Document:

prosper_s-1a5ex10d1.htm

    
      

      

    

    Exhibit 10.1

    

    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 (the
“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 obtained by Prosper
borrowers through the platform 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 all loans made to
Prosper borrowers through the platform.  The following Agreement
describes the services and your rights and obligations should you elect to
register as a borrower on the platform.  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 marketplace, so that you may be eligible to post loan requests or
“listings” for display on the platform to people who may be interested in
bidding against one another in a competitive auction format to facilitate the
funding of a loan to you by WebBank.  We refer to the people who bid
on listings as “lenders” even though all loans to Prosper borrowers obtained
through the platform are made by WebBank.  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 platform 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
one or more consumer credit reporting agencies.  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 debt you currently have, in order to determine your
debt-to-income ratio, (iii) to obtain your credit score and assign you a
Prosper Rating based in part on that score, (iv) to obtain and display
certain information and characteristics from your credit report from one or more
consumer credit reporting agencies, 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, and
(v) to obtain and display on the Folio Investing Note Trader platform
certain information and characteristics from your credit report from one or more
consumer credit reporting agencies at any time or times that a Borrower Payment
Dependent Note corresponding to your loan is offered for sale by lenders holding
such Notes.  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 may 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 by posting a listing on the
platform.  The minimum and maximum loan amounts you may request are
posted on the Prosper website and 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,
subject to a minimum interest rate based on the Prosper Rating assigned to your
listing.  At the time you post a listing you must also provide your
annual income, occupation and employment status.  You authorize and
agree that we may display in your listing, and in listings displayed on the
Folio Investing Note Trader platform describing Borrower Payment Dependent Notes
corresponding to a loan you obtain through the Prosper platform that is offered
for sale by lenders holding such Notes, any information from your credit file
with the consumer credit reporting agency, including but not limited to the
following information:

    
      	
              (i)

            	
              Your
      Prosper Rating;

            
	
              (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
may 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.

    

    Prosper
lenders may ask you questions about your loan listing and you may, but are not
required to, respond to such questions.  If you do elect to respond to
a lender’s question you may respond privately, or you may elect to have the
question and answer posted publicly in the listing.  Lenders’
questions are not posted in the listing or displayed elsewhere on our website
unless you elect to answer the question and elect to make the question and
answer publicly available, in which case the question and answer appears in the
listing.

    

    Borrower
listings are displayed on the platform.  This means that people who
visit the Prosper website will be able to view your listing, and see your
Prosper Rating, 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 platform for
purposes of obtaining a loan and for enabling Prosper lenders who own Borrower
Payment Dependent Notes (described in Section 5 below) corresponding to
your loan to offer such Notes for sale to other lenders at any time while your
loan is outstanding.  You authorize and agree that Prosper may obtain
and display updated information from your credit file with one or more consumer
credit reporting agencies, as well as information about the payment history and
status of your loan, on the Folio Investing Note Trader platform at any time or
times that a Borrower Payment Dependent Note corresponding to your loan is
offered for sale by lenders holding such Notes.  To facilitate bids
for your listing or for listings posted by lenders offering to sell a Borrower
Payment Dependent Note corresponding to your loan.  To facilitate bids
for your listing, Prosper may forward the listing by email to third parties,
including but not limited to registered Prosper lenders, and may display the
listing in promotional, advertising and marketing materials, and you authorize
Prosper to do so.

    
      
         

      

      
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    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 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 platform, 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 platform; 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 platform.

    

    Your
listing is a request for a loan from WebBank 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 with lender bids totaling
the amount of your requested loan, 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 platform you must have a
good faith intent to obtain and repay your loan and your listing must be
consistent with that intent.

    

    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 may 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. If a loan is made to
you, you do not have any right to rescind the loan.

    

    Number of
Listings.  Prosper reserves the right, in its sole discretion,
to limit the number of listings you post or attempt to post on the
platform.  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 platform for fourteen (14) days or for such other time
period that we may in our sole discretion establish and amend from time to
time.  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 borrowers with certain Prosper Ratings or other credit
characteristics.  The bidding period for your listing will also end
automatically if you receive bids totaling your requested loan amount and the
interest rate is bid down to the minimum interest rate assigned to your
listing.  When you post a listing, it will be displayed on the
platform along with all other listings until the listing ends or expires, or
until the listing is withdrawn by you or by us as provided in Section 4
below.

    

    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 until a
specified number of months has elapsed since the date you obtained your existing
loan.  The guidelines and eligibility requirements for second loans
are posted on the Prosper website and are subject to change by us in our sole
discretion at any time without notice.

    

    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

    
      
         

      

      
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    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 director, officer or employee, of Prosper or WebBank, unless you are such
director, officer or employee.

    

    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 platform 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 platform and all bids against
the listing will be cancelled, and 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; Loan Funding.

    

    a.  Registered
Prosper lenders will be able to review your listing and may commit funds to
purchase, in various amounts, Borrower Payment Dependent Notes (“Notes”) that
Prosper may issue to lenders who, as winning bidders for your listing, commit
funds to facilitate the funding of your loan.  The Notes Prosper
issues to these lenders will be dependent for payment on payments we receive
from you on your loan.  This means that the Prosper lenders who
facilitated the funding of your loan will receive payments on their Notes only
to the extent you make payments on your loan.  You acknowledge and
agree that a lender’s commitment to purchase a Note corresponding to all or a
portion of your loan from us does not confer any rights to you.  You
also acknowledge and agree that Prosper lenders make their own decisions whether
to commit funds toward your loan.

    

    b.  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, subject to a

    
      
         

      

      
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    minimum
interest rate based on the Prosper Rating assigned to your
listing.  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.  Most listings are matched with multiple
lender bids.

    

    c.  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.  The loan will be evidenced
by a Promissory Note in the form set forth on the attached
Exhibit A.  Loan proceeds are disbursed into your designated
deposit account.  After loan funding, the loan will be sold by WebBank
to Prosper, and Prosper will service the loan.

    

    d.  We
do not warrant or guaranty that your listing 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 only a portion (even a
substantial portion) of your requested loan amount is matched with a bid or
bids.

