Document:

Exhibit 10.7

 

Prosper-Folio Software License Agreement

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (this “Agreement”) is made and entered into as
of March 3, 2009, by and between Prosper Marketplace, Inc., a
Delaware corporation, (“Prosper” or “Licensor”) and FOLIOfn Investments, Inc.,
a broker-dealer registered under the Securities Exchange Act of 1934, as
amended, and organized under the laws of the Commonwealth of Virginia (“Licensee”).

 

RECITALS

 

A.            Licensor owns
certain rights relating to the Licensed Property (as defined below).

 

B.            Licensee desires to
utilize the Licensed Property in connection with the Business (as defined
below).

 

C.            Licensor and
Licensee have entered into that certain Services Agreement of even date
herewith, pursuant to which Licensor has agreed to provide certain services to
Licensee in connection with the Business (as defined below) (“Services
Agreement”).

 

D.            Licensor and
Licensee have entered into that certain Hosting Services Agreement of even date
herewith, pursuant to which Licensee has agreed to host the Licensed Property
for Licensor’s exclusive use in connection with the Business (“Hosting Services
Agreement”).

 

E.             On the terms and subject to
the conditions hereafter set forth, Licensee desires to obtain from Licensor,
and Licensor is willing to grant to Licensee, the rights and licenses described
below.

 

NOW THEREFORE, in consideration of the mutual covenants contained
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

 

1.             Certain
Definitions.  As used in this
Agreement, the following terms have the meanings set forth below:

 

“Affiliate” shall mean, as to any Person, any other Person that,
directly or indirectly, controls, is under common control with, or is
controlled by, that Person.  For purposes
of this definition, “control” (including, with its correlative meanings, the
terms “controlled by” and “under common control with”), as used with respect to
any Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.

 

“Business” shall mean the operation of an alternative trading system
for the trading of certain notes issued by Prosper by members of the Prosper
Internet-based social lending platform who also are customers of Licensee.

 

“Documentation” shall mean Licensor’s printed and electronic
documentation, manuals, and instructions relating to the operation of the
Licensed Software which Licensor delivers to Licensee hereunder.

 

“Effective Date” shall mean the date of this Agreement as set forth in
the preamble hereof.

 

“Enhancements” shall mean modifications to the Licensed Software
requested by Licensee that add significant features to it, including new
functionality, capabilities, services and links to Third Party Software, to be
delivered by Licensor to Licensee.

 

“Intellectual Property” shall mean all (i) patents, patent
applications, patent disclosures, certificates of invention and any related
continuations, continuations-in-part, divisionals, reissues or reexaminations; (ii) trademarks,
service marks, trade dress, Internet domain names, logos, trade names and
corporate names and registrations and applications for registration thereof; (iii) copyrights
and registrations and applications for registration thereof; (iv) mask
works and registrations and applications for registration thereof; (v) computer
software, data and documentation; (vi) inventions, trade secrets and
confidential business information, whether patentable or nonpatentable and
whether or not reduced to practice, know-how, manufacturing and product 

 

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processes and techniques, research and development information,
copyrightable works, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists and
information; and (vii) copies and tangible embodiments thereof.

 

“Licensed Property” shall mean the Documentation and the Licensed
Software.

 

“Licensed Software” shall mean that computer software listed on Exhibit A
hereto, together with all Updates and Enhancements.

 

“Object Code” shall mean (i) machine executable programming
instructions, substantially in binary form, which are intended to be directly
executable by an operating system after suitable processing and linking but
without the intervening steps of compilation or assembly, or (ii) other
executable code (e.g., programming instructions written in procedural or
interpretive languages).

 

“Patch” means additional or revised software designed to correct an
identified problem with the Software.  A
Patch may include revised Documentation.

 

“Person” shall mean a natural person, sole proprietorship, corporation,
general partnership, limited partnership, limited liability partnership,
limited liability company, joint venture, unincorporated organization, joint
stock company, trust, estate, governmental entity or other entity.

 

“Source Code” shall mean the human readable form of Object Code and
related system documentation, including comments, procedural language and
material useful for understanding, implementing and maintaining such
instructions (for example, logic manuals, flow charts and principles of
operation).

 

“Third Party Software” shall mean software that is incorporated into or
bundled with the Licensed Software but that is not owned by Licensor.

 

“Update” means any, correction, bug fix or modification to the Licensed
Software other than an Enhancement to be delivered by Licensor to Licensee.

 

2.             License.

 

2.1           Grant of License.  On the terms and subject to the conditions of
this Agreement, Licensor hereby grants to Licensee, subject to termination as
provided herein, an exclusive, non-sublicensable, non-transferable (except as
provided herein), royalty-free right and license to use, display and operate
the Licensed Software in Object Code form solely for Licensee’s commercial
purposes in conducting the Business. 
Licensee shall have no right to use the Licensed Property for any
purpose outside the Business.

 

2.2           Restrictions.  Licensee shall not: (i) copy, reverse
compile, disassemble, or reverse engineer any portion of Licensed Software, (ii) remove
any production identification, copyright notices or proprietary indications
from the Licensed Property, (iii) disclose results of any benchmark test
of the Licensed Software to any third party without Licensor’s prior written
approval or (iv) disclose, distribute or publish any portion of the
Licensed Property.

 

2.3           No Other Rights.  Except as provided in this Section 0,
nothing in this Agreement shall be deemed to grant any license or rights in any
other technology, products or services to Licensee except for rights
specifically granted herein with respect to the Licensed Property.  Licensee has no right to utilize or dispose
of any Licensed Property beyond the scope of this Section 0.

 

2.4           Exclusivity.  Licensee (or any Affiliate of Licensee) may,
in its sole discretion, develop or operate an alternative trading system (or
similar exchange or system) for the trading of notes or securities by members,
participants, subscribers (or persons of a similar nature) of an Internet-based
social lending platform (howsoever described) that directly or indirectly
competes with Licensor.

