UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
   
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2015
Commission File Number: 001-36771
 
LendingClub Corporation
(Exact name of registrant as specified in its charter)

Delaware
51-0605731
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
 
 
71 Stevenson St., Suite 300, San Francisco, CA 94105
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (415) 632-5600
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   ý     No   ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes   ý     No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
 
¨

Accelerated filer
¨

 
 
 
 
Non-accelerated filer
 
ý (Do not check if a smaller reporting company)
Smaller reporting company
¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes   ¨     No   ý
As of July 31, 2015 , there were 375,196,702 shares of the registrant’s common stock outstanding.


LENDINGCLUB CORPORATION
TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Except as the context requires otherwise, as used herein, “Lending Club,” “Company”, “we,” “us,” and “our,” refer to LendingClub Corporation, a Delaware corporation, and, where appropriate, its two wholly owned subsidiaries:
•
LC Advisors, LLC (LCA), a registered investment advisor with the Securities and Exchange Commission (SEC) that acts as the general partner for certain private funds and as advisor to separately managed accounts.
•
Springstone Financial, LLC (Springstone), a company we acquired in April 2014 that facilitates education and patient finance loans.

Additionally, LC Trust I (the Trust) is an independent Delaware business trust that acquires and holds loans for the sole benefit of certain investors that purchase trust certificates (Certificates) issued by the Trust and that are related to underlying loans.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 29A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this Quarterly Report on Form 10-Q (Report) regarding borrowers, credit scoring, Fair Isaac Corporation (FICO) or other credit scores, our strategy, future operations, expected losses, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “appear,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “will,” or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements include, among other things, statements about:
•
the status of borrowers, the ability of borrowers to repay loans and the plans of borrowers;
•
interest rates and origination fees on loans charged by issuing banks;
•
expected rates of return for investors;
•
the effectiveness of our scoring models;
•
the likelihood of us having to fund contingent commitments, including commitments made to Springstone’s issuing bank and credit support agreements we have entered into with certificate investors;
•
the potential impact of having to fund any such contingent commitments;
•
transaction fee revenue we expect to recognize after loans are issued by our issuing bank partners;
•
our financial condition and performance, including the impact that management’s estimates have on our financial performance;
•
investor, borrower, platform and loan performance-related factors that may affect our revenue;
•
our ability to develop and maintain effective internal controls;
•
our compliance with applicable local, state and federal laws;
•
our compliance with applicable regulations and regulatory developments affecting our marketplace; and
•
other risk factors listed from time to time in reports we file with the SEC.

We caution you that the foregoing list may not contain all of the forward-looking statements in this report. We may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. We have included important factors in the cautionary statements included in this Report, particularly in "Part II - Other Information - Item 1A - Risk Factors" in this Report and the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2014, that could, among other things, cause actual results or events to differ materially from forward-looking statements contained in this Report. Forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

You should read this Report carefully and completely and with the understanding that actual future results may be materially different from what we expect. We do not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.


1

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
LENDINGCLUB CORPORATION
Condensed Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)
 
June 30, 
 2015
 
December 31, 
 2014
Assets
 
 
 
Cash and cash equivalents
$
490,466

 
$
869,780

Restricted cash
56,738

 
46,763

Securities available for sale
397,771

 
—

Loans at fair value (includes $2,343,799 and $1,772,407 from consolidated trust, respectively)
3,637,383

 
2,798,505

Accrued interest receivable (includes $20,174 and $15,209 from consolidated trust, respectively)
32,631

 
24,262

Property, equipment and software, net
39,087

 
27,051

Intangible assets, net
33,483

 
36,302

Goodwill
72,683

 
72,592

Due from related parties
578

 
467

Other assets
21,994

 
14,332

Total assets
$
4,782,814

 
$
3,890,054

Liabilities and Stockholders ’  Equity
 
 
 
Accounts payable
$
5,142

 
$
5,892

Accrued interest payable (includes $22,820 and $16,989 from consolidated trust, respectively)
35,398

 
26,964

Accrued expenses and other liabilities
37,824

 
31,620

Payable to investors
48,475

 
38,741

Notes and certificates at fair value (includes $2,358,679 and $1,772,407 from consolidated trust, respectively)
3,660,124

 
2,813,618

Total liabilities
3,786,963

 
2,916,835

Stockholders’ Equity
 
 
 
Common stock, $0.01 par value; 900,000,000 shares authorized at June 30, 2015 and December 31, 2014, respectively; 374,524,782 and 371,443,916 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively
3,745

 
3,714

Additional paid-in capital
1,086,674

 
1,052,728

Accumulated deficit
(93,737
)
 
(83,223
)
Accumulated other comprehensive loss
(831
)
 
—

Total stockholders’ equity
995,851

 
973,219

Total liabilities and stockholders’ equity
$
4,782,814

 
$
3,890,054


See Notes to Condensed Consolidated Financial Statements.

2

LENDINGCLUB CORPORATION
Condensed Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Amounts)
(Unaudited)

 
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,
 
2015
 
2014
 
2015
 
2014
Operating revenue:
 
 
 
 
 
 
 
Transaction fees
$
85,651

 
$
45,801

 
$
158,133

 
$
81,213

Servicing fees
6,479

 
1,468

 
11,871

 
3,248

Management fees
2,548

 
1,461

 
4,763

 
2,555

Other revenue (expense)
1,441

 
(109
)
 
2,397

 
307

Total operating revenue
96,119

 
48,621

 
177,164

 
87,323

Net interest income:

 
 
 
 
 
 
Total interest income
130,526

 
85,212

 
243,998

 
158,260

Total interest expense
(129,727
)
 
(85,594
)
 
(243,007
)
 
(158,594
)
Net interest income (expense)
799

 
(382
)
 
991

 
(334
)
Fair value adjustments, loans
(52,201
)
 
(26,405
)
 
(100,021
)
 
(51,154
)
Fair value adjustments, notes and certificates
52,200

 
26,391

 
100,015

 
51,108

Net interest income (expense) after fair value adjustments
798

 
(396
)
 
985

 
(380
)
Total net revenue
96,917

 
48,225

 
178,149

 
86,943

Operating expenses:
 
 
 
 
 
 
 
Sales and marketing
40,317

 
19,225

 
75,201

 
39,807

Origination and servicing
15,287

 
8,566

 
27,967

 
15,968

General and administrative
45,064

 
28,981

 
84,479

 
47,014

Total operating expenses
100,668

 
56,772

 
187,647

 
102,789

Loss before income tax expense
(3,751
)
 
(8,547
)
 
(9,498
)
 
(15,846
)
Income tax expense
389

 
640

 
1,016

 
640

Net loss
$
(4,140
)
 
$
(9,187
)
 
$
(10,514
)
 
$
(16,486
)
Basic net loss per share attributable to common stockholders
$
(0.01
)
 
$
(0.16
)
 
$
(0.03
)
 
$
(0.29
)
Diluted net loss per share attributable to common stockholders
$
(0.01
)
 
$
(0.16
)
 
$
(0.03
)
 
$
(0.29
)
Weighted-average common shares - Basic
372,841,945

 
57,971,180

 
372,401,583

 
56,903,128

Weighted-average common shares - Diluted
372,841,945

 
57,971,180

 
372,401,583

 
56,903,128


See Notes to Condensed Consolidated Financial Statements.



3

LENDINGCLUB CORPORATION
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
(Unaudited)

 
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,
 
2015
 
2014
 
2015
 
2014
Net loss
$
(4,140
)
 
$
(9,187
)
 
$
(10,514
)
 
$
(16,486
)
Other comprehensive loss, before tax:
 
 
 
 
 
 
 
Change in net unrealized loss on securities available for sale
(831
)
 
—

 
(831
)
 
—

Other comprehensive loss, before tax
(831
)
 
—

 
(831
)
 
—

Income tax effect
—

 
—

 
—

 
—

Other comprehensive loss, net of tax
(831
)
 
—

 
(831
)
 
—

Comprehensive loss
$
(4,971
)
 
$
(9,187
)
 
$
(11,345
)
 
$
(16,486
)

See Notes to Condensed Consolidated Financial Statements.

4

LENDINGCLUB CORPORATION
Condensed Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)

 
Six Months Ended June 30,
 
2015
 
2014
Cash Flows from Operating Activities:
 
 
 
Net loss
$
(10,514
)
 
$
(16,486
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Net fair value adjustments of loans, notes and certificates
6

 
46

Change in fair value of loan servicing liabilities
(2,080
)
 
1,800

Change in fair value of loan servicing assets
1,031

 
(500
)
Stock-based compensation, net
24,079

 
15,352

Depreciation and amortization
9,753

 
3,463

Loss (gain) on sales of loans
(446
)
 
781

Other, net
85

 
123

Purchase of whole loans to be sold
(1,383,130
)
 
(632,740
)
Proceeds from sales of whole loans
1,383,130

 
631,959

Net change in operating assets and liabilities:
 
 
 
Accrued interest receivable
(8,369
)
 
(5,269
)
Other assets
(5,310
)
 
14,057

Due from related parties
(110
)
 
(56
)
Accounts payable
(669
)
 
68

Accrued interest payable
8,434

 
5,491

Accrued expenses and other liabilities
5,883

 
4,048

Net cash provided by operating activities
21,773

 
22,137

Cash Flows from Investing Activities:
 
 
 
Purchases of loans
(1,745,013
)
 
(1,002,301
)
Principal payments received from loans
798,304

 
451,403

Proceeds from recoveries and sales of charged-off loans
7,810

 
2,584

Purchases of securities available for sale
(402,112
)
 
—

Proceeds from sales of securities available for sale
3,509

 
—

Payments for business acquisition, net of cash acquired
—

 
(109,464
)
Net change in restricted cash
(9,975
)
 
(6,659
)
Proceeds from sale of property and equipment
11

 
—

Purchases of property, equipment and software
(15,960
)
 
(9,380
)
Net cash used for investing activities
(1,363,426
)
 
(673,817
)
Cash Flows from Financing Activities:
 
 
 
Change in payable to investors
9,734

 
8,227

Proceeds from issuances of notes and certificates
1,744,741

 
1,001,976

Principal payments on notes and certificates
(790,432
)
 
(451,699
)
Payments on notes and certificates from recoveries/sales of related charged-off loans
(7,788
)
 
(2,564
)
Proceeds from term loan, net of debt discount
—

 
49,813


5

LENDINGCLUB CORPORATION
Condensed Consolidated Statements of Cash Flows (Continued)
(In Thousands)
(Unaudited)

 
Six Months Ended 
 June 30,
 
2015
 
2014
Payment for debt issuance cost
—

 
(1,192
)
Principal payment on term loan
—

 
(313
)
Change in equity offering costs
90

 
—

Proceeds from issuance of common stock for ESPP
2,694

 
—

Proceeds from issuance of Series F convertible preferred stock, net of issuance costs
—

 
64,803

Proceeds from stock option exercises
3,297

 
2,198

Proceeds from exercise of warrants to acquire common stock
3

 
90

Net cash provided by financing activities
962,339

 
671,339

Net (Decrease) Increase in Cash and Cash Equivalents
(379,314
)
 
19,659

Cash and Cash Equivalents, Beginning of Period
869,780

 
49,299

Cash and Cash Equivalents, End of Period
$
490,466

 
$
68,958

Supplemental Cash Flow Information:
 
 
 
Cash paid for interest
$
234,573

 
$
152,679

Non-cash investing and financing activity:
 
 
 
Issuance of Series F convertible preferred stock for business acquisition
$
—

 
$
2,762

Non-cash investing activity:
 
 
 
Accruals for property, equipment and software
$
2,100

 
$
1,094


See Notes to Condensed Consolidated Financial Statements.


6

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)




1. Basis of Presentation

LendingClub Corporation (Lending Club) is an online marketplace for connecting borrowers and investors. LC Advisors, LLC (LCA), is a registered investment advisor with the Securities and Exchange Commission (SEC) and wholly-owned subsidiary of Lending Club that acts as the general partner for certain private funds and advisor to separately managed accounts. LC Trust I (the Trust) is an independent Delaware business trust that acquires and holds loans for the sole benefit of certain investors that purchase trust certificates (Certificates) issued by the Trust and that are related to underlying loans. Springstone Financial, LLC (Springstone), is a wholly-owned subsidiary of Lending Club that facilitates education and patient finance loans.

The accompanying unaudited condensed consolidated financial statements include Lending Club, the Trust and its wholly-owned subsidiaries (collectively referred to as the Company, we, or us). All intercompany balances and transactions have been eliminated. These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and, in the opinion of management, reflect all adjustments (consisting of normally recurring accruals) necessary for the fair statement of the results and financial position for the periods presented. The Company's results of operations and cash flows for any interim period are not necessarily indicative of the results for the full year or any other interim period.

The accompanying interim condensed consolidated financial statements and these related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (Annual Report).

The Company's significant accounting policies are included in " Part II - Item 8 - Financial Statements and Supplementary Data - Note 2 – Summary of Significant Accounting Policies " in the Annual Report. There have been no significant changes to these accounting policies during the first half of 2015, except as noted in " Note 4 – Securities Available for Sale " and " Note 6 – Fair Value of Assets and Liabilities " of these condensed consolidated financial statements.

2. New Accounting Standards

New Accounting Standards Not Yet Adopted

In February 2015, the Financial Accounting Standards Board (FASB) issued new guidance amending accounting for consolidations, which will be effective January 1, 2016. The guidance changes what an investor must consider in determining whether it is required to consolidate an entity in which it holds an interest. The Company is currently evaluating the impact of this guidance on the Company’s financial position, results of operations, earnings per common share, and cash flows.

In April 2015, the FASB issued new guidance amending accounting for customer's cloud based fees, which will be effective January 1, 2016. The guidance changes what a customer must consider in determining whether a cloud computing arrangement contains a software license. If the arrangement contains a software license, the customer would account for the fees related to the software license element in accordance with guidance related to internal use software; if the arrangement does not contain a software license, the customer would account for the arrangement as a service contract. The Company is currently evaluating the impact of this guidance on the Company’s financial position, results of operations, earnings per common share, and cash flows.


7

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



3. Net Loss Per Share and Net Loss Attributable to Common Stockholders

Earnings (loss) per share (EPS) is the amount of net income (loss) available to each share of common stock outstanding during the reporting period. Diluted EPS is the amount of net income (loss) available to each share of common stock outstanding during the reporting period, adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares are excluded from the computation of diluted EPS in periods in which the effect would be antidilutive. Potentially dilutive common shares include incremental shares issued for stock options, convertible preferred stock and warrants to purchase common stock. In conjunction with the Company's Initial Public Offering (IPO) on December 11, 2014, all of its convertible preferred stock converted to common stock and all warrants to purchase convertible preferred stock were converted to warrants to purchase common stock.

The Company calculates EPS using the two-class method when applicable. The two-class method allocates net income that otherwise would have been available to common shareholders to holders of participating securities. All participating securities are excluded from basic weighted-average common shares outstanding. Prior to the Company's IPO, it considered all series of its convertible preferred stock to be participating securities. The Company had no participating securities as of June 30, 2015 .

The following table details the computation of the basic and diluted net loss per share:
 
 
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,
 
 
2015
 
2014
 
2015
 
2014
Net loss
 
$
(4,140
)
 
$
(9,187
)
 
$
(10,514
)
 
$
(16,486
)
Net loss available to common stockholders (1)
 
$
(4,140
)
 
$
(9,187
)
 
$
(10,514
)
 
$
(16,486
)
Weighted average common shares - Basic
 
372,841,945

 
57,971,180

 
372,401,583

 
56,903,128

Weighted average common shares - Diluted
 
372,841,945

 
57,971,180

 
372,401,583

 
56,903,128

 
 
 
 
 
 
 
 
 
Basic net loss per share attributable to common stockholders
 
$
(0.01
)
 
$
(0.16
)
 
$
(0.03
)
 
$
(0.29
)
Diluted net loss per share attributable to common stockholders
 
$
(0.01
)
 
$
(0.16
)
 
$
(0.03
)
 
$
(0.29
)
(1)  
In a period with net income, both earnings and dividends (if any) are allocated to participating securities. In a period with a net loss, only declared dividends (if any) are allocated to participating securities. There were no dividends declared in the first halves of 2015 or 2014 .

4. Securities Available for Sale

The Company purchased securities available for sale during the second quarter of 2015. Securities available for sale are recorded at fair value and unrealized gains and losses are reported, net of taxes, in accumulated other comprehensive income (loss) included in stockholders' equity unless management determines that a security is other-than-temporarily impaired (OTTI). Realized gains and losses from sales of securities available for sale are determined on a specific identification basis and are included in other revenue (expense).


8

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



The amortized cost, gross unrealized gains and losses, and fair value of securities available for sale as of June 30, 2015 , are as follows:
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Corporate debt securities
$
257,626

 
$
3

 
$
(824
)
 
$
256,805

Asset-backed securities
61,858

 
4

 
(47
)
 
61,815

U.S. Treasury securities
31,563

 
37

 
—

 
31,600

U.S. agency securities
30,600

 
7

 
(8
)
 
30,599

Municipal securities
9,948

 
3

 
(2
)
 
9,949

Other securities
7,007

 
—

 
(4
)
 
7,003

Total securities available for sale
$
398,602

 
$
54

 
$
(885
)
 
$
397,771


A summary of securities available for sale with unrealized losses as of June 30, 2015 , aggregated by category and period of continuous unrealized loss, is as follows:
 
Less than
12 months
 
12 months
or longer
 
Total
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Corporate debt securities
$
245,211

 
$
(824
)
 
$
—

 
$
—

 
$
245,211

 
$
(824
)
Asset-backed securities
42,412

 
(47
)
 
—

 
—

 
42,412

 
(47
)
U.S. agency securities
11,986

 
(8
)
 
—

 
—

 
11,986

 
(8
)
Municipal securities
2,999

 
(2
)
 
—

 
—

 
2,999

 
(2
)
Other securities
7,002

 
(4
)
 
—

 
—

 
7,002

 
(4
)
Total securities with unrealized losses (1)
$
309,610

 
$
(885
)
 
$
—

 
$
—

 
$
309,610

 
$
(885
)
(1)  
The number of investment positions with unrealized losses totaled 144 .

Management evaluates whether securities available for sale are OTTI on a quarterly basis. Debt securities with unrealized losses are considered OTTI if the Company intends to sell the security or if it is more likely than not that we will be required to sell such security before any anticipated recovery. If management determines that a security is OTTI under these circumstances, the impairment recognized in earnings is measured as the entire difference between the amortized cost and then-current fair value.

A security is also OTTI if management does not expect to recover all of the amortized cost of the security. In this circumstance, the impairment recognized in earnings represented estimated credit loss, and is measured by the difference between the present value of expected cash flows and the amortized cost of the security. Management utilizes cash flow models to estimate the expected future cash flow from the securities to estimate the credit loss. Expected cash flows are discounted using the security's effective interest rate.

The evaluation of whether the Company expects to recover the amortized cost of a security is inherently judgmental. The evaluation includes the assessment of several bond performance indicators, including the current price and magnitude of the unrealized loss and whether the Company has received all scheduled principal and interest payments. There were no impairment charges recognized during the first half of 2015.


9

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



The maturities of securities available for sale at June 30, 2015 , are as follows:
 
Within
1 year
After 1 year
through
5 years
After 5 years
through
10 years
After
10 years
Total
Corporate debt securities
$
20,105

$
236,700

$
—

$
—

$
256,805

Asset-backed securities
—

58,427

3,388

—

61,815

U.S. Treasury securities
4,007

27,593

—

—

31,600

U.S. agency securities
3,999

26,600

—

—

30,599

Municipal securities
3,108

6,841

—

—

9,949

Other securities
—

7,003

—

—

7,003

Total fair value
$
31,219

$
363,164

$
3,388

$
—

$
397,771

Total amortized cost
$
31,234

$
363,968

$
3,400

$
—

$
398,602


Proceeds and gross realized losses from sales of securities available for sale are as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2015
 
2014
 
2015
 
2014
Proceeds
$
3,509

 
$
—

 
$
3,509

 
$
—

Gross realized losses
$
1

 
$
—

 
$
1

 
$
—


There were no gross realized gains during the first halves of 2015 and 2014.

5. Loans, Notes and Certificates, and Loan Servicing Rights

Loans, Notes and Certificates

At June 30, 2015 and December 31, 2014 , loans, notes and certificates measured at fair value on a recurring basis were as follows: 
 
 
Loans
 
Notes and Certificates
 
June 30, 
 2015
 
December 31, 
 2014
 
June 30, 
 2015
 
December 31, 
 2014
Aggregate principal balance outstanding
$
3,694,823

 
$
2,836,729

 
$
3,717,556

 
$
2,851,837

Net fair value adjustments
(57,440
)
 
(38,224
)
 
(57,432
)
 
(38,219
)
Fair value
$
3,637,383

 
$
2,798,505

 
$
3,660,124

 
$
2,813,618

Original term
 
12 - 60 months
 
12 - 60 months
 
 
 
 
Interest rates (fixed)
 
4.99% - 29.90%
 
5.79% - 29.90%
 
 
 
 
Maturity dates
 
≤ June 2020
 
≤ December 2019
 
 
 
 

10

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



We place loans on non-accrual status once they are 120 days past due, including loans to borrowers who have filed for bankruptcy. At June 30, 2015 and December 31, 2014 , loans for which the borrower has filed for bankruptcy or is deceased, or that were 90 days or more past due (including non-accrual loans), were as follows:
 
 
June 30, 2015
 
December 31, 2014
 
 
>  90 days
past due (1)
 
Non-accrual loans
 
>  90 days
past due (1)
 
Non-accrual loans
Outstanding principal balance
 
$
23,064

 
$
919

 
$
19,790

 
$
1,373

Net fair value adjustments
 
(21,635
)
 
(842
)
 
(18,825
)
 
(1,289
)
Fair value
 
$
1,429

 
$
77

 
$
965

 
$
84

# of loans (not in thousands)
 
2,023

 
76

 
1,797

 
125

(1)
Includes all loans for which the Company has been notified that the borrower has filed for bankruptcy or is deceased, or that were 90 days or more past due (including non-accrual loans).

Loan Servicing Rights

Servicing assets and liabilities related to retained servicing rights are recorded at fair value in “Other assets” and “Accrued expenses and other liabilities,” respectively. At June 30, 2015 , loans underlying loan servicing rights had a total outstanding principal balance of $2.847 billion , original terms between 12 and 84 months , monthly payments with fixed interest rates ranging from 2.99% to 33.15% and maturity dates through June 2022 . At December 31, 2014 , loans underlying loan servicing rights had a total outstanding principal balance of $1.872 billion , original terms between 12 and 60 months , monthly payments with fixed interest rates ranging from 5.90% to 33.15% and maturity dates through December 2019 .

6. Fair Value of Assets and Liabilities

For a description of the fair value hierarchy and the Company’s fair value methodologies, see " Part II - Item 8 - Financial Statements and Supplementary Data - Note 2 - Summary of Significant Accounting Policies " in the Annual Report. The Company did not transfer any assets or liabilities in or out of level 3 during the second quarter and first half of 2015 or the year ended December 31, 2014 .

Financial Instruments Recorded at Fair Value

See " Part II - Item 8 - Financial Statements and Supplementary Data - Note 2 - Summary of Significant Accounting Policies " in the Company's Annual Report for a description of the fair value methodology for loans, notes and certificates.

When available, the Company uses quoted prices in active markets to measure the fair value of securities available for sale. When utilizing market data and bid-ask spreads, the Company uses the price within the bid-ask spread that best represents fair value. When quoted prices do not exist, the Company uses prices obtained from independent third-party pricing services to measure the fair value of investment assets. The Company generally obtains prices from at least three independent pricing sources for assets recorded at fair value. The Company's primary independent pricing service provides prices based on observable trades and discounted cash flows that incorporate observable information, such as yields for similar types of securities (a benchmark interest rate plus observable spreads) and weighted-average maturity for the same or similar "to-be-issued" securities. The Company compares the prices obtained from its primary independent pricing service to the prices obtained from the additional independent pricing services to determine if the price obtained from the primary independent pricing service is reasonable. The Company does not adjust the prices received from independent third-party pricing services unless

11

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



such prices are inconsistent with the definition of fair value and result in a material difference in the recorded amounts.

The following tables present the fair value hierarchy for assets and liabilities measured at fair value:
June 30, 2015
 
Level 1 Inputs
 
Level 2 Inputs
 
Level 3 Inputs
 
Balance at
Fair Value
Assets:
 
 
 
 
 
 
 
 
Loans
 
$
—

 
$
—

 
$
3,637,383

 
$
3,637,383

Securities available for sale:
 
 
 
 
 
 
 
 
Corporate debt securities
 
—

 
256,805

 
—

 
256,805

Asset-backed securities
 
—

 
61,815

 
—

 
61,815

U.S. Treasury securities
 
—

 
31,600

 
—

 
31,600

U.S. agency securities
 
—

 
30,599

 
—

 
30,599

Municipal securities
 
—

 
9,949

 
—

 
9,949

Other securities
 
—

 
7,003

 
—

 
7,003

Total securities available for sale
 
—

 
397,771

 
—

 
397,771

Servicing assets
 
—

 
—

 
5,225

 
5,225

Total assets
 
$
—

 
$
397,771

 
$
3,642,608

 
$
4,040,379

 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Notes and certificates
 
$
—

 
$
—

 
$
3,660,124

 
$
3,660,124

Servicing liabilities
 
—

 
—

 
4,831

 
4,831

Total liabilities
 
$
—

 
$
—

 
$
3,664,955

 
$
3,664,955

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
Level 1 Inputs
 
Level 2 Inputs
 
Level 3 Inputs
 
Balance at
Fair Value
Assets:
 
 
 
 
 
 
 
 
Loans
 
$
—

 
$
—

 
$
2,798,505

 
$
2,798,505

Servicing assets
 
—

 
—

 
2,181

 
2,181

Total assets
 
$
—

 
$
—

 
$
2,800,686

 
$
2,800,686

 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Notes and certificates
 
$
—

 
$
—

 
$
2,813,618

 
$
2,813,618

Servicing liabilities
 
—

 
—

 
3,973

 
3,973

Total liabilities
 
$
—

 
$
—

 
$
2,817,591

 
$
2,817,591


As our loans and related notes and certificates, and loan servicing rights do not trade in an active market with readily observable prices, we use significant unobservable inputs to measure the fair value of these assets and liabilities. Financial instruments are categorized in the level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. These fair value estimates may also include observable, actively quoted components derived from external sources. As a result, the realized and unrealized gains and losses for assets and liabilities within the level 3 category may include changes in fair value that were attributable to both observable and unobservable inputs.
 

