Exhibit 10.3


 


Executed: 04/14/2008


 


CONFIDENTIAL
TREATMENT REQUESTED BY PROSPER MARKETPLACE, INC.


 


WEBBANK


 


and


 


PROSPER MARKETPLACE, INC.


 


LOAN ACCOUNT PROGRAM AGREEMENT


 


Dated as of April 14, 2008


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  PROGRAM
  MARKETING AND SERVICES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  EXTENSION
  OF CREDIT

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  CONSUMER
  DOCUMENTS AND CREDIT POLICY

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  LOAN
  ACCOUNT PROCESSING AND ORIGINATION

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  FUNDING
  LOANS; PAYMENT OF SERVICING FEE

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  OTHER
  RELATIONSHIPS WITH BORROWERS

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  INDEMNIFICATION

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  TERM
  AND TERMINATION

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  CONFIDENTIALITY

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  PROPRIETARY
  MATERIAL

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  RELATIONSHIP
  OF PARTIES

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  EXPENSES

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  EXAMINATION

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  INSPECTION;
  REPORTS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  GOVERNING
  LAW; WAIVER OF JURY TRIAL

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  SEVERABILITY

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  ASSIGNMENT

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  THIRD
  PARTY BENEFICIARIES

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  NOTICES

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  AMENDMENT
  AND WAIVER

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  ENTIRE
  AGREEMENT

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  COUNTERPARTS

  	
   

  	
  15

  



 

















 


	
  25.

  	
   

  	
  INTERPRETATION

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  AGREEMENT
  SUBJECT TO APPLICABLE LAWS

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  FORCE
  MAJEURE

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
   

  	
  JURISDICTION;
  VENUE

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  29.

  	
   

  	
  INSURANCE

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
   

  	
  COMPLIANCE
  WITH APPLICABLE LAWS; PROGRAM COMPLIANCE MANUAL

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31.

  	
   

  	
  PROHIBITION
  ON TIE-IN FEES

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  32.

  	
   

  	
  NOTICE
  OF CONSUMER COMPLAINTS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  33.

  	
   

  	
  HEADINGS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  34.

  	
   

  	
  PRIVACY
  LAW COMPLIANCE

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  35.

  	
   

  	
  MANNER
  OF PAYMENTS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  36.

  	
   

  	
  REFERRALS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  37.

  	
   

  	
  AUDITED
  FINANCIAL STATEMENTS

  	
   

  	
  18

  



 

















 


SCHEDULES AND EXHIBITS


 


	
  SCHEDULE
  1

  	
   

  	
  Definitions

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  A

  	
   

  	
  The
  Program Website

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  B

  	
   

  	
  Credit
  Policy

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  C

  	
   

  	
  Form of
  Application

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  D

  	
   

  	
  Loan
  Account Documentation

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  E

  	
   

  	
  Sample
  Funding Statement

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  F

  	
   

  	
  Insurance
  Requirements

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  G

  	
   

  	
  Program
  Compliance Manual

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  H

  	
   

  	
  Third-Party
  Service Contractors

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  I

  	
   

  	
  Bank
  Secrecy Act Policy

  



 

















 


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


 


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


 


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


 


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


 


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


 


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


 


2.                                       Program
Marketing and Services.


 


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


 


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


 


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


 


1

















 


	
   

  	
   

  	
  (b)

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

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

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

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

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

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Loan Account Processing and Origination.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

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

  



 


2

















 


	
   

  	
   

  	
  process.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (f)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (g)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (h)

  	
   

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

  



 


6.                                       Funding
Loans; Payment of Servicing Fee.


 


	
  (a)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

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

  



 


3

















 


	
   

  	
   

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

  



 


7.                                       Representations
and Warranties.


 


	
  (a)

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (4)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (5)

  	
  Bank is not Insolvent;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (6)

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

  



 


4

















 


	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (7)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (8)

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

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (4)

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

  



 


5

















 


	
   

  	
   

  	
  (5)

  	
  Company is not Insolvent;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (6)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (7)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (8)

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

  
	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (1)

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

  



 


6

















 


	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)  

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

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

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

  



 


8.                                       Other
Relationships with Borrowers.


 


	
  (a)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

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

  



 


7

















 


9.                                       Indemnification.


 


	
  (a)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

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

  



 


8
















 


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


 


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


 


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


 


10.           Term and Termination.


 


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


 


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


 


9

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


10

















 


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


 


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


 


11.           Confidentiality.


 


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


 


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


 


(1)           is generally available to the public;


 


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


 


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


 


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


 


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


 


11

















 


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


 


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


 


12.           Proprietary Material.


 


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


 


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


 


12

















 


Program Website.


 


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


 


14.           Expenses.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 






** Confidential Treatment Requested


 


13

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 






** Confidential Treatment Requested


 


14

















 


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


	
   

  	
   

  
	
  To
  Bank:

  	
  WebBank

  
	
   

  	
  6440
  S Wasatch Blvd.

  
	
   

  	
  Suite 300

  
	
   

  	
  Salt
  Lake City, UT 84121

  
	
   

  	
  Attn:
  Gerry Smith

  
	
   

  	
  E-mail
  Address: gerry@webbank.com

  
	
   

  	
  Telephone:
  (801) 993-5001

  
	
   

  	
  Facsimile:
  (801) 993-5015

  
	
   

  	
   

  
	
  To
  Company:

  	
  Prosper
  Marketplace, Inc.

  
	
   

  	
  111
  Sutter Street, 22nd Floor

  
	
   

  	
  San
  Francisco, CA 94104

  
	
   

  	
  Attn:
  Kirk T. Inglis

  
	
   

  	
  E-mail
  Address: kirk@propser.com

  
	
   

  	
  Telephone:
  (415) 593-5432

  
	
   

  	
  Facsimile:
  (415) 362-7233

  



 


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


 


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


 


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


 


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


 


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


 


15

















 


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


 


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


 


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


 


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


 


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


 


16

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


17

















 


upon request.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


18

















 


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


 


WEBBANK


 


	
  By:

  	
  /s/
  Gerry J. Smith

  	
   

  
	
  Name:

  	
  Gerry
  J. Smith

  	
   

  
	
  Title:

  	
  President
  and CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PROSPER
  MARKETPLACE, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Kirk Inglis

  	
   

  
	
  Name:

  	
  Kirk
  Inglis

  	
   

  
	
  Title:

  	
  Chief
  Financial Officer

  	
   

  



 


19
















 


Schedule 1


 


Definitions


 


(a)                                  “ACH” means the
Automated Clearinghouse.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


2

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


4
















 


Exhibit A


 


The Program Website


 

















 


WebBank
Program Website:


 


Exhibit A:


 





 

















 


WebBank
Program Website:


 


Exhibit A: Program Website (cont.)


 





 


2

















 


WebBank
Program Website:


 


Exhibit A: Program Website (cont.)


 





 


3

















 


WebBank
Program Website:


 


Exhibit A: Program Website (cont.)


 





 


4
















 


WebBank
Program Website:


 


Exhibit A: Program Website (cont.)


 





 


5

















 


WebBank
Program Website:


 


Exhibit A: Program Website (cont.)


 





 


6

















 


WebBank
Program Website:


 


Exhibit A: Program Website (cont.)


 





 


7

















 


WebBank
Program Website:


 


Exhibit A: Program Website (cont.)


 





 


8

















 


WebBank
Program Website:


 


Exhibit A: Program Website


Sample Listing


 





 


9
















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 
















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 
















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 
















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 
















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 
















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 

















 


WebBank
Program Website: Exhibit A


 





 
















 


Exhibit B


 


Credit Policy


 

















 


Section No.:   700


Policy No.:  
712


Current Approval Date: April 16, 2008


Last Revision Date: New Policy


 


WebBank


 


Person-to-Person Credit Policy - Prosper


 


Policy Summary


 


·                  This document outlines the Approval
Policy to be followed in reviewing, approving and administering Loans made by
WebBank (the “Bank”) under the Loan product line which will be marketed and
serviced by Prosper Marketplace, Inc. (“Prosper” or the “Agent”).


 


·                  Policy Objective: Determine the
creditworthiness of interested Loan Applicants. 
Establish the financial and repayment terms for each Borrower that are
based on the customer’s credit risk.


 


Policy
Owner


 


·                  WebBank


 


Contract
Services to Prosper


 


Contract
Administration


 


Due
Diligence


 


Finance


 


Marketing


 


Underwriting


 


1.                                      Objective Statement


 


·                  The Bank’s goal is to establish a
Loan program that will be marketed by Prosper. 
Marketing and delivery of this product will be made available through Prosper,
who brings industry knowledge that will facilitate the sourcing of deals as
well as the analysis of creditworthiness of potential borrowers.


 


·                  Prosper will review, on behalf of the
Bank, all Applications and other Program Materials submitted by Applicants and
will determine the disposition of each Application for the administration of
the Loan Program in accordance with this Policy.


 


·                  Adequate underwriting for the Loan
Program must result in a determination that the Applicant has the willingness
and ability to repay the Loan obligation and that the Bank fully expects to recover
its principal and pre-computed interest in a timely manner.


 


·                  The Loan is documented by promissory
notes requiring monthly payments of principal and interest by Borrower.  The monthly payment of principal and interest
will be remitted via an automated transaction from the bank account designated
by and belonging to each Borrower (a debit ACH transaction).  A borrower may alternatively elect to make
monthly payments via a bank draft generated by Prosper.


 


2.                                      Application


 


·                  Prosper will actively solicit Loan
Applications for the Loan Program.  All
Loan Applications must be submitted directly by Applicants in electronic format
to the Prosper website, www.prosper.com. 
Prosper will not accept  Loan Applications
from third party sources under any conditions. 
The Bank’s approved Loan Application, Borrower Registration Agreement
and Program Materials are to be used for all requests.  All Loan Applications will authorize the Bank
or its authorized agent to procure individual credit reports and other identity
verification information prior to Loan Application approval.


 

















 


WebBank
Loan  Approval Policy


 


All Loan Applications, Borrower Registration Agreements and Program
Materials will provide the following essential information to ensure a timely
credit review and assessment of the submitted information:


 


·                  Applicant -
Correct individual name, address and social security number of Applicant.  The address must include a physical address
and a valid e-mail address.  Applicant
must also provide two telephone numbers.


 


·                  Personal Information of Applicant
— The Bank has an obligation to clearly identify all signatories to the Loan
Agreements.  All applicants must pass the
identification verification screen conducted with information obtained from the
credit bureau, which includes compliance with OFAC procedures.


 


·                  Banking Information -
The Applicant’s bank information, including type of account, ACH routing number
and account number are required.


 


·                  See Exhibit A for a sample Loan
Application and Exhibit B for a sample Borrower Registration Agreement,
which includes a sample Promissory Note.


 


3.                                      Underwriting Standards


 


3.1                               Loan
Funding Amounts


 


·                  Loan amounts range from $1,000 to
$25,000.


 


·                  A borrower can have up to two open
loans at one time.


 


·                  Total outstanding balance at time of
loan issuance cannot excel $25,000.


 


3.2                               Loan
Type


 


·                  All loans are 3-year, unsecured,
fully amortizing loans.


 


3.3                               Loan
Approval Authorities


 


·                  The Bank has contracted for
processing and approval services with Prosper, and Prosper will provide such
services only as outlined in the Program Agreement executed between the Bank
and Prosper as amended from time to time.  No Bank funds will be used to fund a Loan
without an accompanying approval from Prosper on behalf of the Bank (and in
accordance with this Approval Policy).


 


	
  ·

  	
   

  	
  Prosper Chief Financial
  Officer

  	
   

  	
  $

  	
  25,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ·

  	
   

  	
  Prosper Controller

  	
   

  	
  $

  	
  25,000

  	
   

  



 


3.4                               Loan
Underwriting


 


·                  All Loan requests will contain the
following information:


 


·                  Loan Application


 


·                  Borrower Registration Agreement


 


·                  Credit Report Information, including
score and certain attributes (e.g. number current delinquencies, number public
records)


 


2

















 


WebBank Loan 
Approval Policy


 


·                  Stated Income and Employment
Information


 


·                  Debt-to-Income Ratio


 


·                  Homeownership Status


 


·                  Borrower identity must be verified


 


·                  Home Address must be verified


 


·                  Bank account must be verified


 


·                  Experian Scorex Plus score >= 520


 


·                  Credit Report must be <30 days old
at time listing is initiated


 


·                  Loan request must be 100% funded
prior to the expiration date


 


3.4.1                     Second
Loans


 


4.                                      Experian Scorex Plus score >= 520


 


4.1                               Credit
Report must be < 30 days old at time listing is initiated


 


5.                                      Eligibility requirements to request
Second Loan


 


	
  Credit Grade* 

  of 1st Loan

  	
   

  	
  # Mos Since

  Origination of

  1st Loan

  	
   

  	
  # of consecutive

  months without

  15+ dpd

  	
   

  
	
  D, E, HR, NC

  	
   

  	
  12

  	
   

  	
  12

  	
   

  
	
  B, C

  	
   

  	
  9

  	
   

  	
  9

  	
   

  
	
  AA, A

  	
   

  	
  6

  	
   

  	
  6

  	
   

  



 






*
see Exhibit C for Experian Scorex Plus-to-credit grade translation


 


·                  Underwriting


 


·                  Credit Grade Criteria


 


	
  Credit Grade* of

  1st Loan

  	
   

  	
  Credit Grade

  Drop Allowed

  	
   

  
	
  D, E, HR, NC

  	
   

  	
  0

  	
   

  
	
  B, C

  	
   

  	
  1

  	
   

  
	
  AA, A

  	
   

  	
  1

  	
   

  



 






* see Exhibit C for Experian Scorex
Plus-to-credit grade translation


 


·                  Loan request must be 100% funded
prior to the expiration date


 


3

















 


WebBank Loan 
Approval Policy


 


5.1.1                     Prefunding
Verification


 


·                  Additional verification may be
required for select borrowers based on variables such as:


 


·                  Credit Grade, Loan Amount, Income,
Debt-to-Income Ratio


 


·                  Verification may include:


 


·                  Drivers’ License


 


·                  Employment Verification


 


·                  Proof of Address


 


·                  Proof of Income


 


·                  Phone Verification


 


5.1.2                     Loan
Expiration and Cancellation


 


·                  A loan request that that does not
receive sufficient bids in the Prosper marketplace to be fully funded prior to
the expiration date will expire.  The
borrower will receive an adverse action letter.


 


·                  A loan request that does not pass the
Underwriting or Prefunding Verification processes will be cancelled.  The borrower will receive an adverse action
letter.


 


5.2                               Geographic
Areas


 


·                  50 States and DC (US Only)


 


4.                                      Pricing


 


·                  All loans have a fixed interest rate.


 


·                  Maximum annual interest rate is 36%.


 


·                  Interest rate is determined by
bidding demand in the Prosper marketplace.


 


·                  There is no pre-payment penalty.


 


5.                                      Loan Sales


 


·                  The Bank intends to sell the loans
originated from this program to Prosper.


 


4

















 


WebBank Loan 
Approval Policy


 


Exhibit B: Scorex Plus-to-Credit Grade Translation


 





 


5
















 


Exhibit C


 


Form of Application


 

















 


Pre-registration page:


 





 


Lender registration:


 





 

















 


Screen for borrowers with self-reported poor credit:


 





 


Registration
for borrowers:


 





 

















 


Check your email:


 





 


Email
that goes to user:


 





 

















 


Getting
started: (after verifying email)


 





 

















 


Personal Info:


 





 
















 


Verify your address:


 





 


Bank info:


 





 

















 


Employment info:


 





 

















 


Confirm info:


 





 

















 


Identity
verification questions:


 





 

















 


Create listing:


 





 

















 


Set
your starting rate:


 





 
















 


Your credit profile: (this is a pop-up window from the “Set your rate”
page


 





 

















 


Preview listing:


 





 

















 


Confirm listing: (1 of 2)


 





 

















 


Confirm listing: (2 of 2)


 





 

















 


Listing created, invite friends:


 





 


After
inviting friends:


 





 


FIN


 
















 


Exhibit D


 


Loan Account Documentation


 

















 


PROMISSORY NOTE


 


Borrower Address:                                                                                             .


 


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


 


2.  Payments.  This Note is payable in 36 monthly
installments of $                      
each, consisting of principal and interest, commencing on the                 
day of                           ,
and continuing until the final payment date of                                     ,
which is the maturity date of this Note. The final payment shall consist of the
then remaining principal, unpaid accrued interest and other charges due under
this Note.  All payments will be applied
first to any late charges then due, then to any unpaid fees incurred as a
result of failed automated payments or returned checks or bank drafts as provided
in Paragraph 11, then to interest then due and then to principal. No unpaid
interest or charges will be added to principal.


 


3.  Interest.  Interest will be charged on unpaid principal
until the full amount of principal has been paid.  Interest under this Note will accrue daily,
on the basis of a 365-day year. If payments are made on time, my final payment
will be in the amount of a regular monthly payment. If payments are paid late,
a greater portion of the payment will be applied to accrued interest, a lesser
portion (if any) will be applied to principal reduction, and the loan will not
amortize as originally scheduled, resulting in a higher final payment amount.
The interest rate I will pay will be the rate I will pay both before and after
any default.


 


4.  Late Charge.  If the full amount of any monthly payment is
not made by the end of fifteen (15) calendar days after its due date, I will
pay you a late charge of                            .
I will pay this late charge promptly but only once on each late payment.


 


5.  Waiver of Defenses.  Except as otherwise provided
in this Note, you are not responsible or liable to me for the quality, safety,
legality, or any other aspect of any property or services purchased with the
proceeds of the loan.  If I have a
dispute with any person from whom I have purchased such property or services, I
agree to settle the dispute directly with that person.


 


6.  Certification; Exception to Waiver.  I certify that, to my
knowledge, the proceeds of this loan will not be applied in whole or part to
purchase property or services from any person to whom any interest this loan
may be assigned. If, notwithstanding the preceding sentence, any person from
whom I have purchased such property acquires any interest in this loan, then Paragraph
5 will not apply to the extent of that person’s interest, even if that person
later assigns that person’s interest to another person.


 


7. Method of Payment.  I will pay the
principal, interest, and any late charges or other fees on this loan when due.
Those amounts are called “payments” in this Note.  To ensure that my payments are processed in a
timely and efficient manner, you have given me the choice of making my monthly
payments (i) by automated withdrawal from an account that I designate using
an automated clearinghouse (ACH) or other electronic fund transfer, or (ii) by
bank drafts drawn by you on my behalf on my account each month; and I have
chosen one of these methods. If I close my account or if my account changes or
is otherwise inaccessible such that you are unable to withdraw my payments from
that account or draw bank drafts on the account, I will 


 


1

















 


notify you at least three (3) days prior to any such closure,
change or inaccessibility of my account, and authorize you to withdraw my
payments from, or draw bank drafts on, another account that I designate.


 


With
regard to payments made by automatic withdrawals from my account, I have the
right to (i) stop payment of a preauthorized automatic withdrawal, or (ii) revoke
my prior authorization for automatic withdrawals with regard to all further
loan payments, by notifying the financial institution where my account is held,
orally or in writing at least three (3) business days before the scheduled
date of the transfer. I agree to notify you orally or in writing, at least
three (3) business days before the scheduled date of the transfer, of the
exercise of my right to stop a payment or to revoke my prior authorization for
further automatic withdrawals.


 


8.  Default and
Remedies. If I fail to make any payment when due in the
manner required by Paragraph 7, or if receivership or insolvency proceedings or
any assignment for the benefit of creditors is instituted by or against
me; I die, I fail to keep any promise or meet any other obligations in
this Note, or I make a material misrepresentation in connection with my loan, I
will be in default and you may at your option accelerate the maturity of this
Note and declare all principal, interest and other charges due under this Note
immediately due and payable. If you exercise the remedy of acceleration you
will not do so until one or more payments under this Note is at least 120 days
past due, and you will give me at least 30 days prior notice of acceleration;
provided, however, that if my default is the result of a material
misrepresentation you do not need to wait until one or more payments is past
due, and you do not need to give me any prior notice of acceleration.


 


9.  Prepayments.  I may prepay this loan in full or in part at
any time without penalty.


 


10.  Waivers.  You may accept late payments or partial
payments, even though marked “paid in full,” without losing any rights under
this Note, and you may delay enforcing any of your rights under this Note
without losing them. You do not have to (a) demand payment of amounts due
(known as “presentment”), (b) give notice that amounts due have not been
paid (known as “notice of dishonor”), or (c) obtain an official
certification of nonpayment (known as “protest”). I hereby waive presentment,
notice of dishonor and protest. Even if, at a time when I am in default, you do
not require me to pay immediately in full as described above, you will still
have the right to do so if I am in default at a later time. Neither your
failure to exercise any of your rights, nor your delay in enforcing or
exercising any of your rights, will waive those rights.  Furthermore, if you waive any right under
this Note on one occasion, that waiver will not operate as a waiver as to any
other occasion.


 


11.
Insufficient Funds Charge. If I attempt to make a
monthly payment, whether by check or bank draft or by automated withdrawal from
my designated account, and the payment is unable to be made due to (i) insufficient
funds in my account, (ii) the closure, change or inaccessibility of my
account without my having notified you as provided in Paragraph 7, or (iii) for any other
reason (other than an error by you), I will pay you an
additional fee of $            
for each check or bank draft returned or failed automated withdrawal, unless
prohibited by applicable law.


 


12.  Loan Charges. 
If a law, which applies to this loan and which sets maximum loan
charges, is finally interpreted so that the interest or other loan charges
collected or to be collected in connection with this loan exceed the permitted
limits, then: (a) any such loan charge shall be reduced by the amount
necessary to reduce the charge to the permitted limit; and (b) any sums
already collected from me which exceeded permitted limits will be refunded to
me. You may choose to make this refund by reducing the principal I owe under
this Note or by making a direct payment to me.


 


2

















 


13.
Assignment.  I may not
assign any of my obligations under this Note without your written
permission.  You do not have to give me your permission.  You may
assign this Note at any time without my permission. Unless prohibited by
applicable law, you may do so without telling me.  My obligations under this
Note apply to all of my heirs and permitted assigns. Your rights under this
Note apply to each of your successors and assigns.


 


14.  Notices. 
All notices and other communications hereunder shall be given in
writing and shall be deemed to have been duly given and effective (i) upon
receipt, if delivered in person or by facsimile, email or other electronic
transmission, or (ii) one day after deposit prepaid for overnight delivery
with a national overnight express delivery service.  Such notices must be properly addressed to
the parties at the addresses set forth below unless a different address for
notice is later provided in writing by giving notice pursuant to this Paragraph.


 


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


 


16. 
Miscellaneous.   No provision of
this Note shall be modified or limited except by a written agreement signed by
both you and me. The unenforceability of any provision of this Note shall not
affect the enforceability or validity of any other provision of this Note.


 


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


 


(a)   In this Resolution of Disputes provision:


 


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


 


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


 


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


 


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


 


(c)   Claims will be arbitrated by a single,
neutral arbitrator, who shall be a retired judge or a lawyer with at least ten
years experience.  You agree not to
invoke your right to elect arbitration of an 


 


3

















 


individual
Claim filed by me in a small claims or similar court (if any), so long as the
Claim is pending on an individual basis only in such court.


 


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


 


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


 


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


 


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


 


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


 


4

















 


(i)   I understand that I may reject this
Resolution of Disputes provision, in which case neither you nor I will have the
right to elect arbitration.  Rejection of
this provision will not affect the remaining parts of this Agreement.  To reject this Resolution of Disputes
provision, I must send us written notice of my rejection within 30 days after
the date that this Note was made.  I must
include my name, address, and account number. 
The notice of rejection must be mailed to WebBank, c/o Prosper
Marketplace, Inc., 111 Sutter Street, 22nd Floor, San
Francisco, CA 94104, Attention: Legal Department.  This is the only way that I can reject this
Resolution of Disputes provision.


 


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


 


Arizona
Residents: Notice: I understand that I may request that the
initial disclosures prescribed in the Truth in Lending Act (15 United States
Code sections 1601 through 1666j) be provided in Spanish before signing any
loan documents.


 


Aviso Para Prestatarios En Arizona: Puedo solicitar que las divulgaciones iniciales
prescritas en la Ley  Truth
in Lending Act (15 Código de los
Estados Unidos secciones 1601 hasta 1666j) sean proporcionadas en español antes
de firmar cualesquiera documentos de préstamos.


 


Missouri
Residents: Oral agreements or commitments to loan money,
extend credit or to forbear from enforcing repayment of a debt including
promises to extend or renew such debt are not enforceable. To protect me
(borrower) and you (creditor) from misunderstanding or disappointment, any
agreements we reach covering such matters are contained in this writing, which
is the complete and exclusive statement of the agreement between us, except as
we may later agree in writing to modify it.


 


By
signing this Note, I acknowledge that I (i) have read and understand
all terms and conditions of this Note, (ii) agree to the terms set forth
herein, and (iii) acknowledge receipt of a completely filled-in copy of
this Note.


 




	
  Date:

  	
   

  	
   

  
	
   

  	
  [Borrower]

  
	
   

  	
   

  
	
  Last
  Updated:  April 15, 2008

  	
   

  






 


5

















 


Credit
Profile Authorization


 


I
understand that by checking the checkbox immediately following this notice, I
am providing “written instructions” to Prosper Marketplace, Inc. (“Prosper”)
and WebBank, a Utah-chartered Industrial Bank (“WebBank”) under the Fair Credit
Reporting Act authorizing Prosper and WebBank, each for their own purposes, to
obtain information from my personal credit profile or other information from
Experian. I authorize Prosper and WebBank to obtain such information solely to
confirm my identity to avoid fraudulent transactions in my name and to conduct a credit pre-qualification.


 

















 


Authorization
To Debit Account


 


I
hereby authorize Prosper Marketplace, Inc. (“Prosper”), as loan servicer
for any holder of my loan, to initiate electronic debit entries to my
designated checking or savings account at the financial institution indicated (“Financial
Institution”) for payment of the monthly installment payments on the loan”)
made by WebBank, a Utah-chartered Industrial Bank to me, if my listing is
matched with a sufficient amount of lender bids on the Prosper marketplace. I
acknowledge that the origination of electronic debits to my Account must be
permitted by my Financial Institution, which must be located in the United
States.


 


THE
AMOUNT DEBITED FROM THE ACCOUNT EACH MONTH WILL BE THE MONTHLY PAYMENT AMOUNT
ON THE LOAN. THE MONTHLY PAYMENT AMOUNT WILL BE DEBITED EACH MONTH ON THE DUE
DATE OF THE MONTHLY PAYMENT; HOWEVER, IF THE PAYMENT DATE OCCURS ON A WEEKEND
OR HOLIDAY, THE ACCOUNT WILL BE DEBITED THE NEXT BUSINESS DAY.


 


I
understand that this authorization will remain in full force and effect until
Prosper has received written notification from me of its termination in such
time as to afford Prosper and my Financial Institution a reasonable opportunity
to act.


 
















 


BORROWER REGISTRATION AGREEMENT


 


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


 


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


 


1.  Registration as a Prosper
Borrower. You are registering as a borrower in the Prosper
credit marketplace, so that you may be eligible to post loan requests or “listings”
for display on the Prosper website to people who may be interested in bidding
against one another in a competitive auction format to purchase your loan after
it is made and funded by WebBank. For the sake of simplicity,
we refer to the people who bid on listings as “Lenders” even though loans are
made by WebBank and sold to the winning bidder or bidders. You agree to
comply with the terms and provisions of this Agreement, the Terms of Use of the
Prosper website, and the Prosper Policies, as those guidelines may be amended
from time to time by Prosper in its sole discretion (collectively, the “Prosper
Terms and Conditions”).


 


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


 


2.  Authorization to Obtain
Credit Report. You authorize us to obtain a credit report from the
Experian consumer credit reporting agency. We may use the credit report for any
lawful purpose, including but not limited to (i) for authentication
purposes, to make sure you are who you say you are, (ii) to determine how
much non-mortgage debt you currently have, in order to determine your
debt-to-income ratio, (iii) to obtain your Experian Scorex PLUSsm credit score and assign you a Prosper Credit
Grade based on that score, and (iv) to identify and display certain
information and characteristics from your credit profile, including but not
limited to the number, age, type and status of the credit lines currently being
reported, public records (such as bankruptcies and judgments) and mortgage
loans appearing on your credit report, and the number of your recent requests
for credit. Information from your credit report will be displayed on the
Prosper website with your listings. You authorize us to verify information in
your credit report, and you agree that Prosper may contact third parties to
verify any such information. We will obtain your credit report each time you
post a listing, except that we will not obtain a new credit report when you
post listings within thirty (30) days following the posting of an earlier
listing.


 


3.  Listings. You may
request a loan from WebBank (“Loan”) by posting a listing on the Prosper
website. You may request a Loan in amounts from $1,000 to $25,000. The minimum
and maximum Loan amounts are subject to change by us at any time without
notice. To post a listing, you must provide the amount of the Loan you are
requesting and the maximum interest rate you are willing to pay. At the time
you post a listing you must also provide your annual income, occupation and
employment status. The following information based on your credit file with
Experian will be displayed with your listing:


 


1

















 




	
  (i)

  	
   

  	
  Your Prosper credit
  grade;

  
	
  (ii)

  	
   

  	
  Your debt-to-income
  ratio, expressed as a percentage, reflecting the ratio between the amount of
  your monthly non-mortgage debt, as compared to the amount of monthly income
  that you indicated when completing your listing;

  
	
  (iii)

  	
   

  	
  Whether you own a home;

  
	
  (iv)

  	
   

  	
  The number of accounts on
  which you are currently late on a payment;

  
	
  (v)

  	
   

  	
  The total past-due
  amount you owe on all delinquent and charged-off accounts;

  
	
  (vi)

  	
   

  	
  The number of 90+ days
  past due delinquencies on your credit report in the last 7 years;

  
	
  (vii)

  	
   

  	
  The number of negative
  public records (e.g., bankruptcies, liens, and judgments) on your credit
  report over the last 12 months, and over the last 10 years;

  
	
  (viii)

  	
   

  	
  The month and year your
  first recorded credit line (e.g., revolving, installment, or mortgage credit)
  was opened;

  
	
  (ix)

  	
   

  	
  The total number of
  credit lines appearing on your credit report, along with the number that are
  open and current;

  
	
  (x)

  	
   

  	
  The total balance on
  all of your open revolving credit lines;

  
	
  (xi)

  	
   

  	
  Your bankcard
  utilization ratio, expressed as a percentage, reflecting the ratio of the
  total balance used, to the aggregate credit limit on, all of your open
  bankcards; and

  
	
  (xii)

  	
   

  	
  The number of inquiries
  made by creditors to your credit report in the last six months.

