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Subject to timely receipt of the Funding Statement,
  Bank shall transfer the Funding Amount from the Funding Account to the
  Disbursement Account by ACH transfers originated by Company on each Funding
  Date. Company shall provide Bank the account number and routing number for
  the Disbursement Account prior to the first Funding Date.

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Subject to timely receipt of the Funding Amount,
  Company shall disburse Loan Proceeds to Borrowers by ACH transfers from the
  Disbursement Account in accordance with the

  



 


3

















 


	
   

  	
   

  	
  Funding Statement on the Funding Date. Bank
  authorizes Company to deduct and retain from the Funding Amount the aggregate
  amount of the Origination Fees set forth on the Funding Statement as a
  Program servicing fee.

  



 


7.                                       Representations
and Warranties.


 


	
  (a)

  	
   

  	
  Bank hereby represents and warrants, as of the
  Effective Date, or covenants, as applicable, to Company that:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

  	
  Bank is an FDIC-insured Utah-chartered industrial
  bank, duly organized, validly existing under the laws of the State of Utah
  and has full corporate power and authority to execute, deliver, and perform
  its obligations under this Agreement; the execution, delivery and performance
  of this Agreement have been duly authorized, and are not in conflict with and
  do not violate the terms of the charter or bylaws of Bank and will not result
  in a material breach of or constitute a default under, or require any consent
  under, any indenture, loan or agreement to which Bank is a party;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
  All approvals, authorizations, licenses,
  registrations, consents, and other actions by, notices to, and filings with,
  any Person that may be required in connection with the execution, delivery,
  and performance of this Agreement by Bank, have been obtained (other than
  those required to be made to or received from Borrowers and Applicants);

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)

  	
  This Agreement constitutes a legal, valid, and
  binding obligation of Bank, enforceable against Bank in accordance with its
  terms, except (i) as such enforceability may be limited by applicable
  bankruptcy, insolvency, reorganization, moratorium, receivership,
  conservatorship or other similar laws now or hereafter in effect, including
  the rights and obligations of receivers and conservators under 12 U.S.C. §§
  1821 (d) and (e), which may affect the enforcement of creditors’ rights
  in general, and (ii) as such enforceability may be limited by general
  principles of equity (whether considered in a suit at law or in equity);

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (4)

  	
  There are no proceedings or investigations pending
  or, to the best knowledge of Bank, threatened against Bank (i) asserting
  the invalidity of this Agreement, (ii) seeking to prevent the
  consummation of any of the transactions contemplated by Bank pursuant to this
  Agreement, (iii) seeking any determination or ruling that, in the
  reasonable judgment of Bank, would materially and adversely affect the
  performance by Bank of its obligations under this Agreement,
  (iv) seeking any determination or ruling that would materially and
  adversely affect the validity or enforceability of this Agreement or
  (v) would have a materially adverse financial effect on Bank or its
  operations if resolved adversely to it;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (5)

  	
  Bank is not Insolvent;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (6)

  	
  The execution, delivery and performance of this
  Agreement by Bank comply with Utah and federal banking laws specifically
  applicable to Bank’s operations; provided that Bank makes no representation
  or warranty regarding compliance with Utah or federal banking laws relating
  to consumer protection, consumer

  



 


4

















 


	
   

  	
   

  	
   

  	
  lending, usury, loan collections, anti-money
  laundering, data security or privacy as they apply to the operation of the
  Program;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (7)

  	
  The Proprietary Materials Bank licenses to Company
  pursuant to Section 12, and their use as contemplated by this Agreement,
  do not violate or infringe upon, or constitute an infringement or
  misappropriation of, any U.S. patent, copyright or U.S. trademark, service
  mark, trade name or trade secret of any person or entity and Bank has the
  right to grant the licenses set forth in Section 12 below; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (8)

  	
  Bank shall comply with Title V of the
  Gramm-Leach-Bliley Act and the implementing regulations of the FDIC,
  including but not limited to applicable limits on the use, disclosure,
  storage, safeguarding and destruction of Applicant information, and shall
  maintain commercially reasonable data security and disaster recovery
  protections that, at the least, are consistent with industry standards for
  the consumer lending industry.

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Company hereby represents and warrants, as of the Effective
  Date, or covenants, as applicable, to Bank that:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

  	
  Company is a corporation, duly organized and validly
  existing in good standing under the laws of the State of Delaware, and has
  full power and authority to execute, deliver, and perform its obligations
  under this Agreement; the execution, delivery, and performance of this
  Agreement have been duly authorized, and are not in conflict with and do not
  violate the terms of the articles or bylaws of Company and will not result in
  a material breach of or constitute a default under or require any consent
  under any indenture, loan, or agreement to which Company is a party;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
  All approvals, authorizations, consents, and other
  actions by, notices to, and filings with any Person required to be obtained
  for the execution, delivery, and performance of this Agreement by Company,
  have been obtained;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)

  	
  This Agreement constitutes a legal, valid, and
  binding obligation of Company, enforceable against Company in accordance with
  its terms, except (i) as such enforceability may be limited by
  applicable bankruptcy, insolvency, reorganization, moratorium, or other
  similar laws now or hereafter in effect, which may affect the enforcement of
  creditors’ rights in general, and (ii) as such enforceability may be
  limited by general principles of equity (whether considered in a suit at law
  or in equity);

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (4)

  	
  There are no proceedings or investigations pending
  or, to the best knowledge of Company, threatened against Company
  (i) asserting the invalidity of this Agreement, (ii) seeking to
  prevent the consummation of any of the transactions contemplated by Company
  pursuant to this Agreement, (iii) seeking any determination or ruling
  that, in the reasonable judgment of Company, would materially and adversely
  affect the performance by Company of its obligations under this Agreement,
  (iv) seeking any determination or ruling that would materially and
  adversely affect the validity or enforceability of this Agreement, or
  (v) would have a materially adverse financial effect on Company or its
  operations if resolved adversely to it;

  



 


5

















 


	
   

  	
   

  	
  (5)

  	
  Company is not Insolvent;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (6)

  	
  The execution, delivery and performance of this
  Agreement by Company, the Consumer Finance Materials and the promotional and
  marketing materials and strategies shall all comply with Applicable Laws; except
  that if Company requests that Bank change the Bank Secrecy Act Policy to
  cause it to include any measures needed to comply with the Bank Secrecy Act
  or the USA Patriot Act and Bank does not do so, then Company provides no
  representations or warranties regarding any elements of the Bank Secrecy Act
  or the USA Patriot Act compliance affected by the unchanged provisions.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (7)

  	
  The Proprietary Materials Company licenses to Bank
  pursuant to Section 12, and their use as contemplated by this Agreement,
  do not violate or infringe upon, or constitute an infringement or
  misappropriation of, any U.S. patent, copyright or U.S. trademark, service
  mark, trade name or trade secret of any person or entity and Company has the
  right to grant the license set forth in Section 12 below; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (8)

  	
  Company shall comply with Title V of the
  Gramm-Leach-Bliley Act and the implementing regulations of the FDIC,
  including but not limited to applicable limits on the use, disclosure,
  storage, safeguarding and destruction of Applicant information, and shall
  maintain commercially reasonable data security and disaster recovery
  protections that at the least are consistent with industry standards for the
  consumer lending industry.