 

3.             Condition to Agreement. Licensor has
filed an S-1 registration statement with the U.S. Securities and Exchange
Commission (“SEC”) and has filed similar registration statements at the state
level, describing the platform for the purchase and sale of receivables, in
order to activate its platform for the offering and sale of receivables.
Licensee has filed a form ATS with the SEC seeking authorization to operate a
marketplace for the secondary trading of notes issued pursuant to the S-1
registration statement. The 

 

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obligations of Licensor and Licensee under this Agreement shall not
commence or become effective until the later of (i) the date that Licensor’s
S-1 registration statement filed with the SEC becomes effective and (ii) the
date that the form ATS is approved by the SEC (the “Effective Date”). The
parties further understand and agree that after the effectiveness of such
filing, bids from Licensor’s lender members may not be made by residents of a
state that has not declared Prosper’s registration statement effective in such
state.

 

4.             Updates and Enhancement of
Licensed Software.

 

4.1           No Right to
Modify.  Licensee shall not, without
the prior written approval of Licensor in each instance, modify, correct or
change the Licensed Property in any respect.

 

4.2           Updates and
Enhancement. Licensor will update and enhance the Licensed Software, from
time to time and in its sole discretion. 
This Agreement shall apply to all such Updates and Enhancements during
the term of this Agreement.

 

5.             Rights in Intellectual
Property.

 

5.1           Reservation of
Rights.  Except as otherwise
expressly granted herein, this Agreement does not transfer from Licensor to
Licensee any Intellectual Property and all right, title or interest in or to
the Licensed Property, or in or to any Intellectual Property of Licensor
therein, shall remain solely with Licensor. 
Except for the rights expressly granted herein, this Agreement does not
transfer from Licensee to Licensor any Intellectual Property and all right,
title or interest in or to any Intellectual Property of Licensee will remain
solely with Licensee.    Licensor and
Licensee each agree that it will not, directly or indirectly, reverse engineer,
decompile, disassemble or otherwise attempt to derive source code or other
trade secrets from the other party.

 

5.2           Licensee
Developments.  Licensee shall own
Intellectual Property only to the extent that it independently develops or
acquires such Intellectual Property and that it does not infringe on the
Licensed Property, or any Updates or Enhancements to the Licensed Software by
it (“Licensee Developments”).

 

5.3           Benefit.  All use of the Licensed Property shall inure
to the benefit of Licensor, or, as applicable, its suppliers.

 

5.4           Injunctive Relief.  Because unauthorized use, disclosure or
transfer of the Licensed Property will diminish substantially its value and
irrevocably harm Licensor, if Licensee materially breaches the provisions of
Sections 0 or 0 of this Agreement, Licensor shall be entitled to
injunctive and/or other equitable relief, in addition to other remedies
afforded by law, to prevent a breach of such sections of this Agreement.

 

5.5           General Skills
and Knowledge.  Notwithstanding
anything to the contrary in this Agreement, neither party will be prohibited or
enjoined at any time from utilizing skills or knowledge of a general nature
acquired during the course of providing or using the Licensed Property pursuant
to this Agreement, including without limitation, information publicly known or
available or that could reasonably be acquired during the course of similar
work performed for another.

 

6.             Indemnification. In addition
to, and not in lieu of, such other indemnifications to which Licensor or
Licensee is entitled with regard to use of the Licensed Property (provided,
however, that no indemnified party hereunder or under any other indemnification
receive more than one entire indemnity (including costs) for an indemnified
loss), the parties hereto agree to indemnify each other as follows:

 

6.1           Infringement.  If any Licensed Property provided to Licensee
by Licensor is held to infringe a United States patent, copyright trade secret
or trademark right of a third party, Licensor may, at its own expense, and in
its sole discretion, (a) procure for Licensee the right to continue to use
the allegedly infringing Licensed Property; (b) replace or modify the
Licensed Property to make it non-infringing so long as the replacement to or
modification of Licensed Software provide substantially the same functional,
performance and operational features as the infringing software which is being
replaced or modified; or (c) to the extent that the activities under
clauses (a) and (b) above are not commercially reasonable, terminate
this Agreement with respect to the allegedly infringing Licensed Property and
accept the return of the Licensed Software and related Documentation.

 

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6.2           Indemnification by Licensor.

 

(a)           Licensor agrees to
defend any claims or suits brought against Licensee and, subject to the
limitations set forth in Section 0, will indemnify and hold it harmless
against any award of damages and costs made against it by settlement or a final
judgment of a court of competent jurisdiction in any suit insofar as, and only
to the extent that, the same is based on a claim by any Person (other than
Licensee or a Licensee Affiliate) that the Licensed Property infringes any
United States patent, copyright or trademark or misappropriates any trade
secret (a “Licensee Claim”).  Licensee
shall give Licensor prompt written notice of any Licensee Claim.

 

(b)           Licensor shall have
sole control over the defense of any Licensee Claim, including appeals,
negotiations and the right to effect a settlement or compromise thereof,
provided that (i) Licensor may not partially settle any Licensee Claim
without the written consent of Licensee, unless such settlement releases
Licensee fully from such claim, (ii) Licensor shall promptly provide
Licensee with copies of all pleadings or similar document relating to any
Licensee Claim, (iii) Licensor shall consult with Licensee with respect to
the defense and settlement of any Licensee Claim, and (iv) in any
litigation to which Licensee is a party, Licensee shall be entitled to be
separately represented at its own expense by counsel of its own selection.

 

(c)           Licensor shall have
no liability for any Licensee Claim or any other claim of intellectual property
infringement or trade secret misappropriation to the extent (i) such
infringement is based upon adherence to specifications, designs or instructions
furnished by Licensee, (ii) such claim is based upon the combination,
operation or use of any Licensed Property with products or content owned by any
Person other than Licensor, including without limitation Licensee Developments,
(iii) such claim is based upon the combination of any Licensed Property or
modification of any products or content supplied by any Person other than
Licensor, (iv) such claim is based upon use of Licensed Property in a
manner which is inconsistent with the terms of this Agreement if such
infringement would not have occurred except for such use, or (v) such
claim is based upon use of a version of the Licensed Property other than the
latest version of the Licensed Property, which has been delivered by Licensor
to Licensee, to the extent such latest version provides substantially all of
the same functional, performance and operational features as the prior version,
and to the extent such claim could have been avoided by use of the latest
version.