  






 


Listings also display your self-reported occupation,
employment status and range of income. If you are a member of a
Prosper group when you post a listing, the listing will also identify your
group; however, you do not have to be a member of a group to post a listing.
You may also create a network of Prosper friends, and if one or more of your
Prosper friends or your fellow group members bid on your listing, your listing
will reflect that the bid was made by a fellow group member or a Prosper
friend. Your Prosper friends who bid on your listing may also write a
recommendation that will be displayed in your listing. Prosper friends do not
guarantee payments on your Loan, and bids and recommendations of your listing
from your Prosper friends do not obligate the individual making the bid or
recommendation to guarantee or make any payments on your Loan.


 


You
may not include any personally identifying information, including, without
limitation, your name, address, phone
number, email address, Social Security number or driver’s license number, or
your bank account or credit card numbers in your listing or on your
Prosper member web page, or elsewhere on the Prosper Website. Listings that
include this information are subject to cancellation by Prosper, or deletion or
redaction by Prosper of the personally identifying information, although
Prosper is under no obligation to take such actions and you include such
information solely at your own risk.


 


Borrowers’
listings are displayed on the Prosper website. This means that people who visit
the Prosper website will be able to view your listing, and see your Prosper
credit grade, your debt-to income ratio and other information, provided,
however, that certain information concerning your credit history will only be
viewable by registered Prosper Lenders. Upon your submission of a listing, you
authorize Prosper to display the listing on the Prosper website. To facilitate
bids for your listing, Prosper may forward your listing by email to third
parties, including but not limited to registered Prosper Lenders, and may display
your listing in promotional, advertising and marketing materials, and you
authorize Prosper to do so.


 


You
authorize Prosper to verify your residence, income, occupation and any other
information you provide in connection with a listing or your registration as a
borrower, and you agree that Prosper may contact third parties to verify
information you provide. If such information changes 


 


2

















 


after
you post a listing but before the listing expires, you must either (i) promptly
notify Prosper of the change, or (ii) withdraw your listing. For example,
if, while your listing is displayed on the Prosper website, your state of
residence changes or the annual income amount you provided to Prosper when you
submitted your listing decreases materially, you must either notify Prosper of
the change, or withdraw the listing. If you elect to withdraw your listing as a
result of a change, you may (but are not required to) post a new listing
containing the updated information. You cannot edit or amend your listing once
it is posted on the Prosper website; however, you have the right to withdraw
your listing at any time prior to expiration of the listing, and you may post
another listing if you desire. Prosper reserves the right, in its sole
discretion, to limit the number of listings you post or attempt to post on the
Prosper website.


 


Each
listing you post on the Prosper website is both a request for a Loan and a
commitment to borrow.


 


Loan Request. Your listing is a request for a Loan in the
amount specified in the listing, at an interest rate equal to the maximum
interest rate set forth in your listing. If your listing is matched, the
interest rate on your Loan may be lower than the maximum rate you specified,
but it will never be higher. You will not receive a Loan in an amount less than
the amount specified in your listing, even if one or more bids match a portion
of your requested Loan amount.
In order to post a listing on the Prosper website you must have a good faith intent
to obtain and repay your Loan and your listing must be consistent with that
intent.


 


Commitment to Borrow. Each listing you post on
the Prosper website is a commitment and promise to obtain a Loan from WebBank,
for purchase by the person or persons whose bid or bids are matched with your
listing. You have the right to withdraw your listing at any time prior to
expiration of the listing. If your
listing receives a Lender bid in, or Lender bids totaling, the amount of your
requested Loan, you will receive a Loan from WebBank in the amount
you requested, subject to our right to verify information you provided in
connection with your listing and your registration as a Prosper user and our
other rights as described in Section 4 below.


 


AT
THE TIME YOU SUBMIT YOUR LISTING, YOU ARE COMMITTING TO OBTAIN A LOAN IN THE
AMOUNT SPECIFIED IN YOUR LISTING, AT THE MAXIMUM INTEREST RATE SET FORTH IN
YOUR LISTING, SHOULD YOUR LISTING BE MATCHED
WITH A BID IN, OR BIDS TOTALING, THE AMOUNT OF YOUR REQUESTED LOAN. YOU HAVE THE
RIGHT TO WITHDRAW YOUR LISTING AT ANY TIME PRIOR TO EXPIRATION OF YOUR LISTING;
HOWEVER, YOU HAVE NO RIGHT TO RESCIND ANY LOAN.


 


Number of Listings. You may post as many
listings as you desire; however, Prosper reserves the right, in its sole
discretion, to limit the number of listings you post or attempt to post on the
Prosper website. You may have only one listing outstanding at a time.


 


Duration of Listings. When you post a listing,
your listing will be displayed on the Prosper website for seven (7) days.
However, if your listing receives
a Lender bid in, or Lender bids totaling, the full amount of your
requested Loan prior to expiration of your listing, you may elect to end your
listing early – you need not wait until your listing expires. You may also
designate your listing for “automatic funding,” in which case your listing will
end and no further bids on your listing will be accepted toward your listing as
soon as your listing receives a bid or bids
totaling the full amount of your requested Loan. We reserve the right to make
the automatic funding feature available only to certain credit grades. When you
post a listing, it will be displayed on the Prosper website along with all
other listings until you end the listing or the listing expires, or until the
listing is withdrawn by you or by us as provided in Section 4 below.


 


3

















 


Additional Loans. Subject to eligibility requirements that we
may in our sole discretion establish and amend from time to time, you may have
up to two Loans outstanding at any one time, provided that the aggregate
outstanding principal balance of your Loans does not exceed the maximum Loan
amount for your state of residence. To be eligible to post a listing for a
second loan, you must be current on your existing Loan, and you must have a
record of on-time monthly Loan payment performance, within such guidelines as
may be established and amended from time to time by us in our sole discretion.
You may not post a listing for a second Loan within (6) months following
the date of origination of your existing Loan.


 


Prohibited Activities. You agree that you will
not, in connection with any listings, bids, Loans or other transactions
involving or potentially involving Prosper or WebBank, (i) make any false,
misleading or deceptive statements or omissions of material fact in your
listing; (ii) misrepresent your identity, or describe, present or portray
yourself as a person other than yourself, whether in a narrative description or
a photo in your listing; (iii) give to or receive from, or offer or agree
to give to or receive from any Prosper Lender or other person any fee, bonus,
additional interest, kickback or thing of value of any kind in connection with
a requested or existing Loan or in exchange for such person’s bid, recommendation, or offer or
agreement to bid on or recommend your listing; or (iv) represent
yourself to any person, as a representative, employee, or agent of Prosper or
WebBank, or purport to speak to any person on behalf of Prosper or WebBank.


 


4.  Right to Verify Information
and Cancel Funding.


 


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


 


b.
In the event we determine, prior to funding a Loan, that a listing, or a bid
for the listing, contains materially inaccurate information (including but not
limited to unintended inaccuracies, inaccuracies resulting from errors by
Prosper, or inaccuracies resulting from changes in the borrower’s income,
residence or credit profile between the date a listing is posted and the date
the listing is to be funded) or was posted illegally or in violation of any
order, writ, injunction or decree of any court or governmental instrumentality,
for purposes of fraud or deception, or otherwise in a manner inconsistent with
the Prosper Terms and Conditions or any registration agreement, we may refuse
to post the listing or, if the listing has already been posted, remove the
listing from the Prosper marketplace and cancel all bids against the listing.


 


c.
When a listing ends or expires with a bid or bids totaling the amount of a
borrower’s requested Loan, we may conduct a “pre-funding” review prior to
funding the Loan. Loan funding occurs
when Loan proceeds are disbursed into the borrower’s designated deposit account. We may, at
any time and in our sole discretion, delay funding of a Loan in order to enable
us to verify the accuracy of information provided by borrowers, Lenders and
group leaders in connection with the listing or bids against the listing, and
to determine whether there are any irregularities with respect to the listing
or the bids against the listing. We may cancel or proceed with funding the
Loan, depending on the results of our pre-funding review. If funding is
cancelled, the listing will be removed from the Prosper marketplace and all
bids against the listing will be cancelled, and 


 


4

















 


each
bidder’s funds will be returned to the Prosper Funding Account, available for
further bidding. In the event we cancel funding of a Loan, Prosper will notify
the borrower, group leader (if any), and all bidders for the listing of our
determination to cancel funding of the Loan.


 


5.  Matching of Bids and
Listings.


 


a.
Prosper’s auction platform will automatically match your listing with any bids
that specify a minimum interest rate equal to or below the maximum interest
rate you would accept. Bids are first matched with borrower listings with the
highest offered interest rates above the bidder’s minimum interest rate, and thereafter
the bids are matched to borrower listings with incrementally lower offered
interest rates.


 


b.
A match of your listing with one or more bids in the full amount of your
requested Loan results in a Loan from WebBank to you, subject to our right to
verify information as provided in this Agreement. Each Loan will be evidenced
by a Promissory Note in the form set forth on the attached Exhibit A.


 


c.
We do not warrant or guaranty that your listings will be matched with any bids.
Your listing must receive a bid in, or bids totaling, the entire amount of your
requested Loan in order for a Loan to be made. You will not receive a Loan if,
prior to withdrawal or expiration of your listing, only a portion (even a
substantial portion) of your requested Loan amount is matched with a bid or
bids.


 


d.
To safeguard your privacy rights, on listings your name and address will be
shielded from the view of bidders and prospective bidders, and your identity as
the borrower on the Promissory Note will be shielded from the winning bidders
who purchase your Loan. Only your Prosper user name will appear on listings and
Promissory Notes, and only the user name of the bidders will appear with bids.


 


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


 


7.  Listings Matched with
Multiple Bids.  Your listing
may be matched with more than one bid. If that happens, you agree to enter into
separate Promissory Notes in the amount of each bid, with the aggregate
principal amount of the Notes equal to your requested Loan amount. Each
Promissory Note will be in the form of the Promissory Note attached as Exhibit A,
and will have identical interest rates and, monthly payment due dates. Your
monthly payment amount will be the aggregate monthly payment amount under the
Promissory Notes, and the payments you
make on your Loan are allocated pro rata
to the respective Note owners based
on the principal amount of each Lender’s Promissory Note with respect to the Loan. As used in this Agreement,
the term “Loan” shall include your total indebtedness as evidenced by all Notes
resulting from your listing being matched with multiple bids.


 


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


 


5

















 


for
all Loans you obtain from WebBank through the Prosper marketplace, and all
communications regarding your Loan must be made to Prosper.


 


9. Authorization to Contact Your Group Leader. You acknowledge
and agree that if you obtain a Loan through the Prosper marketplace as a member
of a group registered with Prosper, and your Loan payment becomes fifteen (15)
days past due, Prosper may notify your group leader of the delinquent payment.
You also acknowledge and agree that if you obtain a Loan through the Prosper
marketplace, in the event your loan payment becomes fifteen (15) days past due
Prosper may notify all of your designated Prosper friends who were winning
bidders on your Loan listing of your delinquent payment. Groups on Prosper are
rated according to the collective payment performance of the group’s members,
so your failure to make Loan payments when due may have a negative effect on
your group’s rating.


 


10.  Collection &
Reporting of Delinquent Loans. In the event you do not make
your Loan payments on time, WebBank or any subsequent owner of the Loan will
have all remedies authorized or permitted by the Promissory Note and applicable
law. In addition, when a monthly payment becomes thirty (30) days past due,
your Loan may be referred to a collection agency for collection. Prosper may
report Loan payment delinquencies in excess of 30 days to one or more credit
reporting agencies in accordance with applicable law. Subject to limitations of
applicable law, you authorize and agree that Prosper or a collection agency may
contact you at any or all of the telephone numbers you provide to Prosper at or
after registration.


 


11.  No Guarantee. NEITHER PROSPER
NOR WEBBANK WARRANTS OR GUARANTEES (1) THAT YOUR LISTING WILL BE MATCHED
WITH ANY BIDS, (2) THAT YOU WILL RECEIVE A LOAN AS A RESULT OF POSTING A
LISTING, OR (3) THAT IF YOUR LISTING IS MATCHED YOU WILL RECEIVE A LOAN
WITH AN INTEREST RATE LESS THAN THE MAXIMUM RATE SPECIFIED IN YOUR LISTING.


 


12.  Restrictions on Use. You are not
authorized or permitted to use the Prosper website to obtain, or attempt to
obtain, a Loan for someone other than yourself. You must be the owner of the
deposit account you designate for electronic transfers of funds, with sole
authority to direct that Loan payments be made from the account. Your
designated account will be the account into which Loan proceeds will be
deposited, and from which Loan payments will be made. Although you are
registering as a borrower, you may also register and participate in the Prosper
marketplace as a Lender or as a group leader. If you obtain a Loan and fail to
pay your loan in full, whether due to default, bankruptcy or other reasons, you
will not be eligible to post any further listings or re-register with Prosper
as a borrower, Lender or group leader. Prosper may in its sole discretion, with
or without cause and with or without notice, restrict your access to the
Prosper website or marketplace.


 


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


 


14.  Termination of Registration.
Prosper may in its sole discretion, with or without cause, terminate
this Agreement at any time by giving you notice as provided below.  In addition, upon Prosper’s determination
that you committed fraud or made a material misrepresentation in connection
with a listing, bid or Loan, performed any prohibited activity, or otherwise
failed to abide by the terms of this Agreement or the Prosper Terms and
Conditions, Prosper may, in its sole discretion, immediately and without
notice, take one or more of the following actions: (i) suspend your right
to post listings or otherwise participate in the Prosper marketplace; (ii) terminate
this Agreement and your registration with Prosper. Upon termination of this
Agreement and your registration with Prosper, any listings you have placed on
the Prosper website shall terminate, and will be removed from the Prosper
website immediately. Any Loans you obtain 


 


6

















 


prior
to the effective date of termination resulting from listings you had placed on
the Prosper website shall remain in full force and effect in accordance with
their terms.


 


15.  Prosper’s Right to Modify
Terms.  Prosper has the right to
change any term or provision of this Agreement or the Prosper Terms and
Conditions, provided, however, that Prosper does not have the right to change
any term or provision of a Promissory Note evidencing a Loan to which you are a
party except as authorized in the Promissory Note. Prosper will give you notice
of material changes to this Agreement, or the Prosper Terms and Conditions, in
the manner set forth in Section 17. You authorize Prosper to correct
obvious clerical errors appearing in information you provide to Prosper,
without notice to you, although Prosper expressly undertakes no obligation to
identify or correct such errors. This Agreement, along with the Prosper Terms
and Conditions, represent the entire agreement between you and Prosper
regarding your participation as a borrower in the Prosper credit marketplace,
and supersede all prior or contemporaneous communications, promises and
proposals, whether oral, written or electronic, between you and Prosper with
respect to your involvement as a borrower in the Prosper marketplace.


 


16.  Member Web Page Display
and Content.  You may, but
are not required to, maintain a “Prosper member web page” on the Prosper
website, where you can post photos, content, logos or links to websites. If you
elect to do so, you authorize Prosper to display on the Prosper website all
such material you provide to Prosper. Any material you display on your member page must
conform to the Prosper Terms and Conditions, as amended from time to time, and
must not (i) infringe on any third party’s copyright, patent, trademark,
trade secret or other proprietary rights or right of publicity or privacy; (ii) violate
any applicable law, statute, ordinance or regulation; (iii) be defamatory
or libelous; (iv) be lewd, hateful, violent, pornographic or obscene; (v) violate
any laws regarding unfair competition, anti-discrimination or false
advertising; (vi) promote violence or contain hate speech; or (vii) contain
viruses, trojan horses, worms, time bombs, cancelbots or other similar harmful
or deleterious programming routines. You may not include or display any
personally identifying information, including, without limitation, name, address, phone number, email address, Social
Security number or driver’s license number, or bank account or credit card
numbers of any Prosper member on your Prosper member web page, or elsewhere on
the Prosper website.


 


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


 


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


 


19.  Limitation on Liability.  IN NO EVENT SHALL ANY PARTY TO THIS AGREEMENT
BE LIABLE TO ANY OTHER PARTY FOR ANY LOST PROFITS OR SPECIAL, EXEMPLARY,
CONSEQUENTIAL OR PUNITIVE DAMAGES, EVEN IF INFORMED OF THE POSSIBILITY OF SUCH
DAMAGES. FURTHERMORE, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO ANY
OTHER PARTY 


 


7

















 


REGARDING
THE EFFECT THAT THE AGREEMENT MAY HAVE UPON THE FOREIGN, FEDERAL, STATE OR
LOCAL TAX LIABILITY OF THE OTHER.


 


20.  Miscellaneous. You may not
assign, transfer, sublicense or otherwise delegate your rights under this
Agreement to another person without Prosper’s prior written consent. Any such
assignment, transfer, sublicense or delegation in violation of this Section shall
be null and void. This Agreement shall be governed by federal law
and, to the extent that state law applies, the laws of the State of
Utah. Any waiver of a breach of any provision of this Agreement will not be a
waiver of any other subsequent breach. 
Failure or delay by either party to enforce any term or condition of
this Agreement will not constitute a waiver of such term or condition. If any
part of this Agreement is determined to be invalid or unenforceable under
applicable law, then the invalid or unenforceable provision will be deemed
superseded by a valid enforceable provision that most closely matches the
intent of the original provision, and the remainder of the Agreement shall
continue in effect. WebBank is not a party to this Agreement, but you agree
that WebBank is a third-party beneficiary and is entitled to rely on your
representations and authorizations, and other provisions of this Agreement.


 


8
















 


EXHIBIT A


 


PROMISSORY NOTE


 


Borrower Address:
                                                                                            .


 


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


 


2.  Payments.  This Note is payable in 36 monthly
installments of
$                      
each, consisting of principal and interest, commencing on the
                
day of
                          ,
and continuing until the final payment date of
                                    ,
which is the maturity date of this Note. The final payment shall consist of the
then remaining principal, unpaid accrued interest and other charges due under
this Note.  All payments will be applied
first to any late charges then due, then to any unpaid fees incurred as a
result of failed automated payments or returned checks or bank drafts as
provided in Paragraph 11, then to interest then due and then to principal.
No unpaid interest or charges will be added to principal.


 


3.  Interest.  Interest will be charged on unpaid principal
until the full amount of principal has been paid.  Interest under this Note will accrue daily,
on the basis of a 365-day year. If payments are made on time, my final payment
will be in the amount of a regular monthly payment. If payments are paid late,
a greater portion of the payment will be applied to accrued interest, a lesser
portion (if any) will be applied to principal reduction, and the loan will not
amortize as originally scheduled, resulting in a higher final payment amount.
The interest rate I will pay will be the rate I will pay both before and after
any default.


 


4.  Late Charge.  If the full amount of any monthly payment is
not made by the end of fifteen (15) calendar days after its due date, I will
pay you a late charge
of                            .
I will pay this late charge promptly but only once on each late payment.


 


5.  Waiver of Defenses.  Except as otherwise provided
in this Note, you are not responsible or liable to me for the quality, safety,
legality, or any other aspect of any property or services purchased with the
proceeds of the loan.  If I have a
dispute with any person from whom I have purchased such property or services, I
agree to settle the dispute directly with that person.


 


6.  Certification; Exception to Waiver.  I certify that, to my
knowledge, the proceeds of this loan will not be applied in whole or part to
purchase property or services from any person to whom any interest this loan
may be assigned. If, notwithstanding the preceding sentence, any person from
whom I have purchased such property acquires any interest in this loan, then
Paragraph 5 will not apply to the extent of that person’s interest, even if
that person later assigns that person’s interest to another person.


 


7.  Method of Payment.  I will pay the principal,
interest, and any late charges or other fees on this loan when due. Those
amounts are called “payments” in this Note. 
To ensure that my payments are processed in a timely and efficient
manner, you have given me the choice of making my monthly payments (i) by
automated withdrawal from an account that I designate using an automated
clearinghouse (ACH) or other electronic fund transfer, or (ii) by bank
drafts drawn by you on my behalf on my account each month; and I have chosen
one of these methods. 


 


9

















 


If I close my account or if my account changes or is otherwise
inaccessible such that you are unable to withdraw my payments from that account
or draw bank drafts on the account, I will notify you at least three (3) days
prior to any such closure, change or inaccessibility of my account, and
authorize you to withdraw my payments from, or draw bank drafts on, another
account that I designate.


 


With
regard to payments made by automatic withdrawals from my account, I have the
right to (i) stop payment of a preauthorized automatic withdrawal, or (ii) revoke
my prior authorization for automatic withdrawals with regard to all further
loan payments, by notifying the financial institution where my account is held,
orally or in writing at least three (3) business days before the scheduled
date of the transfer. I agree to notify you orally or in writing, at least
three (3) business days before the scheduled date of the transfer, of the
exercise of my right to stop a payment or to revoke my prior authorization for
further automatic withdrawals.


 


8.  Default and Remedies. If I fail to
make any payment when due in the manner required by Paragraph 7, or if
receivership or insolvency proceedings or any assignment for the benefit of
creditors is instituted by or against me; I die, I fail to keep any
promise or meet any other obligations in this Note, or I make a material
misrepresentation in connection with my loan, I will be in default and you may at your
option accelerate the maturity of this Note and declare all principal, interest
and other charges due under this Note immediately due and payable. If you
exercise the remedy of acceleration you will not do so until one or more
payments under this Note is at least 120 days past due, and you will give me at
least 30 days prior notice of acceleration; provided, however, that if my
default is the result of a material misrepresentation you do not need to wait
until one or more payments is past due, and you do not need to give me any
prior notice of acceleration.


 


9.  Prepayments.  I may prepay this loan in full or in part at any
time without penalty.


 


10.  Waivers.  You may accept late payments or partial
payments, even though marked “paid in full,” without losing any rights under
this Note, and you may delay enforcing any of your rights under this Note
without losing them. You do not have to (a) demand payment of amounts due
(known as “presentment”), (b) give notice that amounts due have not been
paid (known as “notice of dishonor”), or (c) obtain an official
certification of nonpayment (known as “protest”). I hereby waive presentment,
notice of dishonor and protest. Even if, at a time when I am in default, you do
not require me to pay immediately in full as described above, you will still
have the right to do so if I am in default at a later time. Neither your
failure to exercise any of your rights, nor your delay in enforcing or
exercising any of your rights, will waive those rights.  Furthermore, if you waive any right under
this Note on one occasion, that waiver will not operate as a waiver as to any
other occasion.


 


11. Insufficient
Funds Charge. If I attempt to make a monthly payment, whether by
check or bank draft or by automated withdrawal from my designated account, and
the payment is unable to be made due to (i) insufficient funds in my
account, (ii) the closure, change or inaccessibility of my account without
my having notified you as provided in Paragraph 7, or (iii) for any other
reason (other than an error by you), I will pay you an additional fee of
$             for
each check or bank draft returned or failed automated withdrawal, unless
prohibited by applicable law.


 


12.  Loan Charges. 
If a law, which applies to this loan and which sets maximum loan
charges, is finally interpreted so that the interest or other loan charges
collected or to be collected in connection with this loan exceed the permitted
limits, then: (a) any such loan charge shall be reduced by the amount
necessary to reduce the charge to the permitted limit; and (b) any sums
already collected from me which exceeded permitted limits will be refunded to
me. You may 


 


10

















 


choose
to make this refund by reducing the principal I owe under this Note or by
making a direct payment to me.


 


13.  Assignment.  I may not assign any of my obligations under
this Note without your written permission.  You do not have to give me
your permission.  You may assign this Note at any time without my
permission. Unless prohibited by applicable law, you may do so without telling
me.  My obligations under this Note apply to all of my heirs and permitted
assigns. Your rights under this Note apply to each of your successors and
assigns.


 


14.  Notices. 
All notices and other communications hereunder shall be given in
writing and shall be deemed to have been duly given and effective (i) upon
receipt, if delivered in person or by facsimile, email or other electronic
transmission, or (ii) one day after deposit prepaid for overnight delivery
with a national overnight express delivery service.  Such notices must be properly addressed to
the parties at the addresses set forth below unless a different address for
notice is later provided in writing by giving notice pursuant to this
Paragraph.


 


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


 


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


 


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


 


(a)   In this Resolution of Disputes provision:


 


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


 


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


 


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


 


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


 


11

















 


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


 


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


 


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


 


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


 


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


 


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


 


12

















 


APPEAL (EXCEPT AS PERMITTED IN PARAGRAPH (e) OR UNDER
THE FEDERAL ARBITRATION ACT).


 


(i)   I understand that I may reject this
Resolution of Disputes provision, in which case neither you nor I will have the
right to elect arbitration.  Rejection of
this provision will not affect the remaining parts of this Agreement.  To reject this Resolution of Disputes
provision, I must send us written notice of my rejection within 30 days after
the date that this Note was made.  I must
include my name, address, and account number. 
The notice of rejection must be mailed to WebBank, c/o Prosper
Marketplace, Inc., 111 Sutter Street, 22nd Floor, San
Francisco, CA 94104, Attention: Legal Department.  This is the only way that I can reject this
Resolution of Disputes provision.


 


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


 


Arizona
Residents: Notice: I understand that I may request that the
initial disclosures prescribed in the Truth in Lending Act (15 United States
Code sections 1601 through 1666j) be provided in Spanish before signing any
loan documents.


 


Aviso Para Prestatarios En Arizona: Puedo solicitar que las divulgaciones iniciales
prescritas en la Ley  Truth
in Lending Act (15 Código de los
Estados Unidos secciones 1601 hasta 1666j) sean proporcionadas en español antes
de firmar cualesquiera documentos de préstamos.


 


Missouri
Residents: Oral agreements or commitments to loan money,
extend credit or to forbear from enforcing repayment of a debt including
promises to extend or renew such debt are not enforceable. To protect me
(borrower) and you (creditor) from misunderstanding or disappointment, any
agreements we reach covering such matters are contained in this writing, which
is the complete and exclusive statement of the agreement between us, except as
we may later agree in writing to modify it.


 


By
signing this Note, I acknowledge that I (i) have read and understand
all terms and conditions of this Note, (ii) agree to the terms set forth
herein, and (iii) acknowledge receipt of a completely filled-in copy of
this Note.


 


	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
  [Borrower]

  



 


Last
Updated: September 24, 2008


 


13
















 


Exhibit E


 


Sample Funding Statement


 

















 


Daily Funding Statement


Report
Date 4/10/2008


 


Section A


 


A) Loans
to be disbursed by WebBank on Disbursement Date of April 11, 2008


 


	
  LoanID

  	
   

  	
  Customer Name

  	
   

  	
  Amount

  	
   

  
	
  27350

  	
   

  	
  Joseph Koeck

  	
   

  	
  $

  	
  5,000.00

  	
   

  
	
  27351

  	
   

  	
  kari rice

  	
   

  	
  $

  	
  10,000.00

  	
   

  
	
  27352

  	
   

  	
  John Smith

  	
   

  	
  $

  	
  1,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  sum

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  16,000.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
								



 


B) Loans to be purchased by Prosper
from WebBank on the Purchase Date of April 11, 2008


 


	
  LoanID

  	
   

  	
  Customer Name

  	
   

  	
  Amount

  	
   

  
	
  27349

  	
   

  	
  Jerry Garcia

  	
   

  	
  $

  	
  5,000.00

  	
   

  
	
  27349

  	
   

  	
  WILLIE M SIMON

  	
   

  	
  $

  	
  5,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  sum

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  10,000.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
								



 
















 


Exhibit F


 


Insurance Requirements


 


(a)           From the Effective Date and
until termination of this Agreement, Company shall maintain insurance of the
following kinds and amounts, or in amounts required by Applicable Laws,
whichever is greater.


 


(i)            A blanket fidelity bond and
an errors and omissions insurance policy, with broad coverage on all officers
and employees acting in any capacity with regard to handling funds, money, or
documents. The fidelity bond and errors and omissions insurance shall be in a
form reasonably acceptable to Bank and shall protect and insure against losses,
including forgery, theft. embezzlement, fraud, errors and omissions and
negligent acts of such persons. No provision of this paragraph requiring the
fidelity bond and errors and omissions insurance shall diminish or relieve
Company from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
$1,000,000, with the exception of $500,000 minimum coverage for forgery.


 


(ii)           Commercial general liability
insurance written on an occurrence basis against claims on account of bodily
injury, death or property damage. Such insurance shall have a combined single
limit of not less than $1,000,000 per occurrence and $1,000,000 annual
aggregate for bodily injury, death and property damage.


 


(iii)          Worker’s Compensation and
employers’ liability insurance affording (A) protection under the Worker’s
Compensation Law containing an all states endorsement and (B) Employers’ Liability
Protection subject to a limit of not less than $500,000.


 


(iv)          Upon reasonable request by
Bank, such other insurance as may be maintained by Persons engaged in the same
or similar business and similarly situated.


 


(b)           Insurance policies required
to be maintained hereunder shall be procured from insurance companies
reasonably acceptable to Bank. Liability insurance limits may be provided
through any combination of primary and/or excess insurance policies. If
requested by Bank, Company shall cause to be delivered to Bank annually a
certified true copy of each fidelity bond and insurance policy required under
this Agreement.


 
















 


Exhibit G


 


Program Compliance
Manual


 

















 


Privacy and Procedure


Policy


 


Prosper Marketplace, Inc.


111 Sutter Street, 22nd Floor


San Francisco, CA 94104


 


Version
Control


 


Owner/Individual Responsible for
Maintaining Policy:


 


Director
of Compliance,
Prosper Marketplace, Inc.


 


Last Revised:  April 8,
2008


 

















 


Introduction


 


As financial services professionals entrusted with
sensitive financial information, Prosper respects the privacy of our customers
and is committed to treating customer information responsibly.  Prosper is dedicated to protecting
confidential information and has established standards and procedures to
safeguard that personal information.