    

    e.  To
safeguard your privacy rights, on listings your name and address will be
shielded from the view of bidders and prospective bidders.  Only your
Prosper screen name will appear on listings, and only the screen name of the
bidders will appear with bids.

    

    6.  Compensation.  If
you receive a loan, you must pay WebBank an origination fee.  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 fee is paid by the borrower out of the loan proceeds at
the time a loan is funded, so that the net amount of loan proceeds you receive
will be less than the full amount of your loan.

    

    7.  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 for all loans you obtain
from WebBank through the platform, and all communications regarding your loan
must be made to Prosper.

    

    8.  Group
Membership.    Groups on Prosper may be rated
according to the collective payment performance of the group’s members, so if
you are a member of a group your failure to make loan
payments when due may have a negative effect on your group’s
rating.

    

    9.  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
or any of your other telephone numbers.

    

    10.  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.

    

    11.  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 an owner of the deposit account you designate
for electronic transfers of funds, with authority to direct that loan payments
be made

    
      
         

      

      
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    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 on the platform as a lender or as a group
leader.  If you participate on the platform as a lender any amounts in
your Prosper funding account are subject to set-off against any delinquent
amounts owing on any loan or loans you obtain as a Prosper borrower. You will
not receive further notice in advance of our exercise of our right to set-off
amounts in your Prosper funding account against any delinquent amounts owing on
any loan or loans you obtain.  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 platform.

    

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

    

    13.  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) terminate or suspend your right to post
listings or otherwise participate on the platform; (ii) terminate this
Agreement and your registration with Prosper.  Upon termination of
this Agreement and your registration with Prosper, any listings you have posted
on the platform shall terminate, and will be removed from the platform
immediately.  Any loans you obtain prior to the effective date of
termination resulting from listings you had placed on the platform shall remain
in full force and effect in accordance with their terms.

    

    14.  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.  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 on the platform, 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 on the platform.

    

    15.  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 material you display or link to must not (i) infringe on
Prosper’s or 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.

    

    16.  Notices.  All
notices and other communications hereunder shall be given by email to your
registered email address or will be posted on the Prosper website, and shall be
deemed to have been duly given and effective upon transmission or
posting.  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

    
      
         

      

      
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    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.

    

    17.  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 THE PLATFORM,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.

    

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

    

    19.  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.  There are no other third party
beneficiaries to this Agreement.

    
      
         

      

      
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    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        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 unpaid fees incurred as a result of failed automated payments or returned
checks or bank drafts as provided in Paragraph 11, then to any late charges then
due, 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 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.

    
      
         

      

      
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    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, 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 give me at least 30 days 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.  Attorneys’
Fees.  To the extent permitted by law, I am liable to you for
your legal costs if you refer collection of your loan to a lawyer who is not
your salaried employee.  These costs may include reasonable attorneys’
fees as well as costs and expenses of any legal action.

    

    13.  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.

    

    14.  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.

    

    15.  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.  Unless a different address is
provided for in a different Paragraph of this Note, notices to me must be
properly addressed to my registered email address or to my address set forth
above unless I provide you with a different address for notice by giving notice
pursuant to this Paragraph, and notices to you must be addressed to
support@prosper.com or to Prosper Marketplace, Inc., 111 Sutter Street,
22nd Floor, San Francisco, CA 94104, Attention: Customer
Service.

    
      
         

      

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

    

    17.  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.

    

    18.  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 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

    
      
         

      

      
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    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).

    

    (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.

    
      
         

      

      
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    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:

            	 
      	 
      	 
      

    

    

    

    
      
         

      

      
        11prosper_s-1a5ex10d2.htm

    
      

      

    

    Exhibit 10.2

    

    LENDER
REGISTRATION AGREEMENT

    (Note
Commitment, Purchase and Sale Agreement)

    

    This
Lender Registration Agreement is made and entered into between you and Prosper
Marketplace, Inc. (“Prosper”, “we”, or “us”).  This Agreement
will govern all purchases of Borrower Payment Dependent Notes that you may, from
time to time, purchase from Prosper.

    

    Prosper
has filed with the U.S. Securities and Exchange Commission a registration
statement on Form S-1
(No.                        )
(as amended from time to time, the “Registration Statement”) to register the
continuous offering and sale of Notes issued by Prosper.  The
Registration Statement includes a prospectus related to the offering of the
Notes by Prosper dated
                        
(as supplemented from time to time, the “Prospectus”).  The
Registration Statement became effective on
                            
pursuant to the rules and regulations of the U.S. Securities and Exchange
Commission under the Securities Act of 1933, as amended.  You
acknowledge that the Registration Statement has been delivered to
you.  You should read the Prospectus carefully and retain a copy for
your records.

    

    1.  Registration as a
Prosper Lender.  You are registering as a lender in the Prosper
marketplace, so that you may be eligible to post bids on listings displayed on
Prosper’s online auction marketplace (the “platform”) and purchase from Prosper
Borrower Payment Dependent Notes (“Notes”) issued by Prosper that are dependent
for payment on payments we receive on the corresponding borrower loans described
in the listings (“borrower loans”).  As a registered lender you also
have access to the Folio Investing Note Trader platform, where you may list
Notes that you own for sale to other Prosper lender members, and bid to purchase
Notes offered for sale by other lender members, in an auction-style bidding
environment.  You agree to comply with the terms and provisions of
this Agreement, the Terms of Use of the Prosper website, and the policies posted
on the Prosper website, as amended from time to time by Prosper in its sole
discretion (collectively, the “Prosper Terms and Conditions”).

    

    Your role
as a Prosper “lender” is that of a purchaser of Notes issued by Prosper, and
your rights and obligations as a purchaser or prospective purchaser of Notes are
set forth below.  Although you are referred to in this Agreement and
on the Prosper website as a “lender,” you are not actually lending your money
directly to Prosper borrowers, but are, instead, acting as an investor and
making purchase commitments for Notes and purchasing Notes from Prosper, that
are dependent for payment on payments we receive on borrower
loans.  Prosper uses the term “lender” instead of “investor” in this
Agreement and on portions of Prosper’s website for the convenience of Prosper
users who appropriately view Prosper as a marketplace for connecting individuals
who wish to borrow money, with people who have money and the desire to have
loans funded to other individuals.

