Exhibit 4.2


 


PROSPER MARKETPLACE, INC.


 


BORROWER
PAYMENT DEPENDENT NOTES


 


INDENTURE


 


DATED AS
OF May      , 2009


 


WELLS
FARGO BANK, NATIONAL ASSOCIATION


                                                     ,

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

  
	
   

  	
  I

  	
   

  	
  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

  



 






(9)          N.A. means not applicable1)     Note: This Cross Reference Table shall
not, for any purpose, be deemed to be part of the Indenture.


 


i

















 


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

  	
   

  	
  5

  
	
  Section 2.1

  	
  FORMS
  GENERALLY

  	
   

  	
  5

  
	
  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

  	
   

  	
  7

  
	
  Section 2.7

  	
  TRANSFER

  	
   

  	
  8

  
	
  Section 2.8

  	
  OUTSTANDING
  SECURITIES; DETERMINATIONS OF HOLDERS’ ACTION

  	
   

  	
  8

  
	
  Section 2.9

  	
  CANCELLATION

  	
   

  	
  8

  
	
  Section 2.10

  	
  PAYMENTS

  	
   

  	
  8

  
	
  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

  	
   

  	
  9

  
	
  Section 3.4

  	
  FURTHER
  INSTRUMENTS AND ACTS

  	
   

  	
  9

  
	
  Section 3.5

  	
  MAINTENANCE
  OF OFFICE OR AGENCY

  	
   

  	
  9

  
	
  Section 3.6

  	
  BORROWER
  LOAN SERVICING

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  	
  SUCCESSOR
  CORPORATION

  	
   

  	
  10

  
	
  Section 4.1

  	
  WHEN
  COMPANY MAY MERGE OR TRANSFER ASSETS

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  	
  DEFAULTS
  AND REMEDIES

  	
   

  	
  11

  
	
  Section 5.1

  	
  EVENTS
  OF DEFAULT

  	
   

  	
  11

  
	
  Section 5.2

  	
  ACCELERATION

  	
   

  	
  11

  
	
  Section 5.3

  	
  OTHER
  REMEDIES

  	
   

  	
  12

  
	
  Section 5.4

  	
  WAIVER
  OF PAST DEFAULTS

  	
   

  	
  12

  
	
  Section 5.5

  	
  CONTROL
  BY MAJORITY

  	
   

  	
  12

  
	
  Section 5.6

  	
  LIMITATION
  ON SUITS

  	
   

  	
  12

  
	
  Section 5.7

  	
  RIGHTS
  OF HOLDERS TO RECEIVE PAYMENT

  	
   

  	
  12

  
	
  Section 5.8

  	
  COLLECTION
  SUIT BY TRUSTEE

  	
   

  	
  12

  
	
  Section 5.9

  	
  TRUSTEE
  MAY FILE PROOFS OF CLAIM

  	
   

  	
  13

  
	
  Section 5.10

  	
  PRIORITIES

  	
   

  	
  13

  
	
  Section 5.11

  	
  UNDERTAKING
  FOR COSTS

  	
   

  	
  13

  
	
  Section 5.12

  	
  WAIVER
  OF STAY, EXTENSION OR USURY LAWS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
  TRUSTEE

  	
   

  	
  14

  
	
  Section 6.1

  	
  DUTIES
  OF TRUSTEE

  	
   

  	
  14

  
	
  Section 6.2

  	
  RIGHTS
  OF TRUSTEE

  	
   

  	
  14

  
	
  Section 6.3

  	
  INDIVIDUAL
  RIGHTS OF TRUSTEE, ETC.

  	
   

  	
  16

  
	
  Section 6.4

  	
  TRUSTEE’S
  DISCLAIMER

  	
   

  	
  16

  
	
  Section 6.5

  	
  NOTICE
  OF DEFAULTS

  	
   

  	
  16

  
	
  Section 6.6

  	
  REPORTS
  BY TRUSTEE TO HOLDERS

  	
   

  	
  16

  
	
  Section 6.7

  	
  COMPENSATION
  AND INDEMNITY

  	
   

  	
  16

  
	
  Section 6.8

  	
  REPLACEMENT
  OF TRUSTEE

  	
   

  	
  17

  
	
  Section 6.9

  	
  SUCCESSOR
  TRUSTEE BY MERGER

  	
   

  	
  18

  
					



 


ii

















 


	
  Section 6.10

  	
  ELIGIBILITY;
  DISQUALIFICATION

  	
   

  	
  18

  
	
  Section 6.11

  	
  PREFERENTIAL
  COLLECTION OF CLAIMS AGAINST COMPANY

  	
   

  	
  18

  
	
  Section 6.12

  	
  SECURITY
  INTEREST

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VII

  	
  SATISFACTION
  AND DISCHARGE

  	
   