 


Background


 


The
requirement for privacy of consumer financial information is mandated by the
Gramm-Leach-Bliley Act and similar state laws, including California Financial
Code Section 4053 (commonly known as “California SB1”).


 


These
regulations govern the treatment of consumers’ nonpublic personal information
and regulates how and with whom that information may be shared.  The regulation requires Prosper Marketplace, Inc.
(“Prosper”) to provide notice to customers about its privacy policies and
practices and, if it shares that information with nonaffiliated third parties,
Prosper must allow customers to opt out.


 


Prosper’s  Privacy Policy:


 


Prosper
does not sell or rent nonpublic personal information about our customers to
third parties for marketing purposes.


 


Definition
of Nonpublic Personal Information:


 


Nonpublic
personal information consists of nonpublic information that is collected in
connection with providing a financial product or service.  Specifically, it means:


 


1)                                      personally identifiable
financial information, which includes:


·                  information a consumer
provides on an application for a loan, credit card, or other financial product
or service;


·                  account balance information,
payment history, overdraft history and credit or debit card purchase
information;


·                  information that a consumer
provides to you (or your agent) that you obtain in connection with collecting
on a loan or servicing a loan;


·                  any information collected
through an Internet “cookie”;


·                  information from a consumer
report;


·                  the fact that an individual
is or has been one of your customers or has obtained a financial product or
service from you;


·                  any information about your
consumer if it is disclosed in a manner that indicates that the individual is
or has been your consumer; and


·                  any list, description, or other grouping of
consumers that is derived using any personally identifiable financial information
that is not publicly available.  Lists
include, but are not limited to:


·                  any list of individuals’
names and addresses that is derived in whole or in 


 


1

















 


part using personally
identifiable information that is not publicly available, such as account
numbers.


 


Nonpublic
personal information does not include information that is available from public
sources, such as telephone directories or government records.


 


How We
Collect Information:


 


Prosper
collects personal information as part of the registration process for people
joining the Prosper community. This information includes name, email, address,
and telephone number. We may collect a customer’s Social Security number and
driver license number in order to help determine a credit grade and verify
identity.


 


Each
Prosper member has their own community page, where they may post information
about themselves.  Borrower listings
contain basic information regarding credit grades and other financial information,
in addition to any other information the member makes the personal decision to
post.  Each member is identified only by
their screen name, chosen by them, and which can be used to remain anonymous.
If a member provides identifying information, either in your choice of screen
name or otherwise, it is their individual choice, and done at their own
discretion.


 


Prosper
uses names and Social Security numbers to request credit reports. We use
information from the credit bureau file to verify a customer’s identity,
protect against fraud, and provide Prosper lenders with a more complete picture
of a borrower’s credit history.


 


Prosper
uses a customer’s information to prepare a lender or borrower profile and to
facilitate requested transactions in the Prosper community. This includes:


 


·                  Obtaining credit information in order to
determine a credit grade.


·                  Communicating with financial service
companies to facilitate automatic payments, loan sales, and other services in
order to complete the customer’s transactions.


·                  Assisting members in completing transactions
with other members, including arranging email contacts and collection services
if necessary.


 


Information
We Are Allowed To Share:


 


Prosper
is permitted by law to share information with our affiliates, to the extent
that there is a need for our affiliate to have that information.


 


We
may share information with other parties, without meeting the opt-out condition
(defined below), if it is necessary to:


·                  market the Prosper’s own financial products
or services;


·                  if the third parties are performing services
or functions on behalf of the Prosper, including marketing Prosper’s own
products or services or 


 


2

















 


products and services
offered pursuant to a joint agreement between Prosper and another financial
institution, provided that Prosper:


·                  discloses that
arrangement,  and


·                  enters into an
agreement with the third party to maintain the confidentiality of the
information.


·                  if the customer consents;


·                  if it is necessary to “effect, administer, or
enforce” a transaction requested or authorized by the consumer;


·                  process and service transactions the consumer
requests or authorizes;


·                  protect against potential fraud or
unauthorized transactions;


·                  to protect the confidentiality or security of
Prosper’s records;


·                  for risk control purposes or for resolving
customer disputes;


·                  to persons holding a legal or beneficial
interest relating to the consumer


·                  to persons acting in a fiduciary capacity on
behalf of the consumer;


·                  to law enforcement agencies if permitted or
required under other provisions of law;


·                  to respond to judicial process, attorneys,
accountants and auditors;


·                  to respond to governmental authorities for
examination, compliance, or other lawful purposes;


·                  to a consumer reporting agency in accordance
with the Fair Credit Reporting Act;


·                  comply with federal state or local laws; or


·                  any other permissible sharing as defined
within the Gramm-Leach-Bliley Act.


 


Opt-out
provision:


 


If
Prosper shares nonpublic personal information with nonaffiliated third parties
in any other capacity than as defined above, we are required to offer our
customers the opportunity to “opt out” of the information sharing process.


 


While
Prosper does not sell or rent nonpublic personal information to third parties
for marketing purposes, we give consumers the opportunity to opt-out of having
their personally identifiable information used for certain other purposes.  For example, customers can elect not to
receive newsletters, promotional material, emails from other Prosper members,
event notifications, research or surveys, and group leader notifications.
Customers can opt out of receiving these communications and can view or change
their account opt-out preferences online.


 


Privacy
Notice to Customers


 


Notice
to New Customers:


 


Prosper
is required to provide a copy of its Privacy Policy when it enters into a
customer relationship with a consumer. 
As allowed by the Electronic Signatures in Global and National Commerce
(E-SIGN) Act, and supported by Prosper’s Terms of Use, Prosper posts its
Privacy notice on its website and requires the 


 


3

















 


consumer/customer
to agree to its terms as a condition of service.  Prosper will also post online a copy of
WebBank’s Privacy Policy, in addition to the Prosper Privacy Notice.


 


A
customer relationship means a continuing relationship between a consumer and
Prosper when we provide one or more financial products or services to the
consumer that are to be used primarily for personal, family or household
purposes.


 


Annual
Notice:


 


Not
less than annually thereafter, Prosper will provide a Privacy Notice to
applicable customers as long as there is a continuation of the customer
relationship.  Annually means at least
once in any period of 12 consecutive months during which that relationship
exists.  For purposes of this section,
the 12-month consecutive period will be defined as a calendar year.  Prosper will provide the annual notice to the
customer once in each calendar year following the calendar in which the
customer registered for a Prosper account. 
For example, if a customer opens an account on any day of year 1, we
must provide an annual notice to that customer no later than December 31
of year 2.


 


Confidentiality:


 


We
will limit the use and collection of information about our customers to that
which is necessary to conduct our business. All Prosper employees are
responsible for maintaining the confidentiality of customer information.


 


Limits
on Employee Access:


 


At
Prosper, employee access to personally identifiable customer information is
limited to those with a business reason to know such information.


 


Unauthorized
Access by Employees:


 


Disciplinary
actions will be instituted against any employee who inappropriately accesses or
discloses personally identifiable information of customers.


 


Security:


 


Prosper
will safeguard personal and financial information according to established
standards and procedures.  Prosper
protects sensitive account information by storing it in encrypted form on
computers not connected to the Internet. We control access to this information
via secure web pages and employ firewalls and other security technologies
to protect our servers from external attack. Paper records will be stored in a
secure location at all times.


 


4

















 


Records
Retention and Destruction:


 


The
unnecessary retention of records may lead to inadvertent misuse.  Thus, Prosper will not retain records longer
than is useful to the administration of a customer’s relationship or as subject
to the retention schedule required by law.


 


Information
About Former Customers:


 


Prosper
will maintain the same policy about disclosing information about former
customers as we do about current customers.


 


Complete
and Accurate Information:


 


Prosper
will continually strive to maintain complete and accurate information about our
customers’ accounts.  Should any customer
believe that our records contain inaccurate or incomplete information about
them, they have been advised to notify us. 
We will investigate all concerns and correct any inaccuracies.


 


Designation
of a Responsible Individual:


 


Prosper’s
Chief Compliance Officer will oversee Prosper’s Privacy Program and employee
training as it relates to Privacy.


 


The
Chief Compliance Officer will also advise Prosper’s Chief Information Security
Officer on physical security, information security, and investigation of
criminal activity.  The Chief Information
Security Officer will also be responsible for ensuring that customer
information is maintained in an appropriately risk-free environment and that
systems are established to prevent unauthorized access to, or manipulation or
destruction of, such information.  The
Chief Compliance Officer will be responsible for creating an environment at
Prosper that makes unauthorized access to personal financial information by its
employees a violation of corporate policy, subject to disciplinary action up to
and including termination.


 


5
















 


Safeguarding


Customer Information


Policy


 


Prosper Marketplace, Inc.


111 Sutter Street, 22nd Floor


San Francisco, CA 94104


 


Version
Control


 


Owner/Individual Responsible for
Maintaining Policy:


 


Director
of Compliance,
Prosper Marketplace, Inc.


 


Last Revised:  April 8,
2008


 

















 


Background


 


It is the policy of
Prosper Marketplace, Inc. (“Prosper”) to protect the security and
confidentiality of all customer nonpublic personal information.  These safeguards are intended to ensure the
security and confidentiality of customer records and information, protect
against any anticipated threats or hazards to the security or integrity of such
records, and protect against unauthorized access to or use of such records or
information that would result in substantial harm or inconvenience to any
customer.  This policy reflects the
requirements of section 501(b) of the Gramm-Leach-Bliley Act. To
accomplish this, Prosper has developed this written information security
program to address administrative, technical, and physical safeguards.


 


Assessment of Risk


 


At least annually, Prosper
will identify foreseeable threats, both internal and external, and the
likelihood and potential damage of those threats that could result in
unauthorized disclosure, misuse, alteration or destruction of customer
information. Present areas containing potential threats include, but are not
limited to:


 


·      Electronic
or physical access to customer account information by customers and others.


·      Unauthorized
internal access to customer records by Prosper staff


 


Management and Control of Risk


 


The following controls
will be implemented to safeguard customer records:


 


1.     Establishment of an
information security program:


 


·      Customer
information systems will include controls to authenticate and permit access
only to authorized individuals. 
Currently, “firewalls” and password protection are in place to control
unauthorized access to customer information by external individuals.


·      Access
customer information.  Employees have
been instructed to verify the identity of individuals who make inquiries
regarding account information in order to prevent providing customer information
to unauthorized individuals.


·      Physical
access to customer information is controlled through restricted entry to
Prosper’s premises, log on and password requirements for employees to gain
entry to data processing systems, and secured storage of records.


·      Prosper’s
firewall system is capable of detecting actual or attempted attacks into
customer information systems.  Should
unauthorized individuals gain access to customer information systems, Prosper
will report the intrusion to WebBank as well as regulatory and law enforcement
agencies.


·      Prosper
will take adequate measures to protect customer information from environmental
hazards, such as fire and water damage or technological failure.


 


1

















 


Currently, all physical documents containing customer
information are stored in secured file cabinets.  The premises contain automatic sprinkler
systems to minimize fire damage.


·      The
key controls, systems, and procedures of the information security program will
be regularly tested.  At a minimum, the
test will be conducted annually.  The
test will be conducted by an independent third party or by a staff member who
is independent of the individuals who have developed and maintained the
security programs.


 


2.     Overseeing Service Provider
Arrangements


 


·      Prosper
will perform due diligence in selecting the company to ensure their ability to
comply with safeguarding customer information.


·      Prosper
will notify WebBank of any new service provider to be used in connection with
Prosper’s origination services for WebBank, and will share with WebBank the
results of due diligence performed to select such provider. Prosper will obtain
WebBank’s prior approval to the use of any such provider.


·      At
least annually, Prosper will monitor the service provider’s performance in
implementing appropriate measures to meet the objectives of the information
security guidelines by reviewing audits, summaries of test results, or other
equivalent evaluations of its service provider.


 


3.     Adjustment of the Program:


 


·      Prosper
will monitor, evaluate, and adjust as appropriate its information security
program on a regular basis. Such review will occur at least annually.  The review will consider any relevant changes
in technology, the sensitivity of its customer information, internal or
external threats to information, and any changes to customer information
systems.


 


2

















 





 


Prosper Marketplace, Inc.


Collections Policy


 


Last Updated:  3/21/08


 


FOREWORD


 


The ability of the Prosper
to collect on the assets of its lenders is an important and essential part of
the marketplace. Prosper attempts to administer the process of collections on
assets fairly yet aggressively. The key to effective collection success is
close and constant follow-up.


 


PURPOSE


 


Prosper has established this
policy to outline the responsibilities of Management and to establish the
cornerstone of a collections program. It is vital that Prosper exercise all
prudent means in the collection of monies due in a timely manner. The Program
shall adhere to this policy and philosophy.


 


AUTHORITY


 


It shall be the policy of
the Prosper to aggressively collect monies due. The Management is responsible
for the overall collections effort and the optimization of the return on assets
on behalf of lenders.


 


Prosper shall empower any
officer Management deems necessary to effectively administer this function,
recognizing that this effort, although essential, is intended to collect monies
owed and not to adhere to a strict or otherwise confining methodology. That
said, Management recognizes individualized collection methods and encourages
responsible officers to utilize these methods in the collection effort.  At the same time, all methods and activities
used in the collection process must fulfill the requirements of the Prosper
Lender Registration Agreement and Terms of Service.


 


POLICY


 


Management shall develop and
implement a comprehensive Program for the collection effort. This program shall
establish parameters for which monies due are considered delinquent and the
extent of customer contact for the purpose of collections. In the case of
specialized lending programs, as part of the development of the program plan,
separate collection procedures may be developed and incorporated into the
program guidelines.


 

















 


Reports are to be produced
monthly and presented to the collections committee detailing all delinquencies,
number of days delinquent, outstanding amount due, outstanding balance,
collateral description (if any), a detail of past, current, and future
collection efforts, and any accounts that are determined uncollectable.


 


The collection committee is
comprised of the Chief Financial Officer, the Vice President of Operations, the
Chief Security Officer, the Vice President of Credit Risk and the Chief
Technology Officer.


 


LATE FEES


 


It shall be the policy of
Prosper that all late charges are collected on loans pursuant to the terms of
the specific credit documents for each transaction. Waivers of accrued late
fees should be minimal and will be addressed on a case by case basis. The
following approval authorities will govern waivers of late fees:


 


a)     A late fee caused by an
internal error (i.e. non-posting or misapplication of payments) can be waived
by the Director of Customer Service.


b)    The first request for a late
waiver on a particular loan relationship can be approved by the Vice President
of Operations.


c)     Any subsequent requests for
late fee waivers on a particular loan relationship must be approved by the
Chief Financial Officer.


 


All requests for late fee
waivers will be documented in a Customer Service Case and the approval
information entered as the case is closed.


 


DELINQUENT
ACCOUNTS


 


It is the current policy of
Prosper that loans which exceed 120 days delinquent shall be marked for sale to
a qualified Debt Buyer.  At the time of
the sale, the proceeds shall be credited against the outstanding principal and
remainder charged off as a defaulted loan.


 


Delinquent loans to
employees, Management, or Board members shall be reported and discussed when
the account reaches the 60 days past due status. Corrective action is to be
taken prior to the account reaching 90 days past due.


 


In the case of bankruptcy,
the loan will not be defaulted until an Order of Discharge is received from the
bankruptcy court.


 


FAIR DEBT
COLLECTION


 


Prosper shall adhere to the
guidelines outlined in the Fair Debt Collections Practices Act as to customer
contact, collection tactics, etc. Any written complaint and/or violation shall
be reported to the Board together with any corrective action taken.


 
















 


Fair Lending


Policy


 


Prosper Marketplace, Inc.


111 Sutter Street, 22nd Floor


San Francisco, CA 94104


 


Version
Control


 


Owner/Individual Responsible for
Maintaining Policy:


 


Director
of Compliance,
Prosper Marketplace, Inc.


 


Last Revised:  April 3,
2008


 

















 


Background


 


Prosper
Marketplace, Inc. (“Prosper”) believes in lending fairness and is
dedicated to assuring that loans initiated on its platform are made available
on a fair and consistent basis to all individuals who meet Prosper’s standards
for creditworthiness.


 


Through
self-assessment and audit, Prosper will examine compliance with all applicable
fair lending laws and regulations.  If Prosper
detects practices that are inconsistent with its Policies, the matter will be
promptly investigated and appropriate action taken.


 


Purpose


 


The Purpose of this Policy is to promote the
availability of unsecured loans to all worthy applicants with underwriting
standards and lending procedures that are applied consistently and fairly.


 


Policy


 


Prosper’s policy is to fully comply with all
applicable federal and state consumer protection, civil rights, and fair
lending laws and regulations.  Lending
policies, procedures, and practices will not in any way discriminate against
any person on the basis of race, color, religion, national origin, sex, marital
status, age (providing the applicant has the capacity to enter into a
contract), receipt of public assistance, exercise of legal rights under the
Consumer Credit Protection Act or any other prohibited basis.  This policy of nondiscrimination includes, in
particular, the application for, consideration, granting, servicing, and
collection of credit.


 


GOALS


 


Fair
lending goals are essential to enable us to accomplish Prosper’s Fair Lending Mission.  Our primary fair lending goals are to:


 


1.             Assure a high quality of
assistance.  Prosper provides consistent,
high quality assistance and service to all of our customers, regardless of
race, national origin, religion, sex, age, receipt of public assistance, or
other factors covered by the federal and state fair lending laws governing the
Bank.  All customers will have an equal
chance to submit a listing and secure bidders (lenders) for a loan.


 


2.             Apply credit standards
fairly and consistently.  Prosper will
assure that underwriting standards and lending processes promote access to
credit for a broad range of customers and that applicants with equivalent
credit qualifications receive the same consideration in the evaluation for and
extension of credit terms and conditions.


 


1

















 


3.             Demonstrate technical and
substantive fair lending compliance. 
Through self-assessment and audit, Prosper will demonstrate a high level
of technical compliance with all applicable fair lending laws and regulations.  We will also demonstrate a high level of
compliance with the substantive provisions of these laws and regulations by
assuring that all of our business practices are consistent with fair lending
principles.


 


FAIR LENDING RESPONSIBILITIES OF DIRECTORS,
OFFICERS, EMPLOYEES AND THIRD PARTIES


 


1.             Chief Compliance
Officer.  Prosper’s Chief Compliance
Officer will have the primary responsibility to assess regulatory developments affecting
fair lending. The Chief Compliance Officer, with the help of outside legal
counsel, will be responsible for assuring a high level of substantive support
to the Compliance Director and business units and will cooperate in developing
and assist in implementing policies, processes and standards.


 


2.             Director of Compliance.  Prosper’s Compliance Director will have
responsibility for oversight of compliance with the fair lending mission of the
institution.  The Compliance Director
will ensure that Prosper establishes and maintains effective policies,
procedures and programs to accomplish the fair lending goals of the company.


 


3.             Department Heads.  All department heads are responsible for
devoting the resources and providing the leadership necessary to achieve a high
level of compliance with fair lending requirements and to achieve an excellent
level of service to our diverse customers and communities.  Management will be held accountable for any
lack of cooperation of other avoidable factors that weaken Prosper’s performance,
as reflected in compliance monitoring, internal audits, examinations, or
consumer complaints.


 


4.             All Personnel.  Each employee is responsible for
demonstrating a commitment to fair lending in his/her regular activities and
for assuring a high level of compliance with fair lending requirements in job
duties.  In delivering our products to
our communities, Prosper develops and sustains relationships with independent
third parties.  These relationships help Prosper
reach more customers, including more minority customers.  Prosper will evaluate these relationships and
only enter into and maintain relationships with third parties that are
committed to a high level of compliance with fair lending principles.


 


POLICIES FOR PROSPER’S
FAIR LENDING PROGRAM


 


1.             Marketing, Advertising,
Business and Product Development and Outreach. 
Prosper will encourage a wide range of customers to register on its
website and use Prosper’s platform to both borrow and bid for loans.  Prosper will continue its efforts to
communicate to all potential applicants in marketing 


 


2

















 


materials our fair lending commitment, utilize messages, images and
media in its marketing and advertising programs, and encourage applications from
a wide range of customers.  Prosper will
avoid advertisements or promotional materials that may imply or express any
preference for, or exclusion of, any applicants because of their income, ethnic
group, sex, handicap, neighborhood location, or age.  Prosper will provide a balance of marketing
resources and attention to research and address the product and service needs
of a variety of credit customers and communities so that our customer base
reflects the diverse characteristics of our market area.  Prosper will establish cooperative
relationships with community organizations, specialized community-based lending
organizations, governmental bodies, and other third parties to encourage
referrals for applications for credit.


 


2.             The Application
Process.  Prosper will actively promote
fair lending and avoid discouragement of any kind.  This includes compliance with the application
and adverse action notification requirements of the fair lending laws with
effective ongoing monitoring and coaching by management-level personnel and
training in effective non-discriminatory customer contact behavior so everyone
receives the same quality of assistance and has an equal chance to qualify for credit.  This training will include material designed
to create greater sensitivity to cultural diversity.


 


3.             Underwriting Practices and
Standards.  Prosper has a responsibility
to its customers, communities, shareholders and, by law, to the public to lend
both fairly and safely.  This requires
both effective efforts to meet credit needs of customers and communities and prudent
management of credit risk, interest rate risk, and loan diversification.  Prosper will develop products which serve a
diverse group of potential borrowers and will be a leader in designing
innovative responses to credit needs and in a manner that also is consistent
with prudent banking practices.  Prosper’s
credit underwriting practices include utilizing review procedures to ensure
that credit underwriting, including consideration of compensating factors, is
consistent, that policy exceptions are non-discriminatory, and that all customers
who may qualify for credit are given the assistance necessary to do so.  Measures will be taken to identify, evaluate,
and eliminate underwriting standards that may exclude credit applicants or
limit access to credit without a clear basis in prudent business practices.


 


4.             Employment Incentives and
Accountability.  Prosper will ensure that
personnel policies fully support our Fair Lending Mission.  Prosper will strive to increase the diversity
of the company’s work force, including customer service, marketing, and
credit-related positions.


 


5.             Complaints.  The Chief Compliance Officer will develop and
coordinate, and the Director of Compliance will administer, in cooperation with
outside legal counsel, a procedure to respond to and evaluate consumer complaints
of discrimination.  They will assess
whether the complaints provide any 


 


3

















 


indication of problems in Prosper’s fair lending performance, including
problems that could lead to regulatory agency criticism or civil liability.


 


6.             Training.  Prosper provides fair lending training to communicate
the Fair Lending Mission.  The training addresses
the need for a specific inclusion of fair lending principles in all
credit-related customer service and management role.  Every Prosper customer contact employee shall
receive fair lending training.  Management
will also receive training relevant to their responsibilities with respect to
the fair lending performance of the company.


 


7.             Fair Lending Review.  Prosper will ensure that fair lending
compliance and performance is reviewed at least annually.  An integral part of the review will be
testing for substantive illegal discrimination at each stage of the credit
transaction.  The compliance reviews
(including the fair lending portions) will be submitted to Prosper
management.  In addition, the Chief Compliance
Officer will make recommendations based on the audit results for changes in our
program or its execution.


 


TAKING APPLICATIONS


 


Prosper will not make any oral
or written statements that would discourage on a prohibited basis, applicants
or prospective applicants from pursuing an application.


 


Limitations on information requests


 


·      Prosper will not ask about income from alimony,
child support, or separate maintenance unless it is disclosed that such income
need not be revealed if the applicant does not want it considered in
determining creditworthiness.


·      Prosper will not inquire about the sex of an
applicant.


·      Questions about the number and ages of the applicant’s
dependents, and any dependent-related financial obligations may be asked.  Prosper will not ask about birth control
practices, intentions concerning having or rearing children or capability to
have children.


·      Prosper will not ask the applicant’s race, color,
religion, or national origin.  Permanent
residence and immigration status may be asked.


 


EVALUATION OF APPLICATIONS


 


·      Age will not be considered (provided that the
applicant has the capacity to enter into a binding contract) unless the
applicant is elderly (62 years or older) and age is a favorable factor.


·      Prosper will not make assumptions about the
likelihood a person will bear or rear children and will, for that reason,
receive diminished or interrupted income in the future.


 


4

















 


·      A telephone in the applicant’s residence may be
considered, but not whether it is listed in the applicant’s name.


·      Prosper will not discount or exclude income from
consideration because it comes from part-time employment or is an annuity,
pension, or other retirement benefit. 
The amount and probable continuance of any income may be considered.


·      Where credit history is normally considered, the
credit history must be considered, when applicable, of accounts the applicant and
the applicant’s spouse are both contractually liable for or both permitted to
use.  In addition, upon the applicant’s request,
any account reported in the name of the applicant’s spouse or former spouse
that reflects the applicant’s creditworthiness must be considered.  The applicant, on request, may also present
any information that tends to indicate that the credit history being considered
does not accurately reflect the applicant’s creditworthiness.


·      Prosper may consider whether an applicant is a
permanent resident of the United States, immigration status, and any additional
information necessary to ascertain rights and remedies regarding repayment.


 


EXTENTIONS OF CREDIT


 


·      Accounts may be opened or maintained in a
birth-given first name and surname that is the applicant’s birth given surname,
the spouse’s surname, or a combined surname.


·      The spouse’s or other person’s signature, other than
joint applicant, cannot be required on any credit instrument if the applicant
meets the credit standards for the amount and terms requested.


·      The applicant’s inability to obtain credit life,
health, accident, disability or other credit-related insurance because of age,
cannot be a reason to refuse or terminate credit.


 


NOTIFICATIONS


 


·      Notification of the action taken concerning the
approval of, counteroffer to, or adverse action on a completed application will
be made within 30 days after receiving a completed application, an incomplete
application, or an existing account must also be notified of adverse action
within 30 days.


·      The notification must be in writing and contain a
statement of the action taken, Prosper’s name and address, the ECOA notice, the
FDIC’s address and a statement of specific reasons for the action taken.


-and
webbank’s name and address


 


ECOA
NOTICE:  The Federal Equal Credit Opportunity Act prohibits creditors
from discrimination against credit applicants on the basis of race, color,
religion, national origin, sex, marital status, age (provided the applicant has
the capacity to enter into a binding contract); because all or 


 


5

















 


part
of the applicant’s income derives from any public assistance program; or
because the applicant has in good faith exercised any right under the Consumer
Credit Protection Act.  The federal
agency that administers compliance with this law concerning this creditor is
the Federal Deposit Insurance Corporation (FDIC) Consumer Response Center, 2345
Grand Blvd., Suite 100, Kansas City, MO, 64108.


 


·      If the credit decision was based in whole or in part
on information obtained from a credit report, or from any other source other
than the applicant or Prosper’s own files, the adverse action notice must
disclose this.


 


RECORD RETENTION


 


·      All applications and adverse action notices will be
retained for 25 months.


 


6
















 


Servicemember


Civil Relief Act Policy


 


Prosper Marketplace, Inc.


111 Sutter Street, 22nd Floor


San Francisco, CA 94104


 


Version
Control


 


Owner/Individual Responsible for
Maintaining Policy:


 


Director
of Compliance,
Prosper Marketplace, Inc.


 


Last Revised:  April 3,
2008


 

















 


Background


 


Recognizing
that the very nature of military service often compromises the ability of
service members to fulfill their financial obligations and to assert many of
their legal rights, Congress began passing protective legislation in 1918, in the
form of the Soldiers’ and Sailors’ Civil Relief Act.  In 2003, President Bush signed into law the
Servicemembers Civil Relief Act (“SCRA,” 50 USC App. 501 et seq), completely
re-writing the Soldiers and Sailors Civil Relief Act. This is the law that now
governs legal protections for members of the United States Military.


 


Scope
of Application


 


In
addition to active duty military personnel, reservists and members of the
National Guard (when in active federal service) are also protected under the SCRA.


 


SCRA
protection (for all) begins on the first day of active duty, generally when they
ship out to basic training.  Some
protections under the act extend for a limited time beyond active duty
discharge or release, but are tied to the discharge/release date. Additionally,
some of the Act’s protections extend to the members’ dependents.


 


National
Guard members recalled for State duty are also protected by the SCRA in certain
circumstances.  National Guard members
are entitled to SCRA protection when called to state active duty under Title
32, if the duty is because of a federal emergency, the request for active duty
is made by the President or Secretary of Defense, and the member is activated
for longer than 30 days.


 


Application
to Prosper Marketplace, Inc.


 


Prosper
Marketplace, Inc. (“Prosper”) is committed to honoring the protections
afforded to service members, members of the National Guard, reservists, and
military personnel under the SCRA.


 


If
a service member’s military obligation has affected his/her ability to make the
required monthly payments on their Prosper loan(s), the service member has the
ability to have the interest rate* on their loan capped at 6%, effective the
first day of active duty, for the duration of their military obligation.  Interest above 6% will be permanently forgiven
and will not become due once the service member leaves active duty.  Monthly payments on any effected loans will
be re-amortized and reduced by the amount of interest saved during the covered
period.


 






*In
this context, “interest rate” includes service charges, fees, or any other
charges.


 


1

















 


Notice


 


In
order to exercise SCRA interest rate protection, the service member must notify
Prosper of their intention and provide a copy of their military orders calling
them to military service and any orders further extending military service, not
later than 180 days after the date of the service member’s termination or
release from military service.


 


Qualifying
Loans


 


Only
loans executed prior to the service member going on active duty are
qualified for the 6% interest rate cap. 
Loans entered into after going on active duty are not so protected.


 


2
















 


Exhibit H


 


Third Party Service
Contractors


 





















 


 Partners


 


Prosper,
America’s first people-to-people lending marketplace, was created to make
consumer lending more financially and socially rewarding for everyone


 


Wells Fargo


 





 


Wells Fargo & Company (NYSE: WFC)
is a diversified financial services
company providing banking, insurance, investments, mortgage and consumer
finance through almost 6,000 stores, the internet and other distribution
channels across North America and internationally.


 


Headquartered in San Francisco, but we’re
decentralized so every local Wells Fargo store is a headquarters for satisfying
all our customers’ financial needs and helping them succeed financially. Wells
Fargo has $575 billion in assets and 159,800 team members across our 80+
businesses.