    

    2.  Posting of
Bids.   As a registered Prosper lender, you may post bids on
listings displayed on the platform.  “Listings” are Prosper borrowers’
loan requests that are displayed on the platform.  Listings include
the borrower’s requested loan amount, maximum offered interest rate and
corresponding yield percentage, and the minimum yield percentage that may be bid
on the listing. The yield percentage is the lender member’s effective yield, net
of servicing fees.  The minimum yield percentage applicable to each
listing is based on the Prosper Rating assigned to the listing and will be
calculated by adding the national average certificate of deposit rate that
matches the term of the loan, as published by BankRate.com, to the minimum
estimated loss rate associated with the Prosper Rating assigned to the listing,
which estimated loss rate is based on the historical performance of similar
Prosper loans.  Listings include a Prosper Rating, which is a letter
grade that may be based on a custom Prosper score that indicates the level of
risk associated with the listing and corresponds to an estimated average
annualized loss rate range for the listing.  Listings also include
other information, including but not limited to, the borrower’s debt-to-income
ratio, credit information from the borrower’s credit report, the borrower’s
group affiliation (if any), and the borrower’s self-reported annual income
range, occupation and employment status.  Borrowers are identified by
a Prosper user name but are not able to disclose their identity or contact
information to lenders.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    Prosper
lenders may ask borrowers questions about their listings and borrowers may, but
are not required to, respond to such questions.  Borrowers who elect
to respond to a lender’s question may respond privately, or they may elect to
have the question and answer posted publicly in the listing.  Lenders’
questions are not posted in the listing or displayed elsewhere on our website
unless the borrower elects to answer the question and elects to make the
question and answer publicly available, in which case the question and answer
appears in the listing.  We do not verify any borrowers’ responses to
lender members’ questions.

    

    A bid by
a lender on a listing is the lender’s commitment to purchase from Prosper a Note
in the principal amount of the lender’s winning bid, provided that the listing
has received bids totaling the full loan amount requested in the
listing.  Lenders “bid” the amount they are willing to commit to the
purchase of a Note that is dependent for payment on payments we receive on the
corresponding borrower loan, and the minimum yield percentage they are willing
to receive.  Lenders must have funds in the amount of the bid on
deposit in the Prosper funding account (described below).  Once a bid
is placed, it is irrevocable, and during the time a bid is a “winning” bid on
the listing, the amount of the bid is not permitted to be withdrawn from the
lender’s Prosper funding account.  Lender bids become “winning” bids
if such bids are in the group of bids for Notes that, in aggregate, correspond
to the requested loan amount and are in the lowest yield percentage among all
bids placed against the listing.

    

    Types of Bids.  You
can make manual bids by browsing through listings and placing a bid on the
listing or listings that you choose.  You can also bid by making a
“portfolio plan” by indicating the aggregate amount of your funds to be bid on
listings that meet your specified criteria, the maximum amount that may be bid
on one listing, the minimum yield percentage you are willing to receive, and the
specific borrower or loan criteria (for example, Prosper Rating, borrower income
or employment characteristics, group affiliation, debt-to-income ratio, etc.)
for the listings on which you wish to bid.  You may have more than one
portfolio plan in place at one time, and you may make manual bids while one or
more portfolio plans are in place.

    

    Availability of
Funds.  At the time you place a bid you must have funds on
deposit with Prosper in at least the amount of your bid, and you are not
permitted to withdraw those funds for so long as your bid is “winning” as
described in Section 3 below.  Your funds will be placed in an
FDIC-insured non-interest bearing account at Wells Fargo Bank, N.A. (the
“Prosper funding account”) separate from Prosper’s own funds.  At the
time you register as a lender, you must provide your deposit account information
to facilitate electronic transfers of funds to and from the Prosper funding
account and your deposit account.  You will not earn interest on funds
in the Prosper funding account.  All of your funds in the Prosper
funding account that are not committed to winning bids are available for further
bidding.  You may at any time request that your uncommitted funds in
the Prosper funding account be returned to you, in which case Prosper will
promptly return the remaining funds to your deposit account using the Automated
Clearing House (“ACH”) network.

    

    Your Note Purchase
Commitment.  Whether you make manual bids or bid by making a
portfolio plan, each bid you post on the platform is a commitment and promise to
purchase a Note issued by Prosper, with the proceeds of the sale of the Note
used by Prosper to purchase the specific borrower loan described in the listing
on which the bid was made.  Once you place a bid, you may not cancel
or withdraw the bid or reduce the amount of the bid, to the extent your bid has
been matched with one or more listings.

    

    AT THE
TIME YOU SUBMIT A BID ON A LISTING, YOU ARE COMMITTING TO PURCHASE A NOTE ISSUED
BY PROSPER IN THE AMOUNT OF YOUR BID, THAT IS DEPENDENT FOR ITS PAYMENT ON
PAYMENTS WE RECEIVE ON THE BORROWER LOAN DESCRIBED IN THE LISTING, IN THE EVENT
THE LISTING RECEIVES BIDS TOTALING THE FULL AMOUNT REQUESTED BY THE
BORROWER.

    

    Limits on
Bids.  Lenders may bid the entire amount requested by the
borrower, or may bid a lesser amount, subject to a minimum bid amount of
$25.  If you make a portfolio plan, you can achieve risk
diversification by designing your portfolio plan to bid your available funds in
increments as low as $25 and designating in your portfolio plan that the
incremental amount is the maximum amount that may be bid on any one
listing.  The aggregate amount of all of your bids, when added to the
amount outstanding on all of

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    your
Notes, must not exceed five million dollars ($5,000,000) for individual lenders,
or fifty million dollars ($50,000,000) for corporate or institutional
lenders.  Subject to these dollar limits, there is no limit on the
amount of funds you may commit to bids on listings.