  	
  18

  
	
  Section 7.1

  	
  DISCHARGE
  OF LIABILITY ON SECURITIES

  	
   

  	
  18

  
	
  Section 7.2

  	
  REPAYMENT
  TO THE COMPANY

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  	
  SUPPLEMENTAL
  INDENTURES

  	
   

  	
  19

  
	
  Section 8.1

  	
  SUPPLEMENTAL
  INDENTURES WITHOUT CONSENT OF HOLDERS

  	
   

  	
  19

  
	
  Section 8.2

  	
  SUPPLEMENTAL
  INDENTURES WITH CONSENT OF HOLDERS

  	
   

  	
  20

  
	
  Section 8.3

  	
  COMPLIANCE
  WITH TRUST INDENTURE ACT

  	
   

  	
  21

  
	
  Section 8.4

  	
  REVOCATION
  AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS

  	
   

  	
  21

  
	
  Section 8.5

  	
  NOTATION
  ON OR EXCHANGE OF SECURITIES

  	
   

  	
  21

  
	
  Section 8.6

  	
  TRUSTEE
  TO SIGN SUPPLEMENTAL INDENTURES

  	
   

  	
  21

  
	
  Section 8.7

  	
  EFFECT
  OF SUPPLEMENTAL INDENTURES

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
  MISCELLANEOUS

  	
   

  	
  21

  
	
  Section 9.1

  	
  TRUST
  INDENTURE ACT CONTROLS

  	
   

  	
  21

  
	
  Section 9.2

  	
  NOTICES

  	
   

  	
  21

  
	
  Section 9.3

  	
  COMMUNICATION
  BY HOLDERS WITH OTHER HOLDERS

  	
   

  	
  22

  
	
  Section 9.4

  	
  CERTIFICATE
  AND OPINION AS TO CONDITIONS PRECEDENT

  	
   

  	
  22

  
	
  Section 9.5

  	
  FORM OF
  DOCUMENTS DELIVERED TO TRUSTEE

  	
   

  	
  22

  
	
  Section 9.6

  	
  STATEMENTS
  REQUIRED IN CERTIFICATE OR OPINION

  	
   

  	
  23

  
	
  Section 9.7

  	
  SEPARABILITY
  CLAUSE

  	
   

  	
  23

  
	
  Section 9.8

  	
  RULES
  BY TRUSTEE, PAYING AGENT AND REGISTRAR

  	
   

  	
  23

  
	
  Section 9.9

  	
  LEGAL
  HOLIDAYS

  	
   

  	
  23

  
	
  Section 9.10

  	
  GOVERNING
  LAW AND JURISDICTION; WAIVER OF JURY TRIAL

  	
   

  	
  23

  
	
  Section 9.11

  	
  NO
  RECOURSE AGAINST OTHERS

  	
   

  	
  23

  
	
  Section 9.12

  	
  SUCCESSORS

  	
   

  	
  24

  
	
  Section 9.13

  	
  EFFECT
  OF HEADINGS AND TABLE OF CONTENTS

  	
   

  	
  24

  
	
  Section 9.14

  	
  BENEFITS
  OF INDENTURE

  	
   

  	
  24

  
	
  Section 9.15

  	
  MULTIPLE
  ORIGINALS

  	
   

  	
  24

  
	
  Section 9.16

  	
  FORCE
  MAJEURE

  	
   

  	
  24

  
	
  Section 9.17

  	
  U.S.A.
  PATRIOT ACT

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  A - FORM OF BORROWER PAYMENT DEPENDENT NOTE SECURITY

  	
   

  	
  A-1

  
					



 


iii

















 


INDENTURE
dated as of May  , 2009, by and between Prosper Marketplace, Inc., a
Delaware corporation (“Company”), and Wells Fargo Bank, National
Association, 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,
individually and collectively, 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 direct loan originated through the Company’s platform on its website
www.prosper.com or any successor website, with a borrower that is an
individual.


 


“Borrower Loan
Net Payment,” means, with respect to each Borrower Loan, all Borrower Loan
Payments net of Other Payments and Charges.


 


“Borrower Loan
Payment,” means, with respect to each Borrower Loan, 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.


 


“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.


 


1

















 


“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.


 


“Corresponding
Borrower Loan” means the Prosper Borrower Loan upon which a series of
Prosper Borrower Notes is dependent for payment.


 


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


 


“Deposit
Account” means the deposit account, as defined in Section 9-108 of the
UCC, in the name of Prosper entitled “              “,
held by the Trustee, or such additional or replacement account as may from time
to time exist, provided such account is deemed a deposit account under Section 9-108
of the UCC and is held by the Trustee.


 


“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 to 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.