 


Experian


 





 


Experian is a global
information services company, dedicated to helping organizations and consumers
make commercial and financial decisions with greater confidence and control.
Our vision is for Experian’s people, data and technology to become a necessary
part of every major consumer economy around the world.


 
















 


EXPERIAN STANDARD TERMS AND CONDITIONS


 


This Agreement is made on the Effective Date
set forth below between Experian Information Solutions, Inc. and Experian
Marketing Solutions, Inc. (collectively, “Experian”) and the Client
indicated below at the signature line (“Client”). All references herein to this
Agreement, unless otherwise specified, shall include the schedules and exhibits
to this Agreement.


 


1.         Agreement. This Agreement contains the standard terms and
conditions for Experian’s provision of products and services (collectively, the
“Services”) to the Client. The terms of this Agreement shall be supplemented by
individual schedules containing additional terms and conditions applicable to
specific Services (each a “Schedule”).


 


2.         Term. The term  of this Agreement shall begin upon the
Effective Date set forth below and shall continue in effect until the
termination or expiration of all Schedules issued pursuant to this Agreement.


 


3.         Client Orders. Client shall provide Experian with such
information as necessary to provide the Services, which shall include at
Experian’s request job specifications or criteria reasonably necessary to
perform the Services (“Client Order”). The terms of this Agreement shall be
superior to, and supersede, any conflicting or inconsistent terms contained in
any Client Order or other Client provided documents. If Client changes or
cancels a Client Order, or any portion thereof, after Experian has commenced
work, Client agrees to pay Experian for its costs incurred for such work in
process. If the Services are substantially completed at the time of such change
or cancellation, Client agrees to pay Experian the full price for such
Services.


 


4.         Fees and Payment. Client will pay Experian for the Services in
the amounts agreed upon and set forth in the applicable Schedule or other
mutually agreed pricing document. Unless otherwise provided in an applicable
pricing document, Experian shall have the right to revise or amend the pricing
by providing thirty (30) days prior written notice to Client before such
revision or amendment becomes effective. Experian’s invoices will be deemed to
be correct and acceptable to Client unless Client advises Experian of disputed
items within ten (10) days of their receipt. Payments shall be made to
Experian within thirty (30) days of invoice date. If Client fails to pay any
invoice in accordance with the foregoing terms, Client shall also pay interest
on the unpaid amount at the lesser of one and one-half percent (1.5%) per month
or the maximum amount allowed by law. The prices and rates for the Services do
not include either shipping costs or applicable federal, state, local, or
foreign sales or use taxes, and Client will pay or reimburse Experian for such  shipping
costs and taxes.


 


5.         Confidential Treatment. Under no circumstances except as specifically
provided in this  Agreement or in any Schedule will
Client resell or otherwise disclose to any other person, other than employees
or agents whose duties reasonably relate to the lawful business purpose for
which the Services were obtained, any of the Services or data that Experian
delivers to Client. Both parties hereby acknowledge that the Services and/or
data provided by either party to the other may include personal information
pertaining to individual consumers, and requires that the parties treat such
information responsibly and take reasonable steps to maintain appropriate
confidentiality and to prevent unlawful dissemination or misuse by its
employees, officers, agents or any other person with access to such
information. The Services and data shall only be used as expressly authorized
in this Agreement or in any Schedule.


 


6.      Compliance with Laws. Both parties agree to comply with all federal, state and local laws, rules and
regulations applicable to each party’s receipt and use of data provided to the
other. Experian reserves the right to revise the terms, or conditions or
pricing under this Agreement, any Schedule and/or the Services (including
without limitation the right to  withdraw or restrict affected data) to meet
any requirement imposed by federal, state, or local law, rule or
regulation, or to address matters concerning privacy and confidentiality, upon
reasonable notice to Client.


 


7.      Data and Intellectual Property Ownership. Client acknowledges that Experian has expended
substantial time, effort and funds to create and deliver the Services and
compile its various databases. All data in Experian’s databases and any other
intellectual property that are part of the Services are and will continue to be
Experian’s exclusive property. Nothing contained in this Agreement or in any
Schedule shall be deemed to convey to Client or to any other party any
ownership interest in or to intellectual property or data provided in
connection with the Services.


 


8.        Termination
for Cause. If either
party is in material breach of this Agreement or any Schedule, the
non-breaching party may terminate the individual Schedule or this Agreement, as
applicable, provided such breach is not cured within thirty (30) days following
written notice of such breach, unless such breach is the failure to pay for the
Services under the terms of this Agreement, in which case  Client shall
have ten (10) days to cure such breach following notice. Notwithstanding
the foregoing, this Agreement or any Schedule may be terminated by Experian
immediately upon written notice to Client if in Experian’s reasonable good
faith judgement any Services and/or data provided to Client are being used or
disclosed contrary to this Agreement or any Schedule. In the event that this
Agreement or a Schedule is terminated as a result of a breach, the
non-breaching party shall, in addition to its rights of termination, be
entitled to pursue all other remedies against the breaching party. Termination
of this Agreement or any Schedule shall not relieve Client of its obligation to
pay for any Services performed or provided by Experian under this Agreement or
any Schedule.


 


9.        Warranty and
Disclaimers. Experian
warrants to Client that Experian will use commercially reasonable efforts to
deliver the Services in a timely manner. Because the Services involve conveying
information provided to Experian by other sources, Experian cannot and will
not, for the fee charged for the Services, be an insurer or guarantor of the
accuracy or reliability of the Services or the data contained in its various
databases. THE WARRANTY IN THE FIRST SENTENCE OF THIS PARAGRAPH IS THE ONLY WARRANTY EXPERIAN HAS
GIVEN CLIENT WITH RESPECT TO THE SERVICES. EXPERIAN MAKES NO REPRESENTATION OR
WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES, ANY EXPERIAN DATA, OR ANY
OTHER MATERIALS (TANGIBLE OR INTANGIBLE) SUPPLIED BY EXPERIAN HEREUNDER, AND
EXPERIAN HEREBY EXPRESSLY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTIES WITH
RESPECT THERETO, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES AS TO THE
ACCURACY, COMPLETENESS OR CURRENTNESS OF ANY DATA OR ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.


 


10.      Limitation of
Liability. Client  acknowledges that Experian maintains several
databases updated on a periodic basis, and that Experian does not undertake a
separate investigation for each inquiry or request for Services made by Client.
Client also acknowledges that the prices Experian charges for the Services are
based upon Experian’s expectation that the risk of any loss or injury that may
be incurred by use of the Services will be borne by Client and not Experian.
Client therefore agrees that it is responsible for determining that the
Services are in accordance with Experian’s
obligations under this Agreement. If Client reasonably determines that the Services do not meet Experian’s
obligations under this Agreement, Client shall so notify Experian in writing
within ten days after receipt of the Services in question. Client’s failure to
so notify Experian shall mean that Client accepts the Services as is. If Client
so notifies Experian within ten days after receipt of the Services, then,
unless Experian reasonably disputes Client’s claim, Experian shall, at its
option, either reperform the Services in question or issue Client a credit for
the amount Client paid to Experian for the nonconforming Services. EXPERIAN’S
REPERFORMANCE OF THE SERVICES OR THE REFUND OF ANY FEES CLIENT HAS PAID FOR SUCH
SERVICES SHALL CONSTITUTE CLIENT’S SOLE REMEDY AND EXPERIAN’S MAXIMUM LIABILITY
UNDER


 


	
   

  	
  Client
  Initials

  	
  

  



 


1

















 


THIS AGREEMENT. IF NOTWITHSTANDING THE ABOVE,
LIABILITY IS IMPOSED ON EXPERIAN, THEN CLIENT AGREES THAT EXPERIAN’S TOTAL
LIABILITY FOR ANY OR ALL OF CLIENT’S LOSSES OR INJURIES FROM EXPERIAN’S ACTS OR
OMISSIONS UNDER THIS AGREEMENT, REGARDLESS OF THE NATURE OF THE LEGAL OR
EQUITABLE RIGHT CLAIMED TO HAVE BEEN VIOLATED, SHALL NOT EXCEED THE AMOUNT PAID
BY CLIENT TO EXPERIAN UNDER THIS AGREEMENT FOR THE PARTICULAR SERVICES WHICH
ARE THE SUBJECT OF THE ALLEGED BREACH DURING THE SIX MONTH PERIOD PRECEDING THE
ALLEGED BREACH BY EXPERIAN. CLIENT COVENANTS THAT IT WILL NOT SUE EXPERIAN FOR
ANY AMOUNT GREATER THAN SUCH AMOUNT.


 


NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
INCIDENTAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES (INCLUDING BUT
NOT LIMITED TO DAMAGES TO BUSINESS REPUTATION, LOST BUSINESS, OR LOST PROFITS),
WHETHER FORESEEABLE OR NOT AND HOWEVER CAUSED, EVEN IF SUCH PARTY IS ADVISED OF
THE POSSIBILITY THAT SUCH DAMAGES MIGHT ARISE.


 


11.      Waiver. Either party may waive compliance by the other
party with any covenants or conditions contained in this Agreement or any
Schedule, but only by written instrument signed by the party waiving such
compliance. No such waiver, however, shall be deemed to waive any other
circumstance or any other covenant or condition not expressly named in the
written waiver.


 


12.      Binding
Arbitration. Any
dispute arising out of or relating to this Agreement or any Schedule shall be
resolved in a binding arbitration under the auspices of the American
Arbitration Association in Los Angeles, California. In addition to all other
rights and remedies a party may have, the prevailing party in any arbitration
or legal action shall be entitled to an award of its reasonable attorneys’ fees
and costs. This binding arbitration provision shall not, however, prevent
either party from seeking equitable or injunctive relief, or from pursuing an
action to collect unpaid amounts due under this Agreement, in a court of
competent jurisdiction.


 


13.      Audit. Experian will have the right to audit Client’s
and any of its agent’s use of the Services to assure compliance with the terms
of this Agreement. Client will be responsible for assuring full cooperation
with Experian in connection with such audits and will provide Experian or
obtain for Experian access to such properties, records and personnel as Experian
may reasonably require for such purpose.


 


14.      Successors and
Assigns. This
Agreement will be binding upon and will inure to the benefit of the parties
hereto and their respective heirs, representatives, successors and permitted assignees.
This Agreement may not be assigned, transferred, shared or divided in whole or
in part by Client without Experian’s prior written consent.


 


15.      Excusable
Delays. Neither party
shall be liable for any delay or failure in its performance under this
Agreement (except for the payment of money) if and to the extent which such
delay or failure is caused by events beyond the reasonable control of the party
including, without limitation, acts of God, public enemies, or terrorists,
labor disputes, equipment malfunctions, material or component shortages,
supplier failures, embargoes, rationing, acts of local, state or national
governments or public agencies, utility or communication failures or delays,
fire, earthquakes, flood, epidemics, riots and strikes. If a party becomes aware
that such an event is likely to delay or prevent punctual performance of its
own obligations, the party will promptly notify the other party and use its
best effort to avoid or remove such causes of nonperformance and to complete
delayed job whenever such causes are removed.


 


16.      Choice of Law. This Agreement is governed by and construed in
accordance with the internal substantive laws of the State of California.


 


17.      Notices. All notices, requests and other communications
hereunder shall be in writing and shall be deemed delivered at the time of
receipt if delivered by hand or communicated by electronic transmission, or, if
mailed, three (3) days after mailing by first class mail with postage
prepaid. Notices to Experian and Client shall be addressed to the addresses
provided below each party’s signature, or to such other address as either party
shall designate in writing to the other from time to time.


 


18.      Complete
Agreement. This
Agreement, as supplemented by any Schedules, sets forth the entire understanding
of Client and Experian with respect to the subject matter hereof and supersedes
all prior letters of intent, agreements, covenants, arrangements,
communications, representations, or warranties, whether oral or written, by any
officer employee, or representative of either party relating thereto.


 


19.      Amendments. This Agreement may only be amended in writing
signed by authorized representatives of both parties.


 


20.      Survival. The provisions of Sections 4, 5, 6, 7, 9, 10,
13 and 17, in addition to any other provisions of this Agreement or any
Schedule that would normally survive termination, shall survive termination of
this Agreement for any reason.


 


21.      Authority to
Sign. Each party
represents that the person signing this Agreement or any Schedule has all
right, power and authority to sign this Agreement or any Schedule on behalf of
such party.


 


IN WITNESS WHEREOF, Client and Experian sign
and deliver this Agreement as of the Effective Date set forth below.


 


	
  Experian Information Solutions, Inc.

  	
   

  	
   

  	
  Circle One Holdings, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  Print or Type Name of Client

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Patrick S. Hanway

  	
   

  	
  By:

  	
  /s/ Chris Larsen

  
	
   

  	
  Signature
  (Duly Authorized Representative Only)

  	
   

  	
   

  	
  Signature
  (Duly Authorized Representative Only)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Patrick S. Hanway

  	
   

  	
  Name:

  	
  Chris Larsen

  
	
   

  	
  Print

  	
   

  	
   

  	
  Print

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Senior Manager, Contracts

  	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Effective
  Date:

  	
  10/20/05

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address for Notice:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Physical

  	
  153 Kearny
  Street

  
	
  Experian Information
  Solutions, Inc.

  	
   

  	
  Address for

  	
  Mezzanine

  
	
  475 Anton Boulevard

  	
   

  	
  Notice:

  	
  San
  Francisco, CA 94108

  
	
  Costa Mesa, CA 92626

  	
   

  	
  Attn:

  	
  Ed Giedgowd

  
	
  Attn: General Counsel

  	
   

  	
   

  	
   

  
						



 


	
   

  	
  Client
  Initials

  	
  

  



 


2

















 


EXPERIAN

CONSUMER SERVICES SCHEDULE


 


This
Consumer Services Schedule
(“Schedule”) supplements the Experian Standard Terms and
Conditions, dated 10/18/05  (“Agreement”),
currently in place between Experian and Client.


 


1.     Application.
For the purposes of
this Schedule, the term “Services” shall mean Experian’s provision of
services to Client which include the supply of consumer credit information,
account review services, identification information, generic scoring services,
and other data services from information stored in one of Experian’s consumer
databases. Experian will provide the Services to Client for the fees  set
forth in the attached Pricing Exhibit.


 


2.     Term. Unless a term is specified in the applicable
pricing document signed by both parties, this Schedule shall commence on the
Schedule Effective Date and continue in force without any fixed date of
termination, but Client or Experian may terminate this Schedule upon thirty
(30) days prior written notice to the other party.


 


3.     FCRA Use. Client will request and use  the Services strictly in accordance with the federal Fair Credit Reporting
Act, 15 U.S.C. 1681 et. seq., as
amended (the “FCRA”). Without limiting the foregoing, Client certifies that
Client will request and use the Services solely in connection with (i) a
single credit transaction with a consumer, or, if applicable, for another “permissible
purpose” as defined by the FCRA; and (ii) transactions involving the
consumer as to whom such information is sought and will not request or use such
Services for purposes prohibited by law. Client further certifies that it will
comply with all requirements of the  FCRA applicable to it. If Client
has purchased a consumer report from Experian in connection with a consumer’s
application for credit, and the consumer makes a timely request of Client,
Client may share the contents of that report with the consumer as long as it
does so without charge and only after authenticating the consumer’s identity.
For Pre-Qualification Client shall follow the rules on Exhibit A or
obtain the written consent of consumer.


 


4.     Data Use
Restrictions. Client
agrees that it will not, either directly or indirectly, itself or through any
agent or third party, without the prior written consent of Experian, request,
compile, store, maintain, resell or use the Services (including any of the
information contained in the Services) to build its own database to act as a
consumer reporting agency. Client shall be solely responsible for assuring the
secure and confidential manner in which it stores, delivers and transmits
Services to its authorized employee users. Client shall, at a minimum, comply
with Experian’s standard access security requirements.


 


5.     Inquiries. When accessing Services, Client certifies it
will use reasonable measures to identify consumers and will accurately provide
Experian with complete identifying information about the consumer inquired upon
in the form specified by Experian. Client will enter all requested Client and
type code information when requesting Services. Experian may use Client’s
inquiry data for any purpose consistent with applicable federal, state and
local laws, rules, and regulations. Client will be responsible for installing
the necessary equipment, software and security codes to prevent unauthorized
access to an Experian database.


 


6.     Data
Contribution. If
Client contributes information on its credit experience with consumers,
including updates thereof, (collectively “Client Records”) to Experian, Client
agrees to make Client Records available to Experian at mutually agreeable times
and format, in accordance with Section 623 of the FCRA. Client shall
provide Client Records which are accurate to the best of its knowledge and
shall promptly update and correct all known inaccurate information. Client
shall provide Experian with written notice (i) if any information is
disputed by a consumer, (ii) if the consumer closes the account; and (iii) not
later than 90 days after furnishing the information, of the date of the
commencement of the delinquency of an account which is placed for collection.
Client shall bear the expense of preparing and delivering Client’s Records to
Experian. Experian may incorporate, at Experian’s expense, Client Records into
its credit reporting system. Information, once incorporated and merged with
other contributed data, will be Experian’s exclusive property. Client shall
retain ownership in information used to compile its Client Records. At Experian’s
request, Client will promptly reinvestigate and verify the accuracy of Client
Records. Experian may use Client Records for any purpose consistent with
applicable federal, state and local laws, rules, and regulations; provided,
however, that Experian will use reasonable commercial efforts not to release a
list that specifically identifies individuals as Client’s customers.


 


7.     Third Party
Processors. In the
event Client chooses to use a third party to perform certain data processing or
model building services, the parties understand and acknowledge that the third
party shall be acting on behalf of Client. Client will cause the third party to
(i) handle, process, and possess all Experian provided data in accordance
with this Agreement, and (ii) sign a Third Party Processor Undertaking
form. Client shall provide Experian with the appropriate mailing instructions
at least ten (10) days prior to the requested shipment date.


 


(ALL CLIENTS MUST COMPLETE THIS SECTION 8)


 


8.     Point
of Sale Certification. In compliance with Section
1785.14(a) of the California Civil Code, Client certifies to Experian that (i)
Client IS/IS NOT circle one)
a retail seller, as defined in Section 1802.3 of the California Civil Code
(“Retail Seller”) and issues credit to consumers who appear in person on the
basis of applications for credit submitted in person (“Point of Sale); (ii) if
Client is a Retail Seller who issues Point of Sale credit, Client will instruct
its employees and agents to inspect a photo identification of the consumer at
the time an application is submitted in person; and (iii) it will only use the
appropriate subscriber code number designated by Experian for accessing
consumer reports for California Point of Sale credit transactions conducted by
Retail Seller. Client shall notify Experian within 24 hours of any change in
Client’s status as a Retail Seller.


 


This Schedule and the
Supplement(s), together with the Agreement as amended herein constitutes the
entire agreement between the parties with respect to the Services provided
hereunder and supersedes all prior proposals and agreements, both written and
oral, and all other written and oral communications between the parties.


 


	
  Experian Information Solutions, Inc.

  	
   

  	
   

  	
  Circle One Holdings, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  Print or Type Company Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Patrick S. Hanway

  	
   

  	
  By:

  	
  /s/ Chris Larsen

  
	
   

  	
  Signature
  (Duly Authorized Representative Only)

  	
   

  	
   

  	
  Signature
  (Duly Authorized Representative Only)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Patrick S. Hanway

  	
   

  	
  Name:

  	
  Chris Larsen

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Print

  	
   

  	
   

  	
  Print

  
	
  Title:

  	
  Senior Manager, Contracts

  	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule Effective
  Date:

  	
  10/20/05

  	
   

  	
   

  	
   

  
						



 

















 


EXPERIAN

CONSUMER SERVICES SCHEDULE

PRE-QUALIFICATION


 


Exhibit A- Pre-qualification Instructions


 


1.                                      Services. This addendum is to be used for when a Client
is doing Pre-Qualification or to check to see if a party is qualified for a
certain firm offer of credit under the Fair Credit Reporting Act.


 


2.                                      Client shall follow the following processes
when utilizing this pre-qualification service.


 


A.    FCRA Compliance—Written Instructions. Client shall substantially comply with the
following web site requirements:


 


(1)          Client will prominently display a message specifically informing the
consumer that his or her credit profile will be consulted for the purpose for
which it is to be used and no other purpose, and that clicking on the “I AGREE”
button following such notice constitutes written instructions to the Client
under the FCRA. Client agrees that the notice provided by Client will be
substantially as follows:


 


“You understand that by
clicking on the I AGREE button immediately following this notice, you are
providing ‘written instructions’ to (Client)
under the Fair Credit Reporting Act authorizing (Client)  to obtain information from your
personal credit profile or other information from Experian. You authorize (Client)  to obtain such information solely
to conduct a pre-qualification for a firm offer of credit.


 


(2)          The “I AGREE” button must immediately follow the notice provided for
above. The notice and “I AGREE” button must be separate from any other notice
or message contained on the web site.


 


(3)          The terms to which the consumer is agreeing immediately preceding the
consensual click must be viewable by the consumer.


 


(4)          The consumer must not be able to proceed in the process without
affirmatively agreeing to the terms in the notice.


 


(5)          The consumer must be provided with a statement of the hardware and
software requirements for access to and retention of the terms to which he or
she is agreeing, including their consent, and must consent in a manner that
reasonably demonstrates that the consumer can access information in the
electronic form that will be used to provide the information that is the
subject of the consent.


 


(6)          The record of the consumer’s ‘written instruction’ by clicking “I AGREE”
must be retained by Client in a form that is capable of being accurately
reproduced for later reference by the parties.


 


	
  B.

  	
  Written Instructions by Telephone. If Client is obtaining “written instructions”
  over the telephone, Client shall substantially comply with the following
  requirements which are designed to comply with the Electronic Records and
  Signatures in Commerce Act:

  



 


 


(1)          Client will ask each consumer to confirm his or her consent to access
such persons credit report for pre-qualification purposes by asking the
following: “In order to verify your identity, you need to authorize Client to
access your credit report for pre-qualification purposes. Please confirm your authorization
to access your credit report for pre-qualification purposes by pressing the #
key now”;


 


(2)          The consumer must not be able to proceed in the process without
affirmatively agreeing to allow access to his credit report as provided above;
and


 


(3)          The record of the consumer’s ‘written instruction’ by pressing the #
symbol must be retained by Client in a form that is capable of being accurately
reproduced for later reference by the parties.


 


C.    Additional Terms. Client has developed an online credit
marketplace (the “Website”) through which consumers seeking loans may place “listings”
on the Website, and individuals who desire to lend may “bid” for those listings
in an auction format. A listing may be matched with one or more bids, resulting
in a loan from Client to the individual who posted the listing. Loans are sold
by Client to the “winning” bidder(s) (referred to herein as “Lenders”),
with servicing retained by Client. Client shall service the loans and furnish
loan payment information to Experian. Client hereby certifies that it has the
right to provide ownership of consumer data referred to below and certifies it
is authorized by Lenders to represent and handle consumer dispute processing.


 


(1)          Client may use and display the Services and/or data, provided that (i) the
consumer to which such information relates expressly agrees to such use or
display, (ii) any personally identifiable information of the consumer in
the Services and/or data is not displayed, and (iii) such use or display
does not violate applicable law.


 


(2)          An inquiry that will only show to the consumer will be logged with the
initial pull. No “inquiries to be seen by every user of Experian’s system”
shall be placed on a consumer’s credit file in connection with Client’s request
for Services and/or data pursuant to this Agreement, provided, however, that an
inquiry visible to all of Experian’s user shall be placed on the credit file of
a consumer whose listing is matched with one or more bids, at the time of such
match. Client shall promptly notify Experian, in a manner mutually agreed by
the parties, of any consumer whose consumer report is obtained through Client’s
request, and whose listing is matched with one or more lender bids.


 

















 


EXPERIAN

CONSUMER SERVICES SCHEDULE

PRE-QUALIFICATION


 


(3)          Experian understands that when furnishing payment information to
Experian in connection with loans originated by or through Client, Client shall
report such information in its own name and shall not reveal the identity of
any lender associated to loans originated by or through the Client.


 


 


Pricing Exhibit


 


1 year
agreement


 


Credit Reports with Fraud Shield &
ScorexPLUS Model: $0.99 per report


FACT Act surcharge $0.08 per report

Monthly minimum of $1,000.00


 


If the Agreement and/or the Schedule(s) are
terminated prior to the end of one year, Client will pay the Monthly minimums
for the remainder of the first year, which have not been paid.


 

















 


EXPERIAN

AUTHENTICATION SERVICES SCHEDULE


 


This Authentication Services Schedule (“Schedule”)
supplements the Experian Standard Terms and Conditions, dated 10-18-05 (“Agreement”),
currently in place between Experian and Client.


 


1.     Services. The services which
are the subject of this Schedule shall be provided by Experian from information
stored in various Experian databases. The authentication process varies
according to the level of service chosen by Client. For the purposes of this
Schedule, the term “Services” shall mean the process by which Client supplies
data regarding a consumer to Experian and Experian compares that data with the
consumer’s credit information or other data stored in Experian’s consumer
credit reporting database and demographic databases to authenticate the
consumer’s identity, including but not limited to Credit Card Verification services.
Experian will provide the Services to Client for the fees set forth in the
attached Pricing Exhibit.


 


2.     Term. Unless a term is
specified, this Schedule shall commence on the Effective Date and continue in
force without any fixed date of termination, but Client or Experian may
terminate this Schedule upon thirty days prior written notice to the other
party.


 


3.     Client’s Certification of Use


 


A.    GLB Certification. Client certifies to
Experian that Client will use the Services to protect against or prevent actual
or potential fraud, unauthorized transactions, claims or other liability under
the Gramm-Leach-Bliley Act, 15 U.S.C.A. Sec. 6801, et seq.


 


B.    Credit Information Certification.  When Client chooses to use consumer credit
data in the Services, then Client certifies that it has a “permissible purpose”
under the Fair Credit Reporting Act, 15 U.S.C. 1681 et. seq.
(“FCRA”). If Client’s “permissible purpose” is based upon the written
instructions of the consumer via the Internet, then Client shall obtain the
consumer’s written instructions in a manner substantially similar to that
provided for in Section A of the attached Authentication Services Supplement (“Supplement”),
or if Client obtains the consumer’s consent to access credit data over the
telephone, Client shall do so as provided for in Section B of the Supplement.
If Client’s permissible purpose is “a legitimate business need for the
information in connection with a business transaction that is initiated by the
consumer,” then the written instructions provisions of this Schedule and
Supplement do not apply, but only where the Client has a risk of financial loss
in the transaction. In any case, Client certifies that it will request and use
all data received from Experian solely for its internal purposes in connection
with transactions involving the consumer as to whom such information is sought
and that it will not provide the Services to any third party.


 


C.    Certification for Use of Motor Vehicle Data. If Client chooses
to use vehicle ownership data in the Services, Client certifies that its use is
in compliance with the Driver’s Privacy Protection Act of 1994 (18 U.S.C. Sec.
2721(b)(3)). Further, motor vehicle department data and property information
will be used solely for authentication purposes.


 


D.    Use of OFAC Data. The United States
Treasury Department, Office of Foreign Asset Control (“OFAC”) periodically
provides Experian with a file of specially designated nationals whose property
is blocked. Matching of names to the OFAC list is based on very limited
identification information. A match does not necessarily indicate that the
consumer about whom Client inquired is the same person referenced by OFAC.
Accordingly, if Client chooses to use OFAC data in Client’s authentication
process, Client acknowledges that any action taken by Client regarding a
consumer must be taken based on Client’s complete investigation of the consumer
and not based solely on the OFAC information. When using the OFAC Search
Solution Services, Experian shall not be liable to Client or Client’s third
party vendors for any Client-provided files (e.g. new accounts, current
accounts against the OFAC of Specially Designated Nationals List) and any other
government suppression lists that Client has contracted to receive from outside
third party vendors and that are provided to Experian to enable Experian to
perform the Services. Also, A criteria letter identifying the criteria (e.g.,
frequency of matching, frequency of updates for Experian and the match logic
used), the information to be returned by Experian to Client and any other
pertinent information, will be mutually agreed upon and executed between the
parties that shall apply to the OFAC Search Solution Services.


 


4.     System Implementation Approval. If applicable,
Experian will configure the Services pursuant to specifications provided by
Client in the Sign Up Form. Upon completion of the configuration, Client shall
test and audit performance of the Services to ensure proper configuration.
Client shall notify Experian if the Services fail to meet the configuration
requirements, and Experian shall modify the configuration to meet Client’s
requirements set forth in the Sign Up Form. Such modification constitutes
Client’s sole remedy for failure to configure the Services in accordance with
the Sign Up Form and Experian’s maximum liability for any such failure.


 


5.     Client Use Restrictions. Except as expressly
contemplated by this Schedule, Client shall not (a) distribute, publish,
transmit or disseminate, in any form or by any means (including, without
limitation, any internet) any part of the Services or the data delivered as
part of the Services (the “Data”), (b) allow any third party to access the
Services or the Data (including evaluation results), (c) sell, sublicense,
resell or otherwise transfer any of the Services or the Data, or (d) use the
Services or Data to identify or solicit potential customers for its products or
services (provided, however, that Client shall be entitled to use the Services
and the Data to enhance information relating to its existing customers).


 


This Schedule, and
if applicable, the Sign Up Form and the Supplement, together with the Agreement
as amended herein constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior proposals and
agreements, both written and oral, and all other written and oral
communications between the parties.


 


	
  Experian Information Solutions, Inc.

  	
   

  	
   

  	
  Circle One Holdings, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  Print or Type Name of Client

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Patrick S. Hanway

  	
   

  	
  By:

  	
  /s/ Chris Larsen

  
	
   

  	
  Signature
  (Duly Authorized Representative Only)

  	
   

  	
   

  	
  Signature
  (Duly Authorized Representative Only)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Patrick S. Hanway

  	
   

  	
  Name:

  	
  Chris Larsen

  
	
   

  	
  Print

  	
   

  	
   

  	
  Print

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Senior Manager, Contracts

  	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule Effective
  Date:

  	
  10/20/05

  	
   

  	
   

  	
   

  
						



 

















 


EXPERIAN

AUTHENTICATION SERVICES SCHEDULE

SUPPLEMENT


 


A.    FCRA Compliance—Written Instructions. Client shall substantially comply with the
following web site requirements:


 


(1)          Client will prominently display a message specifically informing the
consumer that his or her credit profile will be consulted for the purpose for
which it is to be used and no other purpose, and that clicking on the “I AGREE”
button following such notice constitutes written instructions to the Client
under the FCRA. Client agrees that the notice provided by Client will be
substantially as follows:


 


“You understand that by
clicking on the I AGREE button immediately following this notice, you are
providing ‘written instructions’ to (Client)  under the Fair Credit Reporting Act authorizing (Client)
to obtain information
from your personal credit profile or other information from Experian. You
authorize (Client)  to obtain such information solely to               (insert purpose e.g. to confirm
your identity to avoid fraudulent transactions in your name.)