    

    YOU AGREE
THAT WHEN MAKING BIDS YOU WILL NOT DISCRIMINATE AGAINST ANY BORROWER OR GROUP ON
THE BASIS OF RACE, COLOR, RELIGION, NATIONAL ORIGIN, SEX, MARITAL STATUS, AGE,
SEXUAL ORIENTATION, MILITARY STATUS, THE BORROWER’S SOURCE OF INCOME, OR ANY
OTHER BASIS PROHIBITED BY AN APPLICABLE FEDERAL, STATE OR LOCAL FAIR LENDING
LAW, INCLUDING WITHOUT LIMITATION THE EQUAL CREDIT OPPORTUNITY ACT.

    

    3.  Matching
of Bids and Listings.

    

    a.  In
order to bid on a listing, you must bid an amount equal to or less than the
current auction yield percentage for the listing, subject to a minimum yield
percentage based on the Prosper Rating assigned to each listing.  If
you bid by making a portfolio plan, Prosper’s auction platform will
automatically match your bids with any listings that offer a yield percentage
higher than your minimum acceptable yield percentage, and otherwise meet your
designated criteria.  Unless you specify a different bid order, bids
will be matched first with listings with the least time left for
bidding.

    

    b.  When
you place a bid on a listing, your bid will be compared to other lender bids
placed against the listing, and will be considered to be “winning” to the extent
the yield percentage specified in your bid is (i) lower than existing bids
against the listing, or (ii) equal to existing bids against the listing,
provided the listing has not already received a bid or bids totaling the full
amount requested by the borrower.  Your bid remains outstanding on a
listing until you are outbid, or until the listing is withdrawn by the borrower
or removed by Prosper in accordance with Section 10 below.  If
you are outbid, or if the listing is withdrawn or removed, your bid will be
cancelled, and your funds that were committed to your bid will be available for
further bidding.

    

    c.  If
a listing gets a bid or bids in an amount totaling the requested loan amount,
the bids that are winning bids at the time the listing ends or expires are
considered the winning bids for the listing.  Listings expire when the
designated bidding period elapses, and may end earlier at the borrower’s
discretion at any time after the listing receives bids totaling the requested
loan amount, or if the listing is bid down to the minimum yield percentage
applicable to the listing.  Listing designated by the borrower for
“automatic funding,” will end as soon as the listing receives a bid or bids
totaling the full amount of the requested loan.

    

    d.  Prosper
does not warrant or guaranty that your bids will become winning bids against any
listings.  In the event some, but not all, of the funds you bid become
winning bids against a listing (for example, when you are the last winning
bidder on a listing), you are committed to purchasing a Note issued by Prosper
in the amount of the portion of your funds that is a winning bid against the
listing, and the remainder of your funds (i.e., the unmatched funds) will remain
in your Prosper funding account, available for further bidding.

    

    e.  In
most instances a listing is matched with more than one bid, and you will be one
of several lenders who purchase a Note in a series of Notes that correspond to
the borrower loan described in the listing.  Each series of Notes will
correspond to a single borrower loan, as described in the listing, originated to
a Prosper borrower member.  Payments to the lenders who purchase the
Notes are dependent on payments received on the corresponding borrower
loan.

    

    f.  To
safeguard your privacy rights and those of borrowers, the identities and
addresses of borrowers and lenders are not displayed on the platform or
elsewhere on the Prosper website.  Only the borrower’s Prosper screen
name will appear on Prosper borrower listings, and only your Prosper screen name
will appear with your bids.

    

    4.  Funding and Sale of
Borrower Loans.  Once a lender has committed to purchase a Note
that is dependent for payment on the corresponding borrower loan and the listing
for such borrower loan receives bids from lenders totaling the requested loan
amount, we proceed with the funding of the corresponding borrower loan, and with
the issuance and sale of Notes to the lenders who were the
winning

    
      
         

      

      
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    bidders
on the listing.  You must commit to the purchase of a Note through the
platform before we will proceed with funding of the borrower loan that
corresponds to the Note you are committing to purchase.

    

    Loan
funding occurs when loan proceeds are disbursed into the borrower’s designated
deposit account.  All loans are made to Prosper borrowers by WebBank,
a Utah-chartered industrial bank (“WebBank”) from WebBank’s own funds, and will
be evidenced by a promissory note, in the form set forth on the attached
Exhibit B, naming WebBank as the payee, in the amount of the requested
loan.  Following disbursement of loan proceeds to the borrower, the
loan will be sold and assigned by WebBank to Prosper without recourse to
WebBank.  As described in Section 5 below, Prosper uses the
proceeds of the sale of each series of Notes to purchase the corresponding
borrower loan.

    

    5.  Purchase and Sale of
Notes.  At the time a borrower loan is purchased by Prosper, we
proceed with the issuance and sale of Notes to the lenders who were the winning
bidders on the listing.  The purchase price for any Notes you purchase
from Prosper through the platform will be the principal amount of the Notes that
you commit to purchase.  The Notes shall be issued pursuant to an
indenture (the “Indenture”) between Prosper and a trustee.  Funds in
the principal amount of each Note are transferred from each lender’s Prosper
funding account to Prosper, as payment of the purchase price for the
Note.  Prosper will use the proceeds of the sale of each series of
Notes to purchase the corresponding borrower loan from WebBank.

    

    Terms of the
Notes.  The Notes shall have the terms and conditions described
in the Prospectus, the Indenture and the Note.  The Indenture and the
Note are reproduced in Exhibit A to this Agreement, and Prospectus is
available for you to review on the Prosper website.  The form of
promissory note evidencing Prosper borrower loans is reproduced in
Exhibit B to this Agreement.  The specific interest rate,
maturity and other terms of the corresponding borrower loans are described in
the Prosper borrower listings.  Subject to the servicing standard set
forth in Section 6 below, you understand and agree that we may in our sole
discretion, at any time and from time to time, amend or waive any term of a
borrower loan, and we may in our sole discretion charge off any borrower loan
that we deem uncollectible.