  
	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Bank hereby represents and warrants to Company as of
  each Funding Date that the Loan Proceeds that Bank is required to disburse on
  the Funding Date are being provided by Bank from its own resources, such as
  deposits, warehouse lines of credit, or other credit facilities of Bank.

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  Company hereby represents and warrants to Bank as of
  each Funding Date that:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

  	
  For each Loan Account and each disbursement of Loan
  Proceeds: (i) to the best of Company’s knowledge, all information in the
  related Application is true and correct, provided, however, that Company’s
  representation and warranty in this regard shall be subject to the following
  limitations: (A) Company does not verify the self-reported income,
  employment and occupation or other information provided by Applicants in
  listings, (B) each Applicant’s debt-to-income ratio is determined by
  Company from a combination of the Applicant’s self-reported income and information
  from the Applicant’s credit report and not otherwise verified by Company,
  (C) credit data that appears in Applications is taken directly from a
  credit report obtained on the Applicant from a credit reporting agency,
  without any review or verification by Company, (D) Company does not
  verify any statements by Applicants as to how Loan Proceeds are to be used
  and does not confirm after loan disbursement how Loan Proceeds were used, and
  (E) Applicants’ home ownership status is not verified by Company but is
  derived from the Applicant’s credit report, in that if the credit report
  reflects an active mortgage loan the Applicant is presumed to be a homeowner;
  (ii) the Loan Account is fully enforceable and all required disclosures
  to Borrowers have been delivered in compliance with Applicable Laws;
  (iii) the Loan Account Agreement and all other Loan Account documents
  are genuine and legally

  



 


6

















 


	
   

  	
   

  	
   

  	
  binding and enforceable, conform to the requirements
  of the Program and were prepared in conformity with the Program Compliance
  Manual; (iv) all necessary approvals required to be obtained by Company
  have been obtained; (v) nothing exists that would prohibit the sale of
  the Loan Accounts by Bank to Company under the Loan Sale Agreement, provided
  that Bank has taken no action (independent of action taken by Company on
  Bank’s behalf) that would prohibit the sale of the Loan Accounts by Bank to
  Company under the Loan Sale Agreement; and (vi) Bank is the sole owner
  of the Loan Accounts prior to any such sale of the Loan Accounts to Company,
  provided that Bank has taken no action (independent of action taken by
  Company on Bank’s behalf) that diminishes Bank’s ownership rights in the Loan
  Accounts;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

  	
  Each Borrower listed on a Funding Statement is
  eligible for a Loan Account under the Credit Policy; and each Borrower has
  submitted an Application; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)  

  	
  The information on each Funding Statement is true
  and correct in all respects.

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  The representations and warranties of Bank and
  Company contained in this Section 7, except those representations and
  warranties contained in subsections 7(a)(4) and 7(b)(4), are made
  continuously throughout the term of this Agreement. In the event that any
  investigation or proceeding of the nature described in subsections
  7(a)(4) and 7(b)(4) is instituted or threatened against either
  Party, such Party shall promptly notify the other Party of the pending or
  threatened investigation or proceeding.

  



 


8.                                       Other
Relationships with Borrowers.


 


	
  (a)

  	
   

  	
  Separate from the obligation to market Loan Accounts
  offered by Bank, and subject to the Program privacy policy and Applicable
  Laws, Company shall have the right, at its own expense, to solicit Applicants
  and/or Borrowers with offerings of other goods and services from Company and
  parties other than Bank, provided, however, that in the event that Company
  uses Bank’s name and/or Proprietary Materials in connection with such
  offerings, Company shall obtain Bank’s prior approval for such use.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Except as necessary to carry out its rights and
  responsibilities under this Agreement and the Loan Sale Agreement, Bank shall
  not use Applicant and/or Borrower information and shall not provide or
  disclose any Applicant and/or Borrower information to any Person, except to
  the extent required to do so under Applicable Laws or legal process.

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Notwithstanding subsection 8(b), (i) Bank may
  make solicitations for goods and services to the public, which may include
  one or more Applicants or Borrowers; provided that Bank does not
  (A) target such solicitations to specific Applicants and/or Borrowers,
  (B) use or permit a third party to use any list of Applicants and/or
  Borrowers in connection with such solicitations or (C) refer to or otherwise
  use the name of Company; and (ii) Bank shall not be obligated to redact
  the names of Applicants and/or Borrowers from marketing lists acquired from
  third parties (e.g.,
  subscription lists) that Bank uses for solicitations.

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  The terms of this Section 8 shall survive the
  expiration or earlier termination of this Agreement.

  



 


7

















 


9.                                       Indemnification.


 


	
  (a)

  	
   

  	
  Bank agrees to defend, indemnify, and hold harmless
  Company and its Affiliates, and the officers, directors, employees,
  representatives, shareholders, agents and attorneys of such entities (the
  “Company Indemnified Parties”) from and against any and all third party
  claims and actions, and all liability, judgments, damages, costs and
  expenses, including reasonable attorneys’ fees arising there from (together
  with third party claims and actions, “Losses”) to the extent arising from its
  (i) gross negligence, willful misconduct or breach of any of Bank’s
  representations, warranties, obligations or undertakings under this Agreement
  by Bank, or (ii) violation by Bank of any Utah or federal banking law
  specifically applicable to Bank’s operations other than Applicable Laws
  regarding consumer protection, consumer lending, usury, loan collection,
  anti-money laundering, data protection or privacy as they apply to the
  operation of the Program.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Company agrees to defend, indemnify, and hold
  harmless Bank and its Affiliates, and the officers, directors, employees,
  representatives, shareholders, agents and attorneys of such entities (the
  “Bank Indemnified Parties”) from and against any and all Losses to the extent
  arising from Company’s participation in the Program as contemplated by the
  Program Documents (including Losses arising from a violation of Applicable
  Laws or a breach by Company or its agents or representatives of any of
  Company’s representations, warranties, obligations or undertakings under the
  Program Documents), unless such Loss results from (i) the gross
  negligence or willful misconduct of Bank or (ii) a breach by Bank of any
  of Bank’s representations, warranties, obligations or undertakings under this
  Agreement.