 


(2)          The “I AGREE” button must immediately follow the notice provided for
above. The notice and “I AGREE” button must be separate from any other notice
or message contained on the web site.


 


(3)          The terms to which the consumer is agreeing immediately preceding the
consensual click must be viewable by the consumer.


 


(4)          The consumer must not be able to proceed in the process without
affirmatively agreeing to the terms in the notice.


 


(5)          The consumer must be provided with a statement of the hardware and
software requirements for access to and retention of the terms to which he or
she is agreeing, including their consent, and must consent in a manner that
reasonably demonstrates that the consumer can access information in the
electronic form that will be used to provide the information that is the
subject of the consent.


 


(6)          The record of the consumer’s ‘written instruction’ by clicking “I AGREE”
must be retained by Client in a form that is capable of being accurately
reproduced for later reference by the parties.


 


B.            Written Instructions by
Telephone. If Client is
obtaining “written instructions” over the telephone, Client shall substantially
comply with the following requirements which are designed to comply with the
Electronic Records and Signatures in Commerce Act:


 


(1)          Client will ask each consumer to confirm his or her consent to access
such persons credit report for authentication purposes by asking the following:
“In order to verify your identity, you need to authorize Client to access your
credit report for authentication purposes. Please confirm your authorization to
access your credit report for authentication purposes by pressing the # key now”;


 


(2)          The consumer must not be able to proceed in the process without
affirmatively agreeing to allow access to his credit report as provided above;
and


 


(3)          The record of the consumer’s ‘written instruction’ by pressing the #
symbol must be retained by Client in a form that is capable of being accurately
reproduced for later reference by the parties.


 

















 


Pricing Exhibit

Authentication Services


 


AS2- $0.60


AS3 Add-on $0.50


AS3 (independent)
$0.85


Monthly Minimum
$2,500


 


If the
Agreement and/or the Schedule(s) are terminated prior to the end of one year,
Client will pay the Monthly minimums for the remainder of the first year, which
have not been paid.


 

















 


	
  Pricing
  Addendum

  	
   

  	
  

  



 


CLIENT NAME: Prosper
Marketplace(“Client )


 


ACCOUNT EXECUTIVE:
Lee Mckillip


 


The parties acknowledge
that Prosper Marketplace (“Client”) and Experian Information Solutions, Inc.
(“Experian”) have entered into one or more other agreements (Other Agreements) concerning the terms and conditions under
which Experian will provide the services
listed on the attached Pricing Exhibit (Services) to Client.


 


This Pricing
Addendum (“Addendum”) establishes the pricing for all of Client’s purchases of
the Services listed below. Wherever possible, this Addendum and the Other
Agreements shall be construed as being consistent.  Where particular matters are addressed
expressly in this Addendum, the terms and conditions of this Addendum (and not
the Other Agreements) shall govern; otherwise, the terms and conditions of the
Other Agreements (and not this Addendum) shall govern.


 


The term of this Addendum shall
commence on the Addendum Effective Date set forth below and shall continue for a
period of one (1) year. Thereafter, the Addendum shall continue on a month to
month basis until one party provides the other party
with thirty (30) days prior written notice of that party’s intent to terminate the Agreement or this Addendum or a subsequent
pricing agreement is mutually executed covering the Services set forth below.


 


The attached Pricing
Exhibit covers the pricing for the quoted Services.


 


The fees set forth in this
Addendum and the attached Pricing Exhibit do not include taxes or FACTA
charges. Client shall be solely responsible for all federal, state and local
taxes levied or assessed in connection with Experian’s performance of the Services,
other than income taxes assessed with respect to Experian’s net income, for
which income taxes Experian will be solely responsible.


 


During the Term of
the Addendum, if any federal, state or local law, ordinance or other regulatory,
administrative or governmental acts or measures are enacted which increase Experian’s
cost of providing the Services which are the subject of this Addendum, Experian
reserves the right, upon thirty (30) days prior written notice, to add a
surcharge to the pricing set forth herein to cover the added cost of providing
the Services in the affected geographic region.


 


Neither party will,
without the other party’s prior written consent, disclose to any person any of the terms of this Addendum.


 


	
  Experian Information Solutions, Inc.

  	
   

  	
   

  	
  Prosper Marketplace

  
	
   

  	
   

  	
   

  	
   

  	
  Print or Type Name of Client

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Patrick S. Hanway

  	
   

  	
  By:

  	
  /s/ Kirk Inglis

  
	
   

  	
  Signature
  (Duly Authorized Representative Only)

  	
   

  	
   

  	
  Signature
  (Duly Authorized Representative Only)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Patrick S. Hanway

  	
   

  	
  Name:

  	
  Kirk Inglis

  
	
   

  	
  Print

  	
   

  	
   

  	
  Print

  
	
  Title:

  	
  Sr Manager,
  Contracts

  	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Addendum
  Effective Date:

  	
  3/31/07

  	
   

  	
   

  	
   

  
						



 


2

















 


Prosper
Pricing


 


	
  Annual Volume

  	
   

  	
   

  	
   

  	
  Credit

  	
   

  	
   

  	
   

  	
  Profile

  	
   

  	
  1 yr term

  	
   

  	
  2 yr term

  	
   

  	
  3 yr term

  	
   

  
	
  Credit
  Services

  	
   

  	
   

  	
   

  	
  data*

  	
   

  	
  STAGGS

  	
   

  	
  Summary

  	
   

  	
  Total
  inquiry

  	
   

  	
  Total
  inquiry

  	
   

  	
  Total
  inquiry

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  140,000

  	
   

  	
  $

  	
  1.09

  	
   

  	
  $

  	
  0.15

  	
   

  	
  $

  	
  0.06

  	
   

  	
  $

  	
  1.30

  	
   

  	
  $

  	
  1.25

  	
   

  	
  $

  	
  1.20

  	
   

  
	
  140,001

  	
   

  	
  240,000

  	
   

  	
  $

  	
  0.99

  	
   

  	
  $

  	
  0.12

  	
   

  	
  $

  	
  0.05

  	
   

  	
  $

  	
  1.16

  	
   

  	
  $

  	
  1.10

  	
   

  	
  $

  	
  1.05

  	
   

  
	
  240,001

  	
   

  	
  350,000

  	
   

  	
  $

  	
  0.95

  	
   

  	
  $

  	
  0.11

  	
   

  	
  $

  	
  0.03

  	
   

  	
  $

  	
  1.09

  	
   

  	
  $

  	
  1.03

  	
   

  	
  $

  	
  0.98

  	
   

  
	
  350,001

  	
   

  	
  +

  	
   

  	
  $

  	
  0.90

  	
   

  	
  $

  	
  0.10

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1.00

  	
   

  	
  $

  	
  0.98

  	
   

  	
  $

  	
  0.93

  	
   

  



 






*      Includes: Scorex Plus model & Fraud Shield


*      STAGGS:< 25


Note: Even though your volume
is currently tracking at 140k tier, Experian will adjust your price to the 240k
to 330k tier.


At 6 months Experian will
review your volume to see what your tracking and adjust downward if tracking
indicates volume exceeds the 350k tier.


 


	
  Annual Volume

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  AS3 add-

  	
   

  
	
  Fraud
  Services

  	
   

  	
   

  	
   

  	
  AS2

  	
   

  	
  on

  	
   

  
	
  1

  	
   

  	
  50,000

  	
   

  	
  $

  	
  0.75

  	
   

  	
  $

  	
  0.65

  	
   

  
	
  50,001

  	
   

  	
  140,000

  	
   

  	
  $

  	
  0.65

  	
   

  	
  $

  	
  0.55

  	
   

  
	
  140,001

  	
   

  	
  240,000

  	
   

  	
  $

  	
  0.60

  	
   

  	
  $

  	
  0.50

  	
   

  
	
  240,001

  	
   

  	
  350,000

  	
   

  	
  $

  	
  0.50

  	
   

  	
  $

  	
  0.40

  	
   

  
	
  350,001

  	
   

  	
  +

  	
   

  	
  $

  	
  0.45

  	
   

  	
  $

  	
  0.35

  	
   

  



 
















 





 


MASTER AGREEMENT FOR TREASURY MANAGEMENT SERVICES


 


Modified September 27, 2005, for P2P Credit, Inc.


 


The
Service Documentation described below contains the terms under which Wells Fargo provides treasury
management services (“Services”). The Wells Fargo bank through which the Services will be provided (“Bank”)
and the Company to which the Services will be provided are identified in the Acceptance of Services (“Acceptance”).


 


Bank
and Company agree:


 


1.             Service
Documentation. The Service Documentation includes:


 


1.1           The Service Description for each Service.


 


1.2           The Acceptance.


 


1.3           This Master Agreement for Treasury Management
Services (“Master Agreement”).


 


1.4           The account agreement for the business or
commercial deposit account(s) (each, an “Account”) that Company or Company’s
affiliate or subsidiary maintains at Bank or Bank’s affiliate in connection
with a Service. The account agreement includes the Dispute Resolution Program
that Company and Bank agree to use to resolve any disagreements between Company
and Bank regarding accounts and Services governed by the Service Documentation.


 


1.5           User Guides which include software, software
licenses, reset diskettes, price schedules, specifications, instructions, and
notices.


 


1.6           The set-up form(s) for each Service.


 


The
Service Documentation also applies to any Service that is provided by an
affiliate of Bank and any Service that is used by an affiliate or a subsidiary
of Company. “Bank” includes each such affiliate, and “Company” includes each
such affiliate and subsidiary. All terms defined in this Master Agreement shall
have the same meaning when used in the Service Documentation. If there is a
conflict among the documents that make up the Service Documentation, the
documents will govern in the order set forth above. Company acknowledges
receiving a copy of the Service Documentation for each Service it requested
when it entered into this Master Agreement.


 


2.             Services. Bank and Company will agree upon the Service(s) to
be provided.


 


3.             Changes to Services. Bank
may change (or add to) the terms and fees in the Service Documentation at any
time upon prior written notification; provided, however, that Bank will provide
at least thirty (30) days prior written notice in the case of any change in
fees, or any material change in the terms of the Service Documentation that is
not generally
applicable to other similarly situated treasury management customers of
Bank. If Company discontinues using the affected Service before the change
becomes effective, it will not be bound by the change. If Company continues to
use a Service after the change becomes effective, it will be bound by the change.


 


4.             Term and Termination. Unless terminated sooner in accordance with
the Service Documentation, this Master Agreement and all Services will continue
in effect until terminated by either party upon thirty (30) days prior written
notice to the other party (unless
a Service is terminated sooner in accordance with the Service Documentation). Bank may terminate
any Service following notice to Company of a material breach of any provision
of the Service Documentation and Company’s failure to cure the breach within
fifteen (15) days of the date of such notice. Bank may also terminate any
Service without notice to Company if Company is subject to a petition under the
U. S. Bankruptcy Code or if Bank determines, in its sole discretion, that a
material adverse change has occurred in Company’s ability to perform its
obligations under the Service Documentation. The termination of a Service will not
affect Company’s or Bank’s rights with respect to transactions which occurred
before termination. Bank shall not be liable to Company for any losses or
damages Company may incur as a result of any termination of any Service in
accordance with the terms of this Agreement.


 


1

















 


5.             Service Fees. Company shall pay Bank the fees described in
the Service Documentation and any taxes applicable to each Service, however
designated, exclusive of taxes based on Bank’s net income. Bank may debit
Company’s account(s) with Bank for any fees not covered by earnings
credits and any taxes that are due, as reflected in Company’s monthly analysis
statement, or it may send an invoice to Company for such amounts, which Company
shall promptly pay. Bank may assess finance charges at a rate of 1.5% per month
(18% per annum) or the highest rate permitted by law, whichever is less, on any
invoiced fees or taxes that are not paid within thirty (30) days of the due
date and shall apply payments and other reductions of amounts owed first to
unpaid interest and then to other fees and charges.


 


6.             Confidential Information.


 


6.1           Unless otherwise provided in the Service
Documentation, all User Guides and computer programs provided pursuant to this
Master Agreement constitute Bank’s or its vendor’s confidential information (“Bank
Confidential Information”). Bank or its vendor will remain the sole owner of
all such Bank Confidential Information, and Company will not acquire any
interest in or rights to it as a result of Company’s use of any Service except
as set forth in the Service Documentation. Company will maintain the
confidentiality of the Bank Confidential Information and will not disclose (or
permit its employees or agents to disclose), copy, transfer, sublicense or
otherwise make any of it available to any person or entity, other than its
employees who have a need to use the Bank Confidential Information in
connection with the applicable Service. Company shall notify Bank immediately if
it knows or suspects that there has been any unauthorized disclosure,
possession, use or knowledge (each, an “Unauthorized Use”) of any Bank
Confidential Information, and if it is responsible for the Unauthorized Use, it
will, at its expense, promptly take all actions, including without limitation
initiating court proceedings to recover possession or prevent further
Unauthorized Use of the Bank Confidential Information and obtain redress for
any injury caused to Bank as a result of such Unauthorized Use. In addition,
except as permitted by applicable law, Company may not decompile, reverse
engineer, disassemble, modify, or create derivative works of any computer
program provided pursuant to this Master Agreement.


 


6.2           As used herein, the term “Company Confidential
Information” shall mean all non-public, confidential and/or proprietary
information of Company, now or at any time hereafter provided to Bank by
Company, or any of Company’s officers, employees, agents or representatives, in
connection with Bank’s providing of the Services, and shall include, without
limitation, any and all financial, technical and/or business information
relating to Company, including trade secrets, research and development test
results, marketing or business plans and strategies, forecasts, budgets,
projections, customer information (including, but not limited to, any
information regarding any payee contained in any data file provided to Bank by
Company, except for any information that would be disclosed in the ordinary
course of clearing a check or processing a payment order), supplier
information, and any other analyses, computations or studies prepared by or for
Company. The Company Confidential Information will be used by Bank solely in
connection with Bank’s providing of the Services to Company. Bank will keep all
the Company Confidential Information confidential, and will not disclose any of
the Company Confidential Information to any person or entity, except
disclosures (a) to federal and state bank examiners, and other regulatory
officials having jurisdictions over Bank; (b) to Bank’s legal counsel and
auditors; (c) to other professional advisors to Bank who need to know the
Company Confidential Information in connection with their employment by Bank; (d) to
Bank’s representatives who need to know the Company Confidential Information
for the purpose of Bank’s providing the Services to Company, it being expressly
understood and agreed that such representatives shall be informed of the
confidential nature of the Company Confidential Information, and shall be
required by Bank to treat the Company Confidential Information as confidential
in accordance with the terms and conditions hereof; (e) as otherwise
required by law or legal process: or (1) as otherwise authorized by
Company in writing. In the event that Bank or any of its representatives
becomes legally compelled to disclose any of the Company Confidential
Information pursuant to clause (e) above, then Bank, except as otherwise
required by law, will provide notice thereof to Company so that Company, at its
sole option (but without obligation to do so), may attempt to seek a protective
order or other appropriate remedy and/or waive compliance with the provisions
of this Agreement. The confidentiality requirement set forth herein shall not
extend to any portion of the Company Confidential Information that (a) is
or becomes generally available to the public other than as a result of a
disclosure by Bank or its representatives; (b) is or becomes available to
Bank on a non-confidential basis by Company or any officer, employee, agent or
representative of Company prior to its disclosure by Bank; or (c) is or
becomes available to Bank on a non-confidential basis from a source other than
Company. Bank shall notify Company promptly if it knows or suspects that there
has been any unauthorized disclosure, possession, use or knowledge (each, an “Unauthorized
Use”) of any Company Confidential Information, and if it is responsible for the
Unauthorized Use, it will, at its expense, promptly take all reasonable and
commercially practicable actions to recover possession or prevent further
Unauthorized Use of the Company Confidential Information and obtain redress for
any injury caused to Company as a result of such Unauthorized Use; provided,
however, that such reasonable and commercially practicable actions need not
include initiation and/or prosecution of legal action in a court of law. At
Company’s request upon termination of this Agreement, Bank will use its best
efforts to return to Company


 


2

















 


all copies of the Company Confidential Information then in the possession of Bank or any
of its representatives.


 


7.             Third Party Networks;
Data Transmission; Use of Required Software.


 


7.1           If Bank determines that any funds transfer or
communications network, Internet service provider, or other system(s) it has
selected to provide a Service is unavailable, inaccessible or otherwise
unsuitable for use by Bank or Company, Bank may, upon notice to Company, suspend
or discontinue the affected Service.


 


7.2           If Company transmits data, information or
instructions (collectively “Data”) to Bank, or requires Bank to deliver Data to
Company, using a leased line, or Value Added Network (“VAN”) or any other third
party provider (collectively, “Third Party Provider”), Company agrees that Bank
shall have no responsibility for the accuracy, completeness, security or
authenticity (collectively “Integrity”) of the Data sent through such Third
Party Provider, and Company agrees that Bank may rely upon the Data delivered
to Bank by the Third Party Provider and that Bank shall have no independent
obligation to verify the Integrity of such Data before receiving, or acting
upon, any such Data.


 


7.3           If Company transmits data to Bank using a
leased line or Value Added Network (“VAN”), Bank strongly recommends that
Company secure a back-up means of transmission such as Secure File Transport
for use in the event of a communications disruption.


 


7.4           Company shall use and maintain in good working
order (and at its own expense) software, hardware and other equipment necessary
for Company to use the Service(s) in accordance with the Service
Documentation.


 


8.             No Representations or
Warranties of Bank or Software Vendor. Neither Bank nor any software vendor
makes any express or implied representations or warranties with respect to the
Services or any software used in connection with the Services including without
limitation any warranty as to the merchantability or fitness for a particular
purpose, other than those expressly set forth in the Service Documentation.


 


9.             Liability and
Indemnification.


 


9.1           Bank will perform each Service in accordance
with reasonable commercial standards applicable to Bank’s business; laws,
regulations and operating circulars governing the activities of Bank;
applicable funds transfer system(s) and clearinghouse rules; and the
Service Documentation.


 


9.2           Bank is under no obligation to honor, in whole
or in part, any entry, file, batch release, payment order, transaction or
instruction (each, an “Order”), which a) exceeds Company’s available funds on
deposit in an Account with Bank related to the Order, unless otherwise provided
in the Service Documentation; b) is not in accordance with the Service
Documentation or Bank’s applicable policies, procedures or practices as Bank
may from time to time establish and make available to Company; c) Bank has
reason to believe may not been duly authorized, should not be honored for its
or Company’s protection, or involves funds subject to a hold, dispute,
restriction or legal process that prevents their withdrawal; or d) would
possibly result in Bank violating any applicable rule or regulation of any
federal or state regulatory authority including without limitation any Federal
Reserve risk control program or guidelines such as the limitations on Bank’s
intra-day net funds position.


 


9.3           Company shall promptly furnish written proof
of loss to Bank and notify Bank if it becomes aware of any third party claim
related to a Service. Company shall cooperate fully (and at its own expense)
with Bank in recovering a loss. If Company is reimbursed by or on behalf of
Bank, Bank or its designee will be subrogated to all rights of Company.


 


9.4           Any claim, action or proceeding against Bank
for losses or damages arising from a Service, including Bank’s honoring or
dishonoring a check covered by a Service, must be brought within one (1) year
from the date of the act or omission or in the case at a check from the date
the check was first paid or returned by Bank.


 


9.5           Bank will have no liability for failure to
perform or delay in performing a Service if the failure or delay is due to
circumstances beyond Bank’s reasonable control.


 


9.6           Except to the extent that such losses or
damages directly result from Bank’s negligence or intentional misconduct,
Company shall indemnify and hold Bank, its directors, officers, employees and
agents harmless from all losses or damages that arise out of a) the performance
of a Service in accordance with the Service Documentation including without
limitation any warranty Bank is required to make to a third party in connection
with a Service; b) an act or omission of any agent, courier or authorized
representative of Company; c) if the Service includes a license or sublicense of
any software to Company, the use or


 


3

















 


distribution of the software by Company or any
person gaining access to the software through Company that is inconsistent with
the license or sublicense; and d) Company’s failure to secure a back-up means
of transmission for data transmissions using leased lines or VANs as set forth
in Subsection 7.3 above


 


9.7           Except in the case
of Bank’s negligence or intentional misconduct, Bank’s liability to Company
will be limited to an amount not to exceed
ten (10) times Bank fees incurred during the calendar month
immediately preceding the calendar month in which such loss or damages were
incurred (or, if no Bank fees were incurred in such month, Bank fees incurred
in the month in which the losses or damages were incurred); provided, however,
that this limitation shall be in addition to any other limitation of liability
specifically set forth elsewhere in the Service Documentation. In no event will
either party to this Master Agreement be liable to the other party for any
special, consequential, incidental (including without limitation court costs
and attorneys’ fees), indirect,
or punitive losses or damages, whether any claim is based on contract or tort,
or whether
the likelihood of such losses or damages was known to the other party and
regardless of the form of the claim or action.


 


10.           General.


 


10.1         The Service
Documentation will be governed by substantive federal laws, regulations and rules and,
to the extent such laws, regulations and rules are not applicable, those
of the state in which the principal office of the Bank identified on the
Acceptance is located, without regard to conflicts of laws principles. Any
portion of the Service Documentation which is inconsistent with applicable
laws, regulations or rules will be deemed modified and applied in a manner
consistent therewith, and Bank will incur no liability to Company as a result
of the inconsistency or modification and application. If any portion of the
Service Documentation is deemed unenforceable or invalid, it will not otherwise
affect the enforceability or validity of the Service Documentation.


 


10.2         The Service
Documentation is the entire agreement between Bank and Company and supersedes
all prior representations, conditions, warranties, understandings, proposals or
agreements regarding a Service. No course of dealing or waiver of any right on
one occasion will constitute a modification of the Service Documentation or be
a waiver of that right on a subsequent occasion.


 


10.3         Company agrees to
provide Bank promptly upon Bank’s request any existing financial statements or
other information pertaining to Company’s financial condition or any previously
unprepared financial statements which Bank may require Company to prepare
and/or to be audited or reviewed by independent certified public accountants acceptable to Bank.


 


10.4         Company expressly warrants that a Service will
not be used in a manner which violates any federal or state law including
without limitation any sanction or control administered by the Office of
Foreign Assets Control or Bureau of Export Administration.


 


10.5         Sections
4, 5, 6, 8, 9, 10.4 and 10.5 of this Master Agreement will survive termination
of this Master Agreement.


 


10.6         Either
party may provide notice to the other party by mail, personal delivery, or
electronic transmission. Bank shall use the most recent address for Company in
Bank’s records, and any notice from Bank will be effective when sent. Company
shall use the address where Company’s relationship manager or other manager is
located and address any notice to the attention of such manager. Any notice from Company will be effective when actually received
by Bank. Bank will be entitled to rely on any notice from Company that it
believes in good faith was authorized by an authorized representative of
Company and, except as expressly stated in the Service Documentation, shall
have no obligation to verify the signature (including an electronic signature).
Each party will have a reasonable time after receipt of any notice to act on
it.


 


10.7         All uses of the Services through Company’s
actual ID codes, passwords, token cards, PINs, or passcodes (each, a “Code”)
will be deemed to be authorized by and binding on Company, except to the extent
that Company suffers damage due to Bank’s unauthorized disclosure of a
particular Code. Company’s failure to protect Codes may allow an unauthorized
party to a) use the Services, b) access Company’s electronic communications and
financial data, and c) send or receive information and communications to Bank.
Unencrypted electronic transmission are not secure. Company assumes the entire
risk for (i) unencrypted electronic transmissions made or authorized by
Company, and (ii) unauthorized use of Codes which does not result from
Bank’s unauthorized disclosure of such Codes.


 


10.8         Company
may not assign or transfer its rights or obligations with respect to the
Service Documentation without Bank’s prior written consent. Bank may assign its
rights and obligations with respect to the Service Documentation to any
successor by merger, consolidation or corporate reorganization.


 


4

















 


10.9         Unless otherwise provided in the Service Documentation, the term “Banking Day”
means that part of a business day
occurring prior to the cutoff time determined in
accordance with Bank’s applicable
funds availability policy.


 





 


5

















 


ACH SERVICES DESCRIPTION


 


Modified September 27, 2005, for P2P Credit, Inc.


 


The ACH Services (the “services”). The Services are generally
described as follows:


 


1.             ORIGINATION SERVICES.


 


1.1.          Direct ACH
Origination.
 The Direct ACH Origination Service will enable Company, using Company’s
software, to create entries and files in standard ACH format and send them
electronically to Bank for transmission in accordance with the Rules (see
Subsection 8.01).


 


1.2.          Third Party ACH
Origination. 
The Third Party ACH Origination Service will enable Company’s agent, using that
agent’s software, to create entries and files in standard ACH format and send
them electronically to Bank for transmission in accordance with the Rules (see
Subsection 8.01 and Subsection 9).


 


1.3.          ACH Express.  The ACH
Express Service will enable Company to create entries and files in standard ACH
format at its own personal computer and send them electronically to Bank for
transmission in accordance with the Rules (see Subsection 8.01). All files
transmitted through the ACH Express Service must be created and transmitted to
Bank using software specified by Bank which is the original, confidential,
valuable and proprietary property of Politzer & Haney (the “Software”),
which has licensed it to Bank, or to an affiliate of Bank, with the right to
sublicense it to Company. Bank grants Company a non-exclusive and
non-assignable sublicense to use the Software solely for the purpose of
initiating entries in accordance with the provisions of the license (a copy of
which is available to Company on request), this ACH Services Description and
the other Service Documentation. This sublicense will terminate upon the
earlier to occur of termination of the license or termination of this Service.
Upon termination, Company will promptly return all copies of the Software to
Bank.


 


2.             LIMITATIONS OF LIABILITY.  IN NO EVENT WILL
BANK BE LIABLE FOR ANY INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST DATA, PROGRAMS,
PROFITS (ANTICIPATED, ACTUAL OR OTHERWISE), OR BENEFITS RESULTING FROM USE OF,
RELIANCE UPON, OR INABILITY TO USE THE SOFTWARE, REGARDLESS OF WHETHER OR NOT
BANK HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF
WHETHER SUCH DAMAGES ARE BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT
LIABILITY, OR ANY OTHER THEORY OR FORM OF ACTION. IN NO EVENT WILL BANK’S
CUMULATIVE LIABILITY TO COMPANY IN RELATION TO THIS SUBLICENSE EXCEED A SUM
EQUAL TO THE TOTAL SUBLICENSE FEE ACTUALLY PAID TO BANK. COMPANY ACKNOWLEDGES
THAT NEITHER POLITZER AND HANEY NOR BANK MAKES ANY WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF MERCHANTABILITY AND OF
FITNESS FOR A PARTICULAR PURPOSE.


 


1

















 


3.             INTERNATIONAL ACH.


 


3.1.          The International ACH Service will enable
Company to create entries and files using a modified NACHA format for the
purpose of debiting or crediting selected country accounts held outside the
United States and send them electronically to Bank for transmission in
accordance with the Rules (see Subsection 4.1), which for purposes of
International ACH shall also include the International ACH Origination
Reference Guide, the Cross-Border Payment Operating Rules, and any other
applicable ACH rules, including those promulgated by a local ACH association or
governmental body (“Other ACH Rules.”) For purposes of originating credits and
debits to a USD or CAD denominated account located in Canada, the Other ACH Rules shall
include the Rules of the Canadian Payments Association (the “CPA Rules”).


 


3.2.          With respect to credit entries, Bank will
convert the amount to be transferred from United States Dollars to the currency
of a designated foreign government or intergovernmental organization (“Foreign
Currency”) at Bank’s buying rate for exchange in effect on the date the entry
is transmitted by Bank to the ACH or gateway operator. If the financial
institution designated to receive the funds does not pay the beneficiary
specified in the entry, or if the entry is subsequently determined to be
erroneous, Bank will not be liable for a sum in excess of the value of the
entry after it has been converted from Foreign Currency to United States
Dollars at Bank’s selling rate for exchange at such time as the entry is
returned to Bank.


 


3.3.          With respect to debit entries (where
permitted), Bank will convert the amount of each Entry from Foreign Currency at
Bank’s selling rate for exchange in effect on the settlement date of the entry.
If the financial institution designated to receive the entry subsequently
returns it, Bank may charge the Account (see Subsection 8.02) for the sum equal
to the value of the returned entry as measured in Foreign Currency at Bank’s
buying rate for exchange at such time as the entry is returned to Bank.


 


3.4.          Before Company may initiate any debit entries
that settle to a USD or CAD denominated account located in Canada, it will be
required to: (a) sign and return to Bank the Payee Letter of Undertaking
for Canadian Pre-Authorized Debits provided by Bank; and (b) collect from
each payor of a debit a debit authorization in a form which complies with the
CPA Rules. Company acknowledges that Bank has provided it with a means for
accessing the CPA Rules, including Rule H1.


 


3.5.          Bank will not be liable for any failure or
delay by a gateway operator, any intermediary financial institutions, or the
receiving depository financial institution in the designated foreign country in
processing or failing to process any entry Bank transmits, or for acts or
omissions by a third party, including by way of example and not by way of
limitation, the delay or failure of any third party to process, credit or debit
any entry.


 


3.6.          Company acknowledges that the ACH system may
not be used to conduct any transaction in violation of Federal law. Company
expressly warrants that no Entry delivered to Bank will, if accepted by Bank,
cause Bank to be in violation of any sanction administered by the Office of
Foreign Assets Control.


 


4.             [RESERVED.]