12

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



Significant Unobservable Inputs

The following tables present quantitative information about the significant unobservable inputs used for our level 3 fair value measurements at June 30, 2015 and December 31, 2014 :
 
 
 
 
June 30, 2015
 
 
 
 
Range of Inputs
Financial Instrument
 
Unobservable Input
 
Minimum
 
Maximum
 
Weighted- Average
Loans, notes and certificates
 
Discount rates
 
3.5
%
 
17.4
%
 
10.0
%
 
 
Net cumulative expected loss rates
 
0.3
%
 
22.2
%
 
10.4
%
 
 
 
 
 
 
 
 
 
Servicing asset/liability
 
Discount rates
 
3.4
%
 
23.2
%
 
10.1
%
 
 
Net cumulative expected loss rates
 
0.3
%
 
22.2
%
 
9.6
%
 
 
Cumulative prepayment rates
 
8.0
%
 
36.0
%
 
22.3
%
 
 
Base market servicing rates (% per annum on unpaid principal balance) (1)
 
0.5
%
 
0.7
%
 
0.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
Range of Inputs
Financial Instrument
 
Unobservable Input
 
Minimum
 
Maximum
 
Weighted- Average
Loans, notes and certificates
 
Discount rates
 
5.2
%
 
17.4
%
 
10.1
%
 
 
Net cumulative expected loss rates
 
0.3
%
 
22.0
%
 
10.0
%
 
 
 
 
 
 
 
 
 
Servicing asset/liability
 
Discount rates
 
5.3
%
 
23.7
%
 
10.7
%
 
 
Net cumulative expected loss rates
 
0.3
%
 
22.0
%
 
10.2
%
 
 
Cumulative prepayment rates
 
16.5
%
 
26.7
%
 
20.0
%
 
 
Base market servicing rates (% per annum on unpaid principal balance) (1)
 
0.5
%
 
0.7
%
 
0.5
%
(1) Excludes ancillary fees charged to investors that would be passed on to a third-party servicer.

At June 30, 2015 , the discounted cash flow methodology used to estimate the note and certificates fair values used the same projected cash flows as the related loans. As demonstrated in the following table, the fair value adjustments for loans were largely offset by the fair value adjustments of the notes and certificates due to the member payment dependent design of the notes and certificates and because the principal balances of the loans were very close to the combined principal balances of the notes and certificates.


13

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



The following tables present additional information about level 3 loans, notes and certificates measured at fair value on a recurring basis for the first halves of 2015 and 2014 :
 
 
Loans
 
Notes and Certificates
 
 
Outstanding Principal Balance
 
Valuation Adjustment
 
Fair Value
 
Outstanding Principal Balance
 
Valuation Adjustment
 
Fair Value
Beginning balance at December 31, 2014
 
$
2,836,729

 
$
(38,224
)
 
$
2,798,505

 
$
2,851,837

 
$
(38,219
)
 
$
2,813,618

Purchases of loans
 
3,128,589

 
—

 
3,128,589

 
—

 
—

 
—

Issuances of notes and certificates
 
—

 
—

 
—

 
1,744,741

 
—

 
1,744,741

Whole loan sales
 
(1,383,576
)
 
—

 
(1,383,576
)
 
—

 
—

 
—

Principal payments
 
(798,304
)
 
—

 
(798,304
)
 
(790,432
)
 
—

 
(790,432
)
Recoveries
 
—

 
(7,810
)
 
(7,810
)
 
—

 
(7,788
)
 
(7,788
)
Charge-offs
 
(88,615
)
 
88,615

 
—

 
(88,590
)
 
88,590

 
—

Change in fair value recorded in earnings
 
—

 
(100,021
)
 
(100,021
)
 
—

 
(100,015
)
 
(100,015
)
Ending balance at June 30, 2015
 
$
3,694,823

 
$
(57,440
)
 
$
3,637,383

 
$
3,717,556

 
$
(57,432
)
 
$
3,660,124


 
 
Loans
 
Notes and Certificates
 
 
Outstanding Principal Balance
 
Valuation Adjustment
 
Fair Value
 
Outstanding Principal Balance
 
Valuation Adjustment
 
Fair Value
Beginning balance at December 31, 2013
 
$
1,849,042

 
$
(20,000
)
 
$
1,829,042

 
$
1,859,982

 
$
(19,992
)
 
$
1,839,990

Purchases of loans
 
1,634,260

 
—

 
1,634,260

 
—

 
—

 
—

Issuances of notes and certificates
 
—

 
—

 
—

 
1,001,976

 
—

 
1,001,976

Whole loan sales
 
(631,959
)
 
—

 
(631,959
)
 
—

 
—

 
—

Principal payments
 
(451,403
)
 
—

 
(451,403
)
 
(451,699
)
 
—

 
(451,699
)
Recoveries
 
—

 
(2,584
)
 
(2,584
)
 
—

 
(2,565
)
 
(2,565
)
Charge-offs
 
(48,425
)
 
48,425

 
—

 
(48,357
)
 
48,357

 
—

Change in fair value recorded in earnings
 
—

 
(51,154
)
 
(51,154
)
 
—

 
(51,107
)
 
(51,107
)
Ending balance at June 30, 2014
 
$
2,351,515

 
$
(25,313
)
 
$
2,326,202

 
$
2,361,902

 
$
(25,307
)
 
$
2,336,595


The following table presents additional information about level 3 servicing assets and liabilities measured at fair value on a recurring basis for the first halves of 2015 and 2014 :
 
 
Six Months Ended 
 June 30, 2015
 
Six Months Ended 
 June 30, 2014
 
 
Servicing Assets
 
Servicing Liabilities
 
Servicing Assets
 
Servicing Liabilities
Fair value at beginning of period
 
$
2,181

 
$
3,973

 
$
534

 
$
936

Issuances (1)
 
3,384

 
2,938

 
874

 
1,655

Changes in fair value, included in servicing fees
 
(1,031
)
 
(2,080
)
 
(659
)
 
145

Additions, included in deferred revenue
 
691

 
—

 
285

 
—

Fair value at end of period
 
$
5,225

 
$
4,831

 
$
1,034

 
$
2,736

(1)  
Represents the offset to the gain or loss on sale of the related loan, recorded in other revenue.


14

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



Significant Recurring Level 3 Fair Value Asset and Liability Input Sensitivity
 
The majority of fair value adjustments included in the Company's net loss are attributable to changes in estimated instrument-specific future credit losses. Certain fair valuation adjustments recorded through earnings were related to level 3 instruments for the second quarters and first halves of 2015 and 2014 . A specific loan that is projected to have larger future default losses than previously estimated has lower expected future cash flows over its remaining life, which reduces its estimated fair value. Conversely, a specific loan that is projected to have smaller future default losses than previously estimated has increased expected future cash flows over its remaining life, which increases its fair value.
 
Changes in the unobservable inputs discussed above may have a significant impact on the fair value of loans, notes and certificates, or servicing assets and liabilities. Certain of these unobservable inputs will (in isolation) have a directionally consistent impact on the fair value of the financial instrument for a given change in that input. Alternatively, the fair value of the financial instrument may move in an opposite direction for a given change in another input. When multiple inputs are used within the valuation techniques for loans, notes and certificates, or servicing assets and liabilities, a change in one input in a certain direction may be offset by an opposite change from another input.

Generally, changes in the net cumulative expected loss rates and discount rates will have an immaterial net impact on the fair value of loans, notes and certificates, and servicing assets and liabilities. Additionally, changes in prepayment rates will have an immaterial net impact on the fair value of loans and notes and certificates.

Our selection of the most representative prepayment rates and base market servicing rates for our loans, servicing assets and servicing liabilities is inherently judgmental. We reviewed third-party servicing rates for loans in similar credit sectors, as well as a market servicing benchmarking analysis provided by a third-party valuation firm, and determined that base market servicing rates on our products ranging from 0.40% to 0.70% per anum of outstanding principal are reasonable estimates as of June 30, 2015 . Expected prepayments are based on analyses of actual prepayment experience of loans considering their various types, terms, and credit grades. The table below shows the estimated impact on the estimated fair value of servicing assets and liabilities, calculated using different base market servicing rate and prepayment rate assumptions as of June 30, 2015 and December 31, 2014 :
 
June 30, 2015
 
December 31, 2014
 
Servicing Assets
 
Servicing Liabilities
 
Servicing Assets
 
Servicing Liabilities
Weighted-average base market servicing rate assumptions
0.50
%
 
0.50
%
 
0.50
%
 
0.50
%
Change in fair value from:
 
 
 
 
 
 
 
Servicing rate increase to 0.60%
$
(1,807
)
 
$
1,684

 
$
(915
)
 
$
1,416

Servicing rate decrease to 0.40%
$
1,889

 
$
(1,602
)
 
$
965

 
$
(1,366
)
Weighted-average cumulative prepayment rate assumptions
22.3
%
 
22.3
%
 
20.0
%
 
20.0
%
Change in fair value from:
 
 
 
 
 
 
 
    25% increase in cumulative prepayments
$
(168
)
 
$
(294
)
 
$
(65
)
 
$
(228
)
    25% decrease in cumulative prepayments
$
195

 
$
320

 
$
67

 
$
231



15

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



Financial Instruments Not Recorded at Fair Value

The following tables present the fair value hierarchy for financial instruments not recorded at fair value:
June 30, 2015
Carrying Amount
 
Level 1 Inputs
 
Level 2 Inputs
 
Level 3 Inputs
 
Balance at
Fair Value
Assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
490,466

 
$
—

 
$
490,466

 
$
—

 
$
490,466

Restricted cash
56,738

 
—

 
56,738

 
—

 
56,738

Deposits
665

 
—

 
665

 
—

 
665

Total assets
$
547,869

 
$
—

 
$
547,869

 
$
—

 
$
547,869

Liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
5,142

 
$
—

 
$
5,142

 
$
—

 
$
5,142

Payables to investors
48,475

 
—

 
48,475

 
—

 
48,475

Total liabilities
$
53,617

 
$
—

 
$
53,617

 
$
—

 
$
53,617

December 31, 2014
Carrying Amount
 
Level 1 Inputs
 
Level 2 Inputs
 
Level 3 Inputs
 
Balance at
Fair Value
Assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
869,780

 
$
—

 
$
869,780

 
$
—

 
$
869,780

Restricted cash
46,763

 
—

 
46,763

 
—

 
46,763

Deposits
657

 
—

 
657

 
—

 
657

Total assets
$
917,200

 
$
—

 
$
917,200

 
$
—

 
$
917,200

Liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
5,891

 
$
—

 
$
5,891

 
$
—

 
$
5,891

Payables to investors
38,741

 
—

 
38,741

 
—

 
38,741

Total liabilities
$
44,632

 
$
—

 
$
44,632

 
$
—

 
$
44,632


7. Property, Equipment and Software, net

Property, equipment and software, net, consist of the following:
 
 
June 30, 
 2015
 
December 31, 
 2014
Internally developed software
 
$
26,605

 
$
16,023

Computer equipment
 
10,575

 
7,929

Leasehold improvements
 
8,262

 
4,802

Purchased software
 
4,352

 
3,326

Furniture and fixtures
 
3,764

 
2,405

Construction in progress
 
311

 
549

Total property, equipment and software
 
53,869

 
35,034

Accumulated depreciation and amortization
 
(14,782
)
 
(7,983
)
Total property, equipment and software, net
 
$
39,087

 
$
27,051



16

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



Depreciation and amortization expense on property, equipment and software was $3.8 million and $1.3 million for the second quarters of 2015 and 2014 , respectively. Depreciation and amortization expense on property, equipment and software was $6.9 million and $2.3 million for the first halves of 2015 and 2014 , respectively.

8. Other Assets

The components of other assets are as follows:
 
 
June 30, 
 2015
 
December 31, 
 2014
Prepaid expenses
 
$
9,305

 
$
6,807

Deferred acquisition compensation
 
2,108

 
2,695

Loan servicing assets at fair value
 
5,225

 
2,181

Accounts receivable
 
3,080

 
1,744

Deposits
 
665

 
657

Receivable from investors
 
480

 
155

Other
 
1,131

 
93

Total other assets
 
$
21,994

 
$
14,332


9. Intangible Assets and Goodwill

Intangible Assets
 
The Company's intangible asset balance of $33.5 million at June 30, 2015 , did not significantly change during the second quarter and first half of 2015 .
 
Amortization expense associated with intangible assets for the second quarter and first half of 2015 was $1.3 million and $2.8 million , respectively. Amortization expense associated with intangible assets for both the second quarter and first half of 2014 was $1.1 million .

Goodwill

As disclosed in the Company’s Annual Report, the Company’s annual goodwill impairment testing date is April 1. In testing for potential impairment of goodwill on April 1, 2015, management performed an assessment of each of the Company’s goodwill reporting units (generally defined as the Company’s businesses for which financial information is available and reviewed regularly by management) and concluded that goodwill was not impaired.

The Company's goodwill balance of $72.7 million at June 30, 2015 , did not significantly change during the second quarter and first half of 2015 . We did not record any goodwill impairment expense for the second quarter and first half of 2015 or 2014 .


17

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



10. Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consist of the following:
 
 
June 30, 
 2015
 
December 31, 
 2014
Accrued compensation
 
$
12,364

 
$
13,659

Accrued expenses
 
10,522

 
6,220

Loan servicing liabilities at fair value
 
4,831

 
3,973

Deferred tax liability
 
2,372

 
1,332

Deferred rent
 
2,265

 
1,377

Deferred revenue
 
1,450

 
759

Contingent liabilities
 
1,066

 
1,995

Loan funding payables
 
985

 
—

Payable to issuing bank
 
678

 
267

Transaction fee refund reserve
 
592

 
828

Early stock option exercise liability
 
227

 
392

Other
 
472

 
818

Total accrued expenses and other liabilities
 
$
37,824

 
$
31,620


11. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss represents cumulative gains and losses that are not reflected in earnings. The components of other comprehensive loss are as follows:
Three Months Ended June 30,
2015
 
2014
 
Before Tax
 
Tax Effect
 
Net of Tax
 
Before Tax
 
Tax Effect
 
Net of Tax
Change in net unrealized loss on securities available for sale
$
(831
)
 
$
—

 
$
(831
)
 
$
—

 
$
—

 
$
—

Other comprehensive loss
$
(831
)
 
$
—

 
$
(831
)
 
$
—

 
$
—

 
$
—

Six Months Ended June 30,
2015
 
2014
 
Before Tax
 
Tax Effect
 
Net of Tax
 
Before Tax
 
Tax Effect
 
Net of Tax
Change in net unrealized loss on securities available for sale
$
(831
)
 
$
—

 
$
(831
)
 
$
—

 
$
—

 
$
—

Other comprehensive loss
$
(831
)
 
$
—

 
$
(831
)
 
$
—

 
$
—

 
$
—


Accumulated other comprehensive loss balances are as follows:
 
Total
Accumulated Other Comprehensive Loss
Balance at December 31, 2014
$
—

Change in net unrealized loss on securities available for sale
(831
)
Balance at June 30, 2015
$
(831
)


18

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



The Company did not have any items of other comprehensive income (loss) during the first half of 2014.

12. Employee Incentive and Retirement Plans

The Company’s equity incentive plans provide for granting stock options and restricted stock units (RSUs) to employees, consultants, officers and directors. In addition, the Company offers a retirement plan and an Employee Stock Purchase Plan (ESPP) to eligible employees.

Stock-based compensation expense was as follows for the periods presented:
 
 
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,
 
 
2015
 
2014
 
2015
 
2014
Stock options
 
$
8,126

 
$
5,454

 
$
15,212

 
$
12,487

ESPP
 
446

 
—

 
925

 
—

RSUs
 
1,744

 
—

 
2,225

 
—

Stock issued related to acquisition
 
2,170

 
2,865

 
5,717

 
2,865

Total stock-based compensation expense
 
$
12,486

 
$
8,319

 
$
24,079

 
$
15,352


The following table presents the Company's stock-based compensation expense as recorded in the condensed consolidated statements of operations:
 
 
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,
 
 
2015
 
2014
 
2015
 
2014
Sales and marketing
 
$
1,806

 
$
615

 
$
3,325

 
$
4,117

Origination and servicing
 
867

 
470

 
1,588

 
828

General and administrative:
 
 
 
 
 
 
 
 
   Engineering and product development
 
2,432

 
1,258

 
3,838

 
1,995

   Other
 
7,381

 
5,976

 
15,328

 
8,412

Total stock-based compensation expense
 
$
12,486

 
$
8,319

 
$
24,079

 
$
15,352


We capitalized $1.0 million and $0.3 million of stock-based compensation expense associated with the cost of developing software for internal use during the second quarters of 2015 and 2014 , respectively. We capitalized $1.8 million and $0.6 million of stock-based compensation expense associated with the cost of developing software for internal use during the first halves of 2015 and 2014 , respectively.

Stock Options

There were no significant changes to the Company's incentive plans or methodology related to stock options valuation during the second quarter and first half of 2015 .


19

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options granted with the following assumptions during the periods presented:
 
 
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,
 
 
2015
 
2014
 
2015
 
2014
Expected dividend yield
 
—

 
—

 
—

 
—

Weighted-average assumed stock price volatility
 
48.3
%
 
52.4
%
 
49.4
%
 
54.3
%
Weighted-average risk-free rate
 
1.72
%
 
1.94
%
 
1.61
%
 
1.91
%
Weighted-average expected life (in years)
 
6.25

 
6.26

 
6.25

 
6.37


The Company's stock option activity for the first half of 2015 is summarized below:
 
 
Number of Options
 
Weighted-
Average
Exercise Price Per Share
 
Weighted-Average Remaining Contractual Life (in years)
 
Aggregate Intrinsic Value
Outstanding at December 31, 2014
 
57,386,829

 
$
3.15

 
 
 
 
Options granted
 
1,131,839

 
$
20.23

 
 
 
 
Options exercised
 
(2,694,194
)
 
$
1.22

 
 
 
 
Options forfeited/expired
 
(1,087,294
)
 
$
6.34

 
 
 
 
Outstanding at June 30, 2015
 
54,737,180

 
$
3.53

 
7.47
 
$
620,465

Vested and expected to vest at June 30, 2015
 
54,098,682

 
$
3.46

 
7.45
 
$
616,510

Exercisable at June 30, 2015
 
25,598,375

 
$
1.25

 
6.35
 
$
348,477


For the first half of 2015 , we granted service-based stock options to purchase 1,131,839 shares of common stock with a weighted average exercise price of $20.23 per share, a weighted average grant date fair value of $9.92 per option share and an aggregate estimated fair value of $11.2 million . For the first half of 2014 , we granted service-based stock options to purchase 17,051,372 shares of common stock with a weighted average exercise price of $5.65 per option share, a weighted average grant date fair value of $4.10 per share and a total estimated fair value of $73.5 million .

Options to purchase 2,694,194 shares with a total intrinsic value of $44.7 million were exercised during the first half of 2015 . Options to purchase 4,112,354 shares with a total intrinsic value of $27.5 million were exercised during the first half of 2014 .

The total grant date fair value of stock options vested during the first halves of 2015 and 2014 was $15.6 million and $7.9 million , respectively. For the first half of 2014 , we incurred $3.0 million of expense for the accelerated vesting of stock options for a terminated employee that was accounted for as a stock option modification. We did not accelerate vesting of any stock options during the second quarter and first half of 2015 .

As of June 30, 2015 total unrecognized compensation cost was $114.7 million and these costs are expected to be recognized over the next 2.63 years.

Since the Company holds a full valuation allowance against all deferred tax benefits, no income tax benefit has been recognized for stock-based compensation expense or for exercised stock options.


20

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



During the second quarter of 2015, the Company launched a rescission offer allowing certain holders of outstanding, unexercised options and shares of common stock to rescind the grant of options and sale of shares back to the Company. The rescission offer was required by the California Department of Business Oversight to address California securities laws compliance issues raised in connection with the Company's permit for qualification filed in July 2014. The offer expired on July 15, 2015 and there were no material acceptances of the rescission offer.

Restricted Stock Units

During the first quarter of 2015, the Company began issuing RSUs to certain employees, officers, and directors. The following table summarizes the activities for the Company's RSUs during the first half of 2015 :
 
Number of RSUs
 
Weighted-
Average
Grant Date
Fair Value
Unvested at December 31, 2014
—

 
$
—

RSUs granted
2,088,758

 
$
19.63

RSUs vested
(47,695
)
 
$
20.51

RSUs forfeited/expired
(22,696
)
 
$
20.44

Unvested at June 30, 2015
2,018,367

 
$
19.60

Expected to vest after June 30, 2015
1,949,286

 
$
19.58


For the first half of 2015 , we granted 2,088,758 RSUs with an aggregate fair value of $41.0 million .

As of June 30, 2015 , there was $38.7 million of unrecognized compensation cost related to unvested RSUs. This amount is expected to be recognized over a weighted-average period of 3.66 years .

Employee Stock Purchase Plan

Under the Company’s ESPP, eligible employees can purchase shares of the Company’s common stock using amounts withheld through payroll deductions, subject to plan limitations. Payroll deductions are accumulated during six month offering periods. The purchase price for each share of common stock is 85% of the lower of the fair market value of the common stock on the first business day of the offering period or on the last business day of the offering period. The Company's employees purchased 211,256 shares under the ESPP during the second quarter and first half of 2015 . As of  June 30, 2015 , a total of  2,788,744 shares of common stock were reserved for issuance under the ESPP.

The fair value of stock purchase rights granted to employees under the ESPP is measured on the grant date using the Black-Scholes option pricing model. The compensation expense related to ESPP purchase rights is recognized on a straight-line basis, net of estimated forfeitures, over the 6 -month requisite service period. We used the following assumptions in estimating the fair value of the grant under the ESPP on June 11, 2015, which are derived using the same methodology applied to stock option assumptions:
Expected dividend yield
—

Weighted-average assumed stock price volatility
38.8
%
Weighted-average risk-free rate
0.10
%
Weighted-average expected life (in years)
0.42



21

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



13. Income Taxes

For the second quarter and first half of 2015 we recorded income tax expense of $0.4 million and $1.0 million , respectively, due to the recognition of a full valuation allowance against deferred tax assets and the amortization of tax deductible goodwill, which gives rise to an indefinite-lived deferred tax liability. Income tax expense was $0.6 million for both the second quarter and first half of 2014 .

We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. On the basis of this evaluation, as of June 30, 2015 , a full valuation allowance of $41.2 million has been recorded.

14. Commitments and Contingencies

Operating Lease Commitments

The Company's corporate headquarters are located in San Francisco, California, and consist of approximately 141,000 square feet of space under lease agreements, most of which expire in June 2022 . Under these lease agreements, the Company has an option to extend nearly all of the space for five years.
 
On April 16, 2015 , the Company entered into a lease agreement for additional office space in San Francisco, California. The lease agreement commenced in the second quarter of 2015 with delivery of portions of the leased space to occur in stages through March 2017. The lease agreement expires on March 31, 2026, with the right to renew the lease term for two consecutive renewal terms of five years each.
 
The Company has additional leased office space of approximately 20,000 square feet in Westborough, Massachusetts, under a lease agreement that expires in January 2020 .

Total facilities rental expense for the second quarter and first half of 2015 was $1.6 million and $3.0 million , respectively. Total facilities rental expense for the second quarter and first half of 2014 was $0.9 million and $1.6 million , respectively. Minimum lease payments for the second quarter and first half of 2015 were $1.3 million and $2.6 million , respectively. Minimum lease payments for the second quarter and first half of 2014 were $0.8 million and $1.4 million , respectively. As of June 30, 2015 , we have pledged $0.6 million of cash as a security deposit under these lease agreements.

Expected annual minimum rental commitments under these leases at June 30, 2015, are as follows:
(in millions)
Minimum
Rental Commitments
2015
$
3.1

2016
10.4

2017
13.0

2018
13.9

2019
13.5

Thereafter
67.4

Total
$
121.3



22

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



Loan Funding and Purchase Commitments

For loans listed on the platform as a result of direct marketing efforts, we have committed to invest in such loans if investors do not provide funding for all or a portion of such loans. At June 30, 2015 , there were 816 such loans on the platform with an unfunded balance of $9.2 million . All of these loans were fully funded by investors by July 9, 2015 .

Springstone has a commitment to purchase certain loans that it facilitates that are originated by an issuing bank partner if Springstone cannot arrange investors to purchase such loans. In connection with this arrangement, in June 2014 the Company entered into a contingent loan purchase agreement with an issuing bank and a third-party investor who agreed to purchase 100% participation interests in certain loans originated by an issuing bank through the Springstone platform. In March 2015 this agreement was extended to January 2016 . The Company's contingent purchase commitment provides that if the third-party investor defaults on its purchase obligations then the Company will purchase such loans from the issuing bank. The remaining limit of this contingent loan purchase commitment under the March 2015 agreement was $38.7 million at June 30, 2015 , of which none has been used.

Subsequent to June 30, 2015, the issuing bank, the Company and a second third-party investor entered into a second loan purchase agreement with respect to the same type of loans covered by the March 2015 agreement. With respect to this second agreement, the Company also has a contingent purchase obligation in the event of default of the second investor. Although this second agreement does not have a purchase limit, Springstone may cease facilitating loans that are subject to these purchase commitments upon proper notice to the issuing bank.

During the second quarter and first half of 2015 we were not required to purchase any loan participation interests pursuant to these contingent purchase commitments. The Company does not anticipate that the Company will be required to purchase loan participation interests under these commitments.

Credit Support Agreement

We are subject to a credit support agreement with a certificate investor. The credit support agreement requires us to pledge and restrict cash in support of our contingent obligation to reimburse the investor for credit losses on loans underlying the investor’s certificates that are in excess of a specified, aggregate loss threshold. We are contingently obligated to pledge cash, not to exceed $5.0 million , to support this contingent obligation. As of June 30, 2015 , and December 31, 2014, approximately $3.4 million was pledged and restricted to support this contingent obligation.
 

23

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



As of June 30, 2015 , the credit losses pertaining to the investor’s certificates have not exceeded the specified threshold, nor are future credit losses expected to exceed the specified threshold, and thus no liability has been recorded. We currently do not anticipate recording losses under this credit support agreement. If losses related to the credit support agreement are later determined to be likely to occur and are estimable, results of operations could be affected in the period in which such losses are recorded.

Loan Purchase Obligation

Under our loan account program with WebBank, a Utah-chartered industrial bank that serves as our primary issuing bank, WebBank retains ownership of the loans facilitated through our marketplace for two business days after origination. As part of this arrangement, we have committed to purchase the loans at par plus accrued interest, at the conclusion of the two business days. As of June 30, 2015 , we were committed to purchase loans with an outstanding principal balance of $13.4 million at par plus accrued interest. At December 31, 2014 , we were committed to purchase loans with an outstanding principal balance of $4.1 million at par plus accrued interest.

Legal

On June 5, 2014, Springstone received a Civil Investigative Demand from the Consumer Financial Protection Bureau, referred to as CFPB, related to the period from 2009 through May 2014. The purpose of the investigation is to determine whether Springstone engaged in unlawful acts or practices in connection with the marketing, issuance, and servicing of loans for healthcare related financing during the period. We continue to have discussions with the CFPB regarding the potential resolution of this matter. As of June 30, 2015, we have recorded a liability for this matter, the amount of which represents the probable estimate of settlement. We do not believe the ultimate liability for such matters will be significantly different from the accrued aggregate liability at June 30, 2015.

In addition to the foregoing, we may be subject to legal proceedings and regulatory actions in the ordinary course of business. We do not believe it is probable that the ultimate liability, if any, arising out of any such matter will have a material effect on our financial condition, results of operations or cash flows.

15. Segment Reporting

The Company reports segment information using the “management approach.” Under this approach, operating segments are identified in substantially the same manner as they are reported internally and used by us for purposes of evaluating performance and allocating resources. Based on this approach, the Company has one reportable segment. The Company's management reporting process is based on our internal operating structure.