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  The Company Indemnified Parties and the Bank
  Indemnified Parties are sometimes referred to herein as the “Indemnified
  Parties,” and Company or Bank, as an indemnitor hereunder, is sometimes
  referred to herein as the “Indemnifying Party.”

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  Any Indemnified Party seeking indemnification
  hereunder shall promptly notify the Indemnifying Party, in writing, of any
  notice of the assertion by any third party of any claim or of the
  commencement by any third party of any legal or regulatory proceeding,
  arbitration or action, or if the Indemnified Party determines the existence
  of any such claim or the commencement by any third party of any such legal or
  regulatory proceeding, arbitration or action, whether or not the same shall
  have been asserted or initiated, in any case with respect to which the
  Indemnifying Party is or may be obligated to provide indemnification (an
  “Indemnifiable Claim”), specifying in reasonable detail the nature of the
  Loss, and, if known, the amount, or an estimate of the amount, of the Loss,
  provided that failure to promptly give such notice shall only limit the
  liability of the Indemnifying Party to the extent of the actual prejudice, if
  any, suffered by such Indemnifying Party as a result of such failure. The
  Indemnified Party shall provide to the Indemnifying Party as promptly as
  practicable thereafter information and documentation reasonably requested by
  such Indemnifying Party to defend against the Indemnifiable Claim.

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  The Indemnifying Party shall have ten (10) days
  after receipt of any notification of an Indemnifiable Claim (a “Claim
  Notice”) to notify the Indemnified Party of the Indemnifying Party’s election
  to assume the defense of the Indemnifiable Claim and, through counsel of its
  own choosing, and at its own expense, to commence the settlement or defense
  thereof, and the Indemnified Party shall cooperate with the Indemnifying

  



 


8
















 


Party in connection therewith if such cooperation is so requested and
the request is reasonable; provided that the Indemnifying Party shall hold the
Indemnified Party harmless from all its reasonable out-of-pocket expenses,
including reasonable attorneys’ fees, incurred in connection with the
Indemnified Party’s cooperation.  If the
Indemnifying Party assumes responsibility for the settlement or defense of any
such claim, (i) the Indemnifying Party shall permit the Indemnified Party
to participate at its expense in such settlement or defense through counsel
chosen by the Indemnified Party; provided that, in the event that both the
Indemnifying Party and the Indemnified Party are defendants in the proceeding
and the Indemnified Party shall have reasonably determined and notified the
Indemnifying Party that representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them, then the fees and expenses of one such counsel for all Indemnified Parties
in the aggregate shall be borne by the Indemnifying Party; and (ii) the
Indemnifying Party shall not settle any Indemnifiable Claim without the
Indemnified Party’s consent, which consent shall not be unreasonably withheld
or delayed for any reason if the settlement involves only payment of money and
releases the Indemnified Party from any and all liability related to such
claim, and which consent may be withheld for any reason if the settlement
involves more than the payment of money, including any admission by the
Indemnified Party.  So long as the
Indemnifying Party is reasonably contesting any such Indemnifiable Claim in
good faith, the Indemnified Party shall not pay or settle such claim without
the Indemnifying Party’s consent, which consent shall not be unreasonably
withheld or delayed.  The Indemnified
Party may pay or settle any such Indemnifiable Claim at any time if it waives
its right to indemnification hereunder.


 


(f)            If the Indemnifying Party
does not notify the Indemnified Party within ten (10) days after receipt
of the Claim Notice that it elects to undertake the defense of the
Indemnifiable Claim described therein, or if the Indemnifying Party fails to
contest vigorously any such Indemnifiable Claim, the Indemnified Party shall
have the right, upon notice to the Indemnifying Party, to contest, settle or
compromise the Indemnifiable Claim in the exercise of its reasonable
discretion; provided that the Indemnified Party shall notify the Indemnifying
Party prior thereto of any compromise or settlement of any such Indemnifiable
Claim.  No action taken by the
Indemnified Party pursuant to this paragraph (f) shall deprive the
Indemnified Party of its rights to indemnification pursuant to this Section 9.


 


(g)           The terms of this Section 9
shall survive the expiration or earlier termination of this Agreement.


 


10.           Term and Termination.


 


(a)           This Agreement shall have an
initial term beginning on the Effective Date and ending twenty-four (24) months
thereafter (the “Initial Term”) and shall renew automatically for two (2) successive
terms of one (1) year each (each a “Renewal Term,” collectively, the
Initial Term and Renewal Term(s) shall be referred to as the “Term”),
unless either Party provides notice of non-renewal to the other Party at least
ninety (90) days prior to the end of the Initial Term or any Renewal Term or
this Agreement is earlier terminated in accordance with the provisions hereof.


 


(b)           This Agreement shall
terminate immediately upon the expiration or earlier termination of the Loan
Sale Agreement.


 


9

















 


(c)           Either Party may terminate
this Agreement without cause upon ninety (90) days’ prior written notice to the
other party.


 


(d)           A Party shall have a right
to terminate this Agreement immediately upon written notice to the other Party
in any of the following circumstances:


 


(1)           any representation or warranty made by the other
Party in this Agreement shall be incorrect in any material respect and shall
not have been corrected within thirty (30) Business Days after written notice
thereof has been given to such other Party;


 


(2)           the other Party shall default in the performance of
any obligation or undertaking under this Agreement and such default shall
continue for thirty (30) Business Days after written notice thereof has been
given to such other Party;


 


(3)           the other Party shall commence a voluntary case or
other proceeding seeking liquidation, reorganization, or other relief with
respect to itself or its debts under any bankruptcy, insolvency, receivership,
conservatorship or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, conservator, custodian, or
other similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of a trustee, receiver,
liquidator, conservator, custodian, or other similar official or to any
involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any corporate action to authorize
any of the foregoing;


 


(4)           an involuntary case or other proceeding, whether
pursuant to banking regulations or otherwise, shall be commenced against the
other Party seeking liquidation, reorganization, or other relief with respect
to it or its debts under any bankruptcy, insolvency, receivership,
conservatorship or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, conservator, custodian, or
other similar official of it or any substantial part of its property; or an
order for relief shall be entered against either Party under the federal
bankruptcy laws as now or hereafter in effect; or


 


(5)           there is a materially adverse change in the
financial condition of the other Party.