 


5.             RECEIVING SERVICES.


 


5.1.          ACH Fraud Filter.  The ACH
Fraud Filter Service will enable Company to better protect its accounts at Bank
from unauthorized debit entries. Bank
offers three options that monitor the debit entries posted to accounts. Company has
elected one of the following options:


 


2

















 


a.             to have ACH debit and/or credit entries
automatically blocked from its account(s);


 


b.             to have ACH debit and/or credit entries
presented to it for review and its request for further action; or


 


c.             to authorize specific ACH debit and/or credit
entries to be posted to its account(s).


 


5.2.          If Company has chosen the review option (see
Subsection 5.01(b) above), it will immediately review each Intercept
Report and notify Bank in the manner and by the applicable cutoff time as
required in the Guide of any debit entry listed on the Intercept Report which
is unauthorized. If it does not, Bank will be entitled to post the debit entry
to Company’s account.


 


5.3.          ACH Investment Fund.  The ACH
Investment Fund Service will enable Company to offer direct deposit or direct
payment arrangements to its customers. Bank will prepare detailed transaction
information which it will send to Company in one file each morning on a
business day. Company has elected either individual postings or a consolidated
settlement of transactions.


 


6.             PROVISIONS
APPLICABLE ONLY TO ORIGINATION SERVICES.


 


6.1.          Security Procedure.  Bank will verify that Company has
authorized, canceled or amended an entry that constitutes a payment order (as
that term is defined in Section 4A-103(a)(1) of the Uniform
Commercial Code, as amended from time to time) solely by means of the security
procedure separately agreed to in writing by Bank and Company. The security
procedure will not be used to detect errors. Company will promptly notify Bank
in writing of the identity of each person authorized to receive information
regarding the security procedure
(each singly or in the aggregate, an “authorized person”) and of any change in
an authorized person. Bank will have a reasonable time after receipt of a
notice to act on it. Company will establish and maintain effective internal procedures to safeguard
against unauthorized transmissions and batch releases. Company warrants that no
individual will be allowed to initiate transfers or batch releases in the absence of proper supervision and safeguards, and
Company will take reasonable
steps to maintain the confidentiality of the security procedure and any passwords, codes, security devices and
related instructions provided by Bank. If Company believes or suspects that any
such information or instructions have been known or accessed by unauthorized
persons, Company will notify Bank immediately followed by written confirmation.
Bank will have a reasonable time after receipt of notice to act on it. If a payment order, or a request for
cancellation or amendment of a payment order, received by Bank purports to have
been transmitted or authorized by Company, it will be deemed effective as
Company’s payment order or request and Company will be obligated to pay Bank
the amount of the payment order even though the payment order or request was
not authorized by Company, provided Bank accepted the payment order in good
faith and acted in compliance with the security procedure. If a payment order,
or request for cancellation or amendment of a payment order, received by Bank
was authorized by Company, Company will pay Bank the amount of the payment order, whether or not Bank complied with the security procedure with
respect to that payment order.


 


6.2.          Rejected Entries.  Without limiting Bank’s general right to reject entries or files under
the Rules, Bank may reject any entry or file which does not comply with the
requirements in this Service Description, the Rules or the security
procedure, or with respect to which the Account (see Subsection 8.02) does not contain sufficient available funds to pay for the entry.


 


3

















 


Bank
may reject an entry received for credit to an account maintained at Bank (an “on-us
entry”) for any reason for which an entry may be returned under the Rules. If
an entry or file is rejected, Bank will make a reasonable effort to notify
Company promptly so that Company may repair and retransmit the entry or file. A
notice of rejection will be effective when given. Bank will have no liability
to Company by reason of the rejection of any entry or file, the fact that notice
is not given at an earlier time than that provided for in this Service
Description or for any loss resulting from Bank’s failure to provide notice. If
Company requests that Bank repair an entry or file and Bank endeavors to do so,
Bank will not be liable for its failure to make the requested repair. Company
will pay all charges and expenses Bank incurs in connection with file repairs.


 


6.3.          Payment Obligations; Settlement.  Company will maintain in the Account
(see Subsection 8.02) as of the applicable settlement date and time immediately
available funds sufficient to cover all credit entries Company originates
through Bank. If requested, the funds will be prepaid to Bank before Bank
delivers the credit entries to the ACH or gateway operator. Company’s
obligation to pay Bank for each credit entry matures at the time Bank transmits
or otherwise delivers the credit entry to the ACH or gateway operator and is
uneffected by termination of the Services. Bank is authorized to debit the
Account for the total amount of all credit entries on or before the applicable
settlement date. Bank is not, however, intending to make a loan to Company.
Notwithstanding any other provision of this Service Description or the other
Service Documentation, Bank is authorized upon notice to Company to place a
hold on an equal amount of funds in the Account or in any other accounts at
Bank or any affiliate of Bank owned in whole or in part by Company, or to take
any other action it deems appropriate to ensure that it receives payment. Bank
may charge the Account or any other Company account at Bank or any affiliate of
Bank for any debit, correcting or reversing entry which is later returned to
Bank. Bank may also set off against any amount it or an affiliate of Bank owes
to Company in order to obtain payment of Company’s obligation as set forth in
this Service Description; provided that the amount thus set off will not exceed
the amount of Company’s obligation due and unpaid.


 


6.4.          Cancellation or Amendment.  Company will have no right to cancel
or amend any entry or file after its receipt by Bank. However, if the request
complies with the security procedure Bank may use reasonable efforts to act on
it prior to transmitting the entry or file to the ACH or gateway operator or,
in the case of an on-us entry, prior to crediting a receiver’s account, but
will have no liability if the cancellation or amendment is not effected.
Company will reimburse Bank for any expenses, losses or damages Bank may incur
in effecting or attempting to affect Company’s request.


 


6.5.          Returned Entries.  Except for an entry or file
retransmitted by Company in accordance with the requirements of this Service
Description, Bank will have no obligation to retransmit a returned entry or file to the ACH or gateway operator if Bank complied
with the terms of this Service Description with respect to the original entry
or file.


 


6.6.          Preparation of
Entries and Files; Processing Schedules; Reconstruction.  Each entry
and file delivered to Bank, including any amendments, cancellations, reversals,
corrections or changes related to it will be prepared in accordance with the Rules, the Service Documentation and Bank’s then current
instructions. Bank will process each entry or file in accordance with its then
current processing schedule,
provided (i) the entries or
files are received by Bank’s
applicable cut-off time on a business day and (ii) the ACH is open for
business on that business day. Entries or files will be deemed received by
Bank, in the case of transmittal by tape, when received by Bank, and in the
case of transmittal by electronic transmission, when the transmission (and
compliance with any applicable security procedure) is


 


4

















 


completed.
If Bank receives an entry, file or batch release after its processing deadline,
Bank will not be responsible for failure to meet the deadlines of the ACH
operator for processing and transmitting the entries or files. If any of the
requirements of clause (i) or (ii) of this Subsection 6.06, are not
met, Bank will use reasonable efforts to transmit the entries or files to the
ACH by the next applicable deadline of the ACH which is on a business day on
which the ACH is open for business. Except as provided in Subsection 6.04, in
the case of an on-us entry, Bank will credit the receiver’s account in the
amount of the entry on the Effective Entry Date contained in any instructions
accompanying the entry, provided the requirements set forth in clauses (i) and
(ii) of this Subsection 6.06 are met. If either of those requirements is
not met, Bank will use reasonable efforts to credit the receiver’s account in
the amount of the entry no later than the next business day following the
Effective Entry Date. Company will retain copies of each entry and file
delivered to Bank or will be able to fully and completely reconstruct each
entry and file for a period of five (5) business days after the applicable
settlement date and will submit the copy or reconstructed entry or file to Bank
upon request.


 


6.7.          Effective Entry Date.  The instructions accompanying an
entry or file will specify a business day on which the entry or file is to be
delivered to the ACH or gateway operator (the “Effective Entry Date”).


 


7.             PROVISIONS APPLICABLE ONLY TO RECEIVING SERVICES. Notice
to Receiver. Unless required by applicable law, Bank will have no
obligation to notify Company of the receipt of an entry, other than by showing
it on the periodic statement for the affected deposit account (see Subsection
8.02).


 


8.             PROVISIONS
APPLICABLE TO BOTH ORIGINATION AND RECEIVING SERVICES.


 


8.1.          Rules.    Origination, receipt, return, adjustment,
correction, cancellation, amendment and transmission of ACH entries must be in
accordance with the Operating Rules of the ACH (“ACH Rules”) in which Bank
is a participant and, with respect to credit entries which constitute payment
orders, Article 4A of the Uniform Commercial Code as adopted in the state
whose law governs the Agreement, as both are varied by this Service Description
and the other Service Documentation, and as both are amended from time to time
(the “Rules”). Company acknowledges that it has had an opportunity to review
and agrees to comply with and be
bound by the Rules. Company will be responsible for promptly obtaining all
future amendments.


 


8.2.          Account.    Company will maintain at least one deposit account with Bank (the “Account”).


 


8.3.          Provisional Credit.    Any credit Bank
gives to Company is provisional until Bank receives final settlement and the
entry for which credit was given is deemed to be finally paid as provided in
this Service Description, the Rules and all laws, rules and
regulations governing any aspect of the entry, including the laws, rules and
regulations of the country to which the entry was sent. If Bank does not
receive final settlement, it is entitled to a refund from the credited person
and Company will not be deemed to have paid that person.


 


8.4.          Reversing Entries.    At Company’s
request, Bank will make a reasonable effort to reverse an entry, but will have
no responsibility for the failure of any other person or entity to honor
Company’s request.


 


8.5.          Warranties.    Company acknowledges that under the Rules,
Bank makes certain warranties with respect to each entry. Company agrees to
reimburse Bank for any loss Bank incurs, including its reasonable attorneys’
fees and legal expenses, as the result of a breach of


 


5
















 


a
warranty made by Bank unless the breach resulted solely from Bank’s own
negligence or intentional misconduct.


 


8.6.          Indemnification.    Company
acknowledges that under the Rules, Bank indemnifies certain persons. Company
agrees to reimburse Bank for any loss Bank incurs, including its reasonable
attorneys’ fees and legal expenses, as the result of the enforcement of an
indemnity, unless enforcement resulted solely from Bank’s own negligence or
intentional misconduct.


 


8.7.          Identify Authorized
Persons.    Any person identified by Company to the Bank or any
certification, notice or other communication delivered to Bank may receive
information, communications and notices regarding the Services, and is
authorized to transact all business, make all agreements and sign and deliver
all documents in connection with the Services. If the identity of such a person
changes Company will promptly notify Bank in writing. Bank will have a
reasonable time after receipt of a certification, notice or other communication
to act on it.


 


8.8.          Software, Hardware
and Backup Requirements.    Subject to Paragraph 1.1.3,
Company will, at its own cost and expense, obtain, install and, at all times
during its utilization of the Services, maintain in good working order all
software, hardware and other equipment necessary for it to perform in
accordance with this Service Description. Except with respect to the Internet
ACH Service, Company agrees to implement, on a periodic basis not less than
weekly, backup-measures, including, among other things, copying onto a diskette(s) each
week’s current data base files. With respect to the Internet ACH Service, Bank
will perform data base backup on a scheduled basis. In the event of any failure
of such software, hardware or other equipment, Company will deliver to Bank all
data which it would otherwise have provided that is necessary for Bank to
perform Bank’s obligations in connection with the Services.


 


9.             PROVISIONS
APPLICABLE TO ORIGINATING ENTRIES FOR THE COMPANY’S CUSTOMERS; PREREQUISITES FOR
THIRD PARTY SENDER ACTIVITIES.


 


9.1.          If the Company has agreed or intends to agree
with one or more of its customers or with an agent (individually an “Originator”
and collectively “Originators”) to initiate credit and debit entries through
the ACH by such Originator to designated accounts maintained at the Bank or
other financial institutions, the Company is acting as a Third Party Sender,
under the ACH Rules. In that event, Company agrees that it:


 


9.2.          Shall initiate entries only on behalf of
itself and those Originators that may have been agreed to in writing by the
Bank.


 


9.3.          Agrees to strictly comply with and be bound
by the ACH Rules, specifically including Article 5 of the ACH Rules regarding
returned entries, the laws of the United States, governing administrative
guidelines, procedures and rules as the Bank may from time to time
establish and distribute, and this Agreement.


 


9.4.          Warrants to Bank that is has a written
agreement with each Originator for which Company initiates an entry prior to
transmitting or delivering any entry to the Bank on behalf of Originator, under
which such Originator agrees to:


 


a.             To comply with and be bound by the ACH Rules.


 


b.             To assume the responsibilities of an
Originator under the ACH Rules, including all warranties of an ODFI.


 


6

















 


c.             To be bound by Article 5
of the ACH Rules, as updated from time to time, regarding returned entries.


 


d.             To be responsible
for and to pay the Bank for any credit entries originated and any debit entries
returned by the RDFI, when the Bank does not receive payment from the Third
Party Sender.


 


e.             That no entries
shall be made which violate the laws of the United States and,


 


f.              That such agreement
has not been terminated on the date any entry is initiated on behalf of that
Originator.


 


10.          OTHER RESPONSIBILITIES OF COMPANY. Company further:


 


10.1.        Warrants to Bank that it has obtained
authorization in compliance with the ACH Rules from the Originator for
each entry, and that it has no knowledge of the revocation of the authorization
by the
account owner whose account receives the entry (“Receiver”) or the termination of the
arrangement between the receiving depository financial institution and the
Receiver concerning any particular entry.


 


10.2.        Warrants to Bank that it has policies and
procedures in place to provide to Bank, upon Bank’s request, any information
that the Bank deems necessary to identify each Originator for which any entry
is processed.


 


10.3.        Agrees to monitor the payment system risk of
the Originator with regard to all CPR and PBR entries, as defined in the ACH
Rules, initiated by the Originator.


 


10.4.        Warrants with regard to Web entries that Company:


 


a.             Shall utilize
commercially reasonable methods to identify the Originator or other
third-party on whose behalf Bank receives Web entries from Company.


 


b.             Shall establish
procedures to monitor, on an on-going basis, the credit worthiness of any
Originator or other third-party initiating an entry.


 


c.             Shall establish
exposure limits for the Originators or third party and implement
procedures to review exposure limits for Web entries periodically and implement
procedures to monitor entries sent or transmitted by the Originator or
third party relative to Company’s exposure limits across multiple settlement
dates.


 


d.             Shall allow Bank,
upon Bank’s request at a reasonable time and place, to conduct an examination from time-to-time
of Company’s ACH operations and review procedures related to the origination of entries in
circumstances where Company is acting on behalf of an Originator.


 


7

















 


11.          COMPANY’S USE OF AGENTS.


 


11.1.        If Company elects to use an agent with
respect to the Services, Company, and not Bank, will be solely responsible for
the acts and omissions of Company’s agent. The acts of the Company’s agent
shall be deemed to be the acts of the Company for purposes of this Agreement.
The agent will, without limitation, be authorized to originate, receive,
return, adjust, correct, cancel, amend and transmit entries and files, and
select the security procedure used to authenticate entries. Company agrees that
any security procedure selected by its Agent will be treated as commercially
reasonable for all purposes. Bank may rely on instructions it receives from
Company’s agent and need not make any inquiries to verify or confirm that
instructions are within the scope of the agency.


 


11.2.        Company will certify each agent’s identity to
Bank and provide any changes to Bank in writing. Bank will be fully protected
in relying on each certificate and on the obligation of Company to promptly
certify any change in the agents so certified. Bank will have a reasonable time
after receipt of a certification or change to act on it.


 


11.3.        Bank may at any time use agents and/or
independent contractors to process entries or provide all or any other portion
of the Services, and will be solely responsible for the acts and omissions of
its agents and independent contractors. However, Bank will not be deemed to be
the agent of, nor responsible for the acts or omissions of any other person,
including without limitation any Federal Reserve Bank, ACH, Internet service provider
or transmission or communications facility, any receiver or receiving depository financial
institution (including without limitation the return of an entry by such
receiver or receiving depository financial institution), and no such person
will be deemed Bank’s agent.


 


12.          PAYMENT OBLIGATIONS;
ESTABLISHMENT AND MAINTENANCE OF ACCOUNT(S); RIGHT TO CHARGE BACK RETURNED
ENTRIES.


 


12.1.        The Company’s obligation to pay the Bank for
each entry initiated by or on behalf of the Company or an Originator matures at
the time the Bank transmits or otherwise delivers such entry to the ACH. This
payment obligation is unaffected by the termination of this Agreement. The
Company agrees to pay the Bank for any credit entries originated and any debit
entries returned by an RDFI.


 


12.2.        The Company shall reimburse the Bank for any
such returned entries on the same day as the Company receives notice of such
returned entry. The Bank may charge back to any account of the Company any
entry which was originated by or on behalf of the Company and later returned to
the Bank. If the Originator whose entry is returned to the Bank subsequently provides
funds to the Bank to cover any such returned entry, then such funds shall be
returned to the Company. This section shall survive the termination of this
Agreement.


 


12.3.        The Company shall have no right to cancel or
amend any Entry or file of Entries after its receipt by the Bank.


 


13.          SOFTWARE.


 


13.1.        Company agrees that, if required by law, the
Software will not be exported directly or indirectly, separately
or as a part of a system, without first obtaining a license from the United
States Department of Commerce or any other appropriate agency of the United States
Government.


 


13.2.        Bank may make copies of any enhanced versions
of the
Software available to Company at such price as Bank will determine at its sole
discretion. Company acknowledges


 


8

















 


that Politzer and Haney has the
right to enforce the terms of the license directly against Company in the event
of a breach of its terms by Company. Company may not assign the license or this
sublicense to anyone. Bank may discontinue to provide to Company any
maintenance or other support with respect to the Software which it now, or
hereafter provides upon prior written notice to Company.


 


13.3.        Company will not publish, disclose, display
or otherwise make the Software available to others. Company will secure and
protect the Software in a manner consistent with the protection of its own
proprietary information and take appropriate action by instruction or agreement
with its employees who are permitted access to the Software to ensure such
protection. Company acknowledges that, except as specifically permitted in
writing by Bank, Company will not provide, transmit, further sublicense, transfer or otherwise
distribute the software or any part of it to a third party, or copy, reverse
engineer, reverse compile, or reverse assemble, modify or alter the Software or
any part of it.


 


14.          TERMINATION.      The Bank may terminate this
agreement in any of the following circumstances:


 


14.1.        In keeping with the terms of the Master Agreement for Treasury
Management Services;


 


14.2.        In the event Bank learns of any breach of ODFI
warranty or other noncompliance with the ACH Rules or the laws of the U.S.
by Company or its Agent;


 


14.3.        If there is excessive return volume, as determined in the sole
discretion of Bank, relating to the ACH activity of the Company or an
Originator for whom the Company is acting as a Third Party Sender;


 


14.4.        In case of a breach of warranty, the Bank shall notify Company in writing
of the nature of the breach warranty or other non-compliance and may, but need
not, provide a period of time to cure such warranty or other non-compliance.
Bank may terminate this agreement immediately upon providing such notice to
company or may terminate this Agreement at the end of the cure period, if the matter is not then resolved to the
satisfaction of the Bank.


 


15.          SURVIVAL.    Subsections 6.03, 8.03, 8.05, 8.06, 8.10, and
Sections 9, 10, 11, and 12 shall
survive termination of the Services.


 


16.          TERMINOLOGY.    Unless specifically
defined in this Service Description, terms used in this Service Description
have the meanings, if any, provided in the Rules, as amended from time to time. As used in this Service
Description, “negligence” will mean a material failure to use that degree of
care that would be used under the same or similar circumstances by a national
banking association having substantially the same volume and type of ACH
activity and approximately the same number, size and diversity of ACH
customers.


 





 


9

















 


	
  COMMERCIAL ELECTRONIC OFFICESM (“CEO”)

  	
   

  	
  

  
	
  SERVICE DESCRIPTION

  	
   

  



 


Modified September 27, 2005, for P2P Credit, Inc.


 


1.             Description of the
CEO Service.    The
CEO Service will allow Company to enter Bank’s CEO website and access those
treasury management services offered through the CEO (each, a “Service”) for
which Company has enrolled. Company agrees to use the CEO only as provided in
the Service Documentation (which term includes notices and information posted
on the CEO website.) Persons entering the CEO for Company (the “Users”) must
also accept the Terms of Use for the CEO which appears on the CEO when a User
initially logs on. Before Company may use a Service, Company must sign or
accept the Service Documentation for that Service.


 


2.             Security Procedures.


 


2.1          Unless Company
requests self-administration of its access to the CEO, Bank will give each User
an ID code and a password to be used when the User first enters the CEO. (Self-administration
may not be available for all services offered through the CEO.) Bank will also
assign a Company ID code for use each time a User enters the CEO. Although the
Company ID code and the ID codes for each User will remain the same for each entry
into the CEO, the password Bank assigns to each User must be changed to a new
password the User selects when the User first enters the CEO. Bank will not
know the new passwords or any subsequent passwords selected by the Users.


 


2.2          If Company requests
self-administration of its access to the CEO, Bank will assign a Company ID code and will set up the first Company
administrator (“FCA”) by assigning a personal ID code and password to be used when the FCA first enters
the CEO. The FCA can then set up additional Company administrators (who will
have access to all Services Company receives through the CEO) and
administrators or Users (each of whom will have access only to the specific
Service(s) they are set up to access.) Any Company administrator: (a) can
set up additional Company administrators, administrators and Users, issuing
them a password and a personal ID code; (b) can reset passwords for all
Services; and (c) shall be required to immediately disable access to the
CEO for any Company administrator, administrator or User who ceases to be a
Company administrator, administrator or User. Administrators can set up
additional administrators and Users and reset passwords for the specific
Service(s) they are set up to access. The Company ID and each personal ID
code will remain the same for each entry into the CEO, but the password assigned
to each Company administrator, administrator, and User must be changed to a new
password they select when they first enter the CEO. Bank will not know the
password of any Company administrator, administrator, or User except the
initial password assigned to the FCA. Company’s administrative contact with
respect to the CEO will be the
FCA.


 


2.3          If Company requests
self-administration of Company’s access to the CEO, Bank will give the Company
administrators and the administrators a token card and a personal
identification number (“PIN”), known only by them and Bank, to use each time
they give personal ID codes and passwords to Company administrators,
administrators, and Users. Token cards and PINs will be given to Users by Bank
only if they have access to a Service


 


1

















 


which requires a token card for access. The token
card generates a random and unique security code for each token card every
minute. The code combines with the PIN to provide a unique password (the “Passcode”)
every minute.


 


2.4          Company will be
able to manage and control who in Company has access to the CEO and the
Services by the ID codes, passwords, token cards, PINs, and Passcodes. It is
Company’s responsibility to ensure that the ID codes, passwords, token cards,
PINs, and Passcodes are known to, and used only by, persons who have been
properly authorized by Company to access the CEO and use the Services through the
CEO.


 


2.5          FAILURE TO PROTECT ID CODES,
PASSWORDS, TOKEN CARDS, PINS, OR
PASSCODES MAY ALLOW AN UNAUTHORIZED PARTY TO (1) USE THE SERVICES, (2) CORRECT,
CHANGE, VERIFY, OR SEND DATA USED WITH THE SERVICES, (3) SEND INFORMATION
AND COMMUNICATIONS TO, OR RECEIVE INFORMATION AND COMMUNICATIONS FROM, BANK OR (4) ACCESS
COMPANY’S ELECTRONIC COMMUNICATIONS AND FINANCIAL DATA. ALL ENTRIES INTO THE
CEO, ALL COMMUNICATIONS SENT, AND ALL USES OF THE SERVICES, THROUGH COMPANY’S
ACTUAL ID CODES, PASSWORDS, TOKEN CARDS, PINs, OR PASSCODES (COLLECTIVELY “CODES”)
WILL BE DEEMED TO BE ENTRIES, COMMUNICATIONS, AND USES AUTHORIZED BY COMPANY
AND BE BINDING UPON COMPANY, EXCEPT TO THE EXTENT THAT COMPANY SUFFERS DAMAGE
AS A DIRECT RESULT OF BANK’S UNAUTHORIZED DISCLOSURE OF SUCH CODES. COMPANY
ASSUMES THE ENTIRE RISK FOR FRAUDULENT OR UNAUTHORIZED USES OF ALL CODES WHICH
DO NOT RESULT FROM BANK’S UNAUTHORIZED DISCLOSURE OF SUCH CODES. Company
acknowledges the importance of developing internal procedures to limit such
risk, which procedures will include, at a minimum, (a) if Company is not
on self- administration, notifying Bank immediately when any new person becomes
a User or when any existing User stops being a User, (b) if Company is on
self-administration, disabling access to the CEO immediately for each Company
administrator, administrator, and User who stops being a Company administrator,
administrator, or User, and (c) not keeping, in any form or in any place,
lists of ID codes, passwords, PINs or Passcodes.


 


2.6           Company agrees to
notify Bank immediately when Company becomes aware of any loss or theft of, or
any unauthorized use of, any ID codes, passwords, token cards, Pins, or
Passcodes. Company also agrees to notify Bank immediately when Company becomes
aware of any unauthorized entry into the CEO.


 


3.             Financial
Information.    Financial market data, quotes,
news, research, and other financial information developed by third parties and
transmitted to Bank (collectively, “Financial Information”) will be available
at the CEO. The posting of any Financial Information or any other information
or data at the CEO will not be a recommendation by Bank that any particular
Service or transaction is suitable or appropriate for Company or that Company
should receive or in any way use any Service. Bank does not guarantee the
accuracy, completeness, timeliness or correct sequencing of any Financial
Information, nor is it in any way responsible for the actions or omissions of
the third parties developing or transmitting Financial Information or for any
decision made or action taken by Company in reliance upon any Financial
Information.


 


4.             Use of Certain
Software to Access the CEO.    In using the CEO,
Company will be sending financial and other data as well as electronic messages
directly to Bank through the Internet. Company acknowledges that when the
Internet, or any other electronic communications


 


2

















 


facilities,
are used to transmit or receive data and messages, the data and the messages
may be accessed by unauthorized third parties. To reduce the likelihood of such
third party access, Company agrees to transmit and receive data and messages
through the CEO using only software, including, but not limited to, browser
software, or other access devices that support the Secure Socket Layer (SSL)
protocol- or other protocols required by, or acceptable to, Bank, and to follow
the Bank log-on procedures that support such protocols.


 


5.             Disclaimers.    Bank
will not be Company’s advisor or fiduciary with respect to this Agreement or
any Service.


 


6.             Limitation of
Liability.    Bank will not be liable to Company
for any direct or indirect damages or losses suffered or incurred by Company in
connection with the CEO, any of the Services, any Financial Information, any
other information or data Company receives through the CEO, or any failure to
provide, or delay in providing, access to the CEO, any Service, or any
Financial Information, except to the extent any Service Documentation
specifically provides otherwise and except to the extent such damages or losses
arise directly from the negligence or willful misconduct of Bank .


 


7.             Restricting or
Terminating Access to the CEO.    In addition to,
and not in substitution for, any provision in this Agreement or any of the
other Service Documentation, Company understands and agrees that Bank will not
in any way be obligated to permit Users access to any Financial Information or
the use of any Service through the CEO if (a) such use or access is not in
accordance with any term or condition applicable to the Service or the CEO or
to the information to be accessed, (b) such use or access is not permitted
by any state or federal law or regulation, (c) Bank has reasonable cause
to believe that such use or access may not be authorized by Company or any
third person whose authorization Bank believes is necessary for such use or
access, or (d) Bank has reasonable cause to deny such use or access for
Company’s protection or the protection of Bank . If any Service cannot be used
through the CEO, Bank will make reasonable efforts for such Service to be used
by other means. Bank shall not have liability to Company for any losses or
damages Company may suffer or incur as a result of any such termination.


 


8.             Survival.    Sections
3, 6, 7 and 8 will survive termination of the Service.


 


9.             Terminology.    Unless
specifically defined in this Service Description, capitalized terms used in
this Service Description have the meanings, if any, provided in the Master
Agreement for Treasury Management Services (the “Agreement”), as amended from
time to time.


 





 


3
















 


	
  WIRE TRANSFER SERVICES DESCRIPTION

  	
   

  	
  

  



 


1.                                      Description of the Wire
Transfer Services (the “Services”). The Services will enable Company to give instructions (“Orders”) to
Bank to (i) transfer funds by wire from the account(s) designated in
the Wire Transfer Services Set-up Forms (the “Account”), and (ii) instruct
another depository institution to debit an account at that institution and
transfer the funds to Bank or debit the Account at Bank and transfer the funds
to that institution (“Drawdown Requests”). In this Service Description, the
term “Transfer Instruction” refers to both Orders and Drawdown Requests. This
Service Description is in addition to, and not in place of, any other agreement
which Company may have entered into with Bank regarding Wire Transfer
Instructions.


 


2.                                      Security Procedure. Company agrees that Bank may verify that
Company has authorized a Transfer Instruction solely in accordance with the
Wire Transfer Services Security Procedure Agreement then in effect (the “Security
Procedure”). The Security Procedure will not apply to Transfer Instructions
delivered to Bank in person by Company or its authorized representative. The
Security Procedure will not be used to detect erroneous Transfer Instructions.
Company agrees that the Security Procedure it selected is commercially
reasonable and is the Security Procedure that best meets its requirements given
the size, type and frequency of the Transfer Instructions Company will issue to
Bank. Company further agrees to safeguard any number, code, password, test key,
or other identifier assigned to it from discovery by any unauthorized person.
If Company has chosen the telephone verification option and the individual
contacted by Bank identifies himself or herself as an individual designated by
Company and confirms that the Transfer Instruction was sent to Bank by Company,
Bank will be conclusively deemed to have complied with the telephone security
procedure. If Company becomes aware of a breach of the Security Procedure, or
suspects that a breach may occur, it will immediately notify Bank in a time and
manner that gives Bank a reasonable opportunity to act on it.


 


3.                                      Identify Authorized Persons.
Company will notify Bank in
writing of the identity of each individual authorized to receive information regarding
the Security Procedure. Company will promptly notify Bank in writing of any
change in an authorized individual. Company’s notice will be binding on Bank if
it is received in a time and manner that gives Bank a reasonable opportunity to
act on it. Bank will be fully protected in relying on Company’s notices. Bank
may, but will not be required to, electronically record any oral communication
that it receives from Company.