16. Related Party Transactions

Several of our executive officers and directors (including immediate family members) have opened investor accounts with us, made deposits and withdrawals to their accounts, and purchased notes or certificates. All note and certificate purchases made by related parties were transacted on terms and conditions that were not more favorable than those obtained by unaffiliated third-party investors.

The deposits made by related parties whose transactions totaled $120,000 or more were $500 thousand and $950 thousand during the second quarters of 2015 and 2014, respectively, and $750 thousand and $1.15 million during the first halves of 2015 and 2014, respectively. The withdrawals made by related parties whose transactions totaled $120,000 or more were $113 thousand and $15 thousand during the second quarters of 2015 and 2014, respectively, and $455 thousand and $110 thousand during the first halves of 2015 and 2014, respectively.


24

LENDINGCLUB CORPORATION
Notes to Condensed Consolidated Financial Statements
(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)
(Unaudited)



17. Springstone Acquisition

In April 2015, we completed the allocation of the purchase price of our acquisition of Springstone to acquired assets and liabilities. There were no material adjustments to the preliminary purchase price allocation as included in " Part II - Item 8 - Financial Statements and Supplementary Data - Note 17 - Springstone Acquisition " in our Annual Report.
The following 2014 pro forma financial information summarizes the combined results of operations for Lending Club and Springstone, as though the companies were combined as of January 1, 2013. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which would have resulted had the acquisition occurred as of January 1, 2013, nor is it indicative of future operating results. The pro forma results presented below include interest expense on the debt financing, amortization of acquired intangible assets, compensation expense related to the post-acquisition compensation arrangements entered into with the continuing employees, and tax expense. Results for the second quarter and first half of 2015 , as presented in the Condensed Consolidated Statements of Operations, reflect consolidated results, including Springstone, for the full period.
 
Three Months Ended  
 June 30, 2014
 
Six Months Ended 
 June 30, 2014
Total net revenue
$
48,720

 
$
92,234

Net loss
$
(7,470
)
 
$
(15,178
)
Basic net loss per share attributable to common stockholders
$
(0.13
)
 
$
(0.27
)
Diluted net loss per share attributable to common stockholders
$
(0.13
)
 
$
(0.27
)

18. Subsequent Events

The Company has evaluated the impact of events that have occurred subsequent to June 30, 2015 , through the date the condensed consolidated financial statements were filed with the SEC. Based on this evaluation, other than as recorded or disclosed within these condensed consolidated financial statements and related notes, the Company has determined none of these events were required to be recognized or disclosed.

25

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes that appear in this Quarterly Report on Form 10-Q (Report). In addition to historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, particularly in "Part II - Other Information - Item 1A - Risk Factors" in this Report and "Part I - Item 1A - Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 (Annual Report).

Overview
 
Lending Club is the world’s largest online marketplace connecting borrowers and investors. We believe a technology-powered marketplace is a more efficient mechanism to allocate capital between borrowers and investors than the traditional banking system. Consumers and small business owners borrow through Lending Club to lower the cost of their credit and enjoy a better experience than traditional bank lending. Investors use Lending Club to earn attractive risk-adjusted returns from an asset class that has generally been closed to many investors and only available on a limited basis to institutional investors.
 
Since beginning operations in 2007 , our marketplace has facilitated $11.2 billion in loan originations. These loans were facilitated through the following investment channels: (i) the issuance of notes, (ii) the sale of certificates, or (iii) the sale of whole loans to qualified investors. In the second quarter of 2015 , our marketplace facilitated $1.9 billion of loan originations, of which approximately $0.3 billion were invested in through notes, $0.6 billion were invested in through certificates and $1.0 billion were invested in through whole loan sales.
 
Our trusted brand, scale and network effect drives significant borrowing and investing activity on our marketplace. We generate revenue from transaction fees from our marketplace’s role in matching borrowers with investors to enable loan originations, servicing fees from investors and management fees from investment funds and other managed accounts. We do not assume credit risk or use our own capital to invest in loans facilitated by our marketplace, except in limited circumstances and in amounts that are not material. The capital to invest in the loans enabled through our marketplace comes directly from investors. Our proprietary technology automates key aspects of our operations, including the borrower application process, data gathering, credit decisioning and scoring, loan funding, investing and servicing, regulatory compliance and fraud detection. We operate with a lower cost structure than traditional banks due to our innovative model, online delivery and process automation, without the physical branches, legacy technology or high overhead associated with the traditional banking system.

Our marketplace is where borrowers and investors engage in transactions relating to unsecured standard or custom program loans. Standard program loans which are part of the publicly available standard program, are three- or five-year unsecured personal loans which are offered to borrowers with a FICO score of at least 660 and that meet other strict credit criteria. These loans can be invested in through the purchase of notes issued pursuant to a note registration statement, and are only available through our website. Separately, qualified investors may also invest in standard program loans in private transactions not facilitated through our website. Custom program loans are only invested in through private transactions with qualified investors, for which notes are not available and loans are not facilitated through our website. Custom program loans include small business loans, super prime consumer loans, loans facilitated by our lending platform program, education and patient finance loans and personal loans that do not meet the requirements of standard program loans.


26

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Generally, the transaction fees we receive from our issuing banks and service providers in connection with our marketplace’s role in facilitating loan originations range from 1% to 6% of the initial principal amount of the loan as of June 30, 2015 . For education and patient finance loans, transaction fees may exceed 6% . Servicing fees paid to us vary based on investment channel. Note investors generally pay us a servicing fee equal to 1% of payment amounts received from the borrower; whole loan purchasers pay a monthly servicing fee up to 1.3% per annum on the month-end principal balance of loans serviced and certificate holders generally pay a monthly management fee ranging from 0.7% to 1.5% per annum of the month-end balance of assets under management.
 
Loans to qualified borrowers are originated by issuing banks. Investors can invest in loans that are offered through our marketplace in one or all of the following channels:

Notes: The Company issues notes pursuant to an effective shelf registration statement. Investors who meet the applicable financial suitability requirements and have completed our investor account opening process may purchase unsecured, borrower payment dependent notes that correspond to payments received on an underlying standard program loan selected by the investor. When an investor registers with us, the investor enters into an investor agreement with us that governs the investor’s purchases of notes. Our note channel is supported by our website and our investor services group, which provides basic customer support to these investors.

Certificates and Investment Funds: Accredited investors and qualified purchasers may establish a relationship with LCA or another third-party advisor in order to indirectly invest in certificates, or they may directly purchase a certificate or interests in separate limited partnership entities that purchase certificates. The certificates are unsecured and are settled with cash flows from underlying standard or custom program loans selected by the investor. Neither certificates nor limited partnership interests can be purchased through our website. Certificate investors typically seek to invest larger amounts as compared to the average note investors and often desire a more “hands off” approach to investing. Investors in certificates generally pay an asset-based management fee instead of cash flow-based servicing fee paid by note investors.

Whole Loan Purchases: Certain institutional investors, such as banks, seek to hold the actual loan on their balance sheet. To meet this need, we sell entire standard or custom program loans to these investors through purchase agreements. Upon the sale of the loan, the investor owns all right, title and interest in the loan. We establish the investors’ accounts and the procedures for the purchase of loans, including any purchase amount limitations, which we control at our discretion. We and the investor also make limited representations and warranties and agree to indemnify each other for breaches of the purchase agreement. The investor also agrees to simultaneously enter into a servicing agreement with us which designates us as the loan servicer for the sold loan. We continue to service these loans after they are sold and can only be removed as the servicer in limited circumstances. For regulatory purposes, the investor also has access to the underlying borrower information, but is prohibited from contacting or marketing to the borrower in any manner and agrees to hold such borrower information in compliance with all applicable privacy laws.

For all investment channels, we agree to repurchase loans in cases of confirmed identity theft.

Springstone

In April 2014 , we acquired all of the outstanding limited liability company interests of Springstone. See " Part II - Item 8 - Financial Statements and Supplementary Data - Note 17 - Springstone Acquisition " in our Annual Report for more information.


27

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Key Operating and Financial Metrics

We regularly review a number of metrics to evaluate our business, measure our performance, identify trends, formulate financial projections and make strategic decisions. The following presents our key operating and financial metrics:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2015
 
2014
 
2015
 
2014
Loan originations
 
$
1,911,759

 
$
1,005,946

 
$
3,546,849

 
$
1,797,294

Operating revenue (1)
 
$
96,119

 
$
48,621

 
$
177,164

 
$
87,323

Contribution (2)
 
$
43,188

 
$
21,915

 
$
78,909

 
$
36,493

Contribution margin (2)
 
44.9
%
 
45.1
%
 
44.5
%
 
41.8
%
Adjusted EBITDA (2)
 
$
13,399

 
$
4,002

 
$
24,045

 
$
5,868

Adjusted EBITDA margin (2)
 
13.9
%
 
8.2
%
 
13.6
%
 
6.7
%
Net loss
 
$
(4,140
)
 
$
(9,187
)
 
$
(10,514
)
 
$
(16,486
)
(1)
See " Factors That Can Affect Revenue " for more information regarding operating revenue.
(2)
Contribution, Contribution margin, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. For more information regarding these measures and a reconciliation of these measures to the most comparable GAAP measure, see " Part I - Financial Information - Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Reconciliations of Non-GAAP Financial Measures ."

Loan Originations

Originations are a key indicator of the adoption rate of our marketplace, growth of our brand, scale of our business, strength of our network effect, economic competitiveness of our products and future growth. Loan originations have grown significantly over time due to increased awareness of our brand, our high borrower and investor satisfaction ratings, the effectiveness of our borrower acquisition channels, a strong track record of loan performance and the expansion of our capital resources. Factors that could affect loan originations include the interest rate and economic environment, the competitiveness of our products, the success of our operational efforts to balance investor and borrower demand, any limitations on the ability of our issuing banks to originate loans, our ability to develop new products or enhance existing products for borrowers and investors, the success of our sales and marketing initiatives and the success of borrower and investor acquisition and retention.

Contribution, Contribution Margin, Adjusted EBITDA and Adjusted EBITDA Margin

Contribution is a non-GAAP financial measure that we calculate as net income (loss), excluding net interest income (expense) and other adjustments, general and administrative expense, stock-based compensation expense and income tax expense (benefit). Contribution margin is a non-GAAP financial measure calculated by dividing contribution by total operating revenue. Contribution and contribution margin are measures used by our management and board of directors to understand and evaluate our core operating performance and trends. Contribution and contribution margin have varied from period to period and have generally increased over time. Factors that affect our contribution and contribution margin include revenue mix, variable marketing expenses and origination and servicing expenses.


28

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income (loss), excluding net interest income (expense) and other adjustments, acquisition and related expense, depreciation and amortization, amortization of intangible assets, stock-based compensation expense and income tax expense (benefit). Adjusted EBITDA margin is a non-GAAP financial measure calculated as adjusted EBITDA divided by total operating revenue. Adjusted EBITDA is a measure used by our management and board of directors to understand and evaluate our core operating performance and trends. Adjusted EBITDA has generally improved over time due to our increased revenue and efficiencies in the scale of our operations. For more information regarding the limitations of contributions, contribution margins, adjusted EBITDA and adjusted EBITDA margin and a reconciliation of net income (loss) to adjusted EBITDA, see " Part I - Financial Information - Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Reconciliations of Non-GAAP Financial Measures ."

Effectiveness of Scoring Models

Our ability to attract borrowers and investors to our marketplace is significantly dependent on our platform's ability to effectively evaluate a borrower’s credit profile and likelihood of default. We evaluate our marketplace’s credit decisioning and scoring models on a regular basis and leverage the additional data on loan history experience, borrower behavior, economic factors and prepayment trends that we accumulate to continually improve the models. If we are unable to effectively evaluate borrowers’ credit profiles, borrowers and investors may lose confidence in our marketplace. Additionally, our ability to effectively segment borrowers into relative risk profiles impacts our ability to offer attractive interest rates for borrowers as well as our ability to offer investors attractive risk-adjusted returns, both of which directly relate to our users’ confidence in our marketplace. Our marketplace's credit decisioning and scoring models assign each loan offered on our marketplace a corresponding interest rate and origination fee. Our investors’ returns are a function of the assigned interest rates for each particular loan invested in less any defaults over the term of the applicable loan. We believe we have a history of effectively evaluating borrower’s credit profiles and likelihood of defaults, as evidenced by the performance of various loan vintages facilitated through our marketplace. The following charts display the historical lifetime cumulative net charge-off rates through June 30, 2015 , by booking year, for all grades and 36 or 60 month terms of standard program loans for each of the years shown.

29

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)


Product Innovation
 
We have made, and intend to continue to make, substantial investments and incur expenses to research and develop or otherwise acquire new financial products for borrowers and investors. Our revenue growth to date has been a function of, and our future success will depend in part on, successfully meeting borrower and investor demand with new and innovative loan and investment options. For example, in early 2014 , our platform began offering small business loans to qualified investors, bringing the benefit of our innovative marketplace model, online delivery and process automation to small business owners. In the latter part of 2014 , we launched through our platform super prime consumer loans and a true no interest product for the education and patient finance market. For investors, we have introduced automated investing, application programming interface (API), investment funds and separately managed accounts, that make investing in loans easier. Failure to successfully develop and offer innovative products could adversely affect our operating results and we may not recoup the costs of new products.

Marketing Effectiveness and Strategic Relationships

We intend to continue to dedicate significant resources to our marketing and brand advertising efforts and strategic relationships. Our marketing efforts are designed to build awareness of Lending Club and attract borrowers and investors to our marketplace. We use a diverse array of marketing channels and are constantly seeking to improve and optimize our experience both on- and offline to achieve efficiency and a high level of borrower and investor satisfaction. We also continue to invest in our strategic relationships to raise awareness of our platform and attract borrowers and investors to our marketplace. Our operating results and ability to sustain and grow loan volume will depend, in part, on our ability to continue to make effective investments in marketing and the effectiveness of our strategic relationships.

In February 2015, Lending Club announced that it had entered into a strategic partnership with a consortium of community banks for its platform to offer co-branded personal loans to the participating banks' customers. As part of this partnership, each community bank is provided initial access to invest in loans sought by their own customers, which may include standard program loans. The customer loans that do not meet the community bank's investment

30

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

criteria are then made available for investment through the marketplace. All loans are originated by our issuing banks.

Regulatory Environment

The regulatory environment for credit and online marketplaces such as ours is evolving and uncertain, creating both challenges and opportunities that could affect our financial performance. We expect to continue to spend significant resources to comply with various federal and state laws and various licensing requirements designed to, among other things, protect borrowers (such as truth in lending, equal credit opportunity, fair credit reporting and fair debt collections practices) and investors. Our marketplace incorporates a number of automated features to help comply with these laws in an efficient and cost effective manner. While new laws and regulations or changes under existing laws and regulations could make facilitating loans or investment opportunities more difficult to achieve on acceptable terms, or at all, these events could also provide new product and market opportunities. In July 2015 the U.S. Treasury Department issued a request for information (RFI) to study the various business models and products offered by online marketplace lenders, the potential for online marketplace lending to expand access to credit to historically underserved borrowers and how the financial regulatory framework should evolve to support the safe growth of the industry. Although the Treasury Department is in the information-gathering stage and no interpretive guidance has been released, there is a possibility that our business may become subject to additional or different regulations in the future. To the extent we seek to grow internationally, we would become subject to additional foreign regulation and related compliance requirements and expense.

Factors That Can Affect Revenue

As a marketplace, we work toward matching supply and demand while also growing originations and correspondingly revenue at a pace commensurate with proper planning, risk management, user experience, and operational controls, that work to optimize the quality of the customer experience, customer satisfaction and long term growth.

The interplay of the following drivers can affect our revenue in any particular period:
•
the volume, timing and quality of:
◦
loan applications from borrowers,
◦
investment appetite and available investment capital from investors,
◦
platform loan processing and originations, and
•
the subsequent performance of loans, which directly impacts our servicing fees.

These drivers collectively result in transaction, servicing or management fees earned by us related to these transactions and their future performance. As these drivers can be affected by a variety of factors, both in and out of our control, revenues may fluctuate from period to period. Factors that can affect these drivers and ultimately revenue and its timing include: the mix of loans, the timing of the deployment of investment capital by investors, the amount of new capital from pooled investment vehicles and managed accounts that typically deploy their capital at the start of a period, the amount of purchase limitations we can impose on larger investors as a way to maintain investor balance and fairness, the attractiveness of alternative opportunities for borrowers or investors, the responsiveness of applicants to our marketing efforts, expenditures on marketing initiatives in a period, the sufficiency of operational staff to process any manual portion of the loan applications in a timely manner, the responsiveness of borrowers to satisfy additional income or employment verification requirements related to their application, borrower withdrawal rates, the percentage distribution of loans between the whole and fractional loan platforms, platform system performance and other factors. In addition, there may be some seasonality in demand for personal loans, which is generally lower in the first and fourth quarters.

31

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)


Given these factors at any point in time, we have loan applications in various stages from initial application through issuance. Depending upon the timing and impact of these factors, loans may not be issued by our issuing bank in the same period in which the corresponding application was originally made resulting in a portion of that subsequent period's revenue being earned from loan applications that were initiated in the immediately prior period. Consistent with our revenue recognition accounting policy under GAAP, we do not recognize the associated transaction fee revenue with a loan until the loan is issued by our issuing bank and the proceeds are delivered by the bank to the borrower.



32

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Results of Operations

The following tables set forth the Condensed Consolidated Statements of Operations data for each of the periods presented: 
 
Three Months Ended  
 June 30,
 
 
 
 
 
2015
 
2014
 
Change ($)
 
Change (%)
Operating revenues:
 
 
 
 
 
 
 
Transaction fees
$
85,651

 
$
45,801

 
$
39,850

 
87
 %
Servicing fees
6,479

 
1,468

 
5,011

 
N/M

Management fees
2,548

 
1,461

 
1,087

 
74
 %
Other revenue (expense)
1,441

 
(109
)
 
1,550

 
N/M

Total operating revenue
96,119

 
48,621

 
47,498

 
98
 %
Net interest income (expense) after fair value adjustments
798

 
(396
)
 
1,194

 
N/M

Total net revenue
96,917

 
48,225

 
48,692

 
101
 %
Operating expenses (1) :


 


 
 
 
 
Sales and marketing
40,317

 
19,225

 
21,092

 
110
 %
Origination and servicing
15,287

 
8,566

 
6,721

 
78
 %
General and administrative:


 


 
 
 
 
Engineering and product development
16,062

 
8,030

 
8,032

 
100
 %
Other
29,002

 
20,951

 
8,051

 
38
 %
Total operating expenses
100,668

 
56,772

 
43,896

 
77
 %
Loss before income tax expense
(3,751
)
 
(8,547
)
 
4,796

 
(56
)%
Income tax expense
389

 
640

 
(251
)
 
(39
)%
Net loss
$
(4,140
)
 
$
(9,187
)
 
$
5,047

 
(55
)%
(1)     Includes stock-based compensation expense as follows:
 
Three Months Ended  
 June 30,
 
 
 
 
 
2015
 
2014
 
Change ($)
 
Change (%)
Sales and marketing
$
1,806

 
$
615

 
$
1,191

 
194
%
Origination and servicing
867

 
470

 
397

 
84
%
General and administrative:

 
 
 
 
 
 
Engineering and product development
2,432

 
1,258

 
1,174

 
93
%
Other
7,381

 
5,976

 
1,405

 
24
%
Total stock-based compensation expense
$
12,486

 
$
8,319

 
$
4,167

 
50
%
N/M - Not meaningful.


33

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

 
Six Months Ended 
 June 30,
 
 
 
 
 
2015
 
2014
 
Change ($)
 
Change (%)
Operating revenues:
 
 
 
 
 
 
 
Transaction fees
$
158,133

 
$
81,213

 
$
76,920

 
95
 %
Servicing fees
11,871

 
3,248

 
8,623

 
N/M

Management fees
4,763

 
2,555

 
2,208

 
86
 %
Other revenue
2,397

 
307

 
2,090

 
N/M

Total operating revenue
177,164

 
87,323

 
89,841

 
103
 %
Net interest income (expense) after fair value adjustments
985

 
(380
)
 
1,365

 
N/M

Total net revenue
178,149

 
86,943

 
91,206

 
105
 %
Operating expenses (1) :


 
 
 
 
 


Sales and marketing
75,201

 
39,807

 
35,394

 
89
 %
Origination and servicing
27,967

 
15,968

 
11,999

 
75
 %
General and administrative:


 
 
 
 
 


Engineering and product development
28,390

 
13,752

 
14,638

 
106
 %
Other
56,089

 
33,262

 
22,827

 
69
 %
Total operating expenses
187,647

 
102,789

 
84,858

 
83
 %
Loss before income tax expense
(9,498
)
 
(15,846
)
 
6,348

 
(40
)%
Income tax expense
1,016

 
640

 
376

 
59
 %
Net loss
$
(10,514
)
 
$
(16,486
)
 
$
5,972

 
(36
)%
(1)     Includes stock-based compensation expense as follows:
 
Six Months Ended 
 June 30,
 
 
 
 
 
2015
 
2014
 
Change ($)
 
Change (%)
Sales and marketing
$
3,325

 
$
4,117

 
$
(792
)
 
(19
%)
Origination and servicing
1,588

 
828

 
760

 
92
 %
General and administrative:

 
 
 
 
 
 
Engineering and product development
3,838

 
1,995

 
1,843

 
92
 %
Other
15,328

 
8,412

 
6,916

 
82
 %
Total stock-based compensation expense
$
24,079

 
$
15,352

 
$
8,727

 
57
 %
N/M - Not meaningful.


34

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Total Net Revenue
 
Three Months Ended  
 June 30,
 
 
 
 
 
2015
 
2014
 
Change ($)
 
Change (%)
Transaction fees
$
85,651

 
$
45,801

 
$
39,850

 
87
%
Servicing fees
6,479

 
1,468

 
5,011

 
N/M

Management fees
2,548

 
1,461

 
1,087

 
74
%
Other revenue (expense)
1,441

 
(109
)
 
1,550

 
N/M

Total operating revenue
96,119

 
48,621

 
47,498

 
98
%
Net interest income (expense) after fair value adjustments
798

 
(396
)
 
1,194

 
N/M

Total net revenue
$
96,917

 
$
48,225

 
$
48,692

 
101
%

 
Six Months Ended 
 June 30,
 
 
 
 
 
2015
 
2014
 
Change ($)
 
Change (%)
Transaction fees
$
158,133

 
$
81,213

 
$
76,920

 
95
%
Servicing fees
11,871

 
3,248

 
8,623

 
N/M

Management fees
4,763

 
2,555

 
2,208

 
86
%
Other revenue
2,397

 
307

 
2,090

 
N/M

Total operating revenue
177,164

 
87,323

 
89,841

 
103
%
Net interest income (expense) after fair value adjustments
985

 
(380
)
 
1,365

 
N/M

Total net revenue
$
178,149

 
$
86,943

 
$
91,206

 
105
%
N/M - Not meaningful.

Our primary sources of net revenue consist of fees received for transactions through or related to our marketplace and include transaction, servicing and management fees.

Transaction Fees: Transaction fees are fees paid by issuing banks or service providers to us for the work we perform through our marketplace's role in facilitating loan originations. The amount of these fees is based upon the terms of the loan, including grade, rate, term and other factors. These fees are recognized as a component of operating revenue at the time of loan issuance.

Transaction fees were $85.7 million and $45.8 million for the second quarters of 2015 and 2014 , respectively, an increase of 87% . The increase was primarily due to an increase in loans facilitated through our marketplace from $1.0 billion for the second quarter of 2014 to $1.9 billion for the second quarter of 2015 , an increase of 90% . The transaction fees as a percentage of the initial principal balance of the loan were 4.5% and 4.6% for the second quarters of 2015 and 2014 , respectively. The decrease was primarily due to a change in the mix of loans facilitated. Transaction fees for the second quarter of 2015 included approximately $9.5 million of revenue associated with the issuance of loans in which the loan application process had commenced prior to end of the first quarter of 2015.

Transaction fees were $158.1 million and $81.2 million for the first halves of 2015 and 2014 , respectively, an increase of 95% . The increase was primarily due to an increase in loans facilitated through our marketplace from $1.8 billion for the first half of 2014 to $3.5 billion for the first half of 2015 , an increase of 94% . Transaction fees for the first half of 2015 included approximately $8.7 million of revenue associated with the issuance of loans in which the loan application process had commenced prior to the end of 2014. The transaction fees as a percentage of the initial principal balance of the loan remained flat at 4.5% for both the first half of 2015 and 2014 .


35

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

In the month of July 2015 the Company recognized approximately $13.5 million in transaction fee revenue associated with the issuance of loans in which the loan application process had commenced prior to the end of the second quarter of 2015.

Servicing Fees: Servicing fees paid to us vary based on investment channel. The servicing fee compensates us for the costs we incur in servicing the related loan, including managing payments from borrowers, collections, payments to investors and maintaining investors’ account portfolios. The amount of servicing revenue earned is predominantly affected by the servicing rates discussed in the Overview section above, the unpaid principal balance for whole loans serviced, and the amount of principal and interest collected from borrowers and remitted to note and certain certificate investors. Additionally, servicing fee revenue is affected by the change in fair value of our servicing assets and liabilities associated with loans that we sell. We record servicing assets and liabilities at their estimated fair values when we sell whole loans to unrelated third parties or when the servicing contract commences. Over the life of the loan, changes in the estimated fair value of servicing assets and liabilities are included in servicing fees in the period in which the changes occur.

Servicing fee revenue increased for the second quarter and first half of 2015 compared to the same periods in 2014 due to increases in the balances of whole loans sold, as well as the loan balances that underlie the notes and certificates. The following table provides the outstanding principal balance of loans that we serviced at the end of the periods indicated, by the method that the loans were financed (in millions):
 
 
June 30, 2015
 
December 31, 2014
Notes
 
$
1,313.9

 
$
1,055.2

Certificates
 
2,380.9

 
1,796.6

Whole loans sold
 
2,852.8

 
1,873.7

Total
 
$
6,547.6

 
$
4,725.5



36

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

The tables below illustrate the composition of servicing fees by source for each period presented:
 
Three Months Ended  
 June 30,
 
 
 
2015
 
2014
 
Change (%)
Servicing fees related to whole loans sold
$
3,475

 
$
775

 
N/M

Note and certificate servicing fees
2,452

 
1,327

 
85
%
Total servicing fees before change in fair value of servicing assets and liabilities
5,927

 
2,102

 
182
%
Change in fair value of servicing assets and liabilities, net
552

 
(634
)
 
N/M

Total servicing fees
$
6,479

 
$
1,468

 
N/M

 
Six Months Ended 
 June 30,
 
 
 
2015
 
2014
 
Change (%)
Servicing fees related to whole loans sold
$
6,087

 
$
1,227

 
N/M

Note and certificate servicing fees
4,735

 
2,540

 
86
%
Total servicing fees before change in fair value of servicing assets and liabilities
10,822

 
3,767

 
187
%
Change in fair value of servicing assets and liabilities, net
1,049

 
(519
)
 
N/M

Total servicing fees
$
11,871

 
$
3,248

 
N/M

N/M - Not meaningful.

Management Fees: Certain investors can invest in investment funds managed by LCA, the general partner in the funds. LCA typically charges these investors a monthly management fee based on the month-end balance of their assets under management, ranging from 0.7% to 1.5% per annum. LCA does not earn any carried interest from the investment funds. For managed account certificate holders, LCA earns a management fee typically ranging from 0.85% to 1.2% per annum of the month-end balance of their assets under management. These fees may be waived or reduced at the discretion of LCA.

