BORROWER REGISTRATION AGREEMENT
Exhibit 10.1
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 in connection with the making 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”). The Terms of Use and Prosper
Policies are accessible via a link at the bottom of the home page of the Prosper
website.
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
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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:
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(i)
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Your
Prosper Rating;
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(ii)
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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;
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(iii)
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Whether
you own a home;
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(iv)
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The
number of accounts on which you are currently late on a
payment;
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(v)
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The
total past-due amount you owe on all delinquent and charged-off
accounts;
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(vi)
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The
number of 90+ days past due delinquencies on your credit report in the
last 7 years;
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(vii)
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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;
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(viii)
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The
month and year your first recorded credit line (e.g., revolving,
installment, or mortgage credit) was
opened;
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(ix)
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The
total number of credit lines appearing on your credit report, along with
the number that are open and
current;
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(x)
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The
total balance on all of your open revolving credit
lines;
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(xi)
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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
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(xii)
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The
number of inquiries made by creditors to your credit report in the last
six months.
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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.
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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, 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.
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.
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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 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.
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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 in connection with the making 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 committed
funds 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 make bids in connection with your loan.
b.
Prosper’s auction platform will automatically match your listing with any bids
that specify a yield percentage that corresponds to a minimum interest rate
equal to or below the maximum interest rate you would accept, subject to a
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 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. 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
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a loan to
be made. You will not receive a loan ifonly 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 origination 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, in which case if you are a member of a group your failure to
make loan payments when due, or the failure of another group member 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, if you fail to make timely payments on your loan, your loan
may be referred to a collection agency for collection. Prosper may report loan
payment delinquencies in excess of thirty (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 WITH BIDS 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 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
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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 16. 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
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have been
duly given and effective upon transmission or posting. You can contact us by
sending an email to xxxxxxx@xxxxxxx.xxx or calling us toll-free at (000)
000-0000. You also agree to notify Prosper if your registered email address
changes, and you agree to update your registered residence address, mailing
address and telephone number on the Prosper website if your address or telephone
number changes.
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 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 in 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.
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If I
close my account or if my account changes or is otherwise inaccessible such that
you are unable to withdraw my payments from that account or draw bank drafts on
the account, I will notify you at least three (3) days prior to any such
closure, change or inaccessibility of my account, and authorize you to withdraw
my payments from, or draw bank drafts on, another account that I
designate.
With
regard to payments made by automatic withdrawals from my account, I have the
right to (i) stop payment of a preauthorized automatic withdrawal, or (ii)
revoke my prior authorization for automatic withdrawals with regard to all
further loan payments, by notifying the financial institution where my account
is held, orally or in writing at least three (3) business days before the
scheduled date of the transfer. I agree to notify you orally or in writing, at
least three (3) business days before the scheduled date of the transfer, of the
exercise of my right to stop a payment or to revoke my prior authorization for
further automatic withdrawals.
8. Default and
Remedies. If I fail to make any payment when due in the manner required
by Paragraph 7, 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.
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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 WebBank at
xxxxxxx@xxxxxxx.xxx or x/x Xxxxxxx Xxxxxxxxxxx, Inc., 000 Xxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxxxxxxx, XX 00000, Attention: Customer Service.
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 American Arbitration Association
or JAMS, under the applicable arbitration rules of the administrator in effect
at the time a Claim is filed (“Rules”). If I file a claim, I may
chose the administrator; if you file a claim, you may chose the administrator
but you agree to change to the other permitted administrator at my request
(assuming that the other administrator is available). I can obtain
the Rules and other information about initiating arbitration by contacting the
American Arbitration Association at 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx,
XX
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10019,
(000) 000-0000, xxx.xxx.xxx; or by contacting JAMS at 0000 Xxxx Xxxxxx, Xxxxx
000, Xxxxxx, XX 00000, (000) 000-0000, xxx.xxxxxxx.xxx. Your address
for serving any arbitration demand or claim is WebBank, x/x Xxxxxxx Xxxxxxxxxxx,
Inc., 000 Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxxxxxxx, XX 00000, 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 administrator 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 administrator 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 administrator. 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 administrator, then these statutory
rights will apply in arbitration.
(e) Any
in-person arbitration hearing will be held in the city with the federal district
court closest to my residence, or in such other location as the parties may
mutually agree. The arbitrator shall apply applicable substantive law
consistent with the Federal Arbitration Act, 9 U.S.C. § 1-16, and, if
requested by either party, provide written reasoned findings of fact and
conclusions of law. The arbitrator shall have the power to award any
relief authorized under applicable law. Any appropriate court may
enter judgment upon the arbitrator’s award. The arbitrator’s decision
will be final and binding except that: (1) any party may exercise any appeal
right under the FAA; and (2) any party may appeal any award relating to a claim
for more than $100,000 to a three-arbitrator panel appointed by the
administrator, 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 administrator 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
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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, x/x Xxxxxxx Xxxxxxxxxxx, Inc., 000 Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxxxxxxx, XX 00000, Attention: Legal Department. This is
the only way that I can reject this Resolution of Disputes
provision.
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1186660v.1
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(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 xx
Xxx Truth in Lending
Act (15 Xxxxxx xx xxx Xxxxxxx Xxxxxx xxxxxxxxx 0000 xxxxx 0000x) xxxx
proporcionadas en español antes de firmar cualesquiera documentos de
préstamos.
Missouri Residents: Oral
agreements or commitments to loan money, extend credit or to forbear from
enforcing repayment of a debt including promises to extend or renew such debt
are not enforceable. To protect me (borrower) and you (creditor) from
misunderstanding or disappointment, any agreements we reach covering such
matters are contained in this writing, which is the complete and exclusive
statement of the agreement between us, except as we may later agree in writing
to modify it.
By
signing this Note, I acknowledge that I (i) have read and understand all
terms and conditions of this Note, (ii) agree to the terms set forth herein, and
(iii) acknowledge receipt of a completely filled-in copy of this
Note.
Date:
_______________ ________________________
[Borrower]
Last
Updated: September 7, 2009
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