 


4.                                      Authorization to Pay. Company authorizes and instructs Bank to pay
any Order that complies with the Security Procedure. For each Transfer
Instruction executed by Bank in accordance with the terms of this Service
Description, Company authorizes Bank to debit or credit, as
applicable, the account specified in the Transfer Instruction (and if no
account is specified, the Account or any other account of Company at Bank or an
affiliate) even if a debit results in an overdraft. Company agrees to have
sufficient available funds in the account specified in the Transfer Instruction
(and if no account is specified, the Account) at the time of each debit.


 


5.                                      Finality of Transfer
instructions. A Transfer
Instruction will be final and will not be subject to stop payment or recall,
except that Bank may, at Company’s request, make an effort to effect such stop
payment or recall. In that case, Bank will incur no liability for its failure
or inability to do so.


 


1

















 


6.                                      Inconsistency of Name and
Number. If a Transfer
Instruction describes the person to receive payment inconsistently by name and
account number (i) payment may be made on the basis of the account number
even if the account number identifies a person different from the named person
or (ii) Bank may in its sole discretion refuse to accept or may return the
Transfer Instruction. If a Transfer Instruction describes a participating
financial institution inconsistently by name and identification number, the
identification number may be relied upon as the proper identification of the
financial institution. If a Transfer Instruction identifies a nonexistent or
unidentifiable person or account as the beneficiary or beneficiary’s account,
Bank may in its sole discretion
refuse to accept or may return the Transfer Instruction.


 


7.                                      Company’s Duty to Exercise
Ordinary Care. Company will
exercise ordinary care to determine whether a Transfer Instruction accepted by
Bank was either erroneous or not authorized and to notify Bank of the facts
within a reasonable time not exceeding fourteen (14) days after Company has
received notification from Bank that the Transfer Instruction was accepted or
that the Account was debited or credited with respect to the Transfer
Instruction, whichever is earlier. Company will be precluded from asserting
that Bank is not entitled to retain payment for a Transfer Instruction unless
Company objects within the fourteen (14) day period.


 


8.                                      Information Requests. Company may request the issuance of tracer messages concerning uncompleted
transfers. Company will provide Bank with any transaction information it
considers necessary to process Company’s inquiry. In addition to Bank’s fees
for this service, Company will reimburse Bank for any charges it incurs from
third parties in connection with Company’s requested tracer messages.


 


9.                                      International Wire
Transfers. A Transfer
Instruction expressed in U.S. Dollars will be sent in U.S. Dollars. Company may
request that prior to executing an Order or outgoing Drawdown Request, Bank
converts the amount to be transferred from U.S. Dollars to the currency of a
designated foreign government or intergovernmental organization (“Foreign
Currency”) at Bank’s selling rate for exchange in effect on the date the Order
or outgoing Drawdown Request is executed by Bank. If the financial institution
designated to receive the funds does not pay the beneficiary specified in the
Order or outgoing Drawdown Request and it is payable in Foreign Currency, Bank
will not be liable for a sum in excess of the value of the Order or outgoing
Drawdown Request after it has been converted from Foreign Currency to U.S.
Dollars at Bank’s buying rate for exchange at the time the cancellation of the
Order or outgoing Drawdown Request is confirmed by Bank.


 


10.                               Responsibility of Bank. Bank is only responsible for making a good faith
effort to execute Company’s Transfer Instructions. Transfer Instructions may be
sent by wire, telegraph, telephone, cable or whatever other transmission method
Bank considers to be reasonable. Orders and outgoing Drawdown Requests may be
transmitted directly to the beneficiary’s financial institution, or indirectly
to the beneficiary’s financial institution through another financial
institution, government agency or other third party that Bank considers to be
reasonable. Bank may execute an incoming Drawdown Request that conforms with
instructions it receives through Fed Wire, SWIFT or any other funds transfer
system, provided such instructions are not inconsistent with instructions
contained in an applicable Set-up Form. The authority to execute the incoming
Drawdown Request shall continue until Bank receives express written notice from
Company that such authority is revoked. Bank will not be liable for any third
party’s failure to or delay or error in processing a Transfer Instruction. If
the beneficiary bank does not pay the beneficiary specified in the Transfer
Instruction, a refund will be made only after Bank has received confirmation of
the effective cancellation of the Transfer Instruction and Bank is in free
possession of the funds debited or earmarked in connection with the Transfer
Instruction. If


 


2

















 


Bank is notified that it did not transfer the full
amount stated in a Transfer Instruction, Bank’s sole obligation will be to
promptly execute a second Transfer Instruction in the amount of the stated
deficiency. If Bank executes a Transfer Instruction in excess of the amount
stated in the Transfer Instruction, to the extent that the originator does not
receive the benefit of the Transfer Instruction, Bank will only be liable for
any loss of the principal amount transferred in excess of the amount stated in
the Transfer Instruction. Additionally, Bank will be liable for the amount of
interest the originator has lost due to the transfer of the excess amount,
computed at the then current Federal Funds rate. However, Bank’s liability for loss of
interest will be limited to twenty (20) calendar day’s interest. This section
sets forth Bank’s complete liability for a Transfer Instruction issued
or received under this Service Description.


 


IN NO EVENT WILL BANK BE LIABLE FOR DAMAGES ARISING
DIRECTLY OR INDIRECTLY IF THE TRANSFER INSTRUCTION IS EXECUTED BY BANK IN GOOD
FAITH AND IN ACCORDANCE WITH THE TERMS OF THIS SERVICE DESCRIPTION.


 


As used in the Master Agreement for Treasury
Management Services (the “Agreement”), with respect to the Services, “negligence”
means a material failure to use the degree of care used under similar
circumstances by a national bank having a similar volume of funds transfers and
similar number, size and diversity of funds transfer customers.


 


11.                               Governing Law; Rules and
Regulations. Bank’s and Company’s rights and obligations regarding Transfer
Instructions will be governed solely by this Service Description and the other
Service Documentation and, to the extent applicable, federal law and the law of
the state in which Bank’s principal office is located, as amended from time to
time. Article 4A of the Uniform Commercial Code will, to the extent possible, be
applied by analogy to any Drawdown Requests. All Transfer Instructions will also be
subject to the rules and regulations of any funds transfer system used by Bank as amended
from time to time. If a Transfer Instruction is to be processed in accordance
with a statute, rule, regulation or license of the United States, or any
federal agency, the Transfer Instruction will be governed by that statute,
rule, regulation or license.


 


12.                               Notices; Receipt of
Confirmations. In addition to the notice provision set forth in Section 10.6 of
the Agreement, the following will apply: A bank statement showing a Transfer
Instruction sent by first class mail to Company’s last address as shown in Bank’s
records and not returned will be conclusively presumed to have been received by
Company seven (7) days after it is sent.


 


13.                               Agents. Bank may use
agents of its choice to perform any of its obligations.


 


14.                               Survival. Sections 4, 7, 9,
10 and 14 will survive termination of the Services.


 


15.                               Terminology. Unless
specifically defined in this Service Description, terms used in this Service
Description have the meanings, if any, provided in Article 4A of the Uniform
Commercial Code, as amended from time to time. Each Bank request, instruction
and set-up form completed by or on behalf of Company in connection with the
Services will be deemed to be a “Set-up Form” as that term is used in the
Service Documentation.


 





 


3

















 





 


PAYMENT MANAGER SERVICES


 


PAYMENT MANAGER® SERVICE and PAYMENT
MANAGER PLUSSM ENHANCED REMITTANCE SERVICE DESCRIPTION


 


Modified September 27, 2005, for P2P Credit, Inc.


 


1.                                      Description of the Payment
Manager Services (the “Services”).  The Services, one
of which has been separately designated by Company in the Payment Manager
Services Set-up Form delivered to Bank, are generally described as
follows: 


 


1.1                                 Payment
Manager Service.  The Payment Manager Service will enable
Company to send an electronic file with payment instructions and data to Bank.
Subject to this Service Description and the other Service Documentation, Bank
will make payments through the ACH (see Subsection 2.1), by Wire (see
Subsection 2.2), or by Check (see Subsection 2.3) in accordance with Company’s
payment instructions. The legal relationships, and the related terms and
conditions, between Company and Company’s trading partners will be governed by
the terms of the contracts between Company and Company’s trading partners and
will not be binding on Bank. 


 


1.2                                 Payment
Manager Plus  Enhanced Remittance
Service.  In addition to providing the Payment Manager Service described in Section 1.1
above, Bank will distribute to trading partners designated by Company (“Company’s
Trading Partners) data and/or documents containing related payment remittance
information (the “Documents”). Bank shall deliver the Documents using one or
more of the following delivery channels as designated by Company: general
e-mail; facsimile; secure e-mail; data transmission; and/or paper via U.S. mail
Bank shall provide Company with access to the Electronic Document Delivery
Service database via the Commercial
Electronic Office® (CEO®), portal so that
Customer can set up and maintain distribution channels and information for its
customers. Prior to commencement of the Service, Company must have enrolled in
the CEO Service.


 


1.2.1                        Security Disclaimer
for Facsimile and General E-Mail.  By using the facsimile or unencrypted
general email delivery channels, Company agrees to the following provisions
including waiver of rights and indemnification of Bank in connection with any
losses or damages due to any lack of security of Bank’s unencrypted general
email and facsimile delivery systems used in providing the Services, except to
the extent that such losses or damages are directly caused by Bank’s negligence
or willful misconduct. The provisions of this Subsection 1.2.1 are in addition
to, and not in restriction of, and notwithstanding, any other provision
contained in the Agreement or other Service Documentation.


 


1.2.1.1               Delivery of Files
by the Bank.  Until Bank receives notice to the contrary, Documents sent to Company’s
Trading Partners shall conclusively be deemed to be delivered and received by
Company’s Trading Partners at the time of their transmission. The Bank will
make no effort to confirm that Company’s Trading Partner has received a Document sent under
this Service Description. It is the responsibility of Company to notify Bank
that any Document has not been received.


 


1

















 


1.2.1.2               Liability.  Any act or
omission by Bank that is based upon information or data furnished by Company in
connection with the Service will be at the sole risk of Company and Bank shall
not bear any liability therefor. Bank is not liable for any corruption or loss
of the data contained on a Document after the Document has left Bank’s
facilities. If a Document is lost, destroyed, or damaged by Bank, Bank’s sole
obligation will be to attempt to recover a prior version of the Document from
back-up media, if any, maintained by Bank. If for any reason Bank is unable to
restore the Company’s Document from back-up media, Bank will attempt to restore
the files using data furnished by Company, in which event Bank shall have no
responsibility for the accuracy or completeness of such data provided by Company.


 


1.2.1.3               Record Retention.  Bank and
Company each agree to retain copies of all Files sent and received for a period
of thirty (30) days from the original transmission of any such File. Bank
agrees to retain copies of Documents distributed for a period of 120 days from
original distribution.


 


1.2.1.4               Suspension of
Service.  In the event of any security breach or other emergency with respect to
providing the Service, Bank may suspend the Service effective immediately until such breach or
emergency has been remedied.


 


2.                                      Transmission
of Payments and Related Information.  The following provisions apply when Company uses the Services to
(i) transmit an entry through an automated clearing house (the “ACH”), (ii) issue
a payment order to be sent by wire transfer (a “Wire”), or (iii) issue a
check drawn by Bank on Company’s Account (a “Check”), as applicable, as part of
the Service.


 


2.1                                 ACH Transactions.  The provisions of Bank’s ACH Services
Description, or if separately entered into by Company and Bank, Bank’s
Agreement for ACH Services, and any related Security Procedure Agreement
between Company and Bank applicable to such ACH Services, will in accordance
with their terms govern each domestic and international ACH transaction.
Company acknowledges that international low value payments initiated through
the Services may be credited on or after the stated Value
Date (see Subsection 3.1). Bank will have no liability in the event a low value
payment is not credited to the receiver’s account until after the stated Value
Date.


 


2.2                                 Wire Transactions.  The provisions of Bank’s Wire Transfer
Services Description, or if separately entered into by Company and Bank, the
applicable agreement(s) for wire transfer services, and any security
procedure agreement between Company and Bank applicable to such Wire Services,
will in accordance with their terms govern each domestic Wire transaction In
addition, the following provisions will apply to each international Wire
transaction:


 


2.2.1                        Description. 
Company may request (each a “Transfer
Request”), that Bank transfer U.S. Dollars or Foreign Currency for Company
(each a “Transfer”) into (i) Company’s
accounts with other banks or (ii) third party accounts with other banks.
The amount of each Transfer will be paid through a Payment By Account Debit (as
defined below) unless Company has requested, and Bank has approved, payment
through a payment by Wire.


 


2.2.2                        Information Required for Transfer Requests.  Bank will not be obligated to make any
requested Transfer if there is any discrepancy between the information provided
by Company in the Transfer
Request and other information available to Bank concerning the Transfer Request or matters relating to the
Transfer Request.


 


2.2.3                        Funds Transfer System. 
Bank will determine the funds transfer system to be used when Bank makes each Transfer and the means by which each Transfer will be made.


 


2.2.4                        Making and Paying for Transfers: Coverage by Foreign Exchange Line.  Company understands and agrees that if
Company has been granted a Foreign Exchange Line (see Subsection 3.1) with
sufficient availability to fully cover the amount of a Transfer at the time it


 


2

















 


is to be made, Bank will make the Transfer upon
receipt of the Transfer Request for the Transfer and, in the case of Payment By
Account Debit, Bank will debit the Designated Company Account for the amount of
the Transfer on the Value Date. If any overdraft is created in the Account or
any other account of Company at Bank, or a bank affiliate of Bank, as a result
of a debit for the amount of a Transfer, Company agrees to pay the amount of
the overdraft to Bank, or its affiliate, on demand in
immediately available funds without setoff or counterclaim.


 


2.2.5.                     Making and Paying for Transfers. No Coverage by Foreign Exchange Line.  Company understands and agrees
that if Company has not been granted a Foreign Exchange Line or if there is not
sufficient availability under a Foreign Exchange Line granted to Company to
fully cover the amount of a Transfer at the time it is to be made, Bank will
make the Transfer only if, in the case of Payment By Account Debit, there are
sufficient immediately available funds in the Account to fully cover the amount
of the Transfer at the time it is made, and Bank will debit the Account for the
amount of the Transfer when the Transfer is made. If any overdraft is created
in the Account, or any other account of Company at Bank, or a bank affiliate of
Bank, as a result of a debit for the amount of a Transfer, Company agrees to
pay the amount of the overdraft to Bank, or its affiliate, on demand in
immediately available funds without setoff or counterclaim.


 


2.2.6.                     Bank’s Right to Reimbursement for Transfers.  Company agrees that it will be
liable for, and that Bank may debit the Account, or if it does not then contain
sufficient immediately available funds, any other account of Company at Bank,
or a bank affiliate of Bank, for, or exercise any other right that Bank may
have to obtain reimbursement for, any amount paid by Bank in connection with a
Transfer.


 


2.2.7.                     Reliance on Identifying Bank Number and Account Numbers Provided by
Company.  Company
understands that if a Transfer Request describes the person to receive payment
inconsistently by name and account number (i) payment may be made on the
basis of the account number even if the account number identifies a person
different from the named person or (ii) Bank may in its sole discretion
refuse to accept or may return the Transfer Request. If a Transfer Request
describes a participating financial institution inconsistently by name and
identification number, the identification number may be relied upon as the
proper identification of the financial institution. If a Transfer Request
identifies a nonexistent or unidentifiable person or account as the beneficiary
or beneficiary’s account, a participating financial institution may in its sole
discretion refuse to accept or may return the Transfer Request.


 


2.3                                 Check Transactions.  The following provisions
will apply to each Check issued:


 


2.3.1                        Commercial Account Agreement.  All Checks issued will be subject to the terms and
conditions set forth in Bank’s (or if applicable, Bank’s affiliates’)
Commercial Account Agreement applicable to the Account.


 


2.3.2                        Check Information.  For
each Check, Company will provide Bank with the amount for which the Check is to
be issued, the payee’s name, the payee’s mailing address, the number to be
assigned to the Check, and the date of the Check (each of which are
individually referred to as a “Data Field” and collectively referred to as “Check
Information”).


 


2.3.3                        Files.  Files
containing Check Information entries (“Files”) will be provided to Bank on
media approved of by Bank and will be presented in a computer readable form
that conforms to such format requirements as may from time to time be specified
by Bank. Bank will attempt to notify Company of any entry that rejects by
calling Company at the most recent phone number Bank has for Company in its
records for this Service.


 


2.3.4                        Submission and Processing of Files.  Customer may deliver Files to Bank, and Bank will
acknowledge receipt of Files, twenty-four hours a day, seven day a week.
Payments will be originated by Bank only on days which are Business Days. For
purposes of payment origination, Bank has established an earlier and a later
cutoff time for receipt of Files on each Business Day. Files that are received
by Bank prior to the earlier cutoff time separately disclosed to Company from
time to time will be printed and mailed on the Business Day received if same
day


 


3

















 


check
processing has been selected. Files that are received by Bank prior to the
later cutoff time separately disclosed to Company from time to time will be
printed on the Business Day received and mailed on the next Business Day. Files
received after the later cutoff time will be considered received on the next
Business Day.


 


2.3.5                        File Edits.  Bank
will conduct an edit of each File that it has agreed to receive. The purpose of
this edit is to confirm that the format of the File conforms to the format
requirements initially agreed to by Bank and Company as modified by mutual
agreement from time to time. The edit will not detect erroneous or missing
information.


 


2.3.6                        Incomplete Files; Files Containing Errors.  If a File is missing any Data
Field for any Check described in the File (other than a Data Field for which
the parties have agreed to a default condition), or if Bank has identified any
other error that prevents it from being able to process the File, Bank may
reject the entire File. In that event, Bank will produce an error report and
communicate its contents to Company by calling the number specified in the
Payment Manager Services Set-up Form or otherwise in writing from time to
time by Company. It will be the obligation of Company to resolve errors
identified, and to resubmit the entire File for processing by Bank.


 


2.3.7                        Preparation of Checks.  After
receipt of a File and, if applicable, confirmation by the Bank, Bank’s check
printer will proceed to print the Checks identified in the File. Company
authorizes Bank to supply a drawer’s signature on behalf of Company on each
Check. Provided Company has adhered to the applicable cutoff times, Bank’s
check printer will make a reasonable effort to print all Checks on the day
specified in Paragraph 2.3.4. In signing the Checks, Bank is acting solely as a
representative of Company and is not acting in a personal capacity. Bank’s
obligations with respect to each Check will be limited to that of a drawee
under applicable law, as modified by the terms of the deposit account agreement
applicable to the Account.


 


2.3.8                        Issuance or Delivery of Checks.  Company may instruct Bank to either mail the Checks to the
designated payees or to deliver the Checks to Company. If Company has
instructed Bank to mail the Checks to the designated payees, Bank’s check
printer will make a reasonable effort to mail Checks on the day specified in
Paragraph 2.3.4. If Company has instructed Bank to deliver the Checks to
Company, Bank will make a reasonable effort to send the Checks to Company via
overnight courier on the Business Day after—the Checks are printed. Company
will pay the cost of the overnight courier in accordance with the instructions
separately provided to Company by Bank from time to time.


 


2.3.9                        Positive Pay.  If
Company utilizes Bank’s Positive Pay Service, Company may request Bank to
either (i) update Company’s File of issued and outstanding Checks
maintained with Bank (the “Positive Pay File”) to reflect the Checks identified
in the File, or (ii) provide Company with the information regarding the
Checks identified in the File that will enable Company to update the Positive
Pay File. If Company requests Bank to update the Positive Pay File, it will be
updated on the Business Day that the Checks are printed.


 


2.3.10                  OFAC Compliance.  Bank
will filter all Checks to ensure that no payment is made to an individual,
entity, or government under Office of Foreign Assets Control (“OFAC”) sanction.
Bank will suspend transactions identified as OFAC matches, pending
investigation. If the match is a false positive, the transaction will be
released and processed. If the match is legitimate, the transaction will be
cancelled and Company will be notified.


 


3.                                      International Payments.  The
following provisions apply when Company uses a Service to make international payments in U.S. Dollars or in currencies other
than Dollars (each a “Foreign Currency”) (i) through the ACH, or (ii) by
Wire, as part of the Service. “Transfer” and “Transfer Request” as used below
include transfers originated by either ACH or Wire.


 


3.1                                 Value Date/Foreign
Exchange Line.  As used in this Service Description, the terms (i) “Value Date” means the date on which the receiver in an international ACH transaction or the beneficiary in
an international Wire transaction should receive the payment in normal


 


4

















 


circumstances, and (ii) “Foreign Exchange Line”
means a line of credit granted by Bank to Company, used in connection with the
Service to fund the Account.


 


3.2                                 Exchange Rates for Transfers.  If a Transfer is made in a
Foreign Currency, the amount to be debited to Company’s account with Bank will
be the amount of the Foreign Currency converted to U.S. Dollars at a foreign
exchange rate (each an “Exchange Rate”) determined by Bank, or as otherwise
arranged between Company and Bank. Unless specifically arranged otherwise
between Company and Bank, the Exchange Rate applicable to a Transfer will be
the Exchange Rate in effect at the time Bank makes the Transfer. Exchange Rates
will be updated by Bank from time to time.


 


3.3                                 Credits for Transfers Which Are Not Accepted.  If a Transfer is not completed because
the Transfer was not accepted by the beneficiary of the Transfer or the
beneficiary’s bank or any intermediary bank or for any other reason, Company
understands that Bank will not be liable to return to Company any amounts in
excess of the amount of the Transfer, less any charges or expenses incurred by
Bank with respect to such return. If the Transfer is in a Foreign Currency, the
amount returned to Company will be the amount of such Transfer, less the
charges or expenses incurred by Bank with respect to such return, after the
Transfer has been converted from the Foreign Currency in which it is
denominated to U.S. Dollars at Bank’s buying rate of exchange at the time Bank
learns that the Transfer was not completed.


 


3.4.                              Deadlines for Receiving Transfer Requests.  Transfer Requests must be received
by Bank before the deadlines disclosed to Company from time to time in writing.


 


3.5                                 Unacceptable Transfer Requests.  A Transfer Request may not be
accepted by Bank or the making of a Transfer may be delayed if the making of
the Transfer would (i) if the Transfer is to be paid by Bank debiting the
Account (a “Payment By Account Debit”), exceed the amount of available funds in
the Account to be debited for the making of the Transfer on the day the Account
is to be debited for such Transfer, (ii) require Bank to use a bank not
acceptable to Bank, (iii) cause Bank to violate any applicable laws or
regulations, or (iv) cause Bank to exceed any limitation on its intra-day
net funds position established in accordance with Federal Reserve or other
regulatory guidelines or violate any other Federal Reserve or other regulatory
risk control program. If Bank does not accept a Transfer Request or must delay
making a Transfer, Bank will attempt to notify Company promptly by telephone or
agreed upon electronic message format.


 


3.6                                 Confirmations. If a Transfer is to be paid through a
Payment By Account Debit, Bank will confirm, by an entry on Company’s statement
for the Account, the making of each Transfer by Bank pursuant to a Transfer
Request. If a Foreign Transfer is not to be paid through a Payment By Account
Debit, Bank may, in its sole discretion, but without in any way being obligated
to do so, confirm by a written or electronic advice to Company the issuance of
a Transfer. Company will notify Bank of any erroneous or unauthorized making of
a Transfer as soon as Company learns of it, but in no case later than fourteen
(14) calendar days after Company receives the first (or only) notice from Bank
of the making of the Transfer; provided, however, that if Company does not
receive a notice or an advice of the issuance of a the making of a Transfer,
Company will notify Bank not later than ninety (90) calendar days after the
Transfer was made if such Transfer was erroneous or unauthorized. If Bank
suffers a loss due to an erroneous Transfer because Company failed to notify
Bank as provided in the preceding sentence, Company agrees to reimburse Bank
promptly for the loss.


 


3.7                                 Cancellations and Amendments of Transfer
Requests.  The
provisions of this Services Description applicable to Transfer Requests will
also apply to requests for cancellations of Transfer Requests. To amend a
Transfer Request, the Request must be cancelled and then a new Transfer Request
sent to Bank as provided in this Services Description. After Bank has executed
a Transfer Request, Bank may at the request of Company, but will not be
obligated to, attempt to cancel the Transfer.


 


3.8                                 Attempts to Restrict Acceptance of Transfer
Requests.  Instructions
attempting to restrict Bank’s acceptance of Transfer Requests may only be made
in a writing, sent to Bank by


 


5

















 


facsimile transmission, mail or personal delivery, which is signed by (i) one
or more persons authorized by Company’s resolutions or certifications of
authority to restrict Bank’s acceptance of Transfer Requests or (ii) if
Transfers are to be paid through a Payment By Account Debit, at least one of
the persons authorized to withdraw funds by check from such account on the
account documentation for such account. Such instructions will only be
effective with respect to Transfer Requests received by Bank on the first
Banking Day after Bank receives such instructions.


 


3.9                                 Limitation of Liability and Indemnification.  In addition to and not in
restriction of, and notwithstanding, any other provision contained in the
Agreement or other Service Documentation, in the case of international
payments, Bank will not be responsible for any material losses arising out of,
or in any way connected with requests for cancellations of Transfer Requests,
and/or Bank’s performance of, or failure to perform, the Service except to the
extent that such losses directly result from Bank’s negligence or intentional
misconduct in performing the Service. In addition to the above provisions, and
not in substitution for such provisions, Bank will have no liability in
connection with any receiver’s, beneficiary bank’s or intermediary bank’s
decision to accept or not accept any ACH transaction or Transfer, and in no
event will Bank be liable for the insolvency, neglect, misconduct, mistake or
defalcation of a any receiver’s, beneficiary bank’s or intermediary bank’s in
connection with an ACH transaction or a Transfer.


 


4.                                      Account.  Company
will maintain one or more
deposit accounts with Bank, which (i) with respect to ACH transactions,
will be identified as provided in the ACH documentation referred to in
Subsection 2.1, (ii) with respect to domestic Wire transactions, will be
identified in the Wire documentation referred to in Subsection 2.2, and with
respect to international Wire transactions, will be identified in the Payment
Manager Services Set-up Form, (iii) with respect to Checks, will be
identified in the Payment Manager Services Set-up Form, or in the Service
Documentation applicable to Bank’s Controlled Disbursement Service if Company
has elected to receive Controlled Disbursement Services from Bank or a Bank
affiliate, or with respect to any of the foregoing, as otherwise designated in
writing from time to time (the “Account”).


 


5.                                      Identify
Authorized Persons.  Any person identified by Company in the
Payment Manager Services Set-up Form or any certification, notice or other
communication delivered to Bank may receive information, communications and
notices regarding the Services, and is authorized to transact all business,
make all agreements and sign and deliver all documents in connection with the
Services. If the identity of such a person changes Company will promptly notify
Bank in writing. Bank will have a reasonable time after receipt of a
certification, notice or other communication to act on it.


 


6.                                      Agents.


 


6.1                                 Company’s Use of Agents.  if Company elects to use an agent
with respect to the Services, Company, and not Bank, will be solely responsible
for the acts and omissions of Company’s agent, and its agent will, without
limitation, be authorized to initiate, originate, receive, return, adjust,
correct, cancel, amend and transmit ACH transactions, Wire transfers,
instructions to issue Checks, and
related information and instructions
and select any related security procedure(s). Company agrees that any security
procedure selected by its agent will be treated as commercially reasonable for
all purposes. Bank may rely on instructions it receives from Company’s agent
and need not make any inquiries to verify or confirm that instructions are
within the scope of the agency.


 


6.2                                 Company Agents; Identity and Changes.  Company will certify each agent’s
identity and any changes to Bank in writing. Bank will be fully protected in
relying on each certificate and on the obligation of Company to promptly
certify any change in the agents 


 


6

















 


so certified. Bank will have a reasonable time after
receipt of a certification or change to act on it.


 


6.3                                 Bank’s Use of
Agents.  Bank
may at any time use agents and/or independent contractors to provide all or any
portion of the Services, and will be solely responsible for the acts and
omissions of those agents and independent contractors. However, Bank will not
be deemed to be the agent of, nor responsible for the acts or omissions of any
other person, including without limitation any Federal Reserve Bank, any of
Bank’s foreign correspondent banks, collecting or depository bank, payee or
endorsee, ACH or Wire transmission or communications facility, any receiver or
receiving depository financial institution or gateway operator (including,
without limitation, the return of any funds), and no such person will be deemed
Bank’s agent.


 


7.                                      Data Backup Requirements.  Company
agrees to implement, on a periodic basis not less than weekly, reasonable data
backup-measures. In the event of any failure of the software, hardware or other
equipment, Company will deliver to Bank all data which it would otherwise have
provided that is necessary for Bank to perform Bank’s obligations in connection
with the Services.


 


8.                                      Survival.  The
portions of this Service Description designated 1.2.1, 2.2.4., 2.2.5., 2.2.6., 3.2.,
3.3., 3.9. and 8 will survive termination of the Services.


 


9.                                      Terminology.  Unless
specifically defined in this Service Description, terms used in this Service
Description have the meanings, if any, provided in the Master Agreement for
Treasury Management Services between Bank and Company (referred to in this Service
Description as the “Agreement”) and the other Service Documentation (including,
without limitation, that referenced in Subsections 2.1. and 2.2., paragraph
2.3.10., and Section 4), as amended from time to time.


 





 


7
















 


	
  ACCEPTANCE OF SERVICES

  	
   

  	
  

  
	
   

  



 


Part I - Certification


 


	
   

  	
  Bank: Wells Fargo Bank, N. A.

  	
   

  	
  x
   New
  Agreement

  	
   

  	
  o
  Additional Service

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Each person signing this Acceptance of Services
  (“Acceptance”) certifies that:

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  the undersigned Company has received and agrees to be
  bound by the Service Documentation, as defined in Bank’s Master Agreement
  for Treasury Management Services (“Agreement”), and, if checked below, Bank’s
  Security Procedures, Sweep Services and Credit Sweep Services; 

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  he or she has full authority to execute this Acceptance on
  behalf of Company, to enter into other agreements with Bank for Services now
  or hereafter offered by Bank and to amend, terminate or otherwise act on
  behalf of Company with respect to such agreements and Services; and

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Company’s use of any Service confirms its agreement to be
  bound by the Service Documentation relating to that Service.