Management fees were $2.5 million and $1.5 million for the second quarters of 2015 and 2014 , respectively, an increase of 74% . The increase in management fees was due primarily to an increase in the total assets under management and outstanding certificate balances.

Management fees were $4.8 million and $2.6 million for the first halves of 2015 and 2014 , respectively, an increase of 86% . The increase in management fees was due primarily to an increase in the total assets under management and outstanding certificate balances.

37

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)


Other Revenue: Other revenue consists of gains and losses on sales of whole loans and referral revenue. Certain investors investing through our marketplace acquire standard or custom program loans in their entirety. In connection with these whole loan sales, in addition to the transaction fee earned in respect of the corresponding loan, we recognize a gain or loss on the sale of that loan based on the degree to which the contractual loan servicing fee is above or below an estimated market rate loan servicing fee (loans are typically sold at par). Referral revenue consists of fees earned from partner companies when customers referred by us complete specified actions with a partner company. The specified action ranges from clicking on a link to visit a partner company’s website to obtaining a loan from the partner company.

Other revenue was $1.4 million and $(0.1) million for the second quarters of 2015 and 2014 , respectively, and $2.4 million and $0.3 million for the first halves of 2015 and 2014 , respectively. These increases were primarily due to gains on sales of whole loans and increases in referral revenue for the second quarter and first half of 2015 compared to the same periods in 2014.

The tables below illustrate the composition of other revenue for each period presented:
 
 
Three Months Ended June 30,
 
 
 
 
2015
 
2014
 
Change (%)
Referral revenue
 
$
1,071

 
$
580

 
85
%
Gain (loss) on sales of loans
 
360

 
(710
)
 
N/M

Other
 
10

 
21

 
(52
%)
Other revenue
 
$
1,441

 
$
(109
)
 
N/M

 
 
Six Months Ended June 30,
 
 
 
 
2015
 
2014
 
Change (%)
Referral revenue
 
$
1,919

 
$
1,049

 
83
 %
Gain (loss) on sales of loans
 
455

 
(781
)
 
N/M

Other
 
23

 
39

 
(41
)%
Other revenue
 
$
2,397

 
$
307

 
N/M

N/M - Not meaningful.

Net Interest Income (Expense) After Fair Value Adjustments

We do not assume principal or interest risk on loans facilitated through our marketplace because loan balances, interest rates and maturities are matched and offset by an equal balance of notes or certificates with the exact same interest rates and maturities. We only make principal and interest payments on notes and certificates to the extent that we receive borrower payments on loans. As a servicer, we are only required to deliver borrower payments to the extent that we actually receive them. As a result, on our statement of operations for any period and balance sheet as of any date, (i) interest income on loans corresponds to the interest expense on notes and certificates and (ii) loan balances correspond to note and certificate balances with variations resulting from timing differences between the crediting of principal and interest payments on loans and the disbursement of those payments to investors.

We may make limited loan investments without issuing a corresponding note or certificate to investors, resulting in differences between interest income from loans and interest expense from notes and certificates on our statement of operations and total loans and notes and certificates balances on our balance sheets. These loan investments have been related primarily to customer accommodations and have not been material. We do not anticipate that such investments will be material in the foreseeable future.

38

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)


Additionally, interest income (expense) includes interest income earned on cash and cash equivalents and the securities available for sale portfolio. Our investment policy and strategy is focused first on the preservation of capital and supporting our liquidity requirements, and then maximizing returns. The following tables provide additional detail related to net interest income and fair value adjustments:
 
 
Three Months Ended June 30,
 
 
 
 
 
 
2015
 
2014
 
Change ($)
 
Change (%)
Interest income:
 
 
 
 
 
 
 
 
Loans
 
$
129,742

 
$
85,210

 
$
44,532

 
52
 %
Securities available for sale
 
548

 
—

 
548

 
N/M

Cash and cash equivalents
 
236

 
2

 
234

 
N/M

Total interest income
 
130,526

 
85,212

 
45,314

 
53
 %
Interest expense:
 
 
 
 
 
 
 
 
Notes and certificates
 
(129,727
)
 
(85,594
)
 
(44,133
)
 
(52
%)
Total interest expense
 
(129,727
)
 
(85,594
)
 
(44,133
)
 
(52
%)
Net interest income (expense)
 
799

 
(382
)
 
1,181

 
N/M

Fair value adjustments on loans, notes and certificates, net
 
(1
)
 
(14
)
 
13

 
93
 %
Net interest income (expense) after fair value adjustments
 
$
798

 
$
(396
)
 
$
1,194

 
N/M

Average outstanding balances:
 
 
 
 
 
 
 
 
Loans
 
$
3,503,786

 
$
2,251,049

 
$
1,252,737

 
56
 %
Notes and certificates
 
$
3,522,177

 
$
2,263,513

 
$
1,258,664

 
56
 %
N/M - Not meaningful.

 
 
Six Months Ended June 30,
 
 
 
 
 
 
2015
 
2014
 
Change ($)
 
Change (%)
Interest income:
 
 
 
 
 
 
 
 
Loans
 
$
243,034

 
$
158,257

 
$
84,777

 
54
 %
Securities available for sale
 
548

 
—

 
548

 
N/M

Cash and cash equivalents
 
416

 
3

 
413

 
N/M

Total interest income
 
243,998

 
158,260

 
85,738

 
54
 %
Interest expense:
 
 
 
 
 
 
 
 
Notes and certificates
 
(243,007
)
 
(158,594
)
 
(84,413
)
 
(53
)%
Total interest expense
 
(243,007
)
 
(158,594
)
 
(84,413
)
 
(53
)%
Net interest income (expense)
 
991

 
(334
)
 
1,325

 
N/M

Fair value adjustments on loans, notes and certificates, net
 
(6
)
 
(46
)
 
40

 
87
 %
Net interest income (expense) after fair value adjustments
 
$
985

 
$
(380
)
 
$
1,365

 
N/M

Average outstanding balances:
 
 
 
 
 
 
 
 
Loans
 
$
3,300,085

 
$
2,121,475

 
$
1,178,610

 
56
 %
Notes and certificates
 
$
3,316,518

 
$
2,131,847

 
$
1,184,671

 
56
 %
N/M - Not meaningful.


39

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Interest income from loans was $129.7 million and $85.2 million during the second quarters of 2015 and 2014 , respectively. The increase in interest income was primarily due to the increase in the outstanding balances of loans. The Company recorded interest expense for notes and certificates of $129.7 million and $85.6 million during the second quarters of 2015 and 2014 , respectively. The increase in interest expense was primarily due to the increase in the outstanding balances of notes and certificates.

Interest income from loans was $243.0 million and $158.3 million during the first halves of 2015 and 2014 , respectively. The increase in interest income was primarily due to the increase in the outstanding balances of loans. For the first halves of 2015 and 2014 , the Company recorded interest expense for notes and certificates of $243.0 million and $158.6 million , respectively. The increase in interest expense was primarily due to the increase in the outstanding balances of notes and certificates.
 
Fair Value Adjustments on Loans, Notes and Certificates: We estimate the fair value of loans and their related notes and certificates using a discounted cash flow valuation methodology that is described in " Part II - Item 8 - Financial Statements and Supplementary Data - Note 2 - Summary of Significant Accounting Policies " in the Annual Report. The changes in fair value of loans, notes and certificates are shown on our condensed consolidated statements of operations on a gross basis. Due to the payment dependent feature of the notes and certificates, fair value adjustments on the loans are offset by the fair value adjustments on the notes and certificates, resulting in no net effect on our earnings. From time to time, however, we may make limited loan investments without issuing a corresponding note or certificate to investors, resulting in differences between total interest income and expense amounts on our statement of operations and total loans and notes and certificates balances on our balance sheets. These loan investments have been related primarily to customer accommodations and have been insignificant. We do not anticipate that such investments will be material in the foreseeable future.

The losses from fair value adjustments on loans were largely offset by the gains from fair value adjustments on notes and certificates due to the borrower payment dependent design of the notes and certificates and due to the principal balances of the loans being similar to the combined principal balances of the notes and certificates. Accordingly, the net fair value adjustments were immaterial for the second quarters and first halves of 2015 and 2014 .


40

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Operating Expenses
 
 
Three Months Ended June 30,
 
 
 
 
 
 
2015
 
2014
 
Change ($)
 
Change (%)
Sales and marketing
 
$
40,317

 
$
19,225

 
$
21,092

 
110
%
Origination and servicing
 
15,287

 
8,566

 
6,721

 
78
%
General and administrative:
 
 
 
 
 
 
 
 
Engineering and product development
 
16,062

 
8,030

 
8,032

 
100
%
Other
 
29,002

 
20,951

 
8,051

 
38
%
Total operating expenses
 
$
100,668

 
$
56,772

 
$
43,896

 
77
%

 
 
Six Months Ended June 30,
 
 
 
 
 
 
2015
 
2014
 
Change ($)
 
Change (%)
Sales and marketing
 
$
75,201

 
$
39,807

 
$
35,394

 
89
%
Origination and servicing
 
27,967

 
15,968

 
11,999

 
75
%
General and administrative:
 
 
 
 
 
 
 
 
Engineering and product development
 
28,390

 
13,752

 
14,638

 
106
%
Other
 
56,089

 
33,262

 
22,827

 
69
%
Total operating expenses
 
$
187,647

 
$
102,789

 
$
84,858

 
83
%

Our operating expenses consist of sales and marketing, origination and servicing and general and administrative expenses, which includes engineering and product development and other general and administrative expenses.

Sales and Marketing: Sales and marketing expense consists primarily of those related to borrower and investor acquisition. In addition, these include general brand and awareness building, and salaries, benefits and stock-based compensation expense related to our sales and marketing team.

Sales and marketing expense was $40.3 million and $19.2 million for the second quarters of 2015 and 2014 , respectively, an increase of 110% . The increase was primarily due to a $12.7 million increase in variable marketing expenses that drove higher loan originations and a $6.3 million increase in personnel-related expenses associated with higher headcount levels. Sales and marketing expense was $75.2 million and $39.8 million for the first halves of 2015 and 2014 , respectively, an increase of 89% . The increase was primarily due to a $23.1 million increase in variable marketing expenses that drove higher loan originations and a $8.8 million increase in personnel-related expenses associated with higher headcount levels.

Origination and Servicing: Origination and servicing expense consists primarily of salaries, benefits and stock-based compensation expense related to our credit, collections, customer support and payment processing teams and vendor costs associated with facilitating and servicing loans.

Origination and servicing expense was $15.3 million and $8.6 million for the second quarters of 2015 and 2014 , respectively, an increase of 78% . The increase was primarily due to a $3.3 million increase in personnel-related expenses and a $3.0 million increase in consumer reporting agency and loan processing costs, both driven by higher loan originations and a higher outstanding balance of loans serviced. Origination and servicing expense was $28.0 million and $16.0 million for the first halves of 2015 and 2014 , respectively, an increase of 75% . The increase was primarily due to a $6.1 million increase in personnel-related expenses and a $4.9 million increase in consumer

41

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

reporting agency and loan processing costs, both driven by higher loan originations and a higher outstanding balance of loans serviced.

General and Administrative: Engineering and product development expense consists primarily of salaries, benefits and stock-based compensation expense for our engineering and product development team and the costs of contractors who work on the development and maintenance of our platform. Engineering and product development expense also includes non-capitalized hardware and software costs and depreciation and amortization of technology assets.

Engineering and product development expense was $16.1 million and $8.0 million for the second quarters of 2015 and 2014 , respectively, an increase of 100% . The increase was primarily driven by continued investment in our platform and product development, which included a $4.6 million increase in personnel-related expenses resulting from increased headcount and a $2.9 million increase in equipment, software and the related support and maintenance, and depreciation expense.

Engineering and product development expense was $28.4 million and $13.8 million for the first halves of 2015 and 2014, respectively, an increase of 106% . The increase was primarily due to a $8.1 million increase in personnel-related expenses resulting from increased headcount and a $5.5 million increase in equipment, software and depreciation expense.

We capitalized $5.8 million and $2.4 million in software development costs for the second quarters of 2015 and 2014 , respectively. We capitalized $10.6 million and $4.7 million in software development costs for the first halves of 2015 and 2014 , respectively.

Other general and administrative expense consists primarily of salaries, benefits and stock-based compensation expense for our accounting and finance, business development, legal, human resources and facilities teams, professional fees related to legal and accounting, and facilities expense and compensation expense related to the acquisition of Springstone.

Other general and administrative expense was $29.0 million and $21.0 million for the second quarters of 2015 and 2014 , respectively, an increase of 38% . The increase was primarily due to a $6.5 million increase in share-based compensation expense and salaries related to increased headcount as we continued to invest in back office infrastructure and stock consideration issued related to the Springstone acquisition, as well as a $1.9 million increase in facilities expense.

Other general and administrative expense was $56.1 million and $33.3 million for the first halves of 2015 and 2014 , respectively, an increase of 69% . The increase was primarily due to a $16.9 million increase in share-based compensation expense and salaries related to increased headcount as we continued to invest in back office infrastructure and stock consideration issued related to the Springstone acquisition, as well as a $3.5 million increase in facilities expense.

Income Taxes
 
For the second quarter and first half of 2015 we recorded income tax expense of $0.4 million and $1.0 million , respectively, due to recognition of a full valuation allowance against deferred tax assets as well as the amortization of tax deductible goodwill which gives rise to an indefinite-lived deferred tax liability. Income tax expense was $0.6 million for both the second quarter and first half of 2014 .


42

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. On the basis of this evaluation, as of June 30, 2015 , a full valuation allowance of $41.2 million has been recorded.

Reconciliations of Non-GAAP Financial Measures

Our non-GAAP measures of contribution, contribution margin, adjusted EBITDA, and adjusted EBITDA margin have limitations as analytical tools and you should not consider them in isolation or as a substitute for an analysis of our results under GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. These non-GAAP measures should not be viewed as substitutes for, or superior to, net income (loss) as prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate these measures differently, which may reduce their usefulness as a comparative measure. These measures do not consider the potentially dilutive impact of stock-based compensation. Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and adjusted EBITDA and adjusted EBITDA margin do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements. Adjusted EBITDA and adjusted EBITDA margin do not reflect tax payments that may represent a reduction in cash available to us.

In evaluating these non-GAAP measures, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. The following tables present a reconciliation of net loss to contributions for each of the periods indicated:
Reconciliation of Net Loss to Contribution
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,
 
2015
 
2014
 
2015
 
2014
Net loss
$
(4,140
)
 
$
(9,187
)
 
$
(10,514
)
 
$
(16,486
)
Net interest (income) expense after fair value adjustments
(798
)
 
396

 
(985
)
 
380

General and administrative expense:
 
 
 
 
 
 
 
Engineering and product development
16,062

 
8,030

 
28,390

 
13,752

Other
29,002

 
20,951

 
56,089

 
33,262

Stock-based compensation expense (1)
2,673

 
1,085

 
4,913

 
4,945

Income tax expense
389

 
640

 
1,016

 
640

Contribution
$
43,188

 
$
21,915

 
$
78,909

 
$
36,493

Total operating revenue
$
96,119

 
$
48,621

 
$
177,164

 
$
87,323

Contribution margin
44.9
%
 
45.1
%
 
44.5
%
 
41.8
%
 
 
 
 
 
 
 
 
(1)     Contribution also excludes stock-based compensation expense as follows:
 
 
 
 
 
 
 
 
 
 
 
 
Stock-based Compensation Expense:
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,
 
2015
 
2014
 
2015
 
2014
Sales and marketing
$
1,806

 
$
615

 
$
3,325

 
$
4,117

Origination and servicing
867

 
470

 
1,588

 
828

Total
$
2,673

 
$
1,085

 
$
4,913

 
$
4,945


43

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)

Reconciliation of Net Loss to Adjusted EBITDA:
Three Months Ended  
 June 30,
 
Six Months Ended 
 June 30,
 
2015
 
2014
 
2015
 
2014
Net loss
$
(4,140
)
 
$
(9,187
)
 
$
(10,514
)
 
$
(16,486
)
Net interest (income) expense after fair value adjustments
(798
)
 
396

 
(985
)
 
380

Acquisition and related expense
403

 
1,378

 
697

 
2,519

Depreciation expense:
 
 
 
 
 
 
 
Engineering and product development
3,261

 
1,088

 
6,005

 
1,879

Other
524

 
245

 
928

 
461

Amortization of intangible assets
1,274

 
1,123

 
2,819

 
1,123

Stock-based compensation expense
12,486

 
8,319

 
24,079

 
15,352

Income tax expense
389

 
640

 
1,016

 
640

Adjusted EBITDA
$
13,399

 
$
4,002

 
$
24,045

 
$
5,868

Total operating revenue
$
96,119

 
$
48,621

 
$
177,164

 
$
87,323

Adjusted EBITDA margin
13.9
%
 
8.2
%
 
13.6
%
 
6.7
%

Liquidity and Capital Resources

At June 30, 2015 , the Company had $490.5 million in available unrestricted cash and cash equivalents primarily held in institutional money market funds and interest-bearing deposit accounts at investment grade financial institutions. The Company believes that the current cash position is sufficient to meet the liquidity needs for the next twelve months.

During the second quarter of 2015, the Company purchased securities available for sale to invest excess cash. The fair value of securities available for sale as of June 30, 2015 was $397.8 million . These securities include corporate debt securities, asset back securities, U.S. Treasury and agency securities, and municipal and other securities. As of June 30, 2015 , all securities in the available for sale portfolio were rated investment grade (defined as a rating equivalent to a Moody’s rating of “Baa” or higher, or a Standard & Poor’s rating of “BBB-” or higher) and there were no significant unrealized losses.

At June 30, 2015 , the Company had $56.7 million in restricted cash that consisted primarily of $48.5 million of cash received for investors and not yet applied to their accounts, $3.4 million for an investor as part of a credit support agreement, and $3.0 million of cash pledged as security for our primary issuing bank.

44

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)


The following table sets forth certain cash flow information for the periods presented:
 
 
Six Months Ended June 30,
Condensed Cash Flow Information:
 
2015
 
2014
Net cash provided by operating activities
 
$
21,773

 
$
22,137

 
 
 
 
 
Cash flow from loan investing activities (1)
 
(938,899
)
 
(548,314
)
Cash flow from all other investing activities
 
(424,527
)
 
(125,503
)
Net cash used for investing activities
 
(1,363,426
)
 
(673,817
)
 
 
 
 
 
Cash flow from note/certificate financing (1)
 
946,521

 
547,713

Cash flow from all other financing activities
 
15,818

 
123,626

Net cash provided by financing activities
 
962,339

 
671,339

Net increase in cash and cash equivalents
 
$
(379,314
)
 
$
19,659

(1)  
Cash flow from loan investing activities includes the purchase of loans and repayment of loans facilitated through our marketplace. Cash flow from note/certificate financing activities includes the issuance of notes and certificates to investors and the repayment of those notes and certificates. These amounts generally correspond and offset each other.

Net Cash Provided by Operating Activities

Net cash provided by operating activities for the first half of 2015 was $21.8 million . Cash flow provided by operating activities was driven by the Company's net loss for the first half of 2015 of $10.5 million , adjusted for non-cash stock-based compensation expense of $24.1 million and depreciation and amortization expense of $9.8 million . Further, cash provided by operating activities was primarily driven by the net change in the fair value of loan servicing assets and liabilities of $1.0 million and by changes in certain components of our working capital, including an increase in accrued expenses and other liabilities of $5.9 million offset by an increase in other assets of $5.3 million and a decrease in accounts payable of $0.7 million .

Net cash provided by operating activities for the first half of 2014 was $22.1 million . Cash flow from operating activities primarily resulted from the net loss for the first half of 2014 of $16.5 million , adjusted for non-cash stock-based compensation expense of $15.4 million . Additionally, operating cash flows were generated due to changes in certain components of our working capital, including a decrease in other assets of $14.1 million that was primarily related to payments of receivables due to investors.

Net Cash Used in Investing Activities

Net cash used in investing activities for the first half of 2015 was $1.363 billion . Cash used in investing activities primarily includes $1.745 billion of cash used to purchase loans at fair value, $402.1 million used to purchase securities available for sale, and $16.0 million used to purchase property, equipment and software, partially offset by $798.3 million of principal payments received on loans at fair value and a $10.0 million increase in restricted cash.

Net cash used in investing activities for the first half of 2014 was $673.8 million , which primarily resulted from $1.002 billion of cash used to purchase loans at fair value, $9.4 million of cash used to purchase property, equipment and software, and a $6.7 million increase in restricted cash, partially offset by $451.4 million of principal payments received on loans at fair value.

45

LENDINGCLUB CORPORATION
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular Amounts in Thousands, Except Share and Per Share Data and Ratios, or as Noted)


Net Cash Provided by Financing Activities

Net cash provided by financing activities for the first half of 2015 was $962.3 million . Cash provided by financing primarily includes $1.745 billion of proceeds from our issuance of notes and sale of loans to the Trust in connection with its issuance of certificates and a $9.7 million decrease in the amount payable to investors, partially offset by $790.4 million in principal payments made on notes and certificates.

Net cash provided by financing activities for the first half of 2014 was $671.3 million , which primarily resulted from $1.002 billion of proceeds from our issuance of notes and sale of loans to the Trust in connection with its issuance of certificates, which was partially offset by $451.7 million of principal payments made on notes and certificates.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements during the first halves of 2015 and 2014 .

Contingencies
 
The Company's contingencies as of June 30, 2015 are included in " Part I - Financial Information - Item 1 - Financial Statements - Note 14 - Commitments and Contingencies. "

Critical Accounting Policies and Estimates

Certain of the Company's accounting policies that involve a higher degree of judgment and complexity are discussed in " Part II - Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operation - Critical Accounting Estimates " in the Annual Report. There have been no significant changes to these critical accounting estimates during the first half of 2015 .

The Company’s annual goodwill impairment testing date is April 1. In testing for potential impairment of goodwill on April 1, 2015, management performed an assessment of each of the Company’s goodwill reporting units (generally defined as the Company’s businesses for which financial information is available and reviewed regularly by management) and concluded that goodwill was not impaired.


46
LENDINGCLUB CORPORATION


Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and interest rates.

Because balances, interest rates and maturities of loans are matched and offset by an equal balance of notes and certificates with the exact same interest rates and maturities, we believe that we do not have any material exposure to changes in the net fair value of the combined loan, note and certificate portfolios as a result of changes in interest rates. We do not hold or issue financial instruments for trading purposes.

The fair values of loans and the related notes and certificates are determined using a discounted cash flow methodology. The fair value adjustments for loans are largely offset by the fair value adjustments of the notes and certificates due to the borrower payment dependent design of the notes and certificates and due to the total principal balances of the loans being very close to the combined principal balances of the notes and certificates.

We had cash and cash equivalents of $490.5 million as of June 30, 2015 . These amounts were held primarily in interest-bearing deposits at investment grade financial institutions and institutional money market funds, which are short-term. Cash and cash equivalents are held for working capital purposes. Due to their short-term nature, we believe that we do not have any material exposure to changes in the fair value of these liquid investments as a result of changes in interest rates. Decreases in short-term interest rates will not materially reduce interest income on these cash and cash equivalents because of the current low rate environment. Increases in short-term interest rates will modestly increase the interest income earned on these cash balances.

Interest Rate Sensitivity

The Company also holds securities in an available for sale portfolio. At June 30, 2015, our securities available for sale portfolio with a fair value of $397.8 million consists of corporate debt securities, asset-backed securities, U.S. Treasury and agency securities, and municipal and other securities. To mitigate the risk of loss, our investment policy and strategy is focused first on the preservation of capital and supporting our liquidity requirements, and then maximizing returns. To manage this risk, the Company monitors maturity, credit ratings, and concentrations within the investment portfolio. Changes in U.S. interest rates affect the interest earned on our cash and cash equivalents and securities available for sale and the market value of those securities. A hypothetical 100 basis point increase in interest rates would result in a decrease of approximately $5.3 million in the fair value of our securities available for sale as of June 30, 2015. A hypothetical 100 basis point decrease in interest rates would result in an increase of approximately $4.9 million in the fair value of our securities available for sale as of June 30, 2015. Any realized gains or losses resulting from such interest rate changes would only occur if we sold the investments prior to maturity.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The management of the Company, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of June 30, 2015 . Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2015 .

Changes in Internal Control Over Financial Reporting

No change in the Company's internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) was identified during the first half of 2015 , that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

47
LENDINGCLUB CORPORATION


PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of legal proceedings, see " Part 1 - Financial Information - Item 1 - Financial Statements - Note 14 - Commitments and Contingencies - Legal. "
 
Item 1A. Risk Factors

You should carefully consider the risks and uncertainties described below, together with all of the other information in this Report, including the section titled "Part I - Financial Information - Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations" and the condensed consolidated financial statements and related notes, and "Part I - Item 1A - Risk Factors" in the Company's Annual Report.

RISKS RELATED TO COMPLIANCE AND REGULATION

If the loans originated through our marketplace were found to violate a state’s usury laws, we may have to alter our business model and our business could be harmed.

The interest rates that are charged to borrowers and that form the basis of payments to investors through our marketplace are enabled by legal principles including (i) the application of federal law to enable an issuing bank that originates the loan to export the interest rates of the jurisdiction where it is located, and (ii) the application of common law “choice of law” principles based upon factors such as the loan document’s terms and where the loan transaction is completed to provide uniform rates to borrowers, and (iii) the application of principles that allow the transferee of a loan to continue to collect interest as provided in the loan document. WebBank, the primary issuing bank of the loans originated through our marketplace, is chartered in, and operates out of, Utah, which allows parties to generally agree by contract to any interest rate. The annual percentage rates offered by WebBank through our marketplace for personal loans as of June 30, 2015 range from 5.99% to 32.99%, which equate to interest rates for investors that range from 4.65% to 28.47%. Certain states, including Utah, have no statutory interest rate limitations on personal loans, while other jurisdictions have a maximum rate. In some jurisdictions, the maximum rate is less than the current maximum rate offered by WebBank through our platform. If the laws of such jurisdictions were found to apply to the loans originated through our marketplace, those loans could be in violation of such laws.

In May 2015, the U.S. Court of Appeals for the Second Circuit issued its decision in Madden v. Midland Funding, LLC that interpreted the scope of federal preemption under the National Bank Act (“NBA”) and held that a non-bank assignee of a loan originated by a national bank, based on the facts of that case in which the national bank no longer had any interest in the loan, was not entitled to the benefits of federal preemption of claims of usury. The Second Circuit remanded the case to address state law issues, such as choice of law. The defendant in that case has asked the Second Circuit to reconsider the decision, and that request remains pending. The Second Circuit's decision is binding on federal courts located in Connecticut, New York, and Vermont, but the decision could also be adopted by other courts. If applied to any of the loans originated through our marketplace, the decision could adversely impact our business.

If a borrower were to successfully bring claims against us for state usury law violations, and the rate on that borrower’s personal loan was greater than that allowed under applicable state law, we could be subject to fines and penalties. We might decide to limit the maximum interest rate on certain loans originated through our marketplace, and we might decide to originate loans under state-specific licenses, where this ruling is applicable. These actions could adversely impact our business.