 


(e)           Bank shall not be obligated
to approve Applications or establish new Loan Accounts after termination of
this Agreement; provided, that Bank shall originate Loan Accounts to Applicants
to whom Bank has issued a lending commitment prior to termination, unless this
Agreement is terminated pursuant to subsection 10(b) or by Bank pursuant
to subsection 10(d).


 


(f)            The termination of this
Agreement either in part or in whole shall not discharge any Party from any
obligation incurred prior to such termination.


 


(g)           Upon termination of this
Agreement, Company shall purchase all Loan Accounts established by Bank prior
to and on the date of termination that have not already been


 


10

















 


purchased by Company.  After termination, Company shall purchase all
Loan Accounts originated by Bank pursuant to subsection 10(e).


 


(h)           The terms of this Section 10
shall survive the expiration or earlier termination of this Agreement.


 


11.           Confidentiality.


 


(a)           Each Party agrees that
Confidential Information of the other Party shall be used  by
such Party solely in the performance of its obligations and exercise of its
rights pursuant to the Program Documents. 
Except as required by Applicable Laws or legal process, neither Party
(the “Restricted Party”) shall disclose Confidential Information of the other
Party to third parties; provided, however, that the Restricted Party may
disclose Confidential Information of the other Party (i) to the Restricted
Party’s Affiliates, agents, representatives or subcontractors for the sole
purpose of fulfilling the Restricted Party’s obligations under this Agreement
(as long as the Restricted Party exercises reasonable efforts to prohibit any
further disclosure by its Affiliates, agents, representatives or
subcontractors), provided that in all events, the Restricted Party shall be
responsible for any breach of the confidentiality obligations hereunder by any
of its Affiliates, agents, representatives or subcontractors, (ii) to the
Restricted Party’s auditors, accountants and other professional advisors, or to
a Regulatory Authority or (iii) to any other third party as mutually
agreed by the Parties.


 


(b)           A Party’s Confidential
Information shall not include information that:


 


(1)           is generally available to the public;


 


(2)           has become publicly known, without fault on the part
of the Party who now seeks to disclose such information (the “Disclosing Party”),
subsequent to the Disclosing Party acquiring the information;


 


(3)           was otherwise known by, or available to, the
Disclosing Party prior to entering into this Agreement; or


 


(4)           becomes available to the Disclosing Party on a
non-confidential basis from a Person, other than a Party to this Agreement, who
is not known by the Disclosing Party after reasonable inquiry to be bound by a
confidentiality agreement with the non-Disclosing Party or otherwise prohibited
from transmitting the information to the Disclosing Party.


 


(c)           Upon written request or upon
the termination of this Agreement, each Party shall, within thirty (30) days,
return to the other Party all Confidential Information of the other Party in
its possession that is in written form, including by way of example, but not limited
to, reports, plans, and manuals; provided, however, that either Party may
maintain in its possession all such Confidential Information of the other Party
required to be maintained under Applicable Laws relating to the retention of
records for the period of time required thereunder or stored on such Party’s
network as part of standard back-up procedures (provided that such information
shall remain subject to the confidentiality provisions of this Section 11).


 


11

















 


(d)           In the event that a
Restricted Party is requested or required (by oral questions, interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any Confidential Information of the other Party,
the Restricted Party shall provide the other Party with prompt notice of such
request(s) so that the other Party may seek an appropriate protective
order or other appropriate remedy and/or waive the Restricted Party’s
compliance with the provisions of this Agreement.  In the event that the other Party does not
seek such a protective order or other remedy, or such protective order or other
remedy is not obtained, or the other Party grants a waiver hereunder, the
Restricted Party may furnish that portion (and only that portion) of the
Confidential Information of the other Party which the Restricted Party is
legally compelled to disclose and shall exercise such efforts to obtain
reasonable assurance that confidential treatment shall be accorded any
Confidential Information of the other Party so furnished as the Restricted
Party would exercise in assuring the confidentiality of any of its own
Confidential Information.


 


(e)           The terms of this Section 11
shall survive the expiration or earlier termination of this Agreement.


 


12.           Proprietary Material.


 


(a)           Each Party (“Licensing
Party”) hereby provides the other Party (“Licensee”) with a non-exclusive right
and license to use and reproduce the Licensing Party’s name, logo, registered
or other trademarks and service marks (collectively, “Marks”) on the
Applications, Loan Account Agreements, and other Consumer Finance Materials
(including the Program Website), Program marketing materials, and any other
publicly distributed or available Program materials, and to otherwise use the
Marks and such copyrights, patents, and other intellectual property as the
Licensing Party may designate or otherwise make available from time to time in
the Licensing Party’s sole discretion (collectively with the Marks, “Proprietary
Material”) for the purposes of or otherwise in connection with the fulfillment
of Licensee’s obligations under this Agreement; provided, however, that (i) the
Licensee shall at all times comply with any and all written instructions
provided by the Licensing Party from time to time regarding the use of the
Licensing Party’s Proprietary Material, and (ii) each Licensee
acknowledges that, except for the license specifically provided in this
Agreement, it shall acquire no interest in the Licensing Party’s Proprietary
Material.  Upon termination of this
Agreement, each such license will terminate, and the Licensee shall cease using
the Licensing Party’s Proprietary Material. Neither Party may use the other
Party’s Marks in any press release without the prior written consent of the
other Party.


 


(b)           Bank hereby
acknowledges and agrees that, as between Bank and Company (i) as of the
Effective Date, Company is the sole and exclusive owner of all pre-existing
Marks, copyrights, patents, other intellectual property rights, software, other
technology, and other tangible and intangible property used on or in connection
with the Program Website, and its Company run predecessors;  and (ii) Company shall be the sole and
exclusive owner of any and all modifications to such tangible and intangible
property during the Term of this Agreement, including but not limited to any
and all trademark, service mark, copyright, patent, and other intellectual
property rights in and to such modifications, except as the Parties may otherwise
agree in writing.  For avoidance of
doubt, Company shall not obtain any rights in Bank’s Marks (other than the
license described in subsection 12(a)) by virtue of incorporation of Bank’s
Marks into the


 


12

















 


Program Website.