    

    PAYMENT
ON THE NOTES, IF ANY, DEPENDS ENTIRELY ON THE RECEIPT OF PAYMENTS BY PROSPER IN
RESPECT OF THE CORRESPONDING BORROWER LOAN.  PROSPER DOES NOT WARRANT
OR GUARANTEE IN ANY MANNER THAT YOU WILL RECEIVE ALL OR ANY PORTION OF THE
PRINCIPAL OR INTEREST YOU EXPECT TO RECEIVE ON ANY NOTE OR REALIZE ANY
PARTICULAR OR EXPECTED RATE OF RETURN.  THE AMOUNT YOU RECEIVE ON YOUR
NOTE, IF ANY, IS SPECIFICALLY RESTRICTED TO PAYMENTS MADE BY US EQUAL TO THE
PAYMENTS MADE BY THE BORROWER UNDER A BORROWER LOAN TO WHICH YOU COMMITTED NET
OF SERVICING FEES ON ALL BORROWER PAYMENTS.  PROSPER DOES NOT MAKE ANY
REPRESENTATIONS AS TO A BORROWER’S ABILITY TO PAY AND DOES NOT ACT AS A
GUARANTOR OF ANY CORRESPONDING BORROWER LOAN PAYMENT OR PAYMENTS BY ANY
BORROWER.

    

    YOU
UNDERSTAND AND AGREE THAT BORROWERS MAY DEFAULT ON THEIR PAYMENT
OBLIGATIONS UNDER THE BORROWER LOANS AND THAT SUCH DEFAULTS WILL REDUCE THE
AMOUNTS, IF ANY, YOU MAY RECEIVE UNDER THE TERMS OF ANY NOTES YOU HOLD THAT
CORRESPOND TO THOSE BORROWER LOANS.

    

    6.  Servicing and
Collection of Borrower Loans.  Prosper will service all Prosper
borrower loans, both before and after default, and will service all
Notes.  In servicing borrower loans Prosper may, in its discretion,
utilize affiliated or unaffiliated third party loan servicers, collection
agencies or other agents or contractors.

    

    Prosper
and any third-party servicer servicing a borrower loan may, in its sole
discretion and subject to the servicing standard set forth in this Section,
refer a borrower loan to a collection agency at any time, or elect to initiate
legal action to collect a borrower loan, or sell a borrower loan to a third
party debt

    
      
         

      

      
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    buyer at
any time.  Subject to the servicing fees described below, any amounts
received by Prosper on Prosper borrower loans will be forwarded
to  the holder of the Notes corresponding to the borrower
loan.

    

    The
referral of a delinquent borrower loan to a collection agency within five
(5) business days after it becomes thirty days past-due shall be deemed to
constitute commercially reasonable servicing and collection efforts. Prosper and
any third-party servicer servicing a borrower loan shall have the right, without
your consent, at any time and from time to time and subject to the servicing
standard set forth in this Section, to change the payment date or reduce the
principal amount or the rate of interest or the place and manner of making loan
payments on a borrower loan, or amend or waive any other term of such borrower
loan, or charge off any borrower loan that Prosper or any third-party servicer
servicing the borrower loan deems uncollectible.

    

    Servicing
Standard.  In servicing borrower loans Prosper will use
commercially reasonable efforts to service and collect the borrower loans in
accordance with industry standards customary for loans of the same general type
and character as the borrower loans.

    

    Servicing
Compensation.  As compensation for servicing Prosper borrower
loans and Notes, Prosper shall be entitled to retain from payments received on
the borrower loans a servicing fee calculated by the application of an annual
servicing fee rate applied to the outstanding principal balance of the
Notes.  The current servicing fee rates charged by Prosper are posted
in the Fees and Charges section of the
Prosper website, and are subject to change by Prosper at any time without
notice.

    

    Prosper’s
current servicing fee rate will be disclosed in all
listings.  Servicing fees will reduce the effective yield on Prosper
borrower loans below the borrower interest rate.

    

    The
servicing fee on each of your Notes will be the amount of the servicing fee in
effect at the time the listing for the loan evidenced by your Note was posted,
and will remain unchanged for the term of the Note. The servicing fee is payable
monthly by deduction from each lender’s share of a loan payment by the borrower.
The servicing fee is payable on all payments received on borrower loans
corresponding to the Notes, including without limitation partial payments made
toward a borrower’s loan. We will not pay you any non-sufficient funds fees or
collection fees we or a third-party collection agency charge, and such fees will
be retained by the party receiving the fee as additional servicing compensation.
Prosper will pay you any late fees we receive on Prosper borrower
loans.  Any prepayments received on borrower loans will be paid
ratably to the Note holders, subject to applicable servicing fees.

    

    7.  Representations and
Warranties as to Notes Sold.  Prosper makes the following
representations and warranties to you, with respect to each Note sold to you
under this Agreement, as of the date the Note is sold, assigned and transferred
to you:

    

    a.  Prosper
has complied in all material respects with applicable federal, state and local
laws in connection with the offer and sale of the Note.

    

    b.  The
Note has been duly authorized and, following payment of the purchase price by
you and electronic execution, authentication and delivery to you, will
constitute valid and binding obligations of Prosper enforceable against Prosper
in accordance with their terms, except as the enforcement of the Note may be
limited by applicable bankruptcy, insolvency or similar laws;

    

    c.  The
proceeds of the borrower loan corresponding to the Note sold have been fully
disbursed to the borrower or the borrower’s designated payee prior to your
purchase of the Note.

    

    d.  Prosper
has made commercially reasonable efforts to authenticate and verify the identity
of the borrower obligated on the borrower loan that corresponds to the
Note.

    

    e.  With
regard to the listing relating to your Note, in the event either of the
following occurs: (1) a Prosper score different from the score calculated
by Prosper for the listing, or (2) Prosper incorrectly

    
      
         

      

      
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    applied
its formula to determine the Prosper score, resulting in a Prosper Rating
different from the Prosper Rating that should have appeared in the listing, the
remedies in Section 8 below shall apply.  Prosper is not, however,
under any obligation to cure, indemnify or repurchase a series of Notes because
of the Prosper score or Prosper Rating for any other reason, including because
the Prosper score or Prosper Rating proved inaccurate.