 

6.3           Indemnification by Licensee.

 

(a)           Licensee agrees to
defend any claims or suits brought against Licensor or any of its Affiliates (“Licensor
Claims”), and will indemnify and hold them harmless against any award or
damages and costs made against them by settlement or a final judgment of a
court of competent jurisdiction in any suit insofar as, and only to the extent
that, the same is based on a claim by any Person (other than Licensor or a
Licensor Affiliate) (i) arising from the use of the Licensed Property,
other than claims for which Licensor indemnifies Licensee pursuant to Section 0
or (ii) the violation by Licensee of any applicable law, rule, regulation
or order in any jurisdiction.  Licensor
shall give Licensee prompt written notice of any Licensor Claim.

 

(b)           Licensee shall have
sole control over the defense of any Licensor Claim, including appeals,
negotiations and the right to effect a settlement or compromise thereof,
provided that (i) Licensee may not partially settle any Licensor Claim
without the written consent of Licensor, unless such settlement releases
Licensor fully from such claim, (ii) Licensee shall promptly provide
Licensor with copies of all pleadings or similar document relating to any
Licensor Claim, (iii) Licensee shall consult with Licensor with respect to
the defense and settlement of any Licensor Claim, and (iv) in any
litigation to which Licensor is a party, Licensor shall be entitled to be
separately represented at its own expense by counsel of its own selection.

 

6.4           Exclusive Remedy.  The remedies set forth in this Section 0
shall constitute the sole and exclusive remedies of the parties, and the
exclusive liability of the parties, with respect to the claims described in
this Section 0.

 

7.             Limitation of Damages and
Disclaimer of Warranties.

 

7.1           Limit on Aggregate Damages.

 

(a)           Waiver of Certain
Damages.  EXCEPT WITH RESPECT TO
LICENSOR’S INDEMNIFICATION OBLIGATIONS HEREUNDER AND UNDER THE SERVICES
AGREEMENT AND THE HOSTING SERVICES AGREEMENT, IN NO EVENT SHALL LICENSOR BE
LIABLE TO LICENSEE OR ANY OTHER PARTY FOR ANY DAMAGES RESULTING FROM LOSS OF
DATA, LOST PROFITS, LOSS OF USE OF EQUIPMENT OR LOST CONTRACTS OR FOR ANY
SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL 

 

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DAMAGES IN ANY WAY ARISING OUT OF OR IN CONNECTION WITH THE USE OR
PERFORMANCE OF THE LICENSED PROPERTY OR RELATING TO THIS AGREEMENT, HOWEVER
CAUSED, EVEN IF LICENSOR HAS BEEN MADE AWARE OF THE POSSIBILITY OF SUCH DAMAGES.  IN NO EVENT SHALL LICENSEE BE LIABLE TO
LICENSOR OR ANY OTHER PARTY FOR ANY DAMAGES RESULTING FROM LOSS OF DATA, LOST
PROFITS, LOSS OF USE OF EQUIPMENT OR LOST CONTRACTS OR FOR ANY SPECIAL,
INDIRECT, INCIDENTAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES IN ANY WAY
ARISING OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF THE LICENSEE’S
DEVELOPMENTS OR RELATING TO THIS AGREEMENT, HOWEVER CAUSED, EVEN IF LICENSEE
HAS BEEN MADE AWARE OF THE POSSIBILITY OF SUCH DAMAGES.

 

(b)           Warranty
Disclaimers.  THE LICENSED PROPERTY
IS PROVIDED TO LICENSEE, AND THE LICENSEE DEVELOPMENTS ARE PROVIDED TO
LICENSOR, AS-IS.  LICENSOR MAKES NO
WARRANTIES TO LICENSEE OR TO ANY OTHER PARTY OF ANY KIND WHATSOEVER WITH
RESPECT TO THE LICENSED PROPERTY, WRITTEN OR ORAL, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR USE OR PURPOSE OR NON-INFRINGEMENT,
ALL OF WHICH WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.  LICENSEE MAKES NO WARRANTIES TO LICENSOR OR
TO ANY OTHER PARTY OF ANY KIND WHATSOEVER WITH RESPECT TO THE LICENSEE
DEVELOPMENTS, WRITTEN OR ORAL, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT
LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
USE OR PURPOSE OR NON-INFRINGEMENT, ALL OF WHICH WARRANTIES ARE HEREBY
EXPRESSLY DISCLAIMED.

 

7.2           LICENSOR DOES NOT WARRANT
THAT THE LICENSED SOFTWARE WILL MEET LICENSEE’S REQUIREMENTS, WILL OPERATE IN
COMBINATIONS LICENSEE MAY SELECT FOR USE, OR THAT OPERATION OF THE
LICENSED SOFTWARE WILL BE UNINTERRUPTED OR ERROR-FREE.  LICENSEE DOES NOT WARRANT THAT THE LICENSEE
DEVELOPMENTS WILL MEET LICENSORS REQUIREMENTS, WILL OPERATE IN COMBINATIONS
LICENSOR MAY SELECT FOR USE, OR THAT OPERATION OF THE LICENSEE
DEVELOPMENTS WILL BE UNINTERRUPTED OR ERROR-FREE.

 

7.3           LICENSEE IS REQUIRED TO
ACCESS OR USE THE INTERNET IN CONNECTION WITH THE USE OF THE LICENSED
SOFTWARE.  LICENSEE UNDERSTANDS AND
AGREES THAT THE INTERNET IS AN UNREGULATED, PUBLIC NETWORK OVER WHICH LICENSOR
EXERTS NO CONTROL.  LICENSOR MAKES NO
REPRESENTATIONS OR WARRANTIES TO LICENSEE OR ANY OTHER PARTY OF ANY KIND
WHATSOEVER, AND SHALL HAVE NO LIABILITY WHATSOEVER, WITH RESPECT TO THE
ACCURACY, DEPENDABILITY, PRIVACY, SECURITY, AUTHENTICITY OR COMPLETENESS OF
DATA TRANSMITTED OVER OR OBTAINED USING THE INTERNET, OR ANY INTRUSION, VIRUS,
DISRUPTION, LOSS OF COMMUNICATION, LOSS OR CORRUPTION OF DATA, OR OTHER ERROR
OR EVENT CAUSED OR PERMITTED BY OR INTRODUCED THROUGH LICENSEE’S USE OF THE
INTERNET.