 


13.           Relationship of Parties.  The Parties agree that in performing their
responsibilities pursuant to this Agreement, they are in the position of
independent contractors.  This Agreement
is not intended to create, nor does it create and shall not be construed to
create, a relationship of partner or joint venturer or any association for
profit between Bank and Company.


 


14.           Expenses.


 


(a)           Except as set forth herein,
each Party shall bear the costs and expenses of performing its obligations
under this Agreement.


 


(b)           Company shall pay all wire
transfer and ACH costs for transfers by Bank under the Program.  Company shall reimburse Bank for all third
party fees incurred by Bank in connection with the performance of this
Agreement.  Bank shall provide Company
with notice of third party fees to be incurred by Bank in connection with
performance of this Agreement as soon as practicable after Bank becomes aware
of such fees.


 


(c)           Company shall pay all costs
of any credit reports it obtains on Applicants or Borrowers and any adverse
action notices it delivers to Applicants or Borrowers in accordance with
Company’s Application processing and Loan Account servicing responsibilities
under this Agreement.


 


(d)           Bank acknowledges receipt of
[**] from Company as
a one-time, fully earned payment to compensate Bank for costs associated with
the start-up of the Program.  This fee is
non-refundable.


 


(e)           Each Party shall be
responsible for payment of any federal, state, or local taxes or assessments
associated with the performance of its obligations under this Agreement and for
compliance with all filing, registration and other requirements with regard
thereto.


 


(f)            Company shall pay for Bank’s out-of-pocket legal
fees and expenses incurred as of the Effective Date for due diligence in
connection with, and negotiation and drafting of, the Program Documents in an
amount not to exceed[**].  Bank acknowledges receipt of [**] as an advance toward such legal fees and expenses.  Bank shall present to Company periodic invoices
reflecting such legal fees and expenses incurred.  Bank shall deduct such amounts from the
advance.  Bank shall promptly remit back
to Company any unused portion of the advance after execution of the Program
Documents.  If, after the Effective Date,
Company requests a change to the Program Documents or Consumer Finance
Materials that requires legal review by Bank, Bank shall invoice Company for
all out-of-pocket legal fees and expenses incurred as a result of such review.  Company shall pay such invoice within thirty
(30) days of receipt of such invoice.


 


(g)           Company shall reimburse Bank for all reasonable
costs associated with Bank’s assignment to Company of Loan Accounts pursuant to
Section 10.


 


(h)           Company shall pay Bank [**] on the
Effective Date as a one-time, fully earned payment to compensate Bank for the
establishment and implementation of the Program.  This fee is non-refundable.


 






** Confidential Treatment Requested


 


13

















 


15.           Examination.  Each Party agrees to submit to any
examination that may be required by a Regulatory Authority having jurisdiction
over the other Party, during regular business hours and upon reasonable prior
notice, and to otherwise provide reasonable cooperation to the other Party in
responding to such Regulatory Authority’s inquiries and requests related to the
Program.


 


16.           Inspection; Reports.  Each Party, upon reasonable prior notice from
the other Party, agrees to submit to an inspection of its books, records,
accounts, and facilities relevant to the Program, from time to time, during
regular business hours subject to the duty of confidentiality each Party owes
to its customers and banking secrecy and confidentiality requirements otherwise
applicable to each Party under Applicable Laws. 
All expenses of inspection shall be borne by the Party conducting the
inspection.  Notwithstanding the
obligation of each Party to bear its own expenses of inspection, Company shall
reimburse Bank for reasonable out of pocket expenses incurred by Bank in the
performance of quarterly, on site reviews of Company’s financial condition,
operations and internal controls, not to exceed the maximum amount per visit of
[**]. 
Company shall store all documentation and electronic data related to its
performance under this Agreement and shall make such documentation and data
available during any inspection by Bank or its designee.  With such reasonable frequency and in such
reasonable manner as mutually agreed by the Parties, Company shall report to Bank
regarding the performance of its obligations.


 


17.           Governing Law; Waiver of Jury Trial.  This Agreement shall be interpreted and
construed in accordance with the laws of the State of Utah, without giving
effect to the rules, policies, or principles thereof with respect to conflicts
of laws.  THE PARTIES HEREBY EXPRESSLY
WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING HEREUNDER.


 


18.           Severability.  Any provision of this Agreement which is
deemed invalid, illegal or unenforceable in any jurisdiction, shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining portions hereof in
such jurisdiction or rendering such provision or any other provision of this
Agreement invalid, illegal, or unenforceable in any other jurisdiction.


 


19.           Assignment.  This Agreement and the rights and obligations
created under it shall be binding upon and inure solely to the benefit of the
Parties and their respective successors, and permitted assigns.  Neither Party shall be entitled to assign or
transfer any interest under this Agreement (including, without limitation, by
operation of law) without the prior written consent of the other Party, which shall
not be unreasonable withheld or delayed. 
No assignment made in conformity with this Section 19 shall relieve
a Party of its obligations under this Agreement.  Company may use subcontractors in the
performance of its obligations under this Agreement, subject to Bank’s prior
written approval of each such subcontractor, which approval shall not be
unreasonably withheld or delayed.  A list
of subcontractors already approved by Bank is attached in the form of Exhibit H hereto.


 


20.           Third Party Beneficiaries.  Nothing contained herein shall be construed
as creating a third-party beneficiary relationship between either Party and any
other Person.


 


21.           Notices.  All notices and other communications that are
required or may be given in connection with this Agreement shall be in writing
and shall be deemed received (a) on the day delivered, if delivered by
hand; (b) on the day transmitted, if transmitted by facsimile or e-mail
with receipt confirmed; or (c)  three (3) business days after the
date of mailing to the other Party, if mailed


 






** Confidential Treatment Requested


 


14

















 


first-class postage prepaid, at the following address, or such other
address as either Party shall specify in a notice to the other:


	
   

  	
   

  
	
  To
  Bank:

  	
  WebBank

  
	
   

  	
  6440
  S Wasatch Blvd.

  
	
   

  	
  Suite 300

  
	
   

  	
  Salt
  Lake City, UT 84121

  
	
   

  	
  Attn:
  Gerry Smith

  
	
   

  	
  E-mail
  Address: gerry@webbank.com

  
	
   

  	
  Telephone:
  (801) 993-5001

  
	
   

  	
  Facsimile:
  (801) 993-5015

  
	
   

  	
   

  
	
  To
  Company:

  	
  Prosper
  Marketplace, Inc.