48
LENDINGCLUB CORPORATION


The regulatory framework for our business is evolving and uncertain as federal and state governments consider new laws to regulate online marketplaces such as ours. New laws and regulations, including taxes on services provided by us, as well as continued uncertainty regarding potential new laws or regulations, may negatively affect our business.

The regulatory framework for online marketplaces such as ours is evolving and uncertain. It is possible that new laws and regulations will be adopted in the United States and internationally, or existing laws and regulations may be interpreted in new ways, that would affect the operation of our marketplace and the way in which we interact with borrowers and investors.

Recognizing the growth in online marketplaces such as ours, in July 2015 the U.S. Treasury Department issued a request for information (RFI) to study the various business models and products offered by online marketplace lenders, the potential for online marketplace lending to expand access to credit to historically underserved borrowers and how the financial regulatory framework should evolve to support the safe growth of the industry. The RFI seeks information about a number of topics, including how credit marketplaces manage the risk of fraud and security breaches, how they protect consumers against scams or default, how much investors in the loans rely on borrowed money, and whether the lenders should have to retain some risk relating to the loans they originate or underwrite.

Although the Treasury Department is in the information-gathering stage and no interpretive guidance has been released, there is a possibility that our business may become subject to additional or different regulations in the future. The cost and complexity to comply with new laws or regulations could be significant and result in the need to modify our operations and increase our operating expenses, and we may be unable to pass any such costs on to borrowers and investors.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

As previously disclosed in the Company’s Current Report on Form 8-K, filed June 12, 2015, at the Company’s 2015 annual meeting of stockholders the Company’s stockholders approved, on a non-binding advisory basis, a proposal to hold a non-binding, advisory vote on the compensation of the Company’s named executive officers (the Named Executive Officers) every year. Based on these results and consistent with the Company’s recommendation, the Company’s Board of Directors has determined that the Company will conduct future stockholder advisory votes regarding compensation awarded to its Named Executive Officers every year. This policy will remain in effect until the next stockholder vote on the frequency of stockholder advisory votes on the compensation of Named Executive Officers, expected to be held no later than the Company’s 2021 annual meeting of stockholders.


49
LENDINGCLUB CORPORATION


Item 6. Exhibits

See Exhibit Index. The exhibits noted in the accompanying Exhibit Index are filed or incorporated by reference as a part of this Report and such Exhibit Index is incorporated herein by reference.
 
 
Incorporated by Reference
 
Exhibit
Number
Exhibit Description
Form
File No.
Exhibit
Filing
Date
Filed Herewith
10.1
Form of Borrower Loan Agreement
 
 
 
 
X
10.2
Form of Borrower Membership Agreement
 
 
 
 
X
10.3
Form of Master Loan Purchase Agreement
 
 
 
 
X
10.4
Form of Master Loan Servicing Agreement
 
 
 
 
X
10.5
Form of Investor Agreement
 
 
 
 
X
31.1
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
 
 
X
31.2
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
 
 
X
32.1
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 
 
 
X
101.INS
XBRL Instance Document
 
 
 
 
X
101.SCH
XBRL Taxonomy Extension Schema Document
 
 
 
 
X
101.CAL
XBRL Taxonomy Extension Calculation Linkbase
 
 
 
 
X
101.DEF
XBRL Taxonomy Extension Definition Linkbase
 
 
 
 
X
101.LAB
XBRL Taxonomy Extension Label Linkbase
 
 
 
 
X
101.PRE
XBRL Taxonomy Extension Presentation Linkbase
 
 
 
 
X


50
LENDINGCLUB CORPORATION


SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
 
 
 
 
 
LENDINGCLUB CORPORATION
 
 
 
(Registrant)
 
 
 
 
 
 
Date:
August 5, 2015
 
/s/ RENAUD LAPLANCHE
 
 
 
 
Renaud Laplanche
 
 
 
Chief Executive Officer
 
 
 
 
 
 
 
 
/s/ CARRIE DOLAN
 
 
 
 
Carrie Dolan
 
 
 
Chief Financial Officer


51


Exhibit 10.1

Form of Borrower Loan Agreement
The following terms, together with your loan request on the Site, as defined herein, constitute a binding agreement (the "Agreement") between you (you and your to mean each and every borrower who executes this Agreement and related Note) and WebBank, a Utah-chartered industrial bank ("WBK," "we," or "us").  BY ELECTRONICALLY SIGNING THE AGREEMENT, YOU HAVE SIGNIFIED YOUR AGREEMENT TO THESE TERMS.  Under this Agreement, you agree to receive and repay one or more installment loans from us, through the website lending platform at www.Lendingclub.com , including any subdomains thereof (the "Site") operated by LendingClub Corporation, a Delaware corporation ("LendingClub"). These terms affect your rights and you should read them carefully and print a copy for your records. Your agreement to these terms means you agree to borrow and repay the money if your loan is funded under the terms of this Agreement, consent to our privacy policy, agree to transact with us electronically, and agree to have any dispute with us resolved by binding arbitration.
1. Loan Terms.  Your loan will have a principal balance between $1,000 and $35,000 in the specific amount and on the terms set forth in the disclosures provided to you (see the disclosures at  http://www.lendingclub.com/account/truthInLending.action ). You agree and acknowledge that the initial loan disclosures made to you are estimates (other than APR) and may be as much as 40% less than the initially requested amounts. All loans are unsecured, fully-amortizing, closed-end loans with either a three (3)-year or five (5)-year term. Please see you Borrower Membership Agreement and other information provided to you in connection with registering your loan request on the Site for additional details. Your obligations, including your obligation to repay principal and interest, are set forth in this Agreement and in the Note or Notes that you will make to us, as described in section 3 below.
2. Credit Decisions.  Your loan request must include your annual income and such other information as we may obtain through the Site. We will consider public assistance, alimony, child support, or separate maintenance income as income if you choose to include such sources of income in your application and such income is likely to continue. We reserve the right to verify any information you submit by requiring you to produce appropriate documentation or other proof, and also reserve the right to conduct such verification through a third party. You hereby authorize us to request and obtain data from a third party to verify any information you provide to us in connection with your loan request. We may terminate consideration of your application at any time in our sole discretion.
3. Loan Funding and Closing.   You may post a loan request on the Site, and LendingClub investors ("Investors") will be able to review your loan request. Investors may commit funds to purchase, in various amounts, Member Payment Dependent Notes ("MPDNs") that LendingClub may issue to Investors who commit funds for your loan request. You acknowledge that an Investor's commitment to purchase a MPDN corresponding to all or a portion of your loan from us does not confer any rights to You. Investors may also choose to purchase your loan directly from either WBK or




LendingClub.  You understand that Investors make their own decisions whether to commit funds for your loan.  Finally, LendingClub may also choose to commit funds for all or part of your loan request but is not obligated to do so.
We may elect in our sole discretion to give You a partial funding option, if necessary, which means your loan will be funded if it receives commitments totaling less than the full amount of your requested loan (subject to the loan size minimum).      
If your loan is going to be issued either for the full amount of your listed loan or as a result of any partial funding option available to You, your loan will close and issue within fourteen (14) days following the posting of your loan request, unless You notify us in writing of your election to terminate your loan request sufficiently far in advance of the loan closing for us to cancel the loan.
Funding of your loan request might be available before the expiration of the 14-day period set forth above. In no event, will we be obligated to notify you of the date upon which your loan may or will fund.
If we extend a loan to you, you agree to execute by power of attorney as described below, and be bound by the terms set forth in, the form of promissory note attached as  Exhibit A  (the "Note") as to your loan. You agree to execute multiple Notes if we request you do so, provided that the aggregate principal amounts of such Notes shall equal the total amount of your loan. LendingClub will execute your Note(s) on your behalf pursuant to a power of attorney you grant to LendingClub when registering your loan request. You authorize us to disburse the loan proceeds by Automated Clearing House ("ACH") transfer to your designated account or on your behalf to your selected designee. Following our disbursement of the loan proceeds as set forth above, we will assign the Note(s) and your loan to LendingClub.
BY COMPLETING YOUR APPLICATION AND SUBMITTING YOUR LOAN REQUEST, YOU ARE COMMITTING TO OBTAIN A LOAN FROM US IN THE AMOUNT AND ON THE TERMS SET FORTH IN YOUR AGREEMENTS WITH WBK (OR ITS ASSIGNEES) AND THE DISCLOSURES PROVIDED TO YOU IN CONNECTION WITH YOUR REQUEST, SHOULD YOUR REQUEST BE FUNDED. YOU HAVE NO RIGHT TO RESCIND THE LOAN ONCE MADE BUT YOU MAY PREPAY THE LOAN AT ANY TIME WITHOUT PENALTY. We will not lend you any funds unless and until sufficient commitments are received from Investors and/or LendingClub.
4. Making Your Loan Payments.  You authorize us and our successors and assigns to debit your designated account by ACH transfer for the amount of each payment due on each due date. You may elect to make payments by personal check by contacting  support@lendingclub.com  or by regular mail at LendingClub Corporation, 71 Stevenson St. Suite 300, San Francisco, CA 94105, Attention: Loan Processing Department. If you elect to make payments by check, you acknowledge and agree that there will be a $7 check processing fee per payment, subject to applicable law. If you elect to make payments by check, you must send the check either (i) by regular mail to Lending Club Corporation, Dept #34268, P.O. Box 39000, San Francisco, CA 94139, or (ii) by overnight mail or UPS delivery to Wells Fargo Lock Box Services, Dept #34268, 3440 Walnut Ave, Window H, Fremont, CA 94538. This authorization does not affect your obligation to pay when due all amounts payable on your loan, whether or not




there are sufficient funds therefore in such accounts. The foregoing authorization is in addition to, and not in limitation of, any rights of setoff we may have. With regard to payments made by automatic withdrawal, you have the right to stop payment of automatic withdrawals or revoke your prior authorization for automatic withdrawals by notifying your financial institution at least three (3) banking days before the scheduled date of transfer. You must notify us of the exercise of your right to stop a payment or revoke your authorization for automatic withdrawals at least three (3) banking days before the scheduled date of transfer. All payments are to be applied first to the payment of all fees, expenses and other amounts due (excluding principal and interest), then to accrued interest, and the balance on account of outstanding principal; provided, however, that after an Event of Default (as defined below), payments will be applied to your obligations as we determine in our sole discretion.
5. Other Borrower Obligations.  You agree that you (A) are a US citizen permanent resident or Non-Permanent Resident Alien in the US on a valid long term visa and (B) will not, in connection with your loan request: (i) make any false, misleading or deceptive statements or omissions of fact in your listing, including but not limited to in the loan title, or in your loan description; (ii) misrepresent your identity, or describe, present or portray yourself as a person other than yourself; (iii) give to or receive from, or offer or agree to give to or receive from any LendingClub member or other person any fee, bonus, additional interest, kickback or thing of value of any kind except in accordance with the terms of your loan; (iv) represent yourself to any person, as a representative, employee, or agent of ours, or purport to speak to any person on our behalf; (v) provide, in your loan request or in communications on the Site related to your loan request, information upon which a discriminatory lending decision may be made, such as your race, color, religion, national origin, sex, marital status, age, any exercise of your consumer rights or the existence of alimony, child support, or separate income (unless you have included such income in your application to be considered for loan qualification) or (vi) use any of the loan proceeds to fund any post-secondary educational expenses, including, but not limited to, tuition, fees, books, supplies, miscellaneous expenses, or room and board (see Section 472 of 20 U.S.C. 1087ll http://www.law.cornell.edu/uscode/search/display.html?terms=1087ll&url=/uscode/html/uscode20/usc_sec_20_00001087--ll000-.html for a complete list). You acknowledge and agree that we may rely without independent verification on the accuracy, authenticity, and completeness of all information you provide to us. You certify that the proceeds of the loan will not be used for the purpose of purchasing or carrying any securities or to fund any illegal activity.
6. Fees. If your loan request results in an issued loan, you may be obligated to pay a non-refundable origination fee to the lender issuing your loan. The amount of any fee is stated in the disclosures provided to you and are available for your review in your online member account. No amount of the finally determined fee is refundable. This fee will be deducted from your loan proceeds. If fee is deducted from your loan proceeds the loan proceeds delivered to you will be less than the full amount of your issued loan. Additionally, if the fee is deducted from your loan proceeds, you acknowledge that the origination fee will be considered part of the principal on your loan and is subject to the accrual of interest.  You acknowledge that the origination fee will be considered part of the principal on your loan and is subject to the accrual of interest. You agree to pay a fee of $15, if ACH transfers or checks are returned or fail due to insufficient funds in your account or for any other




reason. Each attempt to collect a payment is considered a separate transaction, so an unsuccessful payment fee will be assessed for each failed attempt. The bank that holds your designated account may assess its own fee in addition to the fee we assess. If Borrower's payment is more than 15 days late, Lender may charge a late fee in an amount the greater of 5% of the outstanding payment or $15, to the extent permitted by applicable law. If a payment is more than 30 days late, we shall charge such late fee. We will charge only one late fee on each late payment. These fees may be collected using ACH transfers initiated by us from your designated account. Any such late fee assessed is immediately due and payable. Any payment received after 6:00 P.M., Mountain time, on a banking day is deemed received on the next succeeding banking day.
7. Default and Termination.  You will be deemed in default on your loan (each, an "Event of Default") if you: (1) fail to pay timely any amount due on your loan; (2) file or have instituted against you any bankruptcy or insolvency proceedings or make any assignment for the benefit of creditors; (3) die; (4) commit fraud or make any material misrepresentation in this Agreement, the Note, or any other documents, applications or related materials delivered to us in connection with your loan; or (5) fail to abide by the terms of this Agreement. Upon the occurrence of an Event of Default, we may exercise all remedies available to us under applicable law, this Agreement, and the Note, including without limitation (1) demand that you immediately pay all amounts owed on your loan or (2) terminate this Agreement. Any loans you obtain prior to the effective date of termination resulting from listings you placed on the Site shall remain in full force and effect in accordance with their terms.
8. Liability of the Borrower and the Co-borrower is Joint and Several. The liability of any co-borrower is joint and several and is co-existent with that of the borrower. The liability of the co-borrower to repay the Loan together with interest, and to observe the terms and conditions of this Agreement and any other agreement and documents that may have been or may be executed by you with us in respect of this Loan or any other Loan or Loans, is joint and several and consequently we shall have sole discretion to proceed against both or either of them to recover the Loan and other charges payable by you to us. Further, we can accept instructions from either the borrower or the co-borrower, and notice can be given to either the borrower or the co-borrower, and shall be binding on both.
9. Collection & Reporting of Delinquent Loans.  We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report. You agree to pay all costs of collecting any delinquent payments, including reasonable attorneys' fees, as permitted by applicable law.
TCPA Consent & Privacy: You expressly consent to receiving calls and messages, including auto-dialed and pre-recorded message calls and SMS messages (including text messages) from us, our affiliates, marketing partners, agents and others calling at their request or on their behalf, at any telephone numbers that you have provided or may provide in the future (including any cellular telephone numbers). Your cellular or mobile telephone provider will charge you according to the type of plan you carry. You also agree that we may contact you by e-mail, using any email address you have provided to us or that you provide to us in the future. We may listen to and/or record phone calls between you and our representatives without notice to you as permitted by applicable law. For example, we listen to and record calls for quality monitoring purposes.




10. Assignment of Your Loan.  Following the closing of your loan you hereby agree that we may, without notice to you, (i) assign all of our right, title and interest in this Agreement to LendingClub and (ii) assign your Note(s) to LendingClub. You understand, acknowledge and agree that LendingClub may sell, assign or transfer your Note(s) and all associated documents and information related to the Note without your consent or notice to you.
11. NO GUARANTEE.  WE DO NOT WARRANT OR GUARANTEE (1) THAT YOUR LOAN REQUEST WILL BE FUNDED, OR (2) THAT YOU WILL RECEIVE A LOAN AS A RESULT OF POSTING A REQUEST.
12. Entire Agreement.  This Agreement and any Note represents the entire agreement between you and us regarding the subject matter hereof and supersedes all prior or contemporaneous communications, promises and proposals, whether oral, written or electronic, between us with respect to your loan request and loan. The WBK Privacy Notice attached as Exhibit B is incorporated by reference into this Agreement.
13. Electronic Transactions.  THIS AGREEMENT IS FULLY SUBJECT TO YOUR CONSENT TO ELECTRONIC TRANSACTIONS AND DISCLOSURES, WHICH CONSENT IS SET FORTH IN THE TERMS OF USE FOR THE SITE. YOU EXPRESSLY AGREE THAT THE NOTE IS A "TRANSFERABLE RECORD" FOR ALL PURPOSES UNDER THE ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT AND THE UNIFORM ELECTRONIC TRANSACTIONS ACT.
14. Notices.  All notices and other communications to you hereunder may be given by email to your registered email address or posted on the Site, and shall be deemed to have been duly given and effective upon transmission. You acknowledge that you have sole access to such email account and your area on the Site and that communications from us may contain sensitive, confidential, and collections-related communications. If your registered email address changes, you must notify LendingClub of the change by sending an email to  support@lendingclub.com  or calling 888-596-3157. You also agree to update your registered residence address and telephone number on the Site if they change.
15. NO WARRANTIES.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, WE MAKE NO REPRESENTATIONS OR WARRANTIES TO YOU, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
16. LIMITATION ON LIABILITY.  IN NO EVENT SHALL WE BE LIABLE TO YOU FOR ANY LOST PROFITS OR SPECIAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES, EVEN IF INFORMED OF THE POSSIBILITY OF SUCH DAMAGES. FURTHERMORE, WE MAKE NO REPRESENTATION OR WARRANTY TO YOU REGARDING THE EFFECT THAT THE AGREEMENT MAY HAVE UPON YOUR FOREIGN, FEDERAL, STATE OR LOCAL TAX LIABILITY.
17. 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 or obligations under this Agreement to another person without our prior written consent. Any such assignment, transfer, sublicense or delegation in violation of this section 16 shall be null and void. We are located in the state of Utah and this Agreement and the Note will be entered into in the state of Utah. The provisions of this Agreement will be governed by federal laws and the laws of the state




of Utah to the extent not preempted, without regard to any principle of conflicts of laws that would require or permit the application of the laws of any other jurisdiction. 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 at any time after the date of this Agreement, any of the provisions of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality and unenforceability of such provision shall have no effect upon and shall not impair the enforceability of any other provisions of this Agreement. The headings in this Agreement are for reference purposes only and shall not affect the interpretation of this Agreement in any way.
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 (b) BELOW.
a.  Either party to this Agreement, or LendingClub, may, at its sole election, require that the sole and exclusive forum and remedy for resolution of a Claim be final and binding arbitration pursuant to this section 17 (the "Arbitration Provision"), unless you opt out as provided in section 17(b) below. As used in this Arbitration Provision, "Claim" shall include any past, present, or future claim, dispute, or controversy involving you (or persons claiming through or connected with you), on the one hand, and us and/or LendingClub (or persons claiming through or connected with us and/or LendingClub), on the other hand, relating to or arising out of this Agreement, any Note, the Site, and/or the activities or relationships that involve, lead to, or result from any of the foregoing, including (except to the extent provided otherwise in the last sentence of section 17(f) below) the validity or enforceability of this Arbitration Provision, any part thereof, or the entire Agreement. Claims are subject to arbitration regardless of whether they arise from contract; tort (intentional or otherwise); a constitution, statute, common law, or principles of equity; or otherwise. Claims include matters arising as initial claims, counter-claims, cross-claims, third-party claims, or otherwise. The scope of this Arbitration Provision is to be given the broadest possible interpretation that is enforceable.
b.  You may opt out of this Arbitration Provision for all purposes by sending an arbitration opt out notice to WebBank, c/o LendingClub Corporation, 71 Stevenson St., Suite 300, San Francisco CA, 94105, Attention: Loan Processing Department, which is received at the specified address within 30 days of the date of your electronic acceptance of the terms of this Agreement. The opt out notice must clearly state that you are rejecting arbitration; identify the Agreement to which it applies by date; provide your name, address, and social security number; and be signed by you. You may send the opt out notice in any manner you see fit as long as it is received at the specified address within the specified time. No other methods can be used to opt out of this Arbitration Provision. If the opt out notice is sent on your behalf by a third party, such third party must include evidence of his or her authority to submit the opt out notice on your behalf.




c.  The party initiating arbitration shall do so with the American Arbitration Association (the "AAA") or JAMS. The arbitration shall be conducted according to, and the location of the arbitration shall be determined in accordance with, the rules and policies of the administrator selected, except to the extent the rules conflict with this Arbitration Provision or any countervailing law. In the case of a conflict between the rules and policies of the administrator and this Arbitration Provision, this Arbitration Provision shall control, subject to countervailing law, unless all parties to the arbitration consent to have the rules and policies of the administrator apply.
d.  If we (or LendingClub) elect arbitration, we (or LendingClub, as the case may be) shall pay all the administrator's filing costs and administrative fees (other than hearing fees). If you elect arbitration, filing costs and administrative fees (other than hearing fees) shall be paid in accordance with the rules of the administrator selected, or in accordance with countervailing law if contrary to the administrator's rules. We (or LendingClub, as the case may be) shall pay the administrator's hearing fees for one full day of arbitration hearings. Fees for hearings that exceed one day will be paid by the party requesting the hearing, unless the administrator's rules or applicable law require otherwise, or you request that we (or LendingClub) pay them and we agree (or LendingClub agrees) to do so. Each party shall bear the expense of its own attorneys' fees, except as otherwise provided by law. If a statute gives you the right to recover any of these fees, these statutory rights shall apply in the arbitration notwithstanding anything to the contrary herein.
e.  Within 30 days of a final award by the arbitrator, any party may appeal the award for reconsideration by a three-arbitrator panel selected according to the rules of the arbitrator administrator. In the event of such an appeal, any opposing party may cross-appeal within 30 days after notice of the appeal. The panel will reconsider de novo all aspects of the initial award that are appealed. Costs and conduct of any appeal shall be governed by this Arbitration Provision and the administrator's rules, in the same way as the initial arbitration proceeding. Any award by the individual arbitrator that is not subject to appeal, and any panel award on appeal, shall be final and binding, except for any appeal right under the Federal Arbitration Act ("FAA"), and may be entered as a judgment in any court of competent jurisdiction.
f.  We agree not to invoke our right to arbitrate an individual Claim you may bring in Small Claims Court or an equivalent court, if any, so long as the Claim is pending only in that court. NO ARBITRATION SHALL PROCEED ON A CLASS, REPRESENTATIVE, OR COLLECTIVE BASIS (INCLUDING AS PRIVATE ATTORNEY GENERAL ON BEHALF OF OTHERS), EVEN IF THE CLAIM OR CLAIMS THAT ARE THE SUBJECT OF THE ARBITRATION HAD PREVIOUSLY BEEN ASSERTED (OR COULD HAVE BEEN ASSERTED) IN A COURT AS CLASS REPRESENTATIVE, OR COLLECTIVE ACTIONS IN A COURT. Unless consented to in writing by all parties to the arbitration, no party to the arbitration may join, consolidate, or otherwise bring claims for or on behalf of two or more individuals or unrelated corporate entities in the same arbitration unless those persons are parties to a single transaction. Unless consented to in writing by all parties to the arbitration, an award in arbitration shall determine the rights and obligations of the named parties only, and only with respect to the claims in arbitration, and shall not (a) determine the rights, obligations, or interests of anyone other than a named party, or resolve any Claim of anyone other than a named party; nor (b) make an award for the benefit of, or against, anyone




other than a named party. No administrator or arbitrator shall have the power or authority to waive, modify, or fail to enforce this section 17(f), and any attempt to do so, whether by rule, policy, arbitration decision or otherwise, shall be invalid and unenforceable. Any challenge to the validity of this section 17(f) shall be determined exclusively by a court and not by the administrator or any arbitrator.
g.  This Arbitration Provision is made pursuant to a transaction involving interstate commerce and shall be governed by and enforceable under the FAA. The arbitrator will apply substantive law consistent with the FAA and applicable statutes of limitations. The arbitrator may award damages or other types of relief permitted by applicable substantive law, subject to the limitations set forth in this Arbitration Provision. The arbitrator will not be bound by judicial rules of procedure and evidence that would apply in a court. The arbitrator shall take steps to reasonably protect confidential information.
h.  This Arbitration Provision shall survive (i) suspension, termination, revocation, closure, or amendments to this Agreement and the relationship of the parties and/or LendingClub; (ii) the bankruptcy or insolvency of any party or other person; and (iii) any transfer of any loan or Note or any other promissory note(s) which you owe, or any amounts owed on such loans or notes, to any other person or entity. If any portion of this Arbitration Provision other than section 17(f) is deemed invalid or unenforceable, the remaining portions of this Arbitration Provision shall nevertheless remain valid and in force. If an arbitration is brought on a class, representative, or collective basis, and the limitations on such proceedings in section 17(f) are finally adjudicated pursuant to the last sentence of section 17(f) to be unenforceable, then no arbitration shall be had. In no event shall any invalidation be deemed to authorize an arbitrator to determine Claims or make awards beyond those authorized in this Arbitration Provision.
THE PARTIES ACKNOWLEDGE THAT THEY HAVE A RIGHT TO LITIGATE CLAIMS THROUGH A COURT BEFORE A JUDGE OR JURY, BUT WILL NOT HAVE THAT RIGHT IF ANY PARTY ELECTS ARBITRATION PURSUANT TO THIS ARBITRATION PROVISION. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THEIR RIGHTS TO LITIGATE SUCH CLAIMS IN A COURT BEFORE A JUDGE OR JURY UPON ELECTION OF ARBITRATION BY ANY PARTY.