 

8.             Confidentiality.

 

8.1           Licensee’s Confidentiality
Obligation.  For so long
as this Agreement remains in effect and for a period of ten (10) years
after any expiration or termination of this Agreement (and indefinitely with
respect to any Source Code of Licensor), Licensee agrees that it and its
managers, employees, consultants, agents and advisors shall treat
confidentially and not disclose, or permit any affiliate of it or its respective
advisors, employees, agents or representatives to disclose, to any third party
any non-public or proprietary information received from or on behalf of
Licensor or about Licensor (“Confidential Information”).  Confidential Information will include all
information in tangible or intangible form that is marked or designated as
confidential or that, under the circumstances of its disclosure, should be
considered confidential.  Further, for
the avoidance of doubt, such Confidential Information shall include any
personally identifiable information about any borrower or lender member of the
Prosper Internet-based social lending platform, excluding lender member
information received by Licensee in the course of establishing or maintaining a
brokerage account for any such person or relating to executing a transaction
for any such person.  Licensee agrees not
to use such Confidential Information for any purpose other than for the
purposes contemplated under this Agreement, without obtaining the prior written
consent of Licensor, except (a) portions of such information that are or
become generally available to the public other than as a result of disclosure
by Licensee in violation of this Agreement, (b) portions of such
information received on a non-confidential basis from a third party who, to
such recipient’s knowledge, is not prohibited from disclosing the information
pursuant to a confidentiality agreement with, or fiduciary obligations to,
Licensor, and (c) for the purpose of making any disclosures required by
applicable law.  In the event that such
Confidential Information is disclosed in accordance with this paragraph,
Licensee agrees to contractually require each Person to whom it has provided
such Confidential Information as expressly permitted hereunder or with the
prior written consent 

 

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of Licensor to keep such information confidential and to use and
disclose it only in connection with its performance under this Agreement.

 

8.2           Licensor’s Confidentiality
Obligation.  For so long
as this Agreement remains in effect and for a period of ten (10) years
after any expiration or termination of this Agreement, Licensor agrees that it
and its directors, employees, consultants, agents, representatives and advisors
shall treat confidentially and will not disclose to any third party any
Confidential Information received from or on behalf of or any of its
affiliates, or use such Confidential Information for any purpose other than
granting the license hereunder or for the fulfillment of Licensor’s obligations
under this Agreement without obtaining the prior written consent of Licensee,
except (a) portions of such information that are or become generally
available to the public other than as a result of disclosure by Licensor in
violation of this Agreement, (b) portions of such information received on
a non-confidential basis from a third party who, to such recipient’s knowledge,
is not prohibited from disclosing the information pursuant to a confidentiality
agreement with, or fiduciary obligations to, Licensee, and (c) for the
purpose of making any disclosures required by applicable law.

 

8.3           Permitted Disclosure.  Notwithstanding the foregoing provisions of
Sections 7.1 and 7.2, either party may disclose Confidential Information
received from the other if:

 

(a)           such information is
disclosed, in compliance with applicable law, by the receiving party to its
advisors, representatives, agents and employees, acting in their capacity as
such, who have a need to know such Confidential Information in connection with
the performance of this Agreement; provided, however, that such advisors,
representatives, agents and employees shall be required to agree to abide by
the requirements of this Section 7 and the receiving party shall be liable
to the other party for any breach of these requirements by its advisors,
employees, agents and representatives; or

 

(b)           either party
determines that it is required by applicable law to disclose information not
otherwise permitted to be disclosed pursuant hereto.  In advance of any such disclosure (to the
extent legally permitted and reasonably practicable), the receiving party shall
consult with the other party regarding such disclosure and seek confidential treatment
for such portions of the disclosure as may be requested by the other
party.  Such receiving party shall have
no liability hereunder if, prior to the required disclosure, the receiving
party receives a written opinion from its counsel opining that such disclosure
is required by law or regulation.  In
addition, notwithstanding any other provision of this Agreement, either party
shall be permitted to file a copy of this Agreement with any governmental
authority or securities regulatory body.

 

8.4           Damages Not an Adequate
Remedy.  Without prejudice to any other
rights or remedies of a party, the parties acknowledge and agree that damages
would not be an adequate remedy for any breach of this Section 7 and the
remedies of prohibitory injunctions and other relief are appropriate and may be
sought for any threatened or actual breach of any provision of this Section 7.  No proof of special damages shall be
necessary for the enforcement of any party’s rights under this Section 7.

 

9.             Term and Termination.

 

9.1           Term.

 

(a)           Unless earlier terminated as
provided herein, this Agreement shall be effective during the period from the
Effective Date until the first anniversary of the Effective Date, unless
terminated earlier in accordance with Section 0 (the “Term”).

 

(b)           If no notice of termination
is given in accordance with Section 0 prior to the expiration of the Term,
this Agreement shall automatically renew for a period of one (1) year (“Renewed
Term”).

 

9.2           Termination.

 

(a)           The following parties may
terminate this Agreement:

 

(i)            Licensor in writing, without
cause, effective three (3) months’ after notice is sent to Licensee,
provided, however, this Agreement shall terminate along with the Services
Agreement if the Services Agreement is terminated in accordance with Section 2.2(a)(i) thereof;

 

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(ii)           Licensee in writing,
effective nine (9) months’ after such notice is sent to Licensor;

 

(iii)          Either party, in writing,
effective immediately, in the event of any material breach of any warranty,
representation or covenant of this Agreement by the other party which remains
uncured thirty (30) days after written notice of such breach to such other
party; or

 

(iv)          Either party, upon mutual
agreement of the parties.

 

(b)           Notwithstanding the
foregoing, this Agreement shall terminate immediately upon the effective
termination of the Services Agreement or the Hosting Services Agreement.

 

9.3.          Effect of Termination.  Upon the expiration or termination of this
Agreement for any reason, all of the rights and licenses granted hereunder,
shall terminate, and Licensee shall immediately (a) cease any use of the
Licensed Property, (b) either return to Licensor all Licensed Property in
the possession of Licensee, or destroy all embodiments thereof, and (c) certify
to Licensor in writing that Licensee has complied with the requirements of
clauses (a) and (b) of this Section 0.