  
	
   

  	
  111
  Sutter Street, 22nd Floor

  
	
   

  	
  San
  Francisco, CA 94104

  
	
   

  	
  Attn:
  Kirk T. Inglis

  
	
   

  	
  E-mail
  Address: kirk@propser.com

  
	
   

  	
  Telephone:
  (415) 593-5432

  
	
   

  	
  Facsimile:
  (415) 362-7233

  



 


22.           Amendment and Waiver.  This Agreement may be amended only by a
written instrument signed by each of the Parties.  The failure of a Party to require the
performance of any term of this Agreement or the waiver by a Party of any
default under this Agreement shall not prevent a subsequent enforcement of such
term and shall not be deemed a waiver of any subsequent breach.  All waivers must be in writing and signed by
the Party against whom the waiver is to be enforced.


 


23.           Entire Agreement.  The Program Documents, including this
Agreement and its schedules and exhibits (all of which schedules and exhibits
are hereby incorporated into this Agreement), constitute the entire agreement
between the Parties with respect to the subject matter hereof, and supersede
any prior or contemporaneous negotiations or oral or written agreements with
regard to the same subject matter.


 


24.           Counterparts.  This Agreement may be executed and delivered
by the Parties in any number of counterparts, and by different parties on
separate counterparts, each of which counterpart shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but
one and the same instrument.


 


25.           Interpretation.  The Parties acknowledge that each Party and
its counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments thereto, and the same shall be construed neither for nor against
either Party, but shall be given a reasonable interpretation in accordance with
the plain meaning of its terms and the intent of the Parties.


 


26.           Agreement Subject to Applicable Laws.  If (a) either Party has been advised by
legal counsel of a change in Applicable Laws or any judicial decision of a
court having jurisdiction over such Party or any interpretation of a Regulatory
Authority that, in the view of such legal counsel, would have a materially
adverse effect on the rights or obligations of such Party under this Agreement
or the financial condition of such Party, (b) either Party receives a
request of any Regulatory


 


15

















 


Authority having jurisdiction over such Party, including any letter or
directive of any kind from any such Regulatory Authority, that prohibits or
restricts such Party from carrying out its obligations under this Agreement, or
(c) either Party has been advised by legal counsel that there is a
material risk that such Party’s or the other Party’s continued performance
under this Agreement would violate Applicable Laws, then the Parties shall meet
and consider in good faith any modifications, changes or additions to the
Program or the Program Documents that may be necessary to eliminate such
result.  Notwithstanding any other
provision of the Program Documents, including Section 10 hereof, if the
Parties are unable to reach agreement regarding such modifications, changes or
additions to the Program or the Program Documents within ten (10) Business
Days after the Parties initially meet, either Party may terminate this
Agreement upon five (5) days’ prior written notice to the other
Party.  A Party may suspend performance
of its obligations under this Agreement, or require the other Party to suspend
its performance of its obligations under this Agreement, upon providing the
other Party advance written notice, if any event described in subsections
26(a), (b) or (c) above occurs.


 


27.           Force Majeure.  If any Party is unable to carry out the whole
or any part of its obligations under this Agreement by reason of a Force
Majeure Event, then the performance of the obligations under this Agreement of
such Party as they are affected by such cause shall be excused during the
continuance of the inability so caused, except that should such inability not
be remedied within thirty (30) days after the date of such cause, the Party not
so affected may at any time after the expiration of such thirty (30) day
period, during the continuance of such inability, terminate this Agreement on
giving written notice to the other Party and without payment of a termination
fee or other penalty.  To the extent that
the Party not affected by a Force Majeure Event is unable to carry out the
whole or any part of its obligations under this Agreement because a
prerequisite obligation of the Party so affected has not been performed, the
Party not affected by a Force Majeure Event also is excused from such
performance during such period.  A “Force
Majeure Event” as used in this Agreement shall mean an unanticipated event that
is not reasonably within the control of the affected Party or its
subcontractors (including, but not limited to, acts of God, acts of
governmental authorities, strikes, war, riot and any other causes of such
nature), and which by exercise of reasonable due diligence, such affected Party
or its subcontractors could not reasonably have been expected to avoid,
overcome or obtain, or cause to be obtained, a commercially reasonable
substitute therefore.  No Party shall be
relieved of its obligations hereunder if its failure of performance is due to
removable or remediable causes which such Party fails to remove or remedy using
commercially reasonable efforts within a reasonable time period.  Either Party rendered unable to fulfill any
of its obligations under this Agreement by reason of a Force Majeure Event
shall give prompt notice of such fact to the other Party, followed by written
confirmation of notice, and shall exercise due diligence to remove such
inability with all reasonable dispatch.


 


28.           Jurisdiction; Venue.  The Parties consent to the personal
jurisdiction and venue of the federal and state courts in Salt Lake City, Utah
for any court action or proceeding.  The
terms of this Section 28 shall survive the expiration or earlier
termination of this Agreement.


 


29.           Insurance. 
Company agrees to maintain insurance coverage on the terms and
conditions specified in Exhibit F
at all times during the term of this Agreement and to notify Bank promptly of
any cancellation or lapse of any such insurance coverage.


 


30.           Compliance with Applicable Laws; Program Compliance
Manual.  Company shall comply with Applicable Laws,
the Bank Secrecy Act Policy and the Program Compliance Manual in its
performance of this Agreement, including Loan Account solicitation, Application
processing and


 


16

















 


preparation of
Loan Account Agreements and other Loan Account documents.  Except as required by Applicable Laws,
Company may not amend or otherwise modify the Program Compliance Manual without
the prior written consent of Bank, which consent shall not be unreasonable
withheld or delayed.  A copy of the
Program Compliance Manual is attached hereto as Exhibit G. 
Without limiting the foregoing, Company shall:


 


(a)           apply to all Applicants customer identification
procedures that comply with Section 326 of the USA PATRIOT Act of 2001 (“Patriot
Act”) and the implementing regulations applicable to Bank (31 C.F.R. §
103.121);


 


(b)           retain for five (5) years
after a Loan Account is purchased from Bank, and deliver to Bank upon request: (i) the
Applicant’s name, address, social security number, and date of birth obtained
pursuant to such customer identification procedures; (ii) a description of
the methods and the results of any measures undertaken to verify the identity of
the Applicant; and (iii) a description of the resolution of any
substantive discrepancy discovered when verifying the identifying information
obtained;


 


(c)           screen all Applicants
against the Office of Foreign Assets Control list of Specially Designated Nationals
and Blocked Persons, and reject any Applicant whose name appears on such list
and notify Bank thereof;


 