Exhibit A
PROMISSORY NOTE
Borrower name and address: ______________________________________________ (not visible to investors)
Co-Borrower name and address: ______________________________________________ (not visible to investors)
$_______________
_____________, 20_
For value received, I (referred to herein as "Borrower" regardless of whether borrower is an individual or a co-borrower ) promise to pay to the order of WebBank or any subsequent holder ("you" or "Lenders") of this Promissory Note (the "Note") the principal sum of ________________ ($_________) Dollars with interest as set forth below. I intend to be legally bound by this Note. I have read, understood, and agreed to all of the terms of this Note.
Interest Rate . This Note bears interest during each calendar month from the date hereof until paid in full, at a fixed rate of ______ (%) per annum.
Interest Calculation Method . Interest is calculated daily on the basis of a 360-day year with 12 months each of which is 30 days (or 30/360) long, regardless if a month has more or less than 30 days. This Note shall bear interest on any overdue installment or principal and, to the extent permitted by applicable law, on any overdue installment of interest, at the interest rate as calculated above.
Payments . Principal and interest is to be paid during and throughout the period of ________ months in the following manner:
Payments of principal and interest in the amount of ________________ ($______) Dollars are to be made by the Borrower to the Lender commencing _____________, 20_, and on the same day of each successive month thereafter until __________, 20__, when the full amount of unpaid principal, together with unpaid accrued interest is due and payable. If the monthly anniversary is on the 29th, 30th, or 31st of the month, and the following month does not have a 29th, 30th, or 31st day, the monthly payment will be due on the last day of the month in which the payment was due.
Borrower's last payment might be of a different amount, which could be higher than the monthly installment amounts, to adjust for rounding and/or due to calculation of daily interest charges in certain instances such as a payment due date change or Borrower making a payment after the payment due date. In such cases, the amount of the last monthly payment will be adjusted by the amount necessary to repay the loan in full.
All payments on this Note are to be made in immediately available lawful money of the United States. Borrower authorizes Lender to debit Borrower's designated account by Automated Clearing House ("ACH") transfer for the




amount of each payment due on each due date. Borrower may elect to make payments by personal check by contacting  support@lendingclub.com  or by regular mail at LendingClub Corporation, 71 Stevenson St., Suite 300, San Francisco CA, 94105, Attention: Loan Processing Department. If Borrower elects to make payments by check, borrower acknowledges and agrees that there will be a $7 check processing fee per payment, subject to applicable law. This authorization does not affect Borrower's obligations to pay when due all amounts payable under this Note, whether or not there are sufficient funds therefore in such accounts. The foregoing authorization is in addition to, and not in limitation of, any rights of setoff Lender may have. With regard to payments made by automatic withdrawal, Borrower has the right to stop payment of automatic withdrawals or revoke Borrower's prior authorization for automatic withdrawals by notifying Borrower's financial institution at least three (3) banking days before the scheduled date of transfer. Borrower will notify Lender of the exercise of Borrower's right to stop a payment or revoke Borrower's authorization for automatic withdrawals at least three (3) banking days before the scheduled date of transfer. All payments are to be applied first to the payment of all fees, expenses and other amounts due to Lender (excluding principal and interest), then to accrued interest, and the balance on account of outstanding principal; provided, however, that after an Event of Default (as defined below), payments will be applied to Borrower's obligations as Lender determines in its sole discretion.
Fees and Charges . A non-refundable origination fee is paid by Borrower to the Lender in the amount and on the terms set forth in Borrower's agreement with Lender and is deducted from Borrower's loan proceeds. As such, the loan proceeds delivered to Borrower will be less than the full amount of Borrower's loan request. Borrower acknowledges that the origination fee will be considered part of the principal of Borrower's loan and is subject to the accrual of interest. Borrower agrees to pay a fee of $15 if ACH transfers or checks are returned or fail due to insufficient funds in Borrower's account or for any other reason. Borrower acknowledges that the bank that holds Borrower's designated account may charge a fee in addition to this fee. Each attempt to collect a payment is considered a separate transaction, so an unsuccessful payment fee will be assessed for each failed attempt. If Borrower's payment is more than 15 days late, Lender may charge a late fee in an amount the greater of 5% of the outstanding payment or $15, to the extent permitted by applicable law. If Borrower's payment is more than 30 days late, Lender shall charge such late fee. These fees may be collected using ACH transfers initiated by us from Borrower's designated account. Any such late fee assessed is immediately due and payable. Any payment received after 6:00 P.M., Mountain time, on a banking day is deemed received on the next succeeding banking day.
Prepayments and Partial Payments . Borrower may make any payment early, in whole or in part, without penalty or premium at any time. Any partial prepayment is to be applied against the principal amount outstanding and does not postpone the due date of any subsequent monthly installments, unless Lender otherwise agrees in writing. If Borrower prepays this Note in part, Borrower agrees to continue to make regularly scheduled payments until all amounts due under this Note are paid. Lender may accept late payments or partial payments, even though marked "paid in full", without losing any rights under this Note. Any regularly scheduled monthly installment of principal and interest that is received by Lender before the date it is due shall be deemed to have been received on the due date solely for the purpose of calculating interest due.




Use of Funds . Borrower certifies that the proceeds of the loan will not be used for the purpose of purchasing or carrying any securities or to fund any illegal activity.
Default . Borrower will be deemed in default (each, an "Event of Default") of Borrower's obligations under this Note if Borrower: (i) fails to pay timely any amount due under this Note; (ii) files or has instituted against Borrower any bankruptcy or insolvency proceedings or makes any assignment for the benefit of creditors; (iii) dies; (iv) commits fraud or makes any material misrepresentation in this Note; or (v) fails to abide by the terms of this Note. Upon the occurrence of an Event of Default, Lender may exercise all remedies available to it under applicable law, including demand upon Borrower to immediately pay all amounts due under this Note. Lender reserves the right to report loan payment delinquencies of 30 days or longer to one or more consumer reporting agencies in accordance with applicable law. Borrower agrees to pay all costs of collecting any delinquent payments, including reasonable attorneys' fees, as permitted by applicable law.
Joint and Several Liability . The liability of any co-borrower is joint and several and is co-existent with that of the borrower. The liability of the co-borrower to repay the Loan together with interest, and to observe the terms and conditions of this Agreement and any other agreement and documents that may have been or may be executed by Borrower with Lender in respect of this Loan or any other Loan or Loans, is joint and several and consequently Lender shall have sole discretion to proceed against both or either of the Borrowers to recover the Loan and other charges payable by Borrower to Lender.
Loan Charges . If a law that applies to my loan and sets maximum loan charges is finally interpreted so that the interest or other loan charges collected or to be collected in connection with my 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 that 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.
Miscellaneous .
The terms of this note are not subject to negotiation. Notwithstanding the foregoing, Lender may assign this Note, including without limitation, to LendingClub Corporation, without notice to Borrower. Borrower may not assign this Note without the prior written consent of Lender. This Note inures to the successors, permitted assigns, heirs and representatives of Borrower and Lender.
Borrower hereby waives demand, notice of non-payment, protest, and all other notices or demands whatsoever, and hereby consents that without notice to and without releasing the liability of any party, the obligations evidenced by this Note may from time to time, in whole or part, be renewed, extended, modified, accelerated, compromised, settled or released by Lender.




Any changes to this Note must be in writing signed by Borrower and Lender. Notices will be mailed electronically to the addresses provided.
Controlling Law. Lender is located in the State of Utah and this Note has been executed and delivered in the State of Utah and is deemed a contract made under such state's law. The provisions of this Note will be governed by federal laws and the laws of the State of Utah to the extent not preempted, without regard to any principle of conflicts of law. The unenforceability of any provision of this Note shall not affect the enforceability or validity of any other provision of this Note.
STATE LAW NOTICES:
CALIFORNIA  RESIDENTS ONLY: A married applicant may apply for a separate account. If Lender takes any adverse action as defined by § 1785.3 of the California Civil Code and the adverse action is based, in whole or in part, on any information contained in a consumer credit report, Borrower has the right to obtain within 60 days a free copy of Borrower's consumer credit report from the consumer reporting agency who furnished the consumer credit report and from any other consumer credit reporting agency that complies and maintains files on consumers on a nationwide basis.
CALIFORNIA  AND  UTAH  RESIDENTS: As required by California and Utah law, Borrower is hereby notified that a negative credit report reflecting on Borrower's credit record may be submitted to a credit reporting agency if Borrower fails to fulfill the terms of Borrower's credit obligations.
KANSAS  (and  IOWA  residents if the principal amount of this loan exceeds $20,000):  IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. LENDER MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
MARYLAND  RESIDENTS ONLY: Lender elects to make this loan pursuant to Subtitle 10 (Credit Grantor Closed End Credit provisions) of Title 12 of the Maryland Commercial Law Article only to the extent that such provisions are not inconsistent with Lender's authority under federal law (12 U.S.C. § 85, § 1463(g), or § 1831d, as appropriate) and related regulations and interpretations, which authority Lender expressly reserves.
MASSACHUSETTS  RESIDENTS ONLY: Massachusetts law prohibits discrimination based upon marital status or sexual orientation.
MISSOURI  AND  NEBRASKA  RESIDENTS: ORAL LOAN AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF SUCH DEBT, INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE. TO PROTECT BORROWER(S) AND THE LENDER AND ANY HOLDER OF THIS NOTE 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.
NEW JERSEY  RESIDENTS: The section headings of the Note are a table of contents and not contract terms. Portions of this Note with references to actions taken to the extent of applicable law apply to acts or practices that New Jersey law permits or requires. In this Note, actions or practices (i) by which Lender is or may be permitted by "applicable law" are permitted by New Jersey law, and (ii) that may be or will be taken by Lender unless prohibited by "applicable law" are permitted by New Jersey law.
NEW YORK ,  RHODE ISLAND  and  VERMONT  RESIDENTS: Borrower understands and agrees that Lender may obtain a consumer credit report in connection with this application and in connection with any update, renewals for extension of any credit as a result of this application. If Borrower asks, Borrower will be informed whether or not such a report was obtained, and if so, the name and address of the agency that furnished the report. Borrower also understands and agrees that Lender may obtain a consumer credit report in connection with the review or collection of any loan made to Borrower as a result of this application or for other legitimate purposes related to such loans.
OHIO  RESIDENTS ONLY: The Ohio laws against discrimination require that all creditors make credit equally available to all credit-worthy customers, and that credit reporting agencies maintain separate credit histories on each individual upon request. The Ohio Civil Rights Commission administers compliance with the law.
WISCONSIN  RESIDENTS ONLY: For married Wisconsin residents, Borrower's signature confirms that this loan obligation is being incurred in the interest of Borrower's marriage or family. No provision of any marital property agreement (pre-marital agreement), unilateral statement under § 766.59 of the Wisconsin statutes or court decree under § 766.70 adversely affects Lender's interest unless, prior to the time that the loan is approved, Lender is furnished with a copy of the marital property agreement, statement, or decree or have actual knowledge of the adverse provision. If this loan for which Borrower is applying is granted, Borrower will notify Lender if Borrower has a spouse who needs to receive notification that credit has been extended to Borrower.
SCREEN NAME OF BORROWER & CO-BORROWER
BY: LENDINGCLUB CORPORATION
ATTORNEY-IN-FACT FOR BORROWER and CO-BORROWER
(SIGNED ELECTRONICALLY)




Exhibit B
WBK PRIVACY NOTICE
FACTS
WHAT DOES WEBBANK DO WITH YOUR PERSONAL INFORMATION IN CONNECTION WITH YOUR LENDINGCLUB ACCOUNT?
Why?
Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?
The types of personal information we collect and share depend on the product or service you have with us. This information can include:
•
Social Security number and transaction history
•
Account balances and payment history
•
Credit history and credit scores
When you are  no longer  our customer, we continue to share your information as described in this notice
How?
All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons WebBank chooses to share; and whether you can limit this sharing.
Reasons we can share your personal information
Does WebBank share?
Can you limit this sharing?
For our everyday business purposes -  such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus
YES
NO
For our marketing purposes -  to offer our products and services to you
YES
NO
For joint marketing with other financial companies
NO
We don't share
For our affiliates' everyday business purposes -  information about your transactions and experiences
NO
We don't share
For our affiliates' everyday business purposes -  information about your creditworthiness
NO
We don't share
For our affiliates to market to you
NO
We don't share
For non-affiliates to market to you
NO
We don't share





Questions?
Call (888) 596-3157 
What we do
How does WebBank protect my personal information?
To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.
How does WebBank collect my personal information?
We collect your personal information, for example, when you
Ÿ     Open an account or pay us by check
Ÿ Provide account information or give us your contact information
Ÿ Show your driver's license
We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can't I limit all sharing?
Federal law gives you the right to limit only
Ÿ     Sharing for affiliates' everyday business purposes-information about your creditworthiness
Ÿ Affiliates from using your information to market to you
Ÿ Sharing for non-affiliates companies to market to you
State laws and individual companies may give you additional rights to limit sharing.
What happens when I limit sharing for an account I hold jointly with someone else?
WebBank does not offer joint LendingClub accounts.
Definitions
Affiliates
Companies related by common ownership or control.
They can be financial and nonfinancial companies.
Ÿ WebBank does not share with our affiliates Sharing
Non-affiliates
Companies not related by common ownership or control. They can be financial and nonfinancial companies.
Ÿ WebBank does not share with non-affiliates so they can market to you
Joint marketing
A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
Ÿ WebBank doesn't jointly market




Exhibit 10.2

Borrower Membership Agreement
The following terms constitute a binding agreement (the "Agreement") between you (you and your to mean each and every borrower who executes this Agreement) and LendingClub Corporation, a Delaware corporation ("LendingClub," "we," or "us"). BY ELECTRONICALLY SIGNING THE AGREEMENT, YOU HAVE SIGNIFIED YOUR AGREEMENT TO THESE TERMS. Under this Agreement, you agree to apply for one or more installment loans from WebBank, a Utah-chartered industrial bank ("WBK"), through the web site lending platform at www.Lendingclub.com , including any subdomains thereof (the "Site"), operated by us. These terms affect your rights and you should read them carefully and print a copy for your records. Your agreement to these terms means you agree to borrow and repay the money if any of your loans are funded, consent to our privacy policy, agree to transact with us electronically, and agree to have any dispute with us resolved by binding arbitration.
1. Registration as a Borrower Member. You are applying to register with us as a borrower member on the Site. Registration as a borrower member lets you post qualifying loan requests on the Site and obliges you to accept any resulting loans that satisfy such requests, subject to your right to cancel your loan request before closing as set forth in section 3 below. Registration on the Site as a borrower member is restricted to individuals who satisfy WBK's credit policy. Under WBK's current credit policy as of February 2015, your Fair Isaac Corporation ("FICO") score must be greater than or equal to 600 and you must meet other credit criteria in order for you to be eligible to apply for any loan. If for any reason you do not qualify or you later cease to qualify for a loan from WBK, if, for example, your FICO score from any consumer reporting agency falls below 600, we or WBK may terminate your loan request and deny your ability to make additional loan requests. Even if your FICO score is higher than 600, we or WBK may nevertheless terminate your registration or loan request based on WBK's other credit criteria such as debt-to-income ratio or other information in your credit report.
2. Account Verification. You authorize us to initiate a debit entry to your bank account in an amount of $0.01 to $0.99 for account verification purposes through the ACH network. We will reverse this debit following verification and no funds will be removed from your account. You understand that if we are unable to verify your bank account for any reason, we will cancel your application and your loan request will not be posted on the Site.
3. Loan Requests. To the extent you become and remain a registered borrower member, you may post a qualifying loan request on the Site in the amount of $1,000 to $35,000. You may not post more than one loan request on the site at a time and you may not have more than two loans outstanding at any given time. You may post a loan request on the Site, and LendingClub investors ("Investors") will be able to review your loan request. Investors may commit funds to purchase, in various amounts, Member Payment Dependent Notes ("MPDNs") that LendingClub may issue to Investors who commit funds for your loan request. You acknowledge that an Investor's commitment to purchase a MPDN corresponding to all or a portion of your loan from us does not confer any rights to You. Investors may also choose to purchase your loan directly from either WBK or LendingClub.  You understand that Investors make their




own decisions whether to commit funds for your loan.  Finally, LendingClub may also choose to commit funds for all or part of your loan request but is not obligated to do so.
We may elect in our sole discretion to give you a partial funding option, if necessary, which means your loan will be funded if it receives commitments totaling less than the full amount of your requested loan (subject to the loan size minimum).      
If your loan is going to be issued either for the full amount of your listed loan or as a result of any partial funding option available to you, your loan will close and issue within fourteen (14) days following the posting of your loan request, unless You notify us in writing of your election to terminate your loan request sufficiently far in advance of the loan closing for us to cancel the loan. .
4. Limited Power of Attorney. As a condition to registering as a borrower member on the Site, you hereby grant us a limited power of attorney and appoint us and/or our designees as your true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for you and in your name, place and stead, in any and all capacities, to complete and execute one or more promissory notes in the form appended to your Loan Agreement with WBK (each, a "Note") representing in the aggregate the total principal amount you accept, and the terms, of each loan made to you by WBK in accordance with the estimated disclosures made to you about such loan (see the disclosures at http://www.lendingclub.com/account/truthInLending.action ), with the full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with such power as fully to all intents and purposes as you might or could do in person ("Power of Attorney"). You agree and acknowledge that the initial loan disclosures made to you are estimates (other than APR) and may be as much as 40% less than the initially requested amounts. This Power of Attorney is limited solely to the purpose described above and will expire automatically upon the earlier of (i) the execution of the Notes by us on your behalf or (ii) the termination or expiration of your loan request posted on the Site. You may revoke the Power of Attorney at any time before the funds representing your loan proceeds are transferred to your designated account and the Notes are executed on your behalf by contacting us in accordance with section 7, Communications. Once the Notes have been signed by LendingClub acting as your attorney-in-fact, however, they are deemed executed on your behalf and the executed Notes shall be your valid and binding obligations thereafter. If you choose to revoke the Power of Attorney prior to execution of Notes, we will be unable to proceed with processing your loan request and your pending loan requests will be considered withdrawn, and your registration as a borrower member on the Site will be terminated. In such event, we will remove any loan requests you have posted on the Site and you may be prohibited from posting additional qualifying loan requests in the future in our discretion.
5. Origination Fee. If your loan request results in an issued loan, you may be required to pay WBK a non-refundable origination fee . The amount of the fee, if required, will be stated in the disclosures provided to you which will be available for your review prior to loan issuance and in your online member account. No amount of the finally determined fee is refundable. This fee may be deducted from your loan proceeds, which will result in the loan proceeds delivered to you being less than the full amount of your issued loan. You acknowledge that any required origination fee will be considered part of the principal on your loan and is subject to the accrual of interest.




6. Loan Servicing; Check Processing Fee. You acknowledge and agree that LendingClub shall serve as the loan servicer for any and all loans you receive but that LendingClub may delegate servicing to another entity. LendingClub will maintain all Notes representing your loans in electronic form and shall make all such Notes available to you for review on the Site. As loan servicer, LendingClub will administer and collect on your loans. You may elect to make payments by personal check by contacting support@lendingclub.com or by regular mail at LendingClub Corporation, 71 Stevenson St. Suite 300, San Francisco, CA 94105, Attention: Loan Processing Department. If you elect to make payments by check, you acknowledge and agree that there will be a $7 check processing fee per payment, subject to applicable law. If you elect to make payments by check, you must send the check either (i) by regular mail to Lending Club Corporation, Dept #34268, P.O. Box 39000, San Francisco, CA 94139, or (ii) by overnight mail or UPS delivery to Wells Fargo Lock Box Services, Dept #34268, 3440 Walnut Ave, Window H, Fremont, CA 94538.
7. Communications. You agree not to communicate with the investors who purchase Member Payment Dependent Notes ("MPDNs") corresponding to your loans except anonymously and publicly through posting on the Site. For a detailed description of the MPDNs, please refer to the Prospectus available at https://www.lendingclub.com/info/prospectus.action . Subject to section 18, you will send any inquiries, requests for deferment or forbearance, or other communications regarding your loans by email to support@lendingclub.com or by regular mail to LendingClub Corporation, 71 Stevenson St. Suite 300, San Francisco, CA 94105, Attention: Loan Processing Department.
8. Other Borrower Obligations. You agree that you are (A) a US citizen, permanent resident or Non-Permanent Resident Alien in the US on a valid long term visa and (B) will not, in connection with your loan request: (i) make any false, misleading or deceptive statements or omissions of fact in your listing, including but not limited to in the loan title, or in your loan description; (ii) misrepresent your identity, or describe, present or portray yourself as a person other than yourself; (iii) give to or receive from, or offer or agree to give to or receive from any LendingClub member or other person any fee, bonus, additional interest, kickback or thing of value of any kind except in accordance with the terms of your loan; (iv) represent yourself to any person, as a representative, employee, or agent of ours, or purport to speak to any person on our behalf; (v) or in communications on the Site related to your loan request, provide information upon which a discriminatory lending decision may be made, such as your race, color, religion, national origin, sex, marital status, age, any exercise of your consumer rights or the existence of alimony, child support, or separate income (unless you have included such income in your application to be considered for loan qualification), or (vi) use any of the loan proceeds to fund any post-secondary educational expenses, including, but not limited to, tuition, fees, books, supplies, miscellaneous expenses, or room and board (see Section 472 of 20 U.S.C. 1087ll http://www.law.cornell.edu/uscode/search/display.html?terms=1087ll&url=/uscode/html/uscode20/usc_sec_20_00001087--ll000-.html for a complete list). You acknowledge and agree that we may rely without independent verification on the accuracy, authenticity, and completeness of all information you provide to us. You certify that the proceeds of the loan will not be used for the purpose of purchasing or carrying any securities or to fund any illegal activity.




9. Liability of the Borrower and the Co-borrower is Joint and Several. The liability of any co-borrower is joint and several and is co-existent with that of the borrower. The liability of the co-borrower to repay any Loan together with interest, and to observe the terms and conditions of this Agreement and any other agreement and documents that may have been or may be executed by you with us in respect of a Loan or Loans, is joint and several and consequently Lender shall have sole discretion to proceed against both or either of the borrower or co-borrower to recover the Loan and other charges payable by you to Lender. Further, we can accept instructions from either the borrower or the co-borrower, and notice can be given to either the borrower or the co-borrower, and shall be binding on both.
10. Verification. We reserve the right to verify the accuracy of all information you provide and to terminate this Agreement and remove your loan request in case of any inaccuracy or omission in your loan request or your application, or any other violation of this Agreement. We reserve the right to verify any information you submit through the production of appropriate documentation, and also reserve the right to conduct such verification through a third party. You hereby authorize us to request and obtain data from a third party to verify any information you provide us in connection with your registration as a borrower member on the Site.
11. NO GUARANTEE. WE DO NOT WARRANT OR GUARANTEE (1) THAT YOUR REQUEST WILL BE FUNDED, OR (2) THAT YOU WILL RECEIVE A LOAN AS A RESULT OF POSTING A REQUEST.
12. Restrictions on Use of Proceeds; Bank Account. You are not authorized or permitted to use the Site to obtain, or attempt to obtain, a loan for someone other than yourself. You are not authorized or permitted to use the Site to obtain, or attempt to obtain, a loan to (i) fund any illegal activity or (ii) any other activity or use not otherwise allowed under this Agreement or the Site. You must be the owner of the deposit account you designate for electronic transfers of funds and have authority to direct that loan payments be made to us from such account. You acknowledge for those Loans where there may be more than one borrower on a Loan, the designated account may belong to either borrower or both. Your designated account will be the account into which loan proceeds will be deposited and from which loan payments will be made. To the extent that we determine, in our sole discretion, that your loan request violates this Agreement or the Terms of Use, we may terminate your loan request and cancel this Agreement immediately.
13. Termination of Registration. We may terminate this Agreement and your status as a borrower member at any time if you committed fraud or made a misrepresentation in connection with your registration on the Site or any application or request for a loan, performed any prohibited activity, or otherwise failed to abide by the terms of this Agreement. In such event, we will have all remedies authorized or permitted by this Agreement and applicable law. We may, in our sole discretion, with or without cause and with or without notice, restrict your access to the Site.
14. DISCLAIMERS AND LIMITATION ON LIABILITY. THIS AGREEMENT IS FULLY SUBJECT TO ALL DISCLAIMERS AND LIMITATIONS ON LIABILITY SET FORTH IN THE TERMS OF USE.
15. Entire Agreement. This Agreement represents the entire agreement between you and us regarding the subject matter of the Agreement and supersedes all prior or contemporaneous communications, promises and proposals,




whether oral, written or electronic, between us with respect to your registration as a borrower member and your loan request.
16. Consent to Electronic Transactions and Disclosures. THIS AGREEMENT IS FULLY SUBJECT TO YOUR CONSENT TO ELECTRONIC TRANSACTIONS AND DISCLOSURES, WHICH CONSENT IS SET FORTH IN THE TERMS OF USE.
17. Notices. You agree that we can send you any and all notices and other communications related to this Agreement, any loan requests you post or your status as a borrower member by sending an email to your registered email address or posting the notice or communication on the Site, and notice or communication shall be deemed to have been duly given and effective when we send it or post it on the Site. You acknowledge that you have sole access to the registered email account and your area on the Site and that communications from us may contain sensitive, confidential, and collections-related communications. If your registered email address changes, you must notify us immediately of the change by sending an email to support@lendingclub.com or calling 888-596-3157. You also agree to update promptly your registered residence address and telephone number on the Site if they change.
18. 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 or obligations under this Agreement to another person without our prior written consent. Any such assignment, transfer, sublicense or delegation in violation of this section 17 shall be null and void. This Agreement shall be governed by the laws of the State of Delaware without regard to any principle of conflict of laws that would require or permit the application of the laws of any other jurisdiction. 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 at any time after the date of this Agreement, any of the provisions of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality and unenforceability of such provision shall have no effect upon and shall not impair the enforceability of any other provisions of this Agreement. The headings in this Agreement are for reference purposes only and shall not affect the interpretation of this Agreement in any way.
19. Arbitration.
a. Either party to this Agreement, or WBK, may, at its sole election, require that the sole and exclusive forum and remedy for resolution of a Claim be final and binding arbitration pursuant to this section 18 (the "Arbitration Provision"), unless you opt out as provided in section 18(b) below. As used in this Arbitration Provision, "Claim" shall include any past, present, or future claim, dispute, or controversy involving you (or persons claiming through or connected with you), on the one hand, and us and/or WBK (or persons claiming through or connected with us and/or WBK), on the other hand, relating to or arising out of this Agreement, any Note, the Site, and/or the activities or relationships that involve, lead to, or result from any of the foregoing, including (except to the extent provided otherwise in the last sentence of section 18(f) below) the validity or enforceability of this Arbitration Provision, any part thereof, or the entire Agreement. Claims are subject to arbitration regardless of whether they arise from contract; tort (intentional or otherwise); a constitution, statute, common law, or principles of equity; or otherwise.