 

9.4           Waiver.  Upon the expiration or termination of this
Agreement, Licensor shall not have any obligation to Licensee or employee of
Licensee, for compensation or indemnity on account of the loss by Licensee of
present or prospective sales, investments, compensation or goodwill.  Licensee, for itself and on behalf of each of
its employees, hereby waives any rights which may be granted to it or them
under all applicable laws and regulations which are not granted to it or them
by this Agreement.  Licensee hereby
indemnifies and holds Licensor harmless from and against any and all claims,
costs, damages and liabilities whatsoever asserted by any employee, agent or
representative of Licensee under any applicable employment termination, labor,
social security or other similar laws or regulations.

 

9.5           Survival.  The provisions of Sections 0, 0, 0, 0,
0, 0, 0 and 0 shall survive any expiration or termination of this Agreement in
accordance with their terms.

 

10.           Miscellaneous.

 

10.1         Notices.  All notices, requests, demands or other
communications hereunder shall be in writing and shall be deemed to have been
duly given when transmitted by facsimile during business hours with proof of
confirmation from the transmitting machine, or delivered by courier or other
hand delivery, as follows:

 

Prosper Marketplace, Inc.:

 

111 Sutter Street, 22nd Floor

San Francisco, CA 94104

Attn:  Edward A. Giedgowd,
ed@prosper.com

Facsimile: 415-362-7233

 

FOLIOfn Investments, Inc.:

 

8000 Towers Crescent Drive

Suite 1500

Vienna, VA 22182

Attn:  Michael Hogan,
hoganm@foliofn.com

Facsimile: 703-880-7319

 

10.2         Assignment.  Licensee shall neither assign nor transfer
this Agreement or any interest herein without the prior written consent of
Licensor.  Licensor may assign this
Agreement and/or subcontract its performance hereunder upon notice to
Licensee.  A purported assignment of this
Agreement or any of the rights, interests or obligations hereunder not in
compliance with this Section 9.2 shall be null and void ab initio.

 

10.3         Entire Agreement.  This Agreement, including the exhibits
referred to herein, which are hereby incorporated in and made a part of this
Agreement, constitutes the entire contract between the parties with respect to
the subject matter 

 

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covered by this Agreement.  This
Agreement supersedes all previous agreements and understandings, if any, by and
between the parties with respect to the subject matter covered by this
Agreement.  This Agreement may not be
amended, changed or modified except by a writing duly executed by the parties
hereto.

 

10.4         Severability.  If any provision of this Agreement is held by
a court of competent jurisdiction to be unenforceable, invalid or void in any
respect, no other provision of this Agreement shall be affected thereby, and
all other provisions of this Agreement shall nevertheless be carried into
effect and the parties shall amend this Agreement to modify the unenforceable,
invalid or void provision to give effect to the intentions of the parties to
the extent possible in a manner which is valid and enforceable. IT IS EXPRESSLY
UNDERSTOOD AND AGREED THAT EACH AND EVERY PROVISION OF THIS AGREEMENT WHICH
PROVIDES FOR A LIMITATION OF LIABILITY, DISCLAIMER OF WARRANTIES OR EXCLUSION
OF DAMAGES, IS INTENDED BY THE PARTIES TO BE SEVERABLE AND INDEPENDENT OF ANY
OTHER PROVISION AND TO BE ENFORCED AS SUCH.

 

10.5         Remedies and
Waivers.  All rights and remedies of
the parties under this Agreement are separate and cumulative, and no one of
them, whether exercised or not, shall be deemed to be to the exclusion of or to
limit or prejudice any other rights or remedies which the parties may have.  The parties shall not be deemed to waive any
of their rights or remedies under this Agreement, unless such waiver is in
writing and signed by the party to be bound. 
No delay or omission on the part of either party in exercising any right
or remedy hereunder or thereunder shall operate as a waiver of such right or
remedy or any other right or remedy.  A
waiver on any one occasion shall not be construed as a bar to or waiver of any
right or remedy on any future occasion.

 

10.6         Governing Law.  This Agreement, and the rights and
liabilities of the parties hereunder, shall be governed by the substantive laws
of the Commonwealth of Virginia to the exclusion of its rules of conflict
of laws and the parties agree to submit to the exclusive jurisdiction of the
state and federal courts located in Virginia for the resolution of all disputes
arising out of this Agreement or in connection with the Licensed Property.

 

10.7         Headings.  The headings contained in this Agreement are
for convenience only and are not a part of this Agreement, and do not in any
way interpret, limit or amplify the scope, extent or intent of this Agreement,
or any of the provisions of this Agreement.

 

10.8         Counterparts and
Facsimile.  This Agreement may be
executed in counterparts, each of which shall constitute an original, but all
of which together shall constitute one and the same agreement.  Transmission of facsimile copies of signed
original signature pages of this Agreement shall have the same effect as
delivery of the signed originals.

 

10.9         Third Party Beneficiary.  Nothing expressed or implied in this
Agreement is intended or shall be construed to confer upon or give any person,
firm, or corporation other than the parties, any rights or remedies under or by
reason of this Agreement.

 

10.10       Binding Effect.  Subject to Section 0 hereof, this
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns.

 

10.11       Independent
Contractors.  The parties shall for
all purposes hereunder be considered independent contractors with respect to
each other, and neither shall be considered an employee, employer, agent,
principal, partner, franchisee, franchisor or joint venturer of the other.

 

10.12       Force Majeure.  Neither party shall incur liability to the
other party due to any delay or failure in performance hereunder caused by
reason of any occurrence or contingency beyond its reasonable control,
including but not limited to failure of suppliers, strikes, lockouts or other
labor disputes, riots, acts of war or civil unrest, earthquake, fire, the
elements or acts of God, novelty of product manufacture, unanticipated product
development problems, or governmental restrictions or other legal requirements;
provided, that such party notifies the other party in writing immediately upon
commencement of such event and makes diligent efforts to resume performance
immediately upon cessation of such event.

 

8

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

 

	
  Prosper
  Marketplace, Inc.