(d)           monitor, identify and report to Bank any suspicious
activity that meets the thresholds for submitting a Suspicious Activity Report
under the Bank Secrecy Act and the implementing regulations applicable to Bank
(31 C.F.R. § 103.18);


 


(e)           implement an anti-money
laundering program to assist Bank in its compliance with Section 352 of
the Patriot Act and the implementing regulations applicable to Bank (31 C.F.R.
§ 103.120);


 


(f)            in addition to the
information retained pursuant to subsection (b) above, retain the account
number identifying a Borrower’s Loan Account for at least one (1) year
after purchasing the Borrower’s Loan Account from Bank;


 


(g)           upon receipt of a government
information request forwarded by Bank to Company, (i) compare the names,
addresses, and social security numbers on such government list provided by Bank
with the names, addresses, and social security numbers of Borrowers for all
Loan Accounts purchased from Bank within the prior twelve (12) months, and (ii) within
one (1) week of receipt of such an information request, deliver to Bank a
certification of completion of such a records search, which shall indicate
whether Company located a name, address, or social security number match and,
if so, provide for any such match: the name of the Borrower, the account number
identifying the Borrower’s Loan Account, and the Borrower’s social security
number, date of birth, address, or other similar identifying information
provided by the Borrower, to assist Bank in its compliance with Section 314(a) of
the Patriot Act and the implementing regulations applicable to Bank (31 C.F.R.
§ 103.100); and


 


(h)           provide to Bank electronic copies of the information
retained pursuant to subsections (b) and (g) above as mutually agreed
to by the Parties, immediately


 


17

















 


upon request.


 


Company will also provide to
Bank an annual certification letter that it is complying with its obligations
under this section.  Bank will comply
with any reporting requirements of the Utah Department of Financial
Institutions or the FDIC applicable to Bank’s performance of this Agreement.


 


31.           Prohibition on Tie-In Fees.  Company shall not directly or indirectly
impose or collect any fees, charges or remuneration relating to the processing
or approval of an Application, the establishment of a Loan Account, or the
disbursement of Loan Proceeds, unless such fee, charge or remuneration is set
forth in the Consumer Finance Materials or approved by Bank.


 


32.           Notice
of Consumer Complaints.  Each Party
shall notify the other Party if it receives any consumer complaint or if it
becomes aware of any investigations or proceedings by any governmental
authority relating to any aspect of the Program within five (5) days of receipt
of such complaint or upon becoming aware of such investigation or proceeding,
and each Party shall provide the other Party with all related documentation
thereof, subject to any legal prohibitions on disclosure of such investigation
or proceeding.


 


33.           Headings.  Captions and headings in this Agreement are
for convenience only, and are not to be deemed part of this Agreement.


 


34.           Privacy Law Compliance.  Subject to Applicable Laws, Bank and Company
shall comply with the privacy policy agreed upon by both Parties with respect
to Applicants and Borrowers.


 


35.           Manner of Payments.  Unless the manner of payment is expressly
provided herein, all payments under this Agreement shall be made by ACH
transfer to the bank accounts designated by the respective Parties.  Notwithstanding anything to the contrary
contained herein, neither Party shall fail to make any payment required of it under
this Agreement as a result of a breach or alleged breach by the other Party of
any of its obligations under this Agreement or any other agreement, provided
that the making of any payment hereunder shall not constitute a waiver by the
Party making the payment of any rights it may have under the Program Documents
or by law.


 


36.           Referrals.  Neither Party has agreed to pay any fee or
commission to any agent, broker, finder, or other person for or on account of
such person’s services rendered in connection with this Agreement that would
give rise to any valid claim against the other Party for any commission, finder’s
fee or like payment.


 


37.           Audited Financial Statements.  Within ninety (90) days following the end of
Company’s fiscal year, Company shall deliver to Bank a copy of Company’s
audited financial statements, prepared by an independent certified public
accountant in accordance with generally accepted accounting principles.


 


18

















 


IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
duly authorized officers as of the date first written above.


 


WEBBANK


 


	
  By:

  	
  /s/
  Gerry J. Smith

  	
   

  
	
  Name:

  	
  Gerry
  J. Smith

  	
   

  
	
  Title:

  	
  President
  and CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PROSPER
  MARKETPLACE, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Kirk Inglis

  	
   

  
	
  Name:

  	
  Kirk
  Inglis

  	
   

  
	
  Title:

  	
  Chief
  Financial Officer

  	
   

  



 


19
















 


Schedule 1


 


Definitions


 


(a)                                  “ACH” means the
Automated Clearinghouse.


 


(b)                                 “Affiliate”
means, with respect to a Party, a Person who directly or indirectly controls,
is controlled by or is under common control with the Party.  For the purpose of this definition, the term “control”
(including with correlative meanings, the terms controlling, controlled by and
under common control with) means the 
power to direct the management or policies of such Person, directly or
indirectly, through the ownership of twenty-five percent (25%) or more of a
class of voting securities of such Person.


 


(c)                                  “Applicable
Laws” means all federal, state and local laws, statutes,  regulations
and orders applicable to a Party or relating to or affecting any aspect of the
Program including, without limitation, the Loan Accounts, the Program
promotional and marketing materials and the Consumer Finance Materials, and all
requirements of any Regulatory Authority having jurisdiction over a Party, as
any such laws, statutes, regulations, orders and requirements may be amended
and in effect from time to time during the term of this Agreement.


 


(d)                                 “Applicant”
means an individual who is a consumer who requests a Loan Account from Bank by
posting a listing on the Program Website.


 


(e)                                  “Application”
means any request from an Applicant for a Loan Account in the form required by
Bank including such requests received through the Program Website.


 


(f)                                    “Bank”
shall have the meaning set forth in the introductory paragraph of this
Agreement.


 


(g)                                 “Bank Indemnified
Parties” shall have the meaning set forth in subsection 9(b).


 


(h)                                 “Borrower”
means an Applicant or other Person for whom Bank has established a Loan Account
and/or who is liable, jointly or severally, for amounts owing with respect to a
Loan Account.


 


(i)                                     “Business
Day” means any day, other than (i) a Saturday or Sunday, or (ii) a
day on which banking institutions in the State of Utah are authorized or
obligated by law or executive order to be closed.


 


(j)                                     “Claim
Notice” shall have the meaning set forth in subsection 9(e).


 


(k)                                  “Company
Indemnified Parties” shall have the meaning set forth in subsection 9(a).


 


(l)                                     “Confidential
Information” means the terms and conditions of this Agreement, and any
proprietary information or non-public information of a Party, including a Party’s
proprietary marketing plans and objectives, that is furnished to the other
Party in connection with this Agreement.