Claims include matters arising as initial claims, counter-claims, cross-claims, third-party claims, or otherwise. The scope of this Arbitration Provision is to be given the broadest possible interpretation that is enforceable.
b. You may opt out of this Arbitration Provision for all purposes by sending an arbitration opt out notice to LendingClub Corporation, 71 Stevenson St. Suite 300, San Francisco, CA 94105, Attention: Loan Processing Department, which is received at the specified address within 30 days of the date of your electronic acceptance of the terms of this Agreement. The opt out notice must clearly state that you are rejecting arbitration; identify the Agreement to which it applies by date; provide your name, address, and social security number; and be signed by you. You may send the opt out notice in any manner you see fit as long as it is received at the specified address within the specified time. No other methods can be used to opt out of this Arbitration Provision. If the opt out notice is sent on your behalf by a third party, such third party must include evidence of his or her authority to submit the opt out notice on your behalf.
c. The party initiating arbitration shall do so with the American Arbitration Association (the "AAA") or JAMS. The arbitration shall be conducted according to, and the location of the arbitration shall be determined in accordance with, the rules and policies of the administrator selected, except to the extent the rules conflict with this Arbitration Provision or any countervailing law. In the case of a conflict between the rules and policies of the administrator and this Arbitration Provision, this Arbitration Provision shall control, subject to countervailing law, unless all parties to the arbitration consent to have the rules and policies of the administrator apply.
d. If we (or WBK) elect arbitration, we (or WBK, as the case may be) shall pay all the administrator's filing costs and administrative fees (other than hearing fees). If you elect arbitration, filing costs and administrative fees (other than hearing fees) shall be paid in accordance with the rules of the administrator selected, or in accordance with countervailing law if contrary to the administrator's rules. We (or WBK, as the case may be) shall pay the administrator's hearing fees for one full day of arbitration hearings. Fees for hearings that exceed one day will be paid by the party requesting the hearing, unless the administrator's rules or applicable law require otherwise, or you request that we (or WBK) pay them and we agree (or WBK agrees) to do so. Each party shall bear the expense of its own attorneys' fees, except as otherwise provided by law. If a statute gives you the right to recover any of these fees, these statutory rights shall apply in the arbitration notwithstanding anything to the contrary herein.
e. Within 30 days of a final award by the arbitrator, any party may appeal the award for reconsideration by a three-arbitrator panel selected according to the rules of the arbitrator administrator. In the event of such an appeal, any opposing party may cross-appeal within 30 days after notice of the appeal. The panel will reconsider de novo all aspects of the initial award that are appealed. Costs and conduct of any appeal shall be governed by this Arbitration Provision and the administrator's rules, in the same way as the initial arbitration proceeding. Any award by the individual arbitrator that is not subject to appeal, and any panel award on appeal, shall be final and binding, except for any appeal right under the Federal Arbitration Act ("FAA"), and may be entered as a judgment in any court of competent jurisdiction.
f. We agree not to invoke our right to arbitrate an individual Claim you may bring in Small Claims Court or an equivalent court, if any, so long as the Claim is pending only in that court. NO ARBITRATION SHALL PROCEED




ON A CLASS, REPRESENTATIVE, OR COLLECTIVE BASIS (INCLUDING AS PRIVATE ATTORNEY GENERAL ON BEHALF OF OTHERS), EVEN IF THE CLAIM OR CLAIMS THAT ARE THE SUBJECT OF THE ARBITRATION HAD PREVIOUSLY BEEN ASSERTED (OR COULD HAVE BEEN ASSERTED) IN A COURT AS CLASS REPRESENTATIVE, OR COLLECTIVE ACTIONS IN A COURT. Unless consented to in writing by all parties to the arbitration, no party to the arbitration may join, consolidate, or otherwise bring claims for or on behalf of two or more individuals or unrelated corporate entities in the same arbitration unless those persons are parties to a single transaction. Unless consented to in writing by all parties to the arbitration, an award in arbitration shall determine the rights and obligations of the named parties only, and only with respect to the claims in arbitration, and shall not (a) determine the rights, obligations, or interests of anyone other than a named party, or resolve any Claim of anyone other than a named party; nor (b) make an award for the benefit of, or against, anyone other than a named party. No administrator or arbitrator shall have the power or authority to waive, modify, or fail to enforce this section 18(f), and any attempt to do so, whether by rule, policy, arbitration decision or otherwise, shall be invalid and unenforceable. Any challenge to the validity of this section 18(f) shall be determined exclusively by a court and not by the administrator or any arbitrator.
g. This Arbitration Provision is made pursuant to a transaction involving interstate commerce and shall be governed by and enforceable under the FAA. The arbitrator will apply substantive law consistent with the FAA and applicable statutes of limitations. The arbitrator may award damages or other types of relief permitted by applicable substantive law, subject to the limitations set forth in this Arbitration Provision. The arbitrator will not be bound by judicial rules of procedure and evidence that would apply in a court. The arbitrator shall take steps to reasonably protect confidential information.
h. This Arbitration Provision shall survive (i) suspension, termination, revocation, closure, or amendments to this Agreement and the relationship of the parties and/or WBK; (ii) the bankruptcy or insolvency of any party or other person; and (iii) any transfer of any loan or Note or any other promissory note(s) which you owe, or any amounts owed on such loans or notes, to any other person or entity. If any portion of this Arbitration Provision other than section 18(f) is deemed invalid or unenforceable, the remaining portions of this Arbitration Provision shall nevertheless remain valid and in force. If an arbitration is brought on a class, representative, or collective basis, and the limitations on such proceedings in section 18(f) are finally adjudicated pursuant to the last sentence of section 18(f) to be unenforceable, then no arbitration shall be had. In no event shall any invalidation be deemed to authorize an arbitrator to determine Claims or make awards beyond those authorized in this Arbitration Provision.
THE PARTIES ACKNOWLEDGE THAT THEY HAVE A RIGHT TO LITIGATE CLAIMS THROUGH A COURT BEFORE A JUDGE OR JURY, BUT WILL NOT HAVE THAT RIGHT IF ANY PARTY ELECTS ARBITRATION PURSUANT TO THIS ARBITRATION PROVISION. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THEIR RIGHTS TO LITIGATE SUCH CLAIMS IN A COURT BEFORE A JUDGE OR JURY UPON ELECTION OF ARBITRATION BY ANY PARTY.






Exhibit 10.3








 


MASTER LOAN PURCHASE AGREEMENT
 

Dated as of ___________, 20______

by and between

LENDINGCLUB CORPORATION,
as Seller

and

[______________],
as Purchaser


 














THIS MASTER LOAN PURCHASE AGREEMENT, dated as of -----_________ __, 20______ (the “ Effective Date ”), by and between LendingClub Corporation, a Delaware corporation, as seller (“ Seller ”), and_______________, a [_____________], as purchaser (“ Purchaser” ).

RECITALS
WHEREAS, from time to time, Seller purchases, without recourse, loans from banking partners; and
WHEREAS, Seller wishes to sell to Purchaser, and Purchaser wishes to buy from Seller, from time to time, certain of these loans, on a whole loan basis, and Seller and Purchaser desire to set forth the terms and conditions under which Purchaser will purchase such loans.
NOW, THEREFORE, in consideration of the foregoing and of other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Seller and Purchaser hereby agree as follows:

ARTICLE 1.
DEFINITIONS

1.1     Defined Terms .

(a)    As used in this Agreement, the following words shall have the meanings set forth below:

“ Addendum ” means, with respect to any Purchased Loan, the addendum or addenda attached to this Agreement and applicable to such Purchased Loans. For the avoidance of doubt, each Addendum will apply to a specific Loan Program (e.g., “Standard,” “Superprime,” “Custom,” “Small Business”, “Multi-Draw Line of Credit Program,” “Single Draw Line of Credit Program” and such additional programs as may be added from time to time), the program-specific terms and conditions of which are outlined on each Addendum.
“ Affiliate ” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Persons means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“ Agreement ” means this Master Loan Purchase Agreement, including all exhibits, addenda and schedules attached hereto or delivered in connection herewith, as such agreement may be amended, supplemented and modified from time to time.
“ AML-BSA Laws ” means, collectively, (i) the Bank Secrecy Act of 1970, as supplemented by the USA Patriot Act, and any rules and regulations promulgated thereunder; (ii) the Office of Foreign Assets Control’s (“ OFAC ”) rules and regulations regarding the blocking of assets and the prohibition of transactions involving Persons or countries designated by OFAC; and (iii) any other Applicable Laws relating to customer identification, anti-money laundering or preventing the financing of terrorism and other forms of illegal activity, each as amended.
“ Applicable Law ” means all federal, state and local laws, statutes, rules, regulations and orders, and all requirements of any Regulatory Authority having jurisdiction over Seller or Bank, in each case to the extent applicable to the Purchased Loans (including without limitation the underwriting, origination, servicing, ownership, holding, acquisition and sale of such Purchased Loan).



“ Article 7 Repurchase Price ” has the meaning set forth in Section 7.2 .
“ Bank ” means a bank, savings association, or credit union chartered in the United States, or a foreign depository institution acting through a U.S. bank branch, regulated by and subject to the authority of a Regulatory Authority, from which Seller purchases loans, which Bank is the initial issuer of Loans.
“ Borrower ” means, with respect to each Loan, each Person or other obligor (including any co-borrower, co-maker, co-signor or guarantor) who is obligated under the terms of such Loan.
“ Borrower Data ” has the meaning set forth in Section 6.2 .
“ Business Day ” means any day other than: (a) a Saturday or Sunday; (b) a legal or federal holiday; and (c) a day on which banking and savings and loan institutions in San Francisco, California, New York, New York, or the State of Utah are required or authorized by law or Regulatory Authority to be closed for business.
“ Charged Off Loan ” has the meaning assigned to such term in the Servicing Agreement.
“ Claims Notice ” has the meaning assigned to such term in Section 5.2 .
“ Confidential Information ” has the meaning set forth in Section 6.1 .
“ Credit Criteria ” means, with respect to any Loan, the applicable credit criteria with respect to each Loan Program, as such criteria may be modified by Seller from time to time in its sole discretion and upon such notice as required by the terms of the related Addendum.
“ Effective Date ” has the meaning set forth in the introductory paragraph.
“ Eligible Loan ” means a Loan which, as of the related Purchase Date, has been originated by Bank and acquired by Seller from Bank.
“ Event of Default ” has the meaning set forth in Section 8.2 .
“ Expiration Date ” has the meaning set forth in Section 2.2(d) .
“ ID Theft Report ” has the meaning set forth in Section 7.1 .
“ Indemnified Party ” has the meaning set forth in Section 5.3 .
“ Indemnified Purchaser Party ” has the meaning set forth in Section 5.1 .
“ Indemnified Seller Party ” has the meaning set forth in Section 5.2 .
“ Indemnifying Party ” has the meaning set forth in Section 5.3 .
“ Indemnity Deductible ” shall mean, for any date of determination, [__]% of the aggregate original principal balances of all Purchased Loans sold to Purchaser pursuant to the terms of the same Addendum as of the most recent month end.
“ Insolvent ” means the failure to pay debts in the ordinary course of business or the inability to pay debts as they come due.
“ Launch Date ” means a date mutually agreed upon by each Party on which Purchaser may commence purchasing Loans described in the related Addendum, in accordance with the terms of Article 2.



“ LendingClub ” means LendingClub Corporation.
“ Loan ” has the meaning ascribed to such term in the related Addendum.
“ Loan Documents ” means, with respect to any Loan, the applicable loan documents listed on the related Addendum, as such list may be modified by Seller from time to time in its sole discretion upon written notice to Purchaser.
“ Loan Document Package ” means, with respect to any Loan, all of the promissory notes, loan agreements and other documents executed and delivered in connection with the origination, funding, acquisition and ownership of such Loan, including, without limitation, each of the loan documents listed on the related Addendum, as such list may be modified from time to time in the sole discretion of Seller upon written notice to Purchaser.
“ Loan Program ” has the meaning set forth in Section 2.1 .
“ Losses ” has the meaning set forth in Section 5.1 .
“ Material Adverse Change ” means, with respect to any Person, any material adverse change in the business, financial condition, operations, or properties of such Person that would substantially prevent or impair the Person’s ability to perform any of its obligations under this Agreement (which impairment cannot be timely cured, to the extent a cure period is applicable).
“ Material Adverse Effect ” means, (a) with respect to a Party, (i) a Material Adverse Change with respect to such Party or any of its Affiliates taken as a whole; or (ii) a material adverse effect upon the legality, validity, binding effect or enforceability of this Agreement against such Party, or (b) with respect to a Purchased Loan, a material adverse effect upon the legality, validity, binding effect, collectability or enforceability of such Purchased Loan.
“ Maximum Purchase Amount ” means the maximum aggregate initial principal balance of Eligible Loans that Purchaser will actually purchase in any given calendar month.
“ Multi-Party Agreement ” means any agreement entered into by Seller, Purchaser and one or more third parties providing for the financing, securitization or other similar purposes with respect to the Purchased Loans and this Agreement.
“ Non-Conforming Loan ” means a Purchased Loan that is determined to have been issued or sold in material breach of any representation, warranty or covenant contained in Section 4.2 .
“ Non-Conforming Loan Notice ” shall have the meaning set forth in Section 2.4 .
“ Non-Offered Loan ” means a prospective Loan that was initially considered an Eligible Loan and offered to Purchaser pursuant to Section 2.2 , but which Loan subsequently fails to issue because (a) the prospective Borrower withdraws or abandons the request for such Loan or otherwise fails to complete the underwriting or review process to obtain such Loan, (b) after further review or verification of the prospective Loan by Seller, a determination is made that such Loan is not an Eligible Loan or (c) such Loan is otherwise rejected for purchase by Seller from Bank.
“ Non-Public Borrower Data ” has the meaning set forth in Section 6.2 .
“ Origination Date ” means, with respect to a Loan, the date that Loan was issued by Bank.
“ Party ” means either Seller or Purchaser, and “ Parties ” means Seller and Purchaser.
“ Person ” means any individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, unincorporated organization or other entity, including any government agency, commission, board, department, bureau or instrumentality.



“ Purchase Commitment ” means the selection of prospective Eligible Loans by Purchaser through the Purchaser Online Account which selection shall constitute an irrevocable commitment by Purchaser to purchase and a commitment by Seller to sell such prospective Eligible Loans (excluding any prospective Eligible Loan that becomes a Non-Offered Loan) pursuant to Section 2.2.
“ Purchase Date ” means, with respect to any Purchased Loan, the date that such Purchased Loan is purchased by Purchaser under this Agreement, which date shall fall after the Origination Date.
“ Purchase Instructions ” means the purchase instructions in the form set forth as Exhibit A to this Agreement.
“ Purchase Limitation ” has the meaning set forth in Section 2.2(e) .
“ Purchase Price ” has the meaning set forth in Section 2.2(c) .
“ Purchaser ” has the meaning set forth in the introductory paragraph.
“ Purchased Loan ” means any Eligible Loan that is purchased by Purchaser under the terms of this Agreement, which shall be identified on the respective Purchased Loan Confirmation.
“ Purchased Loan Confirmation ” means with respect to each prospective Eligible Loan subject to purchase, either or both an email notification by Seller to Purchaser or posting by Seller to the Purchaser Online Account pursuant to which Seller confirms to Purchaser that such Eligible Loan has been issued and then purchased by Purchaser as a Purchased Loan hereunder on the respective Purchase Date.
“ Purchaser Activity Status Report ” means information provided by Seller from time to time through the Purchaser Online Account or email to Purchaser that sets forth each prospective Eligible Loan for which Purchaser has made a Purchase Commitment, each such prospective Eligible Loan that has become a Non-Offered Loan, and each such prospective Eligible Loan for which a Purchased Loan Confirmation was issued.
“ Purchaser Claims Notice ” has the meaning assigned to such term in Section 5.1(c) .
“ Purchaser Online Account ” means the account(s) established by Purchaser on Seller’s platform which provides Purchaser with online access to the platform and in which Seller posts activity relating to the commitment and purchase by Purchaser of Loans hereunder.
“ Records ” means, with respect to any Purchased Loan, any loan applications, change-of-terms notices, credit files, servicing and other records, credit bureau reports or other documentation or information relating to or regarding such Loan (including computer tapes, magnetic files, and information in any other format).
“ Regulatory Authority ” means any federal, state or local regulatory agency or other governmental agency or authority having jurisdiction over a Party, any Loan or any Borrower.
“ Repurchase Price ” means, for any Purchased Loan, the original principal balance of the Loan, less all amounts received with respect to payments of principal on such Purchased Loan after the applicable Purchase Date.
“ Repurchase Procedure ” means, with respect to a Purchased Loan subject to a Specified Indemnity Claim, the process by which Seller shall purchase, or shall cause the purchase of, such Purchased Loan from Purchaser for the applicable Repurchase Price.
“ Resale Differential ” has the meaning set forth in Section 5.1(e) .
“ Resale Period ” has the meaning set forth in Section 5.1(e) .



“ Resale Price ” means, with respect to any sale of a Purchased Loan to a third party in accordance with the Resale Procedure, the fair market value of such Purchased Loan as of the date of such sale.
“ Resale Procedure ” means, with respect to a Purchased Loan subject to a Specified Indemnity Claim, the process by which Seller shall arrange for and Purchaser shall agree to the sale of such Purchased Loan by Purchaser to a third party for a purchase price equal to the Resale Price.
“ Seller ” has the meaning set forth in the introductory paragraph.
“ Seller Claims Notice ” has the meaning set forth in Section 5.2 .
“ Servicer ” means LendingClub, or its successor in interest or permitted assigns, in its capacity as the servicer under the Servicing Agreement, or any successor to Servicer under the Servicing Agreement as provided therein.
“ Servicing Agreement ” means that certain Master Loan Servicing Agreement of even date herewith, pursuant to which LendingClub will act as the initial servicer of the Purchased Loans for Purchaser, which agreement may be subsequently amended or restated.
“ Specified Indemnity Claim ” has the meaning set forth in Section 5.1(b) .
“ UCC ” means the Uniform Commercial Code as in effect from time to time in each State as applicable to the respective actions of Seller relating to the creation, perfection, priority, validity and/or enforcement of the security interest granted by Seller to Purchaser hereunder.
(b)    Certain words used in this Agreement shall have the meanings set forth in an applicable executed Addendum, and such defined terms are hereby incorporated into this Section 1.1 , as applicable.

1.2     Rules of Construction .

(a)    As used in this Agreement: (i) all references to the masculine gender shall include the feminine gender (and vice versa); (ii) all references to “ include ,” “ includes ,” or “ including ” shall be deemed to be followed by the words “ without limitation ”; (iii) references to any law or regulation refer to that law or regulation as amended from time to time and include any successor law or regulation; (iv) references to “ dollars ” or “ $ ” shall be to United States dollars unless otherwise specified herein; and (v) unless otherwise specified, all references to days, months or years shall be deemed to be preceded by the word “ calendar ”; (vi) all references to “ quarter ” shall be deemed to mean calendar quarter.

(b)    The fact that any Party provides approval or consent shall not mean or otherwise be construed to mean that: (i) either Party has performed any due diligence with respect to the requested or required approval or consent, as applicable; (ii) either Party agrees that the item or information for which the other Party seeks approval or consent complies with any Applicable Law; (iii) either Party has assumed the other Party’s obligations to comply with all Applicable Law arising from or related to any requested or required approval or consent; or (iv) except as otherwise expressly set forth in such approval or consent, either Party’s approval or consent impairs in any way the other Party’s rights or remedies under the Agreement, including indemnification rights for any failure to comply with all Applicable Law.




ARTICLE 2.
SELLER COMMITMENT AND PURCHASE OF LOANS

2.1     Loan Programs, Purchaser Online Accounts and Addenda .

Seller facilitates several Loan programs, each of which provides investors the opportunity to invest in Loans satisfying the Credit Criteria applicable to such program (each a “ Loan Program ”). On or prior to a Launch Date, Purchaser will (i) establish a Purchaser Online Account with Seller for each applicable Loan Program and (ii) execute the related Addendum for each Loan Program in which Purchaser will or intends to participate. A Purchaser Online Account may be used by Purchaser to purchase and hold Loans meeting only one of the Credit Criteria described in the related Addendum (i.e., Loans sold pursuant to a particular Loan Program). By way of example only, if Purchaser participates in both the “Standard” Loan Program and the “Custom” Loan Program, Purchaser shall open two Purchaser Online Accounts and execute the two applicable Addenda.
2.2     Purchase Procedures for Offer, Commitment and Funding of Purchased Loans.

(a)     Purchase Procedures for Offer. Commencing on a Launch Date, Seller will grant Purchaser the right to view applicable Eligible Loans through the applicable Purchaser Online Account.

(b)     Purchase Commitments. From time to time, Purchaser may make a Purchase Commitment (subject to any applicable Purchase Limitation) for each Loan Program in which it participates (i.e., each Loan Program for which Purchase has executed an Addendum). Each Purchase Commitment shall be made by (i) Purchaser, in its sole discretion, or (ii) Seller, acting upon its delegated non-discretionary authority to make Purchase Commitments on behalf of Purchaser (if such authority is delegated to Seller pursuant to the terms of the applicable Addendum). Seller commits to offer Purchaser, and Purchaser hereby commits to purchase Eligible Loans in respect of which any Purchase Commitment is made in accordance with the terms of the immediately preceding sentence; provided, however, that any such prospective Eligible Loan that becomes a Non-Offered Loan shall be released and removed from any Purchase Commitment. Purchaser will be irrevocably obligated to purchase each such Eligible Loan that does not become a Non-Offered Loan. Seller will provide a Purchaser Activity Status Report listing all the Eligible Loans that are subject to a Purchase Commitment. Prior to making any Purchase Commitment, Purchaser will have an amount of funds available in the Purchaser Online Account equal to such Purchase Commitment plus the aggregate amount of all outstanding Purchase Commitments, unless otherwise agreed between the Parties in writing. Unless otherwise agreed to in Seller’s sole discretion, Purchaser shall only be able to execute Purchase Commitments to the extent of immediately available funds in the Purchaser Online Account. Any determination as to whether to make a Purchase Commitment for any Eligible Loan shall be deemed to be in Purchaser’s sole discretion and at Purchaser’s own risk that information supplied by any Borrower may be incorrect, and Seller makes no representation as to the correctness of any information provided by any Borrower with respect to any Eligible Loan.

(c)     Eligible Loan Status and Funding. With respect to each Eligible Loan to which Purchaser is committed, Seller shall provide prompt notice to Purchaser of any change to the ongoing status of the prospective Eligible Loan, including whether such Loan has become a Non-Offered Loan or such Loan is ready for purchase by Purchaser. Seller will debit the Purchaser Online Account for the full purchase price of each Purchased Loan as indicated through the Purchaser Online Account (the “ Purchase Price ”). Purchaser will not withdraw funds from the Purchaser Online Account if, after such withdrawal, immediately available funds in such Purchaser Online Account would be less than the dollar amount necessary to meet Purchaser’s aggregate Purchase Commitments as of the applicable Purchase Date, unless otherwise agreed to by Seller in Seller’s sole discretion.

(d)     Expiration of Purchase Commitments. The Purchase Commitment for each Eligible Loan shall expire thirty (30) Business Days following the date on which the Purchase Commitment for such Eligible Loan was made (the “ Expiration Date ”). If the Purchase Date for such Eligible Loan has not occurred on or before such Expiration Date, Purchaser may withdraw any funds from the Purchaser Online Account that were deposited, wired or otherwise made available to Seller in respect of such Purchase Commitment.



     

(e)     Purchase Limitation. Seller may impose a limit on the aggregate amount of Purchase Commitments that Purchaser may make in a given month with respect to one or more Addenda (each, a “ Purchase Limitation ”). If Seller wishes to impose such a limit, Seller will provide Purchaser thirty (30) days’ prior written notice, informing Purchaser of the total aggregate dollar limit of Purchase Commitments that Seller will accept. The Purchase Limitation will go into effect on the first day of the month immediately following the thirtieth day following the notice, and will apply for each month going forward until Seller provides notice that the Purchase Limitation has been modified or lifted. If a Purchase Limitation is in place, Purchaser will not be permitted to make Purchase Commitments in excess of such Purchase Limitation without prior approval of Seller, which approval may be withheld in the sole and absolute discretion of Seller. For the avoidance of doubt, a breach of this Section 2.2(e) by Purchaser shall constitute a material breach of this Agreement.

2.3     Conditions Precedent to Purchases .

Purchaser’s obligation to purchase each Eligible Loan in any Purchase Commitment shall be subject to all of the representations, warranties and covenants of Seller contained in this Agreement being true, correct and complied with in all material respects as of the applicable Purchase Date. Purchaser’s right to purchase each Eligible Loan hereunder shall be subject to all of the representations, warranties and covenants of Purchaser contained in this Agreement being true, correct and complied with in all material respects as of the applicable Purchase Date, and (unless otherwise agreed between the Parties in writing) shall additionally be conditioned upon there being sufficient available funds in the Purchaser Online Account to pay the Purchase Price of (a) such Eligible Loan and (b) all Eligible Loans that are the subject of an outstanding Purchase Commitment.
2.4     Payment of Purchase Price and Confirmation .

On the Purchase Date for any Loan, as indicated in the Purchaser Online Account, Seller hereby sells, transfers, assigns and otherwise conveys to Purchaser all of Seller’s right, title and interest in, to and under such Loan, and Purchaser hereby purchases and shall become, for all purposes, the owner of such Loan as of such Purchase Date, in each case upon identification of such Loan in the related Purchased Loan Confirmation; provided, however, that distribution of amounts received from the Borrower of such Loan shall be subject to retention by Servicer of any interest and fees that accrued on such Loan prior to the respective Purchase Date. The Parties acknowledge and agree that the Purchase Price for each Eligible Loan reflects an arms-length negotiation, resolution and transaction. If, subsequent to a Purchase Date, Seller discovers that any Purchased Loans were Non-Conforming Loans and Seller provides a notice of such non-conformance to Purchaser (a “ Non-Conforming Loan Notice ”), within five (5) Business Days of its delivery of a Non-Conforming Loan Notice, Seller can without any consent from Purchaser, but shall not be obligated to, repurchase the related Non-Conforming Loan by depositing an amount equal to the then-outstanding principal balance of such Non-Conforming Loan plus accrued and unpaid interest thereon into the related Purchaser Online Account, whereupon all right, title and interest of Purchaser in, to and under such Non-Conforming Loan shall revert to Seller.
2.5     Modification of Loan Document Package .

If any of the documents included in a Loan Document Package are modified, amended, or replaced by Seller in a manner that alters the economic terms of the Loan other than as contemplated by the Loan Documents prior to the Purchase Date, then Seller shall submit notice of such modifications, amendments, or replacement documents to Purchaser, together with a summary of the changes made, at least four (4) Business Days prior to such Purchase Date (or such other number of days as may be agreed to by Purchaser). Purchaser shall not be obligated to purchase any Eligible Loan if Purchaser objects to such modifications, amendments or replacement documents for such Eligible Loan within one (1) day of Purchaser’s receipt of such notice.




2.6     Limitation on Purchase Obligation.

Purchaser shall have no obligation to purchase any Eligible Loan at any time after the termination of this Agreement (except those Eligible Loans for which outstanding Purchase Commitments were made prior to the termination of this Agreement).
2.7     Control of Purchased Loan.

(a)    During the term of this Agreement, and for so long as Seller is the Servicer of the Purchased Loans, Seller shall maintain accurate Records with respect to such Purchased Loans in accordance with the terms of the Servicing Agreement.

(b)    The Parties acknowledge that Seller, in its capacity as Servicer, will provide custody and other services with respect to each Purchased Loan in accordance with the terms of the Servicing Agreement.

ARTICLE 3.
TRUE SALE; GRANT OF SECURITY INTEREST; ENFORCEMENT

3.1     True Sale .

Each of Seller and Purchaser agree that the transactions contemplated hereby are intended to be and shall constitute sales of the Purchased Loans transferred pursuant to Article 2 above, and are not intended to be financings or loans by Purchaser to Seller. The Parties shall treat such transactions as sales for tax, accounting and all other applicable purposes. The sale of each Purchased Loan pursuant to Article 2 above transfers to Purchaser all of Seller’s right, title and interest in and to such Purchased Loan, and Seller will not retain any residual rights with respect to any Purchased Loan. Notwithstanding the two immediately preceding sentences, Seller is concurrently acquiring the rights to service the Purchased Loans under the Servicing Agreement, unless otherwise specified in writing by the Parties, and Purchaser acknowledges that Seller has a customer relationship with each such Borrower that commenced prior to the Purchase Date of such Loan and will continue to maintain such customer relationship, including the right to contact, solicit or market to each such Borrower; and, provided, further, that Purchaser agrees not to contact, solicit or market to any Borrowers.