  	
   

  	
  FOLIOfn
  Investments, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Kirk T. Inglis

  	
   

  	
  By:

  	
  /s/
  Michael J. Hogan

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Kirk
  T. Inglis

  	
   

  	
  Name:

  	
  Michael
  J. Hogan

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Chief
  Financial Officer

  	
   

  	
  Title:

  	
  Chief
  Executive Officer and President

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   March 3, 2009

  	
   

  	
  Date:

  	
   March 3, 2009

  
							

 

9

 

EXHIBITS

 

Exhibit A:           Licensed
Software

 

10

 

EXHIBIT A

 

Licensed Software

 

The Licensed Software shall mean the computer software that allows
users to perform the following tasks: (i) post an offer to sell Prosper
Member Notes (the “Notes”) they hold in their account with Prosper, (iii) review
offers posted by other users, (iv) access information about the consumer
loans underlying each Note (including static information available at the time
the loan was issued, and dynamic information such as payment history and the
borrower’s credit score range, updated each month), and (v) submit orders
to buy Notes.  The software also features
administrative functions that permits Licensee’s personnel to retrieve and
review information regarding transactions. 
For the avoidance of doubt, the aforementioned features may be modified
by Licensor from time to time as may be required by federal or state securities
laws, rules or regulations.

 

1hybridexh4_9i.htm

    
      

    

     

    Exhibit
4.9(i)

    FORM OF
SECURED CONVERTIBLE PROMISSORY NOTE

     

    THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. THIS NOTE MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO (~) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1993 AS AMENDED. OR (ii) AN EXEMPTION FROM REGISTRATION
UNDER SAID AOl WHERE THE HOLDER HAS FURNiSHED TO THE
COMPANY AN OPINION OF ITS COUNSEL. IF SUCH OPINION SHALL BE SATISFACTORY
TO THE COMPANY. THAT AN EXEMP HON FROM REGISTRATiON UNDER
SUCH ACT IS AVAILABLE.

     

    AMOJNT:    
$5000

     

    10%
CONVERTIBLE PROMISSORY NOTE

     

    FOR VALUE
RECEIVED, the undersigneo Hybrid Dynamics Corp., Inc a Nevada
corporation (the “Payor”). having its executive office and principal place of
busress
at 52-66 Iowa Ave. Paterson. NJ., hereby promises to pay to the order of Mr
Arturo
Montepara (the “Payee’). having an address at 9-09 CANGER PL FAIR LAWN
NJ 07410, 180 days from the date signed herein (the “Matunty Date”) at
Lhe
°ayee’s add ess set forth hereina0ove or. at such other place as the Payee shall
nereafter
specify in writing, the principal sum of ~5000 in such coin or currency or the
United
States of America as at the time shall be egal terder for the payment of pubic
ana
private debts unless the HOLDER at his/her option elects to convert the said
promissory
note into the common equity of the PAYOR”.

     

    1.      
INTEREST AND PAYMENT.

     

    1.1    
The unpaid principal amount hereo s a~ bear srnple interest from the
date
hereof at the rate of i0?/3 per annum untii the f’tatur.ty Date (or until any
such earlier
date of payment if this Note is prepaic as nereinafter provided).

     

    1
..2     interest shall be payable in full on the Ma~u~ty Date
(or on any such earlier date of
payment if this Note is prepad as hereinaf~e” nrovided

     

    2.      
BONUS EQUITY. The Payor also ~rees to o~y -o the 2ay.~e in addition to the
interest
staLed herein, five thousand (500C~ sha~es of ~he Payor’s common stock for
each
$5,000 of PRINCIPAL” given to the Payor by the Payee.

     

    3.      
CONVERSION. At any time prior to the Maturity Date or on the Matunty Date
the
unpaid principal balance of this Note shall be convertible, at the option of the
Holder, and
without payment of any additional consideration therefore, into that number of
fufly paid and
non-assessable shares of Common Stock as is determined by dividing the
unpaid
principal balance of this Note by the Conversion Price in effect at the time of
such
conversion. The “Conversion Price” shall be at a twenty five (25%) discount to
the ten (10)
day average closing price preceding the Maturity Date of the Note and shall be
subject
to adjustment (in order to adjust the number of shares of Common Stock into
which the
unpaid principal balance of this Note is convertible) as hereinafter
provided.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.      
EVENTS OF DEFAULT. The occurrence of each or any of the following conditions,
events or acts shall constitute an “Event of Default:”

     

    4.1    
The dissolution of the Payor; or

     

    4.2    
The Payor’s insolvency, assignment for the beneflt of creditors, application
for or
appointment of a receiver, filing of a voluntary or involuntary petition under
any provision
of the Federal Bankruptcy Code or amendments thereto or any other federal
or state
statute affording relief to debtors: or if there shall be commenced against the
Payor any
such proceeding or filed against the Payor any such application or petition
which
proceeding application or petition is not dismissed or withdrawn within thirty
(30) days of
commencement or filing as the case may be: or

     

    4.3    
The failure by the Payor to make any payment of any amount of principal
on, or
accrued interest under, this Note, as and when the same shall become due and
payable;
or

     

    4.4    
The commencement of a proceeding to foreclose the security interest or
lien in
any property or assets to satisfy the security interest or lien therein of any
secured
creditor of the Payor whose debt is in excess of $100,000.00; or

     

    4.5    
The entry of a final judgment for the payment of money in ex~ess of $100000.00
by a court of competent jurisdiction against the Payor, which judgment the
Payor
shall not discharge (or provide for such discharge) in accordance with its terms
within
thirty (30) days of the date of entry thereof, or procure a stay of execution
thereof within
thirty (30) days from the date of entry thereof and, with such thirty (30) day
period,
or such longer period during which execution of such judgment shall have been
stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal:
then, in any such event and at any time thereafter, while such Event of Default
is
continuing, the indebtedness evidenced by this Note shall immediately become due
and
payable, both as to principal and interest, without presentment, demand, protest
or other
notice of any kind, all of which are hereby expressly waived, notwithstanding
anything
contained herein to the contrary.

     

    4.      
SUITS FOR ENFORCEMENT AND REMEDIES~ If any one or more Events of Default
shall occur and be continuing, the holder of this Note may proceed to protect
and
enforce such holder’s rights either by suit in equity or by action at law, or
both, whether
for the specific performance of any covenant, condition or agreement contained
in this
Note or in any agreement or document referred to herein or in aid of the
exercise of any
power granted in this Note or in any agreement or document referred to herein,
or
proceed to enforce the payment of this Note or to enforce any other legal or
equitable right of
the holder of this Note. No right or remedy herein or in any other agreement or
instrument
conferred upon the hoider of this Note is intended to be CXClUSlVC of any
other
right or remedy, and each and every such right or remedy shall be cumulative and
shall be
in addition to every other right and remedy given hereunder or now or hereafter
existing
at law or in equity or by statute or otherwise.