    

    f.  In
the event of a material default under a Note you purchase from Prosper under
this Agreement that is the result of verifiable identity theft of the named
borrower’s identity, Prosper will repurchase the Note by crediting your Prosper
funding account with the remaining unpaid principal balance of the
Note.  The determination of whether verifiable identity theft has
occurred shall be in Prosper’s sole discretion.  We may require proof
of the identity theft, such as a copy of a police report filed by the person
whose identity was wrongfully used to obtain the fraudulently-induced borrower
loan, an identity theft affidavit or a bank verification letter (or all of the
above) in order to determine that verifiable identity theft has
occurred.  Prosper shall not be required to repurchase a Note under
this subsection until such Note is at least 120 days past-due, provided,
however, that Prosper may in its sole discretion elect to repurchase a Note at
an earlier time.  You agree that repurchase of your Note by Prosper is
the sole remedy you will have with respect to any such Notes.

    

    8.  Remedies; Cure and
Repurchase of Loans.  In the event of a breach by Prosper of
any of the foregoing representations and warranties that materially and
adversely affects your interest in a Note sold to you under this Agreement,
Prosper shall either (i) cure the breach, if the breach is susceptible to
cure, (ii) repurchase the Note from you, or (iii) indemnify and hold
you harmless against all losses (including losses resulting from the nonpayment
of the Note), damages, expenses, legal fees, costs and judgments resulting from
any claim, demand or defense arising as a result of the breach.  The
decision whether a breach is susceptible to cure, or whether Prosper shall cure
or repurchase a Note or indemnify you with respect to the Note, shall be in
Prosper’s sole discretion.  Upon discovery by Prosper of any such
breach of the foregoing representations and warranties requiring cure or
repurchase the Note, Prosper shall give you notice of the breach, and of
Prosper’s election to cure or repurchase the Note, no later than ninety (90)
days after our discovery of the breach.  In the event Prosper
repurchases a Note, Prosper will pay you a repurchase price equal to the
remaining outstanding principal balance of the Note as of the date of
repurchase.  The repurchase price will be paid to you by remittance
into the Prosper funding account, and those funds will be available to you for
further bidding.  Upon any such repurchase, the Note shall be
transferred and assigned by you to Prosper, in each case without recourse, and
you authorize and agree that Prosper may execute any endorsements or assignments
necessary to effectuate the transfer and assignment of the Note to
Prosper.  Prosper’s obligation to cure or repurchase a Note or
indemnify you for a  breach of the foregoing representations and
warranties pursuant to this Section is your sole remedy with respect to a
breach of Prosper’s representations and warranties set forth in Section 7
above.

    

    9.  No Advisory
Relationship.  You acknowledge and agree that (i) the
purchase and sale of the Notes pursuant to this Agreement is an arms-length
transaction between you and Prosper; (ii) in connection with the purchase
and sale of the Notes, Prosper is not acting as your agent or fiduciary;
(iii) Prosper assumes no advisory or fiduciary responsibility in your favor
in connection with the purchase and sale of the Notes; (iv) Prosper has not
provided you with any legal, accounting, regulatory or tax advice with respect
to the Notes; and (v) you have consulted your own legal, accounting,
regulatory and tax advisors to the extent you have deemed it
appropriate.

    

    10.  Prosper’s
Right to Verify Information and Cancel Funding.

    

    a.  Prosper
reserves the right to verify the accuracy of all information provided by
borrowers,  lenders and group leaders in connection with listings,
bids and loans.  Prosper also reserves the right to determine in its
reasonable 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 registration agreement between Prosper and such
user.  Prosper may conduct its review at any time — before, during or
after the posting of a listing, or before or after the funding or Prosper’s
purchase of a borrower loan or the sale of a Note.  You agree to
respond promptly to Prosper’s requests for information in connection with your
bid, accounts, or your registration with Prosper.

    
      
         

      

      
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    b.  In
the event Prosper or WebBank, prior to the funding or Prosper’s purchase of a
borrower loan, reasonably determines 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, Prosper and WebBank 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 loan amount requested,
Prosper may conduct a “pre-funding” review prior to the funding or Prosper’s
purchase of the borrower loan.  Prosper may, at any time and in its
sole discretion, delay the funding or Prosper’s purchase of a borrower loan in
order to enable Prosper 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.  Prosper may
cancel or proceed with the funding or Prosper’s purchase of the borrower loan,
depending on the results of Prosper’s 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 each bidder’s funds will be
returned to the Prosper funding account, available for further
bidding.

    

    d.  In
most instances, Prosper and WebBank do not verify the income, employment and
occupation or other information provided by borrowers in
listings.  The borrower’s income, employment and occupation in
listings are self-reported, and the borrower’s debt-to-income ratio is
determined by Prosper and WebBank from a combination of the borrower’s
self-reported income and information from the borrower’s credit
report.  The credit data that appears in Prosper borrower listings is
taken directly from a credit report obtained on the borrower from a credit
reporting agency, without any review or verification by Prosper or
WebBank.  Prosper and WebBank do not verify any statements by
borrowers in Prosper borrower listings as to how loan proceeds are to be used
and does not confirm after borrower loan funding how loan proceeds were
used.  In most instances homeownership status in borrower listings is
derived from the borrower’s credit report, but is not verified by Prosper or
WebBank; if the report reflects an active mortgage loan, the borrower is
presumed to be a homeowner.  In connection with Prosper’s and
WebBank’s identity and anti-fraud verification of borrowers, Prosper verifies
the borrower’s deposit account to determine that the borrower is a holder of
record of the account.