 


(m)                               “Consumer
Finance Materials” shall have the meaning set forth in Section 4.


 

















 


(n)                                 “Credit
Policy” means the minimum requirements of income, residency, employment
history, credit history, and/or other such considerations that Bank uses to
approve or deny an Application and to establish a Loan Account.


 


(o)                                 “Disbursement
Account” means an account established and owned by Company and held at the
Disbursement Institution against which wire transfers and ACH transfers are
settled for payment of Loan Proceeds to Borrowers.


 


(p)                                 “Disbursement
Institution” means the depository institution at which the Disbursement
Account is established, which initially shall be Wells Fargo Bank, N.A. and may
be changed upon mutual agreement of the Parties.


 


(q)                                 “Disclosing
Party” shall have the meaning set forth in subsection 11(b)(2).


 


(r)                                    “Effective
Date” shall have the meaning set forth in the introductory paragraph of
this Agreement.


 


(s)                                  “Force
Majeure Event” shall have the meaning set forth in Section 27.


 


(t)                                    “Funding
Account” means an account established and owned by Bank and held at the
Funding Institution against which wire transfers or ACH transfers are settled
for the payment of Loan Proceeds and Origination Fees to Company.


 


(u)                                 “Funding
Amount” means the aggregate amount, as listed on a Funding Statement, of
all Loan Proceeds to be disbursed by Bank to Borrowers through Company’s
Disbursement Account on each Funding Date and the related Origination Fees.


 


(v)                                 “Funding
Date” means the Business Day on which any pending Applications are
approved.


 


(w)                               “Funding
Institution” means the depository institution at which the Funding Account
is established, which initially shall be Zions First National Bank and may be
changed upon mutual agreement of the Parties.


 


(x)                                   “Funding
Statement” means the statement prepared by Company on a Business Day that
contains (i) a list of all Applicants who meet the eligibility criteria
set forth in the Credit Policy, for whom Bank is requested to establish Loan
Accounts; and (ii) the computation of the Funding Amount and all
information necessary for the transfer of Loan Proceeds and Origination Fees
from the Funding Account to the Disbursement Account and distribution by
Company of the Loan Proceeds to the accounts designated by the corresponding
Borrowers, including depository institution names, routing numbers and account
numbers; and (iii) such other information as shall be reasonably requested
by Bank and mutually agreed to by the Parties.


 


(y)                                 “Indemnifiable
Claim” shall have the meaning set forth in subsection 9(d).


 


(z)                                   “Insolvent”
means the failure to pay debts in the ordinary course of business, the
inability to pay its debts as they come due or the condition whereby the sum of
an entity’s debts is greater than the sum of its assets.


 


2

















 


(aa)                            “Licensee”
shall have the meaning set forth in Section 12.


 


(bb)                          “Licensing
Party” shall have the meaning set forth in Section 12.


 


(cc)                            “Loan
Account” means a consumer installment loan account established by Bank
pursuant to the Program.


 


(dd)                          “Loan
Account Agreement” means the document containing the terms and conditions
of a Loan Account including all disclosures required by Applicable Laws.


 


(ee)                            “Loan Sale
Agreement” means that Loan Sale Agreement, dated as of April 14, 2008,
between Bank and Company, pursuant to which Bank agrees to sell to Company, and
Company agrees to purchase from Bank, the Loan Accounts.


 


(ff)                                “Loan
Proceeds” means the funds disbursed to a Borrower pursuant to a Loan
Account established by Bank under the Program.


 


(gg)                          “Losses”
shall have the meaning set forth in subsection 9(a).


 


(hh)                          “Marks”
shall have the meaning set forth in subsection 12(a).


 


(ii)                                  “Origination
Fee” means the up-front fee a Borrower pays to Bank under the Loan Account
Agreement for origination of a Loan Account in the form of a pre-paid finance
charge.


 


(jj)                                  “Party”
means either Company or Bank and “Parties” means Company and Bank.


 


(kk)                            “Person”
means any legal person, including any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, governmental entity, or other
entity of similar nature.


 


(ll)                                  “Program”
means the installment loan program pursuant to which Bank shall establish Loan
Accounts and disburse Loan Proceeds to Borrowers pursuant to the terms of this
Agreement, initially as described in Exhibit A
attached hereto.


 


(mm)                      “Program
Compliance Manual” means the policies and procedures for the implementation
of the Program by Company, including the policies and procedures regarding the (i) solicitation
and receipt of Applications, (ii) underwriting of Loan Accounts, (iii) processing
of Applications, (iv) requirements of the USA PATRIOT Act Customer
Identification Program, and (iv) initial and periodic Office of Foreign
Assets Control screenings.


 


(nn)                          “Program Documents”
means this Agreement and the Loan Sale Agreement.


 


(oo)                          “Program
Website” means the website located at www.prosper.com, together with any
other website on which the Program is offered to public, which shall be hosted
and maintained by Company.


 


(pp)                          “Proprietary
Material” shall have the meaning set forth in subsection 12(a).


 


3

















 


(qq)                          “Regulatory
Authority” means any federal, state or local regulatory agency or other
governmental agency or authority having jurisdiction over a Party and, in the
case of Bank, shall include, but not be limited to, the Utah Department of
Financial Institutions and the Federal Deposit Insurance Corporation.


 


(rr)                                “Restricted
Party” shall have the meaning set forth in subsection 11(a).


 


4

















 


Exhibit A


 


The Program Website


(screen shots of each page of the
Program Website)


 


[**]


 






** Confidential Treatment Requested


 

















 


Exhibit B


 


Credit Policy


 


[**]


 






** Confidential Treatment Requested


 

















 


Exhibit C


 


Form of Application


 


[**]


 






** Confidential Treatment Requested


 

















 


Exhibit D


 


Loan Account Documentation


 


[**]


 






** Confidential Treatment Requested


 

















 


Exhibit E


 


Sample Funding Statement


 


[**]


 






** Confidential Treatment Requested


 

















 


Exhibit F


 


Insurance Requirements


 


[**]


 






** Confidential Treatment Requested


 

















 


Exhibit G


 


Program Compliance Manual


 


[**]


 






** Confidential Treatment Requested


 

















 


Exhibit H


 


Third-Party
Service Contractors


 


[**]






** Confidential Treatment Requested


 

















 


Exhibit I


 


Bank
Secrecy Act Policy


 


[**]


 






** Confidential Treatment Requested