 


“Lien” means, with respect to any property or assets, any mortgage,
charge, hypothecation, pledge or other security interest or encumbrance on such
property or assets.


 


“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 servicer
or 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

















 


“Other Payments
and Charges” means (i) 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, which are received by the Company, a third-party servicer or
collection agency in respect of such Borrower Loan, and (2) attorneys’
fees or any collection fees imposed in connection with collection efforts on a
delinquent Borrower Loan by the Company, a third-party servicer or collection
agency, other than late payment fees specifically included in Borrower Loan
Payments.


 


“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, 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 Payment 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 percentage rate, as
specified by the Company and, if applicable, a third-party servicer 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.


 


3

















 


“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.


 


“UCC” means
the Uniform Commercial Code as the same may, from time to time, be in effect in
the State of New York, except with respect to perfection matters which shall be
governed by the Uniform Commercial Code of the relevant jurisdiction necessary
to effect the perfection of a security interest.


 


“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

  	
   

  
	
  “Collateral”

  	
   

  	
  6.12

  	
   

  



 


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.


 


4

















 


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 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 Security upon sale of such Security.


 


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


 


(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


 


6
















 


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 of 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 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.  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 


 


7

















 


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 administrative fee for any
registration of transfer or exchange, which fee shall be described on the
Company’s website www.prosper.com and may be changed or waived from time to
time and (2)  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.


 


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 payment 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.


 


8

















 


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 principal and interest on 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
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.


 


9

















 


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 or a third-party servicer
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 within five (5) Business Days after it becomes thirty days past-due,
that referral shall be deemed to constitute commercially reasonable servicing
and collection efforts; and (2) the Company and any third-party servicer
of a Borrower Loan shall have the right, at any time and from time to time and
subject to the foregoing servicing standard, to change the Stated Maturity of
the principal of, or any installment of principal or interest on, any Borrower
Loan, or reduce the principal amount thereof or the rate of interest thereon 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, or amend or waive any term of such Borrower Loan,
or 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.


 


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.


 


10

















 


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 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 specifically provided with respect to Securities of that
series occurs.


 


“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).


 


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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, (b) exercise any and all rights of a
secured party under the UCC and other applicable law pursuant to the security
interest granted to the Trustee under Section 6.12, or (c) 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.


 


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.  Subject to Section 3.6(a),
the right, which is absolute and unconditional, of any Holder of any Security
to receive payment of the Principal of and interest on (subject to Sections 2.2(b)
and 2.10) 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 


 


12

















 


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 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.


 


13

















 


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 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.


 


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(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.


 


(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.


 


15

















 


(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). 
). If the Trustee is required to prepare such report pursuant to Section 313(a)
of the TIA and if it chooses to transmit such report electronically, the
Trustee appoints the Company, and the Company agrees to act as the Trustee’s
agent to transmit such report electronically to each Holder of Securities and
to the SEC as provided in the immediately following paragraph. Promptly
following such transmissions, the Company shall certify, in writing, to the
Trustee that it has effected each of such transmissions to Holders of
Securities and to the SEC. 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 (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.


 


16
















 


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 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.


 


17

















 


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.


 


Section 6.12           SECURITY INTEREST.  The Company hereby pledges, assigns and
grants to the Trustee, as security for the due payment and performance of all
the Company’s obligations under this Indenture for the Securities, for the
benefit of the Trustee on behalf of the Holders, a security interest in and to
all of its right, title and interest, whether now or hereafter existing or
acquired, in the following: (a) the Company’s right to payment under the
Corresponding Borrower Loans, (b) the Deposit Account and all money and
other property from time to time credited to the Deposit Account, (c) all
money, cash, instruments, interest, income and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing held for the benefit and security of the Holders of
the Securities, (d) all present and continuing right, power and authority
of the Company, in the name and on behalf of the Company, as agent and
attorney-in-fact, or otherwise, to make claim for and demand performance on,
under or pursuant to any of the foregoing held for the benefit and security of
the Holders of the Securities, to bring actions and proceedings thereunder or
for the specific or other enforcement thereof, or with respect thereto, to make
all waivers and agreements, to grant or refuse requests, to give or withhold
notices, and to exercise all rights, remedies, powers, privileges and options,
to grant or withhold consents and approvals and do any and all things and
exercise all other discretionary rights, options, privileges or benefits which
the Company is or may become entitled to do with respect to the foregoing held
for the benefit of the Holders of the Securities without notice to, consent or
approval by or joinder of the Company, and (e) all revenues, issues,
products, accessions, substitutions, replacements, profits and proceeds of and
from all the foregoing (the “Collateral”). 
At the expense of the Company, the Company agrees to execute, deliver
and file such further agreements, instruments and certificates as may be
necessary to preserve, perfect and protect the title and interests of the
Trustee on behalf of the Holders of the Securities, including but not limited
to, the execution by the Company of an instrument of assignment to the Trustee
and the execution by the Company and the filing of financing statements
pursuant to the UCC. The Company shall, at its expense, do any further acts and
execute, acknowledge, deliver, file, register and record any further documents
as are necessary in order to protect the Trustee’s title to and first priority
perfected security interest in the Collateral, subject to no Liens or charges
of any type whatsoever except for Liens pursuant to and permitted by this
Indenture.