    

    11.  No
Guarantee of Returns or Payments.

    

    A.  PROSPER
DOES NOT WARRANT OR GUARANTEE THAT YOU WILL RECEIVE ANY RATE OF RETURN, OR ANY
MINIMUM AMOUNT OF PRINCIPAL OR INTEREST ON ANY NOTE, OR ANY PRINCIPAL OR
INTEREST AT ALL.  THE AMOUNT YOU RECEIVE ON YOUR NOTES IS WHOLLY
DEPENDENT UPON THE BORROWERS’ PAYMENT PERFORMANCE ON THE BORROWER LOANS
CORRESPONDING TO YOUR NOTES.  PROSPER DOES NOT GUARANTEE ANY BORROWER
LOANS OR NOTES PURCHASED OR SOLD THROUGH THE PLATFORM AND DOES NOT ACT AS A
GUARANTOR OF ANY LOAN PAYMENT OR PAYMENTS BY ANY BORROWER.

    

    B.  YOU
FURTHER UNDERSTAND AND ACKNOWLEDGE THAT BORROWERS MAY DEFAULT ON THE
BORROWER LOANS CORRESPONDING TO YOUR NOTES, AND THAT SUCH DEFAULTS
MAY NEGATIVELY AFFECT THE AMOUNT OF PRINCIPAL AND INTEREST YOU RECEIVE ON
YOUR NOTES.

    

    12.  Restrictions on
Use.  Except as provided in Section 14 below, you are not
authorized or permitted to use Prosper to bid or purchase Notes for someone
other than yourself.  You must be an owner of the deposit account you
designate for electronic transfers of funds, with authority to direct that funds
be transferred to or from the account.  Although you are registering
as a lender, you may also register and participate in the Prosper marketplace as
a borrower.  If you obtain one or more borrower loans through the
platform, amounts in your Prosper funding account are subject to set-off against
any delinquent amounts

    
      
         

      

      
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    owing on
your loans.  Amounts in your Prosper funding account are also subject
to set-off against any shortfall resulting from ACH returns of transfers or
deposits of funds to your Prosper funding account.  You will not
receive further notice in advance of our exercise of our right to set-off
amounts in your Prosper funding account against any delinquent amounts owing on
any loan or loans you obtain. Prosper may in its sole discretion, with or
without cause and with or without notice, restrict your access to the platform
or the Prosper website.

    

    13.  Financial Suitability
Representations and Warranties.  You represent and warrant that
you satisfy the applicable minimum financial suitability standards and maximum
investment limits, established for the platform or the Note Trader platform (or
as set forth in a supplement to the Prospectus for residents of the state in
which you reside), and you agree to provide any additional documentation
reasonably requested by us, as may be required by the securities administrators
of certain states, to confirm that you meet such minimum financial suitability
standards and maximum investment limits.  You understand that the
Notes will not be listed on any securities exchange, that there may be no, or
only a limited, Note Trader platform for the Notes, that any trading of Notes
must be conducted in accordance with federal and applicable state securities
laws and that Note purchasers should be prepared to hold the Notes they purchase
until the Notes mature.

    

    14.  Your Other
Representations and Warranties.  You warrant and represent to
Prosper, as of the date of this Agreement and as of any date that you commit to
purchase Notes, that (i) you have received the Prospectus, the Indenture,
and the form of the Note; (ii) you have the legal competence and capacity
to execute and perform this Agreement and that you have duly authorized,
executed and delivered this Agreement; and (iii) in connection with this
Agreement you have complied in all material respects with applicable federal,
state and local laws.  In addition, if you are entering into this
Agreement on behalf of a corporation, partnership, limited liability company or
other entity (“institution”), you warrant and represent that (i) you have
all necessary power and authority to execute and perform this Agreement on such
institution’s behalf; (ii) the execution and performance of this Agreement
will not violate any provision in the institution’s charter documents, by-laws,
indenture of trust or partnership agreement, or other constituent agreement or
instrument governing the formation or administration of your institution; and
(iii) the execution and performance of this Agreement will not constitute
or result in a breach or default under, or conflict with, any order, ruling or
regulation of any court or other tribunal or of any governmental commission or
agency, or any agreement or other undertaking to which the institution is a
party or by which it is bound.

    

    15.  Prosper’s
Representations and Warranties.  Prosper represents and
warrants to you, as of the date of this Agreement and as of any date that you
commit to purchase Notes, that: (a) it is duly organized and is validly
existing as a corporation in good standing under the laws of Delaware and has
corporate power to enter into and perform its obligations under this Agreement;
(b) this Agreement has been duly authorized, executed and delivered by
Prosper; (c) the Indenture has been duly authorized by Prosper and
qualified under the Trust Indenture Act of 1939 and constitutes a valid and
binding agreement of Prosper, enforceable against Prosper in accordance with its
terms, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency or similar laws.

    

    16.  Recommendations from
Prosper Friends.  Prosper allows borrowers to create a network
of Prosper friends, and obtain bids and recommendations of listings from one or
more of the borrower’s designated Prosper friends.  Recommendations
accompanying bids from borrowers’ Prosper friends are displayed with borrowers’
listings.  Prosper friends do not guarantee payments on any Note or on
any corresponding borrower loan, and a bid or recommendation from a borrower’s
Prosper friend does not obligate the individual making the bid or recommendation
to guarantee or make any payments on any Note or on any corresponding borrower
loan.

    

    17.  Prohibited
Activities.  You agree that you will not do the following, in
connection with any listings, bids, Notes, borrower loans or other transactions
involving or potentially involving Prosper:

    

    a.  Represent
yourself to any person, as a director, officer or employee of Prosper, or
WebBank, unless you are such director, officer or employee;

    
      
         

      

      
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    b.  Charge,
or attempt to charge, any Prosper borrower any fee in exchange for your
agreement to bid on or recommend a borrower’s listing, or propose or agree to
accept any fee, bonus, additional interest, kickback or thing of value of any
kind, in exchange for your agreement to bid on or recommend a borrower’s
listing;

    

    c.  Engage
in any activities that require a license as a loan broker, credit services
organization, credit counselor, credit repair organization, lender or other
regulated entity, including but not limited to soliciting loans or loan
applications, quoting loan terms and rates, counseling borrowers on credit
issues or loan options, in connection with any Prosper loan;

    

    d.  Take
any action on your own to collect, or attempt to collect from any borrower,
directly or through any third party, any amount owing under any of your Notes or
on any of the borrower loans that correspond to your Notes;