  
	
   

  	
   

  	
   

  
	
   

  	
  All terms defined in the Agreement shall have the same
  meaning when used in this Acceptance.

  
	
   

  	
   

  
	
   

  	
  Company’s elections with respect to Security Procedures,
  Sweep Services, and Credit Sweep Services are:

  
	
   

  	
   

  
	
   

  	
  x Yes

  	
  o No

  	
  Security Procedures -ACH. (If yes, go to Part II,
  below)

  
	
   

  	
  x Yes

  	
  o No

  	
  Security Procedures - Wire Transfers. (If yes, go to Part II,
  below)

  
	
   

  	
  o Yes

  	
  x No

  	
  Sweep Services. (If yes, go to Pan III,
  below)

  
	
   

  	
  o Yes

  	
  x No

  	
  Credit Sweep Services. (Obligation
  #         )

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Part II - Security Procedures

  
	
   

  	
   

  
	
   

  	
  A.    Important Information about Security Procedures.

  
	
   

  	
   

  
	
   

  	
  Company understands that when Bank acts on any instruction
  to transfer funds by ACH or wire transfer from accounts Company maintains at
  Bank (each, an “Order”), Bank and any beneficiary’s bank may rely solely on (i) the beneficiary’s account
  number even if it identifies a person different from the named beneficiary,
  and (ii) if provided to Bank, the identification number of any other financial
  institution through or to which the funds are to be transferred, rather than
  the name of the financial institution. Company expressly agrees to be bound
  by any Order, whether or not authorized, issued in its name and accepted by
  Bank in compliance with the security procedure(s) Company has selected
  as indicated below. If Company selects a security procedure that is set forth
  in an Addendum, that Addendum is incorporated in this Acceptance by this
  reference.

  
	
   

  	
   

  
	
   

  	
  B.    Security
  Procedures for ACH Services. (Select Option 1 or Option 2.)

  
	
   

  	
   

  
	
   

  	
  Option 1

  	
  x
  Yes

  	
  o
  No

  	
  Bank’s Standard Security Procedures (as set forth in Bank’s
  ACH Services Security Procedures Agreement that is incorporated in this Acceptance by this
  reference).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  If Company
  elects Bank’s Standard Security Procedures, Company must select one of the
  following Security Procedures:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  x
  Yes

  	
  o
  No

  	
  Internet ACH security procedure.

  
	
   

  	
   

  	
   

  	
  x
  Yes

  	
  o
  No

  	
  Other ACH Services security procedures (If yes, select procedure
  that applies.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  o Token Card/Passcode - File
  Transmission/Batch
  Release

  	
  o Password — File
  Transmission 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  x Secure File Transport 

  	
  o Password
  — Taped or Written Instructions.

  
														



 


1





















 


	
   

  	
  Option 2

  	
  o
  Yes

  	
  o
  No

  	
  Special Security Procedures. Company has refused the
  security procedures set forth in Option 1 above. Instead Company has
  requested use of the security procedure(s) set forth in the Addendum.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Individual(s) authorized to receive
  information regarding the ACH security procedure selected above:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name

  	
  Chris A. Larsen

  	
   

  	
  Name

  	
  J.P. Whelan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C. Security Procedures for Wire
  Transfer Services. (Select Option 1 or Option 2.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Option 1

  	
  x
  Yes

  	
  o
  No

  	
  Bank’s Standard Security Procedures (as set forth in Bank’s
  Wire Transfer
  Services Security Procedures Agreement that is incorporated in this
  Acceptance by this reference).

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  In addition to Bank’s Standard Security
  Procedures, Company has selected the following security procedures:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  o
  Yes

  	
  o
  No

  	
  Security Procedure for Telephone
  Verification (voice-initiated Orders only). Voice-initiated, non-repetitive Orders exceeding $     will be subject to telephone verification.
  (If no amount is designated, $500,000 will be used.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  x
  Yes

  	
  o
  No

  	
  Security Procedure for Commercial
  Electronic Office® (“CEO®”) Wire Transfer Service (or WellsNet® Wire Transfer
  Service.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  x
  Yes

  	
  o
  No

  	
  Security Procedures for Electronic
  Commerce/Payment Manager Services (If yes, select procedure that
  applies.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  o            Password - File Transmission
  (Non-encrypted).  (This procedure requires
  that a unique eight-digit code separately agreed upon in writing by Company
  and Bank be presented with Company’s wire file. Company may be required to
  change the code on a regular basis.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  x           Secure File Transport (Encrypted).  (This procedure uses 128-bit Secure Sockets Layer
  encryption and requires the use of a transmission ID and a transmission
  password. Use of a digital certificate is optional.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Option 2

  	
  o
  Yes

  	
  x
  No

  	
  Special Security Procedures. Company has refused the security procedures set forth in Option 1, above.
  Instead Company has requested use of the security procedure(s) set forth
  in the Addendum.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Individual(s) authorized to receive
  information regarding the Wire Transfer security procedure selected above:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  	
  Name

  	
   

  	
   

  
												



 


2





















 


	
   

  	
  Part III -
  Sweep Services

  
	
   

  	
   

  
	
   

  	
  A.            IMPORTANT DISCLOSURES

  
	
   

  	
   

  
	
   

  	
  General. The investment instruments
  below that are offered, sold, or placed by Bank are not deposits in or
  obligations of, and are not guaranteed by, Bank or any affiliate (except for
  Repurchase Agreements, see below); are not insured by the FDIC, the
  Securities Investors Protection Corporation, or the United States of America;
  and are subject to investment risk including possible loss of principal
  invested or the nonpayment of interest. Yields vary with market conditions.
  Past performance is no guarantee of future results. Bank makes no
  representation or warranty as to the suitability or safety with respect to
  any investments.

  
	
   

  	
   

  
	
   

  	
  Electronic Delivery. Confirmations and/or
  Statements will be sent to Company by electronic means unless otherwise requested by Company.
  Electronic means include the Commercial Electronic Office®, facsimile or Secure
  E-Mail.

  
	
   

  	
   

  
	
   

  	
  Mutual Funds. Wells Fargo Funds
  Management, LLC, a wholly-owned subsidiary of Wells Fargo & Company,
  provides investment advisory and administrative services for the Wells Fargo
  Advantage FundsSM. Other affiliates of Wells Fargo & Company
  provide sub-advisory and other services for the Funds. The Funds are
  distributed by Wells Fargo Funds Distributor, LLC, Member NASD/SIPC, an
  affiliate of Wells Fargo & Company. Fees for such services are
  disclosed in the prospectuses for these Funds. Bank may act as agent or as principal for Company
  for mutual fund transactions.

  
	
   

  	
   

  
	
   

  	
  For more
  complete information about the Wells Fargo Advantage Money Market Funds,
  obtain a current prospectus by contacting your Treasury Management sales
  officer, relationship or other manager or Institutional Brokerage & Sales
  representative. Consider the investment objectives, risks, charges and
  expenses of the investment carefully before investing. This and other
  information about the Wells Fargo Advantage Funds can be found in a current
  prospectus. Please read it carefully before investing.

  
	
   

  	
   

  
	
   

  	
  An investment in a money market fund is not insured or
  guaranteed by the Federal Deposit Insurance Corporation or any other
  government agency. Although the Wells Fargo Advantage Money Market Funds seek
  to preserve the value of your investment at $1.00 per share, it is possible
  to lose money by investing in a money market fund.

  
	
   

  	
   

  
	
   

  	
  Eurodollar Sweep. Funds invested in the
  Eurodollar Sweep account are not domestic bank deposits, are not insured by
  the Federal Deposit Insurance Corporation and are not guaranteed by the
  United States government or any agency thereof.

  
	
   

  	
   

  
	
   

  	
  Repurchase Agreements. Repurchase Agreement
  transactions are obligations of, but not deposits with, the repurchase
  counterparty (Bank or affiliates).

  
	
   

  	
   

  
	
   

  	
  Government Sponsored Enterprises (“GSE”). Bank will act as principal
  for all GSE transactions. Discount notes and other short-term obligations
  issued by GSE’s are obligations of their respective issuers. The obligations of such
  issuers are
  not obligations of, nor are they guaranteed by the United States of America.

  
	
   

  	
   

  
	
   

  	
  B.            DESIGNATION OF INVESTMENT
  INSTRUMENTS

  
	
   

  	
   

  
	
   

  	
  Company
  designates the following investment instruments (Select only one per checking
  account):

  
	
   

  	
   

  
	
   

  	
  o
  Yes

  	
  x
  No

  	
  OVERLAND EXPRESS® SWEEP. (Wells Fargo Overland
  Express Sweep Fund)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  o
  Yes

  	
  x
  No

  	
  INVESTACCOUNT®. In addition to this
  Acceptance and the Service Description, a Master Repurchase Agreement must be
  completed and signed.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  o
  Yes

  	
  x
  No

  	
  EURODOLLAR SWEEP. 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  o
  Yes

  	
  x
  No

  	
  CORRESPONDENT FED FUNDS SOLD. In addition to this Acceptance
  and the Service Description, a Federal Funds Sale Agreement-Principal
  Only-Sweep letter must be completed and signed.

  



 


3





















 


	
   

  	
  o
  Yes

  	
  x
  No

  	
  CORPORATE CASH MANAGEMENT ACCOUNT
  (“CCMA”). In addition to this Acceptance and
  the Service Description, a Master Repurchase Agreement must be completed and
  signed and each field, below, must be completed.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ·

  	
  Government Sponsored Enterprise
  Investment elections (You must select at least two)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
  Federal Farm Credit Bank (“FFCB”)

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
  Federal Home Loan Bank (“FHLB”)

  
	
   

  	
   

  	
   

  	
   

  	
  o

  	
  Federal National Mortgage Association (“Fannie Mae”)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ·

  	
  Concentration Account Elections

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  The Concentration Account, Interest Account and Specified
  Balance listed below are subject to Bank’s Corporate Cash Management
  Account Service Description.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Concentration Account Name

  	
  Account Number

  	
  Specified Balance

  (if desired)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $                              

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Interest Account Name

  ((May be the Concentration

  Account)

  	
  Account Number

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Agreed To and Accepted By:

  
	
   

  	
   

  
	
   

  	
  Company:

  	
  P2P Credit, Inc.

  	
  

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christian A. Larsen

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Christian A. Larsen

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
												



 
















 


Exhibit I


 


Bank Secrecy Act Policy


 

















 


Exhibit I


 


Anti-Money Laundering


And


Bank Secrecy Act Policy


 


Prosper Marketplace, Inc.


111 Sutter Street, 22nd Floor


San Francisco, CA 94104


 


	
  Version Control

  
	
   

  
	
  Owner/Individual Responsible for Maintaining
  Policy:

  
	
   

  
	
  Director of Compliance,
  Prosper Marketplace, Inc.

  
	
   

  
	
  Last Revised: 
  April 8, 2008

  



 

















 


Background


 


Prosper
Marketplace, Inc. (“Prosper”) provides a person-to-person online credit
auction platform that facilitates loans to borrowers with interest rates set
through auction-style competitive bidding among individuals or institutions
willing to commit their funds to loans. Prosper is committed to complying with
applicable provisions of the Bank Secrecy Act (“BSA”) and all applicable
anti-money laundering (“AML”) regulations.


 


·      All loans originated through the Prosper marketplace
are made by WebBank, a Utah-chartered Industrial Bank.  Prosper provides
services to WebBank in connection with the origination of such loans (the “Program”)
and Prosper services loans made to Prosper borrowers on behalf of registered
Prosper lenders who purchase such loans. In connection with the Program,
Prosper will develop, administer, and maintain the following program for
compliance with the BSA, including record keeping and reporting requirements.


 


1)    Bank
Secrecy Act


 


The
BSA requires banks and other institutions vulnerable to money laundering to
take a number of precautions against financial crime.  Specifically, the act requires financial
institutions to keep records of cash purchases of negotiable instruments, file
reports of cash transactions exceeding $10,000 (daily aggregate amount), and to
report suspicious activity that might signify money laundering, tax evasion, or
other criminal activities.


 


Financial
institutions’ reports are submitted to the U.S. Department of the Treasury’s
Financial Crimes Enforcement Network (“FinCEN”). FinCEN collects and then
analyzes the information submitted to support law enforcement investigations
and provide U.S. policy makers with strategic analyses of domestic worldwide
money laundering developments, trends, and patterns.


 


a.    Currency Transaction Reports


 


A
Currency Transaction Report (“CTR”) must be completed and filed any time a
financial institution engages in a “transaction in currency” that exceeds $10,000.  Under the BSA, only “transactions in currency”
must be reported.  According to the law,
a “transaction in currency” occurs every time a person or a business deposits,
withdraws or exchanges more than $10,000 in cash.


 


1

















 


Used
in this context, “currency” means the coin and/or paper money of any country
that is designated as legal tender by the country of issuance. This definition
only includes physical transfers of cash, either in or out of a financial institution.  The transaction must involve actual currency
in order to be reportable.  Deposits or
withdrawals by check and other non-cash transactions are not subject to the CTR
filing requirement.


 


Also,
CTRs are only triggered if a physical transfer or exchange occurs.  As a result, transfers between accounts, wire
transfers, and other operational transactions that do not involve the physical
transfer of cash are not subject to CTR filing requirements.


 


Prosper
is an entirely online business (does not have physical branch locations) and
does not deal in cash.  Once a loan is
fully funded, proceeds equal to the amount of the loan are disbursed into the
borrower’s designated deposit account using the Automated Clearing House (ACH)
network for transmission of the funds. 
Borrowers can make monthly payments on their loan either through an
electronic funds transfer (EFT) or bank draft. 
Prosper does not accept cash payments for loans.  Once the Borrower has made a payment on
his/her loan, Prosper passes along the funds (minus any applicable fees) to the
loan purchaser (“Lender”) via an ACH transfer. 
Prosper does not engage in physical transfers or exchanges of funds.


 


2)    Customer
Identification


 


In
response to the September 11, 2001 terrorist attacks, Congress passed the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act (“Patriot Act”). Title III of the Patriot
Act is the International Money Laundering Abatement and Anti-Terrorist
Financing Act of 2001. Among other things, Section 326 of the Patriot Act
supplemented the existing BSA framework by strengthening customer
identification procedures and established minimum procedures for identification
verification for all new accounts.


 


a.      Definitions


 


For
purposes of this Policy, the following terms have the same meanings as those
found in the Department of Treasury’s CIP Regulations (see 31 CFR §
103.11 and 103.121). 
Specifically:


 


i.              Account.  Account means a formal
banking relationship established to provide or engage in services, dealings, or
other financial transactions including a deposit account, a transaction or
asset 


 


2

















 


account, a credit account, or other extension of credit. Account also
includes a relationship established to provide a safety deposit box or other
safekeeping services, or cash management, custodian, and trust services.


 


ii.             Customer.  A Customer is (A) A
person that opens a new account; and (B) An individual who opens a new
account for: (1) An individual who lacks legal capacity, such as a minor;
or (2) An entity that is not a legal person, such as a civic club.  For purposes of this definition, a customer
can be an individual, corporation, partnership, trust, estate, joint stock company,
association, syndicate, joint venture, other unincorporated group, certain
Indian Tribes, or any recognized legal entity. 
A customer does not include a person that has an existing account with
the financial institution, provided that the institution has a reasonable
belief that it knows the true identity of the person.


 


Prosper
has two types of customers: Borrowers and Lenders. Borrowers may be any person
who is a U.S. resident in a state where Prosper is licensed or otherwise
authorized or permitted to lend.  Only
individuals (i.e., not groups or corporate entities) can borrow money.  Lenders can be any person who is a U.S.
resident with a bank account and a Social Security number or any institution
with a taxpayer identification number. Therefore, lenders can be either an
individual or an organization/business.


 


b.      Identification of Customers


 


When
a customer registers for an Individual Account, Prosper obtains his or her
name, Social Security number, and date of birth. In addition, Prosper obtains
the following information:


·      Primary address (either a
residential address or a military APO/FPO address);


·      Mailing Address, if
different from primary address;


·      Contact phone number;


·      Contact email address; and


·      Routing number and account
number of preferred bank account.


 


When
a customer registers for a Corporate Account, Prosper obtains the above
information for an agent acting on behalf of the corporation, but also requests
their Taxpayer Identification Number (TIN) and Articles of Incorporation showing
the individual to be an authorized agent for the organization.


 


3

















 


Registration
cannot be completed nor can an account be opened without this information being
provided.


 


Documents
are not typically required during registration, but may be requested based on
certain risk triggers, such as when verification fails or prior to the customer’s
first financial transaction.


 


c.      Verification of Customer Identity


 


Prosper
employs a variety of non-documentary methods during the account set-up process
and prior to the first financial transaction to verify the identity of the
customer.


 


The
following section details the procedures Prosper uses to verify a Customer’s
identity.


 


i.      At the time a Customer
registers for a Prosper Account:


 


·      Email Verification: Prosper sends
an email to the Customer at the email address he/she enters at the time of
registration.  This email contains a
security code that must be entered to activate the account. Only customers who
receive this email and enter the security code can successfully open an
account.


 


·      Verification of Personally Identifiable
Information: Prosper verifies Personally Identifiable  Information (“PII”) provided by the customer against data
on file with credit reporting agencies and other identity and anti-fraud
verification databases.  In order to pass
the verification, the Customer’s PII must have an acceptable degree of
matching.  If the relative degree of
matching is not sufficient, the Customer may be verified through Knowledge-Based
Authentication.


 


·      Knowledge-Based Authentication: depending on
the degree of matching of the customer information provided to the identity and
anti-fraud verification databases, the customer may be asked a series of
personal questions supplied from an identity database. These questions are
designed so that only the actual individual to whom they pertain would know the
appropriate responses.  Prosper then
checks the Customer’s answers against an identity database and a risk score is
calculated which is used to:


·      Deny the account opening request;


·      Recommend additional documentary verification; or


 


4

















 


·      Allow the account to be opened.


·      Note: If the account is opened, this risk score will
continue to be associated to the account and will be included in transaction
decisions.


 


Prosper
uses a risk-based approach to the level of verification a Customer undergoes,
as additional verification measures are taken depending on the accuracy of the
information the Customer provides and the type of transactions the Customer initiates.


 


ii.     At the time a
Customer requests a loan, the following additional verification steps may be
requested:


 


·      Address Verification: a security
postcard containing an address verification code is sent to the customer input
mailing address. In order to receive a loan, the customer must retrieve the
postcard and enter the code prior to loan origination.


 


·      Bank Account Ownership Verification: Prosper takes
reasonable steps to verify that the Customer is an authorized owner of the bank
account to which loan funds will be transferred. Depending on the bank the
Customer uses, Prosper will either:


·      Call the bank’s verification team to confirm
ownership; or


·      Request a check or bank statement from the customer
that lists them as the named owner of the account.


 


·      Employment Verification: Based on risk
characteristics of the loan request, some applicants are flagged for employment
verification. Once flagged for employment verification, Prosper will attempt to
confirm the applicant’s employment status by contacting the named
employer.  Some applicants may also be
asked to provide documented employment verification.


 


·      Income Verification: Some
Customers requesting a loan are flagged for income verification. Income
verification is completed by document verification and may require the Customer
to provide a copy of their paystub and previous year’s W2.


 


·      Phone Verification/Fraud Screen: Some accounts
requesting a loan are flagged for phone verification and/or fraud screen. Phone
Verification is completed by database look-up of the phone number owner
information and/or direct contact with the 


 


5

















 


customer via the input
phone. Additional fraud screening may be employed when the customer is on the
phone.


 


A
Customer’s failure to pass any of the above verification procedures will result
in:


·      Denial of the loan request;
and/or


·      Escalation for document
verification.


 


iii.       When a Customer wishes to
become a Lender, Prosper will utilize the following additional verification
processes:


 


·      Bank Account Access Verification: If available,
the prospective Lender can provide Prosper with their online bank account
username and password for the account from which they intend to transact.  This information is used to establish the
ability to access (and therefore ownership over) the account.  Where this type of verification is not
available, or if the prospective Lender prefers, Prosper will verify bank
account access using Micro-Deposit Verification (“MDV”). During MDV, a small
deposit and a small withdrawal are made from the Customer’s bank account. The
prospective Lender is then asked to provide the amounts of the deposit and
withdrawal.


 


·      Bank Account Ownership Verification: Prosper takes
reasonable steps to verify that the Customer is an authorized owner of the bank
account to which loan funds will be transferred. Depending on the bank the
Customer uses, Prosper will either:


·      Call the bank’s verification team to confirm
ownership; or


·      Request a check or bank statement from the customer
that lists them as the named owner of the account.


 


A
Customer’s failure to pass any of the above verification procedures will result
in:


·      Denial of the Customer’s
request to set up a Lender account; and/or


·      Escalation for document
verification.


 


d.      Screening Against Government
Lists


 


As
part of the Identity Information Verification Process, information provided by
the Customer is cross-checked against federal government agency lists of known
or suspected terrorists or terrorist organizations.  


 


6

















 


This
includes the Office of Foreign Assets and Control’s (“OFAC”) Specially
Designated Nationals list.


 


Where
there is a positive match to any individual on the list, Prosper will deny the
individual’s request to open an account.


 


e.      Verification of Customer Identity
via Documentary Methods


 


At
any point during the registration or account set-up process, a Customer can be
flagged for document verification based on pre-determined risk factors. If an
account is flagged, Prosper will send the Customer a request to provide the
following documents:


 


·      Driver’s License or Government-Issued Identity Card


·      Voided Check or Bank Statement


 


Additionally,
depending on the Identity Information Verification results and the riskiness of
the financial transaction, the customer may be asked to supply the following:


 


·      Social Security card


·      Utility Bill or Bank Statement showing primary
Address


·      Current Pay Stub and their most recent W2.


·      Military ID card and Orders of Deployment


 


Failure
to provide sufficient documents in response to Prosper’s request will result
in:


 


·      Denial of the account request


·      Denial of the transaction request and/or suspension
of the account


 


f.       Recordkeeping


 


A
record for each Customer that includes all identifying information must be made
and maintained for five years after the Customer’s Account is closed or becomes
dormant.  A record for each Customer
includes:


(1)           a description of any document used for verification
of identity, including any identification number, place of issuance and, if
any, the date of issuance and the expiration date;


 


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(2)           a description of the methods and results of any
non-documentary measures undertaken to verify the identity of the Customer; and


(3)           a description of the resolution of any substantive
discrepancy discovered when verifying the identifying information obtained from
a Customer must be made and maintained for five years after the record was
made.


 


g.      Customer Notice


 


Section 326
of the PATRIOT Act requires financial institutions to provide customers with
adequate notice that the information being requesting is to verify their
identities.


 


Prosper’s
process requires customers who are registering as borrowers or lenders to
expressly authorize Prosper and WebBank to obtain information the customer’s credit
profile with the Experian credit bureau to confirm the customer’s identity to
avoid fraudulent transactions in the customer’s name.


 


Additionally,
Prosper provides the following Notice of Customer Information Program in
accordance with regulations implementing Section 326:


 


IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT


 


To
help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account.


 


What
this means for you: When you open an account, we will ask for your name,
address, date of birth, and other information that will allow us to identify
you.


 


We
may also ask to see your driver’s license or other identifying documents.


 


3)       Office of Foreign Assets and
Control Policy


 


Historically,
the U.S. Government has used economic sanctions as a tool against foreign
governments, some of which have been identified as supporting terrorism. Since
1995, the U.S. Government has also used 


 


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economic
sanctions as a tool against international terrorist organizations, marking a
significant departure from the traditional use of sanctions against countries
or regimes. Following the events of September 11, 2001, President Bush
issued Executive Order 13224, significantly expanding the scope of U.S.
sanctions against international terrorists and terrorist organizations. The
combination of programs targeting international terrorist organizations with
those targeting terrorism-supporting governments constitutes a wide-ranging
assault on international terrorism and its supporters and financiers.


 


The
lead office for implementing sanctions with respect to assets of international
terrorist organizations and terrorism-supporting countries is the Department of
the Treasury’s Office of Foreign Assets Control (“OFAC”).  OFAC administers and enforces economic
sanctions programs primarily against countries and groups of individuals, such
as terrorists and narcotics traffickers. The sanctions can be either
comprehensive or selective, using the blocking of assets and trade restrictions
to accomplish foreign policy and national security goals.


 


In
general, these regulations:


 


·      Require blocking of accounts and other assets of
specified countries, entities, and persons.


·      Prohibit unlicensed trade and financial transactions
with specified countries, entities, and persons.


 


Prosper
sends all new account information to Experian’s Authentication Service, which
provides a flag indicating that a new account contains a possible match to the
OFAC Specially Designated Nationals (“SDN”)  List. Pursuant to their services, Experian
holds responsibility for maintaining a current OFAC list.  Possible matches to the list are flagged for
manual review by a verification agent. Where manual verification fails, Prosper
will:


 


·      Deny the account request;


·      Deny the transaction request; and/or


·      Suspend the account.


 


All
customers opening accounts with Prosper are sent through this process.


 


Prosper
will keep a full and accurate record of each rejected transaction for at least
five years after the date of the transaction, and, for blocked property
(including blocked transactions) records will be maintained for 


 


9

















 


the
period the property is blocked and for five years after the date the property
is unblocked.


 


4)       Know Your Customer Policy


 


Prosper
takes a risk-based approach to the customer diligence process.  These procedures allow Prosper to form a
reasonable belief that it knows the true identity of its customers.  A Customer that fails any stage of the
outlined verification procedures, or that exhibits other risk factors, is
manually reviewed by Prosper’s Risk team. 
This team has the ability to request additional information and/or
documentation on a case-by-case basis.  Additionally,
all bidders on loans are verified as part of Prosper’s Lender Registration
process, which obtains sufficient data to develop an understanding of normal
and expected activity for the Customer’s occupation or business operations.  The individuals performing these reviews are
trained to recognize key risk factors for money laundering.


 


Specifically,
Prosper recognizes the following risk factors:


 


For
Loans:


Identity
Verification Results (Match to Data & Answers to Questions)


Loan
Size


Credit
Data


Login
Behavior


Social
Criteria (whether the Customer is a part of a Prosper Group, has registered
Prosper “Friends,” the Customer’s relationship to other Prosper members, etc.)


 


For
Transfers:


Identity
Verification Results (Match to Data & Answers to Questions)


Transfer
Amount


Source
of Funds


Login
Behavior


Social
Criteria (whether the Customer is a part of a Prosper Group, has registered
Prosper “Friends,” the Customer’s relationship to other Prosper members, etc.)


 


Much
of the Customer Due Diligence (“CDD”) information is confirmed through an
information-reporting agency, bank verification, and correspondence and
telephone conversations with the customer. Additional steps Prosper takes may
include obtaining third-party references or researching public information (e.g.,
on the Internet or commercial databases). 
Prosper’s CDD processes includes periodic risk-


 


10

















 


based
monitoring of the customer relationship to determine whether there are
substantive changes to the original CDD information (e.g., change in employment
or business operations).


 


Customer
Due Diligence policies, procedures, and processes should be commensurate with
the institution’s BSA/AML risk profile, paying particular attention to
high-risk customers.  Based on FFIEC
guidance, Prosper’s anti-money laundering risk is relatively low because
Prosper offers limited products and services, loans are made to individuals
only, and its services are limited to residents of the United States (Prosper
does not allow international or foreign correspondence accounts).


 


5)      Suspicious
Activity Monitoring and Reporting


 


Banks
are required to report suspicious activity that may involve money laundering,
BSA violations, terrorist financing, and certain other crimes above prescribed
dollar thresholds.


 


Any
customer or transaction that fails any stage of Prosper’s verification
procedures or that exhibits other risk factors is manually reviewed by Prosper’s
Risk team.  As a part of this process, if
Prosper knows, suspects, or has reason to suspect, (1) insider abuse (in
any amount), or (2) any suspicious transaction involving a violation of
federal law of $5,000 or more, Prosper will aid WebBank in filing its
Suspicious Activity Report (“SAR”) by providing sufficient information for
WebBank to complete its Treasury Form TD F 90-22.47.


 


Prosper
will develop and maintain sufficient operational procedures to allow its
employees to identify red flags for suspicious activity, including when
transactions are:


 


·      Obtained from illegal activity


·      Intended or conducted to hide or disguise funds or
assets derived from illegal activity


·      Designed to evade any reporting requirements of the
Bank Secrecy Act (BSA)


·      Transacted with no business or lawful purpose


·      Not the sort the customer normally engages


·      Prosper knows of no reasonable explanation for the
transaction after examining available facts including the background and
possible purpose of the transaction


 


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Prosper,
its directors, officers, employees, and agents will not notify any person
involved in the suspicious transaction that information has been provided to
WebBank for purposes of filing a SAR, or that a SAR has been reported.


 


Prosper
shall retain the information provided to WebBank for the purposes of filing
SARs and any supporting documentation for five (5) years from the date the
information was reported.


 


6)      FinCEN
Information Requests


 


Section 314(a) of
the PATRIOT Act allows law enforcement agencies to work in conjunction with
Financial Crimes Enforcement Network (“FinCEN”) to require a financial
institution to search its records to determine whether it maintains or has
maintained accounts for, or has engaged in transactions with, any specified
individual, entity, or organization.


 


When
WebBank receives an information request, Prosper will conduct a one-time search
of its records to identify accounts or transactions of a named suspect.  Prosper will search its records for current
accounts, accounts maintained during the preceding 12 months, and transactions
conducted outside of an account by or on behalf of a named suspect during the
preceding six (6) months.  Because
WebBank must report any positive matches to FinCEN within 14 days, Prosper will
search its records and report to WebBank within 5 days of its receiving notice
from WebBank.  No details should be
provided to WebBank or FinCEN other than the fact that Prosper has identified a
match.  Although WebBank is not required
to file a negative response with FinCEN, Prosper will notify WebBank of its
scan results regardless of the outcome.


 


Section 314(b) of
the PATRIOT Act encourages financial institutions and associations of financial
institutions located in the United States to share information in order to
identify and report activities that may involve terrorist activity or money
laundering.  If WebBank chooses to
voluntarily participate in section 314(b), Prosper will follow the same procedures
for reviewing and evaluating its records and notifying WebBank of the results
as for 314(a) requests.


 


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