 


In furtherance of
the grant of the security interest in the Collateral for the Securities, upon
and during continuance of an Event of Default, the Company grants to the
Trustee on behalf of the Holders the full, exclusive and irrevocable right,
power and authority to exercise any and all rights of the Company with respect
to the Collateral held for the benefit of the Holders of Securities, and each
contract, agreement or other document or instrument included therein.  The Trustee agrees that, except upon and
during the continuance of an Event of Default, it shall not exercise the power
of attorney, or any rights granted to the Trustee pursuant to this Section 6.12.


 


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:


 


18

















 


(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


 


(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


 


19

















 


(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


 


(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)                           Subject
to Section 3.6(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.


 


20

















 


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:


 


21

















 


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


 


(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 


 


22

















 


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)                           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.


 


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 


 


23

















 


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 exchange of copies of this Indenture and
of signature pages by facsimile of PDF transmission shall constitute effective
execution and delivery of this Indenture as to the parties hereto and may be
used in lieu of the original Indenture for all purposes. Signatures of the
parties hereto transmitted by facsimile or PDF shall be deemed to be their
original signatures for all purposes.


 


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.


 


Section 9.17           U.S.A. PATRIOT ACT.  The parties hereto acknowledge that in
accordance with Section 326 of the U.S.A. Pariot Act, the Trustee, like
all financial institutions and in order to help fight the funding of terrorism
and money laundering, is required to obtain, verify, and record information
that identifies each person or legal entity that establishes a relationship or
opens an account with the Trustee. The parties to this Indenture agree that
they will provide the Trustee with such information as it may request in order
for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.


 


	
   

  	
  PROSPER MARKETPLACE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


24

















 


EXHIBIT
A


 


Form of
Borrower Payment Dependent Note


 


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 PROSPER BORROWER LOAN. THE ISSUE PRICE OF THE PROSPER
BORROWER NOTE (THIS “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 PROSPER 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 APPLIED TO THE
  OUTSTANDING PRINCIPAL AMOUNT OF THE CORRESPONDING PROSPER BORROWER LOAN:

  	
   

  	
  (7)

  
	
   

  	
   

  
	
  ORIGINAL ISSUE DATE:

  	
                                                    

  	
  (8)

  
	
   

  	
   

  
	
  INITIAL MATURITY DATE:

  	
                                                       

  	
  (9)

  
	
   

  	
   

  
	
  FINAL MATURITY DATE:

  	
                                                      

  	
  (10)

  
																					



 


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 sixth 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
Prosper Borrower Loan.


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


(3) Insert description of Corresponding Prosper
Borrower Loan.


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


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


(6) Insert final yield percentage.


(7) Insert total servicing fee rate to be charged
by Company.


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


 


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


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


 


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 Prosper 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 (1) 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 a
class of special limited obligations of the Company referred to as Borrower
Payment Dependent Notes (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.


 


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.


 


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The Indenture provides that the Company or a third-party
servicer shall use commercially reasonable efforts to service and collect the
Corresponding Borrower Loan in good faith, accurately and in accordance with
industry standards customary for servicing loans such as the Borrower Loans,
and may in applying that standard amend or waive any term of such Borrower Loan,
or in the case of a Borrower Loan that is more than 120 days delinquent,
write off and cancel such Borrower Loan without the consent of any Holder of
any Securities of the series corresponding to such Borrower Loan. The Indenture contains provisions permitting
(subject to the servicing standard)  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 (a) and (b)) 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:  (1) the Corresponding Borrower Loan has
been obtained as a result of verifiable identity theft on the part of the
purported borrower member and a material default under the Note occurs; (2) a
material default under the Prosper Borrower Loan has occurred and (i) a
Prosper score different from the score by the Company for the Prosper Borrower
Loan listing at issue was inserted in that Prosper Borrower Loan listing, or (ii) the
Company incorrectly applied its formula to determine the Prosper score,
resulting in a Prosper Rating different from the Prosper Rating that should
have appeared in the Prosper Borrower Loan listing; or (3) the Company
materially breaches its representations and warranties in the lender member
registration agreement pertaining to the Notes. 
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 $0.01 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.


 


A-3

















 


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
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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