    

    e.  Bring
a lawsuit or other legal proceeding against any borrower on any borrower
loan;

    

    f.  Contact
borrowers on any borrower loans corresponding to your Notes without the
borrower’s consent;

    

    g.  Contact
any collection agency or law firm to which any borrower loan corresponding to
your Note has been referred for collection;

    

    h.  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 or off of the
Prosper website, including but not limited to on any forum, blog or
website;

    

    i.  Contact
a borrower, group leader or Prosper friend or take any action to collect, or
attempt to collect, any amount from any group leader or any of the borrower’s
Prosper friends that provided a recommendation of a listing relating to any
borrower loans corresponding to your Notes, or take any action that directly or
indirectly suggests that any borrower’s group leader or Prosper friend is
obligated in any way on a borrower loan corresponding to any Note;
or

    

    j.  Violate
any applicable federal, state or local laws, including but not limited to, the
Equal Credit Opportunity Act and other fair lending laws, Truth in Lending Act,
Fair Credit Reporting Act, Fair Debt Collection Practices Act, Federal Trade
Commission Act, federal or state consumer privacy laws, state usury or loan fee
statutes, state licensing laws, or state unfair and deceptive trade practices
statutes.

    

    18.  Tax
Treatment.  The parties agree that the Notes are intended to be
indebtedness of Prosper that have original issue discount for U.S. federal
income tax purposes.  You agree that you will not take any position
inconsistent with such treatment of the Notes for tax, accounting, or other
purposes, unless required by law.  You further acknowledge that the
Notes will be subject to the original issue discount rules of the Internal
Revenue Code of 1986, as amended, as described in the Prospectus.  You
acknowledge that you are prepared to bear the risk of loss of your entire
purchase price for any Notes you purchase.

    

    19.  Termination of
Registration.  Prosper may in its sole discretion, with or
without cause, terminate this Agreement by giving you notice as provided
below.  In addition, upon our reasonable 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) terminate or suspend your right to bid
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 bids you have placed on
the platform shall terminate, and will be removed from the platform
immediately.  Any Notes you purchase from Prosper prior to the
effective date of termination shall remain in full force and effect in
accordance with their terms.

    
      
         

      

      
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    20.  Indemnification.  In
addition to your indemnification obligations set forth in Prosper’s Terms and
Conditions, you agree to indemnify, defend, protect and hold harmless Prosper
and its officers, directors, shareholders, employees and agents against all
claims, liabilities, actions, costs, damages, losses, demands and expenses of
every kind, known or unknown, contingent or otherwise, (i) resulting from
any material breach of any obligation you undertake in this Agreement, including
but not limited to your obligation to comply with any applicable laws;
(ii) relating to the contents of your Prosper member web page, your own
website or your business; (iii) resulting from your acts, omissions and
representations (and those of your employees, agents or representatives)
relating to Prosper; or (iv) asserted by third parties against Prosper
alleging that the trademarks, trade names, logos or branding you use, display,
link to or advertise infringes upon the intellectual property rights of any such
third party.  Your obligation to indemnify Prosper shall survive
termination of this Agreement, regardless of the reason for
termination.

    

    21.  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.  Prosper will give you notice of material changes to this
Agreement, or the Prosper Terms and Conditions, in the manner set forth in
Section 23.  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 Indenture, Notes and Prosper
Terms and Conditions, represent the entire agreement between you and Prosper
regarding your participation as a lender on the platform, 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 lender on the platform.

    

    22.  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 material you display or link to must not (i) infringe on
Prosper’s or 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;
(vii) contain viruses, trojan horses, worms, time bombs, cancelbots or
other similar harmful or deleterious programming routines.

    

    23.  Notices.  All
notices and other communications hereunder shall be given by email to your
registered email address or will be posted on the Prosper website, and shall be
deemed to have been duly given and effective upon transmission or
posting.  All notices, required disclosures and other communications
to you from the trustee under the Indenture relating to Notes you purchase or
own will be transmitted to you by e-mail to your registered e-mail address or
mailed to you at the address as it appears on the registration books of the
Registrar under the Indenture.  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 us if your registered email address changes, and you agree
to update your registered residence address on the Prosper website if you change
your residence.

    

    24.  No
Warranties.  EXCEPT FOR THE REPRESENTATIONS CONTAINED IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES TO THE OTHER
PARTY, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.

    

    25.  Limitation on
Liability.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
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 THE OTHER REGARDING THE EFFECT THAT THE AGREEMENT MAY HAVE UPON
THE FOREIGN, FEDERAL, STATE OR LOCAL TAX LIABILITY OF THE
OTHER.

    
      
         

      

      
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    26.  Miscellaneous.  The
parties acknowledge that there are no third party beneficiaries to this
Agreement.  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 the laws of the State of
New York.  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.  The parties agree to execute and deliver such further
documents and information as may be reasonably required in order to effectuate
the purposes of this Agreement.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    INDENTURE

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    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        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 unpaid fees incurred as a result of failed automated payments or returned
checks or bank drafts as provided in Paragraph 11, then to any late charges then
due, 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 paid after the scheduled due date, 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 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

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    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, 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 give me at least 30 days 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.  Attorneys’
Fees.  To the extent permitted by law, I am liable to you for
your legal costs if you refer collection of your loan to a lawyer who is not
your salaried employee.  These costs may include reasonable attorneys’
fees as well as costs and expenses of any legal action.

    

    13.  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.

    

    14.  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.

    

    15.  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.  Unless a different address is
provided for in a different Paragraph of this Note, notices to me must be
properly addressed to my registered email address or to my address set forth
above unless I provide you with a different address for notice by giving notice
pursuant to this Paragraph, and notices to you must be addressed to
support@prosper.com or to Prosper Marketplace, Inc., 111 Sutter Street,
22nd Floor, San Francisco, CA 94104, Attention: Customer
Service.

    
      
         

      

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

    

    17.  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.

    

    18.  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 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

    
      
         

      

      
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    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).

    

    (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.

    
      
         

      

      
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    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:

            	 
      	 
      

    

    

    
      
         

      

      
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