     

    5.      
FEES, WAIVERS, OTHER.

     

    5.1    
If the holder of this Note shall institute any action to enforce the collection
of any
amount of principal of and/or interest on this Note, and there shall be any
amount of
principal of and/or interest on this Note owed to the holder, then there shall
be immediately
due and payable from the Payor, in addition to the then unpaid sum of this
Note, all
reasonable costs and expenses incurred by the Payee in connection therewith,
including,
without imitation, reasonable attorneys’ fees and disbursements.

     

    5.2    
No forbearance, indulgence, delay or failure to exercise any right or
remedy
with respect to this Note shall operate as a waiver, nor as an acquiescence in
any
default, nor shall any single or partial exercise of any right or remedy
preclude any other or
further exercise thereof or the exercise of any other right or
remedy.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.3    
This Note may not be modified or discharged except by a writing duly
executed
by the Payor and the Payee.

     

    5.4    
The Payor hereby expressly waives demand and presentment for payment,
notice of nonpayment notice of dishonor, protest, notice of protest, bringing of
suit, and
diligence in taking any action to collect amounts called for hereunder, and
shall be
directly and primarily liable for the payment of all sums owing and to be owing
herein,
regardless of and without any notice, diligence, act or omission with respect to
the
collection of any amount called for hereunder or in connection with any right,
lien, interest
or property at any and all times which the Payee had or is existing as security
for any
amount called for hereunder.

     

    5.5    
The Payor shall bear all of its expenses, including attorneys’ fees incurred
in
connection with the preparation of this Note.

     

    6.      
MISCELLANEOUS.

     

    6.1    
The headings of the various paragraphs of this Note are for convenience
of
reference only and shall in no way modify any of the terms or provisions of this
Note.

     

    6.2    
All notices required or permitted to be given hereunder sriau te in writing
and shall
be deemed to have been duly given when personally delivered or sent by
registered
or certified mail return rece!pt requested postage prepaid to the address of
the
ntended recipient set forth in the preamble to this Note or at such other
address as the
intended recipient shall have hereafter given to the other party hereto pursuant
to the
provisions hereof.

    

    ATTEST:                                               
Hybrid Dynamics Corp, Inc

    /S/ MARK
KLEIN                                 /S/
MARK KLEIN

    Name;
Mark
Klein                                 Name:
Mark Klein

    Title:
Secretary
President                     Title:
President

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SECURITY
AGREEMENT

     

    1.    
Grant On this 12th day of November~ 2008 , Hybrid Dynamics Corp, Inc a
Nevada
corporation with its pnncipal place of business at 52-66 Iowa Ave Paterson NJ
(hereinafter
called “Debtor~) for valuable consideration receipt whereof is acknowledged
grants to
Mr Arturo Monteparo with his principal address at 9-09 CANGER PL FAIR LAWN
NJ 07410 (hereinafter called “Secured Party ~) a security interest in and
mortgages
to Secured Party the following described property and interests in oroperty of
Debtor (hereinafter
called the “Collateral”):

     

    Delkron
Motor, Serial #DR355501 19

    

    to secure
payment of the following obligations of Debtor to Secured Party (all hereinafter
called the
~‘Obhgation5”):

    

    (i)    
All obligations arid liabilities of Debtor to Secured Party (including without
limitation
all debts claims and indebtedness) whether primary secondary direct contingent
fixed or otherwise heretofore flOW and/or from time to time hereafter
owing due
or payable however evidenced created incurred acquired or owing and
however arising, or by oral agreement ~r operation of law or
otherwise.

     

    2.    
Wag~pties ~ Coy ntsofDebtor. Debtor warrants and covenants that:

     

    (a)    
Except fOr the security interest granted hereby and the security interest
granted
to Arturo Montepara Debtor is the owner of the Collateral free from any adverse
lien,
security interest or encumbrancer and Debtor will defend the Collateral against
all claims
and demands Of all persons at any time claiming the same or any interest
therein.

     

    (b)    
No Financing Statement covering any of the Collateral or any proceeds
thereof
is on file in any public office except in favor of Arturo Montepara The Debtor
shall
immediately notify the Secured Party in writing of any change in name address
identity
or corporate structure from that shown ~n this Agreement and shall also upon
demand
furnish to the Secured Party such further information and shall execute and
deliver
to Secured Party such financing statements and other documents in form
satisfactory
to Secured Party and shall do all such acts and things as Secured Party may
at any
time or from time to time reasonably request or as may be necessary or
appropnate
to establish and maintain a perfected security interest in the Collateral as
secunty
for the Obligations~ subject to no adverse liens or encumbrances and Debtor
will pay
the cost of filing the same or filing or recording this agreement in all public
offices
wherever filing or recording is deemed by Secured Party to be necessary or
desirable
A carbon, photograpnic or other reproduction of this agreement is sufficient
as a
financing statement

     

    (c)    
Debtor will not sell or offer to sell assign pledge, lease or otherwise
transfer
or encumber the Collateral or any interest therein without the prior written
consent
of Secured Party.

     

    (d)    
Debtor shall keep the Collateral at all times insured against risks of loss
or damage
by fire (including so-called extended coverage) theft and such other
casualties
as Secured Party may reasonably require including collision in the case of
any motor
vehicles, all in such amounts under such forms of policies~ upon such terms,
for such
periods and written by such companies or underwriters as Secured Party may
approve
losses in all cases to be payable to Secured Party and Debtor as their interests
may
appear All policies of insurance shall provide that Secured Party s interest
therein shall not
be invalidated by the act, omission or neglect of anyone other than Secured

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Party and
for at least ten days prior written notice of cancellation to Secured Party.
Debtor
shall furnish Secured Party with certificates of such insurance or other
evidence satisfactory
to Secured Party as to compliance with the provisions of this paragraph.
Secured
Party may act as attorney for Debtor in making, adjusting and settling claims
under and
cancelling such insurance and endorsing Debtor’s name on any drafts drawn
by
insurers of the CollateraL

    
       

    

    (e)    
Debtor will keep the Collateral free from any adverse lien, security interest
or
encumbrance and in good order and repair, shall not waste or destroy the
Collateral or any
part thereof, and shall not use the Collateral in violation of any statute,
ordinance or policy
of insurance thereon.

    

    Secured
Party may examine and inspect the Collateral at any reasonable time or times,
wherever
located.

     

    (f)    
Debtor will pay promptly when due all taxes and assessments upon the
Collateral
or for its use or operation or upon this Agreement or upon any note or notes
evidencing
the Obligations.

     

    3.      
Additiq~~l, Rights of P~rti~. At its option, Secured Party may discharge taxes,
liens or
security interests or other encumbrances at any time levied or placed on the
CollateraL may place
and pay for insurance on the Collateral upon failure by the Debtor, after having
been requested
to do so, to provide insurance satisfactory to the Secured Party, and may pay
for the maintenance,
repair, and preservation of the Collateral. To the extent permitted by
applicable law,
Debtor agrees to reimburse Secured Party on demand for any payment made, or any
expense
incurred by Secured Party pursuant to the foregoing authorization. Until default
Debtor may have
possession of the Collateral and use, it in any lawful manner not inconsistent
with this agreement
and not inconsistent with any policy of insurance thereon.

     

    4.      
Events of Default. Debtor shall be in default under this agreement upon the
occurrence
of any of the following events or conditions, namely: (a) default in the payment
or performance
of any of the Obligations or of any covenants or liabilities contained or
referred to herein or
in any of the Obligations; (b) any warranty, representation or statement made or
furnished
to Secured Party by or on behalf of Debtor proving to have been false in any
material respect
when made or furnished; (c) loss, theft, substantial damage, destruction, sale
or encumbrance
to or any of the Collateral, or the making of any levy, seizure or attachment
thereof
or thereon; (ci) dissolution, termination of existence, filing by Debtor or by
any third party against
Debtor of any petition under any Federal bankruptcy statute, insolvency,
business failure,
appointment of a receiver of any part of the property of, or assignment for the
benefit of creditors
by, Debtor; or (e) the occurrence of an event of default in any agreement
between Debtor
and/or Secured Party and Hybrid Dynamics Corporation.

     

    5.    
~p~edies. UPON DEFAULT AND AT ANY TIME THEREAFTER, SECURED PARTY MAY
DECLARE ALL OBLIGATIONS SECURED HEREBY IMMEDIATELY DUE AND PAYABLE
AND SHALL HAVE THE REMEDIES OF A SECURED PARTY UNDER THE UNIFORM
COMMERCIAL CODE OF ILLINOIS, including without limitation the right to take
immediate
and exclusive possession of the Collateral, or any part thereof, and for that
purpose may, so
far as Debtor can give authority therefor, With or without judicial process,
enter (if this can be
done without breach of the peace), upon any premises on which the Collateral or
any part
thereof may be situated and remove the same therefrom (provided that if the
Collateral is affixed
to real estate, Such removal shall be subject to the conditions stated in the
Uniform Commercial
Code of Illinois); and the Secured Party shall be entitled to hold, maintain,

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    preserve
and
prepare the Collateral for sale, until disposed of, or may propose to retain the
Collateral subject
to Debtor’s right of redemption in satisfaction of the Debtors Obligations as
provided in the
Uniform Commercial Code of Illinois. Secured Party without removal may render
the Collateral
unusable and dispose of the Collateral on the Debtor’s premises. Secured Party
may require
Debtor to assemble the Collateral and make it available to Secured Party for
possession at a
place to be designated by Secured Party which is reasonably convenient to both
parties. Unless
the Collateral is perishable or threatens to decline speedily in value or is of
a type customarily
sold on a recognized market, Secured Party will give Debtor at least 5 days’
notice of the
time and place of any public sale thereof or of the time after which any private
sale or any other
intended disposition thereof is to be made. The requirements of reasonable
notice shall be met if
such notice is mailed, postage prepaid, to the address of Debtor shown at the
beginning
of this agreement at least ten days before the time of the sale or disposition.
Secured Party may
buy at any public sale. The net proceeds realized upon any such disposition,
after deduction
for the expenses of retaking, holding, preparing for sale or lease, selling,
leasing and the like
and the reasonable attorney’s fees and legal expenses incurred by Secured Party,
shall be
applied in satisfaction of the Obligations secured hereby. The Secured Party
will account to the
Debtor for any surplus realized on such disposition arid the Debtor shall remain
liable for any
deficiency.

    
       

    

    The
remedies of the Secured Party hereunder are cumulative and the exercise of any
one or
more of the remedies provided for herein or under the Uniform Commercial Code of
lilinois
shall not be construed as a waiver of any of the other remedies of the Secured
Party so long as
any part of the Debtor’s Obligation remains unsatisfied.

     

    6.      
General. No waiver by Secured Party of any default shall operate as a waiver of
any other
default or of the same default on a future occasion. All rights of Secured Party
hereunder
shall inure to the benefit of its successors and assigns; and all obligations of
Debtor shall
bind its successors or assigns. If there be more than one Debtor, their
obligations hereunder
shall be joint and several. This agreement shall become effective when it is
signed by
Debtor.

     

    All
rights of the Secured Party in, to and under this agreement and in and to the
Collateral
shall pass to and may be exercised by any assignee thereof. The Debtor agrees
that if the
Secured Party gives notice to the Debtor of an assignment of said rights, upon
such notice the
liability of the Debtor to the assignee shall be immediate and absolute. The
Debtor will not set up
any claim against the Secured Party as a defense, counterclaim or set-off to any
action brought
by any such assignee for the unpaid balance owed hereunder or for the possession
of the
Collateral, provided that Debtor shall not waive hereby any right of action to
the extent that waiver
thereof is expressly made unenforceable under applicable law.

     

    If any
provision of this agreement shall be prohibited by or invalid under applicable
law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating
the remainder of such provision or the remaining provisions of this
agreement.

     

    Arturo
Monteparo.,                Hybrid
Dynamics Corp. Inc

    

    ___________

    President

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