3.2     Grant of Security Interest .

(a)    Purchaser shall file one or more UCC financing statements with respect to the sale of the Purchased Loans consistent with Section 9-109(a)(3) of the UCC. Notwithstanding the intent of the Parties, in the event that the transactions contemplated hereby are construed to be financings by Purchaser to Seller or the Purchased Loans are determined or held to be property of Seller, then: (a) Seller hereby grants to Purchaser a present and continuing security interest in and to the following, whether now existing or hereafter created, (i) all Purchased Loans held in the name of Purchaser, (ii) all of the related Loan Document Packages for such Purchased Loans, and (iii) all Proceeds (as defined in the Servicing Agreement) and rights to receive Proceeds due to Purchaser pursuant to the terms of the Servicing Agreement (collectively, the “ Purchased Loan Collateral ”); (b) this Agreement shall also be deemed to be a security agreement within the meaning of Article 9 of the UCC; (c) the transfers of the Purchased Loans provided for herein shall be deemed to be a grant by Seller to Purchaser of a first priority lien upon and security interest in all of Seller’s right, title and interest in and to the Purchased Loan Collateral; (d) the possession by Purchaser (or Seller, in its capacity as Servicer, as custodian on behalf of Purchaser) of the Purchased Loans and related Loan Document Packages and such other items of property as constitute instruments, chattel paper, money, or negotiable documents shall be deemed to be “ possession by the secured party ” for purposes of perfecting the lien or security interest pursuant to the UCC, including Section 9-313 of the UCC; (e) Purchaser is hereby authorized to take all necessary or appropriate actions to perfect its security interest in the Purchased Loan Collateral and shall file financing statements on form UCC-1 naming Purchaser as secured party/buyer and Seller as debtor/seller, and identifying the Purchased Loan Collateral as collateral therein; and (f) notifications to Persons holding such property and acknowledgments, receipts or confirmations from Persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of Purchaser for the purpose of perfecting such lien or security interest under the UCC. Any assignment of the interests of Purchaser in the Purchased Loans pursuant to any provision hereof shall also be deemed to be an assignment of any lien or security interest created hereby in the Purchased Loan Collateral.

(b)    Seller shall not create or permit any security interest in Purchased Loan Collateral, except in favor of Purchaser or as may be directed by Purchaser and, if necessary, shall direct the filing of any termination statements on form UCC-3 or modify any previously executed loan or security agreement to eliminate any security interest granted in the Purchased Loan Collateral, including without limitation any security interest in such Purchased Loan Collateral as proceeds or as after-acquired property.

(c)    To the extent consistent with this Agreement, Seller and Purchaser shall take such actions as may be
deemed reasonably necessary or appropriate such that, if this Agreement were deemed to create a lien upon or security interest in the Purchased Loan Collateral and all such reasonably necessary or appropriate actions had been taken, such lien or security interest would be deemed to be a perfected security interest of first priority under Applicable Law and will be maintained as such throughout the term of this Agreement, including, without limitation, the execution and delivery by Seller to Purchaser of all assignments, security agreements, financing statements and other documents Purchaser reasonably requests, in form and substance reasonably satisfactory to Purchaser.

3.3     Purchaser Rights .

Seller acknowledges that because it has sold the Purchased Loans to Purchaser, Purchaser shall have all the rights associated with such Purchased Loans, including the right to take any action against any Borrower for non-payment subject to the provisions of the Servicing Agreement and in accordance with Applicable Law.



 
3.4     Servicing Arrangements .

Concurrently with its entering into this Agreement, Purchaser has entered into the Servicing Agreement under which LendingClub will act as the initial Servicer of the Purchased Loans for Purchaser. Any purchaser, assignee or transferee of a Purchased Loan, whether from Purchaser or any other party shall be bound by such Servicing Agreement as if an original party thereto unless and until such time as such purchaser, assignee or transferee enters into a new or replacement servicing agreement with Servicer or another licensed servicer for the Purchased Loans in accordance with the terms of the Servicing Agreement.

ARTICLE 4.
REPRESENTATION, WARRANTIES AND COVENANTS

4.1     Seller Representations, Warranties and Covenants .

Seller hereby covenants, represents and warrants as of the Effective Date and as of each Purchase Date that:
(a)    Seller is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and is in good standing with every Regulatory Authority having jurisdiction over its activities, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect on Seller or the Purchased Loans. Seller has all requisite corporate power and authority to own its properties, carry on its business as and where now being conducted and execute and deliver this Agreement, perform all of its obligations hereunder, and to carry out the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Seller and is a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency or other similar laws affecting creditors’ rights generally or general equitable principles (whether considered in a proceeding in equity or at law).

(b)    Seller has all qualifications, regulatory permissions and/or licenses necessary, and no consent, approval, authorization, registration, filing or order of any court or governmental or regulatory agency or body is required for the acquisition of the Purchased Loans from Bank and the sale of the Purchased Loans to Purchaser, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect on Seller or the Purchased Loans.
 
(c)    Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement nor compliance with its terms and conditions, conflict with, violate or result in the breach of, or constitute a default under or is prohibited by, or result in the creation or imposition of any lien, charge or encumbrance that could reasonably be expected to have a Material Adverse Effect upon Seller or the Purchased Loans.

(d)    As of the Purchase Date for any Purchased Loan, Seller will not be rendered insolvent by such sale. Seller is not selling any Purchased Loan with any intent to hinder, delay or defraud any of its creditors.

(e)    The consummation of the transactions contemplated by this Agreement, the execution and delivery of this Agreement and compliance with the terms of this Agreement do not materially conflict with, result in a breach of or constitute a default under, and are not prohibited by, Seller’s charter or other agreement relating to its organization or any mortgage, indenture, deed of trust, loan or credit agreement or other agreement or instrument to which it is a party that would have a Material Adverse Effect on Seller or the Purchased Loans.

(f)    There is no litigation or action at law or in equity pending or, to Seller’s knowledge, threatened against Seller in writing and no proceeding or investigation of any kind is pending or, to Seller’s knowledge, threatened in writing, by any federal, state or local governmental or administrative body against Seller that would reasonably be expected to have a Material Adverse Effect on Seller’s ability to sell the Purchased Loans or Seller’s ability to consummate the transactions contemplated hereby.





(g)    Seller has provided to Purchaser or its advisor(s) true and accurate copies of the form Loan Documents used by Bank with respect to each Purchased Loan as of the Effective Date.

(h)    As of the Effective Date, the chief executive office and the principal place of business of Seller is 71 Stevenson Street, Suite 300, San Francisco, California, 94105, USA, the exact legal name of Seller is LendingClub Corporation and Seller is a corporation incorporated solely under the laws of the State of Delaware. Seller shall provide written notification to Purchaser at least ten (10) Business Days prior to any changes to the chief executive office, the principal place of business, the legal name, the type of organization or the jurisdiction of organization of Seller.

(i)    Seller is not required to register as an “investment company” or a company controlled by an “investment company” under the Investment Company Act of 1940, as amended.

(j)    The execution, delivery and performance of this Agreement by Seller do not require compliance with any “bulk sales” laws or similar statutory provisions by Seller.

(k)    Seller is in compliance in all material respects with all Applicable Law, including all AML-BSA Laws.

4.2     Purchased Loan Representations, Warranties and Covenants .

Seller hereby represents, warrants and covenants to Purchaser on each Purchase Date, with respect to the Purchased Loans acquired on such date (unless such covenant, representation or warranty is explicitly made as of a different date or dates, in which case Seller represents, warrants and/or covenants to Purchaser on such date or dates), that:
(a)    Seller is the sole legal, beneficial and equitable owner of such Purchased Loan and has good and marketable title thereto, and has the right to assign, sell and transfer such Purchased Loan to Purchaser free and clear of any lien, pledge, charge, claim, security interest or other encumbrance, and Seller has not sold, assigned or otherwise transferred any right or interest in or to such Purchased Loan and has not pledged such Purchased Loan as collateral for any debt or other purpose, except as contemplated under this Agreement.

(b)    Each Purchased Loan complies with Applicable Laws in all material respects, including, without limitation, (i) the Federal Truth-in-Lending Act (and Regulation Z of the Consumer Financial Protection Bureau); (ii) the Equal Credit Opportunity Act and Regulation B of the Consumer Financial Protection Bureau; (iii) the Federal Trade Commission Act; (iv) all applicable state and federal securities laws; (v) all applicable usury laws; (vi) Title V of the Gramm-Leach-Bliley Act of 1999, as amended, and any implementing regulations; (vii) the Fair Credit Reporting
Act; (viii) the Electronic Signatures in Global and National Commerce Act and any other applicable laws relating to
the electronic execution of documents and instruments; (ix) the Electronic Funds Transfer Act; and (x) all amendments to and rules and regulations promulgated under the foregoing. Seller has not done anything to prevent or impair such Purchased Loan from being valid, binding and enforceable against the applicable Borrower.

(c)    To the actual knowledge of Seller, (i) the applicable Borrower has not asserted any defense, counter claim, offset or dispute and (ii) such Purchased Loan was and is free of any defense, offset, counterclaim or recoupment that could be asserted by the applicable Borrower.

(d)    The Purchased Loan is not in default and is not delinquent by more than 30 days in respect of any payment due thereunder.

(e)    The terms, covenants and conditions of such Purchased Loan have not been waived, altered, impaired, modified or amended in any material respect, except as previously disclosed in a written document to Purchaser or as otherwise allowed under the Loan Documents, which waiver, alteration, impairment, modification or amendment has been included in the related Loan Document Package.




(f)    (i) The loan grade, term and interest rate assigned by Seller, (ii) the loan identification number and initial principal balance on the date of issuance by Bank and (iii) the current principal balance (if different from the initial principal balance) of each Purchased Loan are reported correctly in all material respects by Seller to Purchaser through the Purchaser Online Account or otherwise through Seller’s online platform; provided, that Seller does not make any representation or warranty as to the correctness of any information provided by Borrower.

(g)    The Purchased Loan is not a graduated payment loan, and does not have a shared appreciation or other contingent interest feature.

(h)    Based upon the information provided by the Borrower and the credit bureau, the Purchased Loan satisfies the Credit Criteria.

(i)    As of the applicable Origination Date, the Purchased Loan is denominated in U.S. dollars and the billing address provided by the related Borrower and the related bank account used for payments via ACH transfers on such Purchased Loan are each located in the United States or a U.S. territory.

(j)    The Purchased Loan was originated by a Bank and acquired by Seller from a Bank in accordance with the terms of the related loan sale agreement with such Bank.

(k)    As of the applicable Origination Date, the Bank funds disbursed by Bank to the Borrower in connection with the origination of the Purchased Loan were net of the applicable origination fees paid to Bank.

(l)    Each Purchased Loan specified on the list of Purchased Loans is readily identifiable by its respective loan identification number and loan listing number indicated therein and no other loan owned by, or in possession or control of Seller, has the same loan identification number or loan listing number as such Purchased Loan.

(m)    No notices to, or consents or approvals from, the applicable Borrower or any other Person are required by the terms of such Loan or otherwise for the consummation of the sale of such Loan under this Agreement to Purchaser, or if such notice, consent or approval is required, it has been or will be obtained.

(n)    Assuming the competency and capacity of the Borrower, the Purchased Loan constitutes a valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors' rights generally or to general equitable principles (whether considered in a proceeding in equity or at law).

(o)    The Purchased Loans are being transferred from Seller to Purchaser under this Agreement with the
intention of removing them from Seller’s estate pursuant to Section 541 of Title 11 of the United States Code, 11 U.S.C. §§ 101 et. seq., as amended from time to time. The sales, transfers and assignments by Seller of Purchased Loans made hereunder were not made for or on account of an antecedent debt to Purchaser.

(p)    The Purchased Loan constitutes a “payment intangible” within the meaning of the Article 9 of the UCC.

(q)    The Purchased Loan is not subject to any laws under which the transfer thereof would be unlawful or void. Seller has not entered into any agreement with the related Borrower that prohibits the assignment of such Purchased Loan.

In addition to the representations, warranties and covenants included in this Section 4.2 , the Addendum with respect to the applicable Purchased Loans may include additional representations, warranties and covenants related to such Purchased Loans, which representations, warranties and covenants may be modified, revised or supplemented from time to time, and which representations, warranties and covenants are hereby incorporated into this Section 4.2 .




4.3     Purchaser Representations, Warranties and Covenants .

As of the Effective Date and as of each Purchase Date, Purchaser hereby covenants, represents and warrants that:
(a)    Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and is in good standing with every regulatory body having jurisdiction over its activities of Purchaser, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect on Purchaser. If Purchaser is a Bank, (i) Purchaser is chartered under U.S. federal or state banking laws, or (ii) Purchaser is a foreign depository institution that will act for purposes of this Agreement solely through United States branches that are subject to U.S. federal or state banking laws.

(b)    Purchaser has all requisite corporate power and authority to own its properties, carry on its business as and where now being conducted, execute and deliver this Agreement and the agreements to which it is or will become a party as contemplated by this Agreement, perform all its obligations hereunder and thereunder, and to carry out the transactions contemplated hereby and thereby. This Agreement has been duly and validly executed and delivered by Purchaser and is a legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency and other similar laws affecting creditors’ rights generally and by general principles of equity.

(c)    Purchaser has all material qualifications, regulatory permissions and/or licenses necessary for the acquisition of the Purchased Loans, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect on Purchaser.

(d)    Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated (assuming receipt of all necessary consents) by this Agreement nor compliance with its terms and conditions, shall conflict with or result in the breach of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance of any nature (except pursuant to a financing transaction with respect to the Purchased Loans entered into by Purchaser) upon the Purchased Loans unless otherwise agreed between the Parties in writing.

(e)    Purchaser will not be rendered Insolvent by the consummation of the transactions contemplated hereby. Purchaser is not purchasing any Purchased Loan with any intent to hinder, delay or defraud any of its creditors.

(f)    No consent, approval, authorization, registration, filing or order of any court or governmental or regulatory agency or body is required for the execution, delivery and performance by Purchaser of, or compliance by Purchaser with, this Agreement, or the consummation of the transactions contemplated hereby, or if any such consent, approval, authorization, registration, filing or order is required, Purchaser has obtained or will obtain it.

(g)    The consummation of the transactions contemplated by this Agreement, the execution and delivery
of this Agreement and compliance with the terms of this Agreement shall not materially conflict with, result in a material
breach of, constitute a default under or be prohibited by, Purchaser’s charter or other agreement relating to its organization, or any mortgage, indenture, deed of trust, loan or credit agreement or other agreement or instrument to which it is a party.

(h)    There is no litigation or action at law or in equity pending or, to the best of Purchaser’s knowledge, threatened against Purchaser and no proceeding or investigation of any kind is pending or, to the best of Purchaser’s knowledge, threatened in writing, by any federal, state or local governmental or administrative body against Purchaser that would reasonably be expected to have a Material Adverse Effect on Purchaser’s ability to purchase the Purchased Loans or Purchaser’s ability to consummate the transactions contemplated hereby.





(i)    Purchaser will not utilize Non-Public Borrower Data in any manner prohibited by the terms of Section 6.2 .

(j)    Upon Seller’s request, Purchaser shall provide to Seller all necessary withholding and related tax documentation as required for the transactions contemplated hereunder. Purchaser shall bear and be solely responsible for its tax liability (including making all determinations of such liability and any positions related thereto) without any reliance on Seller.

ARTICLE 5.
INDEMNITY; REMEDIES

5.1     Seller’s Indemnification .

(a)     Indemnified Purchaser Party . Seller shall indemnify and hold harmless Purchaser and its Affiliates, trustees, directors, officers, employees, members, managers, representatives, stockholders and agents (each, an “ Indemnified Purchaser Party ”) from and against any claims, losses, damages, liabilities, costs and expenses (including, but not limited to, reasonable attorneys’ fees incurred in connection with the defense of any actual or threatened action, proceeding or claim, or any investigations with respect thereto) (collectively, “ Losses ”) to the extent that such Losses directly arise out of, and are imposed upon any such Indemnified Purchaser Party by reason of, any material breach by Seller of any covenant, agreement, representation or warranty of Seller contained in this Agreement.

(b)     Exceptions . Notwithstanding Section 5.1(a) above, Seller shall have no obligation to do any of the following: (i) except for acts or omissions that constitute fraud, gross negligence or willful misconduct of Seller or its employees or agents, indemnify any Indemnified Purchaser Party for any punitive damages or for any actual or lost profits of such Indemnified Purchaser Party, regardless of whether Seller knew or was aware of such possible Losses; (ii) indemnify or hold harmless an Indemnified Purchaser Party from and against any Losses to the extent such Losses result from the negligence or willful misconduct of or material breach of this Agreement by any potential Indemnified Purchaser Party; (iii) indemnify any Indemnified Purchaser Party from and against any Losses resulting from any material breach by Seller of any representation, warranty or covenant of Seller contained in Sections 4.1 or 4.2 (any claim with respect thereto, a “ Specified Indemnity Claim ”) if such Specified Indemnity Claim can be and is fully satisfied through the Repurchase Procedure or Resale Procedure pursuant to Section 5.1(e) ; (iv) indemnify any Indemnified Purchaser Party with respect to any Specified Indemnity Claim unless (A) the Purchased Loan(s) with respect to which such Losses are payable have become Charged Off Loan(s); and (B) the Purchased Loan(s) with respect to which such Losses are payable have been Charged Off Loan(s) for no more than 90 calendar days; (v) indemnify any Indemnified Purchaser Party with respect to any Specified Indemnity Claim for any amount in excess of the outstanding principal balance(s) of the applicable Purchased Loan(s) on the date the Purchased Loan(s) become Charged Off Loan(s); or (vi) indemnify any Indemnified Purchaser Party with respect to a Specified Indemnity Claim if the aggregate amount of all such Specified Indemnity Claims under this Agreement, the Servicing Agreement and any Multi-Party Agreement with respect to the applicable Addendum is less than or equal to the Indemnity Deductible. For the avoidance of doubt, Seller shall only be obligated to indemnify an Indemnified Purchaser Party with respect to Specified Indemnity Claims made after the applicable Indemnity Deductible has been satisfied and only for amounts
in excess of the applicable Indemnity Deductible; provided, that if an Indemnity Deductible is satisfied but also exceeded by a particular Specified Indemnity Claim, Seller shall only be obligated to indemnify an Indemnified Purchaser Party with respect to the portion of the Specified Indemnity Claim that exceeds the applicable Indemnity Deductible.





(c)     Purchaser Claims Notice . Purchaser shall be responsible for making any claim for indemnity pursuant to this Section 5.1 on behalf of any Indemnified Purchaser Party. Purchaser shall provide prompt written notice (a “ Purchaser Claims Notice ”) to Seller describing any claim for indemnity pursuant to Section 5.1(a) within sixty (60) days after the date on which (A) Purchaser, (B) any other Person to whom such Purchased Loan shall have been sold, transferred or assigned or (C) any Person who shall have succeeded to the role of servicer of such Purchaser Loan, receives notice of, becomes aware of (or should have become aware of in the diligent exercise of their duties) or knows of the applicable breach. Furthermore, Purchaser shall include in each Purchaser Claims Notice regarding a Specified Indemnity Claim, for each affected Purchased Loan, (i) a certification of an authorized officer of Purchaser as to the satisfaction of each of the conditions to indemnification set forth in Section 5.1(e) and (ii) sufficient information and supporting documentation as may be necessary to describe the relevant details of the Specified Indemnity Claim and the underlying Purchased Loan (to the extent not otherwise known to Seller).

(d)     Seller Response Process . If Seller disagrees with the claim set forth in a Purchaser Claims Notice, Seller shall formally dispute the claim in a writing delivered to Purchaser within sixty (60) days of receipt of such Purchaser Claims Notice. If Seller does not elect to dispute the claim (and the applicable Indemnity Deductible has been satisfied), Seller shall do one of the following within ninety (90) days of its receipt of the Purchaser Claims Notice: (i) make payment of the applicable indemnification amount to Purchaser, (ii) commence the Repurchase Procedure, or (iii) commence the Resale Procedure. Notwithstanding the foregoing, Seller may only elect to carry out the Repurchase Procedure or the Resale Procedure (A) with respect to a Specified Indemnity Claim and (B) to the extent that any material breach giving rise to such claim has not been cured by Seller within ninety (90) days of receipt of the related Purchaser Claims Notice.

(e)     Specified Indemnity Claims .

(i)
General . Seller shall have no obligation to indemnify or hold harmless any Indemnified Purchaser Party from and against any Losses to the extent such Losses result from a Specified Indemnity Claim unless (i) Purchaser or, at its option, its subsequent transferee or assignee can transfer good and marketable title to the affected Purchased Loan on the date it is to be repurchased by Seller for the Repurchase Price or, at the direction of Seller, sold to a third party for the Resale Price, (ii) Purchaser is the party requesting such indemnification, and (iii) Purchaser shall have provided a Purchaser Claims Notice in respect thereof in accordance with the terms of Section 5.1(c) . In addition, Purchaser shall cause each Person to whom a Purchased Loan is sold, transferred or assigned to agree in writing to provide prompt written notice to Purchaser of such Person’s notice or knowledge of the occurrence of any material breach of any representation, warranty or covenant of Seller contained in Sections 4.1 or 4.2 .

(ii)
Repurchase Procedure . Subject to Sections 5.1(a) and 5.1(b) , if Seller elects and implements the Repurchase Procedure with respect to a Purchased Loan, Seller shall have no further indemnity obligations to Purchaser for any breach of this Agreement with respect to such Purchased Loan.

Seller shall finalize and/or complete the Repurchase Procedure and pay the related Repurchase Price to Purchaser within 120 days of Seller’s receipt of the related Purchaser Claims Notice.
For the avoidance of doubt, if Seller implements the Repurchase Procedure, upon payment to Purchaser of the applicable Repurchase Price for the related Purchased Loan, the title to such Purchased Loan shall be transferred to Seller.




(iii)
Resale Procedure . Subject to Sections 5.1(a) and 5.1(b) , if Seller elects and implements the Resale Procedure with respect to a Purchased Loan, Seller shall pay to Purchaser an amount equal to the positive difference, if any, between (x) the outstanding principal balance of such Purchased Loan as of the date of such resale and (y) the related Resale Price (any such positive difference, a “ Resale Differential ”).

Subject to the following paragraph, Seller shall finalize and/or complete the Resale Procedure, pay any due and owed Resale Differential payments to Purchaser and arrange for payment in full of the Resale Price by the applicable buyer(s) to Purchaser within 120 days of Seller’s receipt of the related Purchaser Claims Notice (“ Resale Period ”).
For the avoidance of doubt, if Seller implements the Resale Procedure, upon payment to Purchaser of the applicable Resale Price plus any due and owed Resale Differential for the related Purchased Loan, the title to such Purchased Loan shall be transferred to the third party purchaser. Furthermore, the obligations of Seller with respect to a Specified Indemnity Claim for which it has elected the Resale Procedure are not satisfied until the applicable Resale Price (together with any due and owed Resale Differential) has been received by Purchaser (or its designee) by wire transfer into the account Purchase shall specify prior to such sale (or such other payment method reasonably acceptable to Purchaser). Notwithstanding the Resale Period, in the event any proposed buyer fails to make the requisite payment of the Resale Price, Seller shall remain obligated to pay the full Resale Price (less any previously paid Resale Differential made in anticipation of a successful Resale Procedure sale) within sixty (60) days of Seller’s receipt of notice from Purchaser (or its designee) of such failed payment.
(f)     Assignment and Multi-Party Agreements . For the avoidance of doubt, (a) Purchaser hereby acknowledges that it bears the risk of non-payment by the obligors of the Purchased Loans and associated credit-related losses in respect thereof, and indemnification shall not be available for any such non-payment or associated losses under this Agreement, (b) to the extent that that any rights of Purchaser hereunder, or under any executed Addendum, the Servicing Agreement or any Multi-Party Agreement are assigned or otherwise transferred to a third party in accordance with the terms of this Agreement or such other agreements, as applicable, any such assignee or beneficiary shall not, unless consented to in writing by Seller, be permitted to claim indemnification hereunder and, in the case any such consent shall have been provided by Seller, shall be bound by the limits on indemnification contained in this Section 5.1 as if such assignee or beneficiary were Purchaser, and such assignee or beneficiary may only claim indemnity in conjunction with, or in place of, Purchaser and (c) multiple recoveries for any single breach shall not be permitted.

5.2     Purchaser’s Indemnification .

(a)    Purchaser shall indemnify and hold harmless Seller and its Affiliates, trustees, directors, officers, employees, members, managers, representatives, stockholders and agents (each, an “ Indemnified Seller Party ”) from and against any Losses incurred by Seller in connection with this Agreement, except to the extent that such Losses arise out of, and are imposed upon any such Indemnified Seller Party by reason of, any material breach by Seller of any covenant, agreement, representation or warranty of Seller contained in this Agreement. Seller shall provide prompt written notice (a “ Seller Claims Notice ”, and together with a Purchaser Claims Notice and as the context suggests, each a “ Claims Notice ”) to Purchaser of any claim for indemnity pursuant to this Section 5.2. In the case of any claim for indemnity made pursuant to this Section 5.2 , if Purchaser does not dispute the claim made by Seller in writing within sixty (60) days of receipt of the related Seller Claims Notice, Purchaser shall make payment of the applicable indemnification amount to Seller within ninety (90) days of receipt of the related Seller Claims Notice.





(b)    Notwithstanding Section 5.2(a) , Purchaser shall have no obligation to do any of the following: (i) except for acts or omissions that constitute fraud, gross negligence or willful misconduct of Purchaser or its employees
or agents, indemnify any Indemnified Seller Party for any punitive damages or for any actual or lost profits of such Indemnified Seller Party, regardless of whether Purchaser knew or was aware of such possible Losses; or (ii) indemnify or hold harmless an Indemnified Seller Party from and against any Losses to the extent such Losses result from the negligence or willful misconduct of or breach of this Agreement by any Indemnified Seller Party.

5.3     Notice of Claims .

Each Party against whom a claim for indemnity pursuant to this Article 5 shall have been made (each, an “ Indemnifying Party ”) shall have the right to defend the Person seeking such indemnity (each, an “ Indemnified Party ”) with counsel of such Indemnifying Party’s choice in respect of any third party claim, so long as (i) such counsel is reasonably satisfactory to the Indemnified Party, (ii) the Indemnifying Party shall have provided written notice to the Indemnified Party, within thirty (30) days after receipt by the Indemnifying Party of the related Claims Notice, indicating that the Indemnifying Party will indemnify the Indemnified Party in accordance with the terms of this Article 5, and (iii) the Indemnifying Party conducts the defense of the third party claim or matter actively and diligently. The Indemnified Party shall have the right to retain separate co-counsel at its sole cost and expense and participate in the defense of any such claim or matter; provided, that any related attorneys’ fees shall not be indemnifiable Losses. Knowledge by an Indemnified Party of any breach or non-compliance hereunder shall not constitute a waiver of such Indemnified Party’s rights and remedies under this Agreement, provided that such Indemnified Party shall have notified the applicable Indemnifying Party of such breach or non-compliance in a timely manner and in accordance with the terms of this Article 5 . No express or implied waiver by an Indemnified Party of any default hereunder shall in any way be, or be construed to be, a waiver of any other default. The failure or delay of an Indemnified Party to exercise any of its rights granted hereunder regarding any default shall not constitute a waiver of any such right as to any other default, and any single or partial exercise of any particular right granted to an Indemnified Party hereunder shall not exhaust the same or constitute a waiver of any other right provided herein.
ARTICLE 6.
ADDITIONAL COVENANTS

6.1     Confidentiality

(a)    During the term of this Agreement, a Party (the “ Recipient ”) may receive or have access to certain information of the other Party (the “ Discloser ”) including, though not limited to, records, documents, proprietary information, technology, software, trade secrets, financial and business information, or data related to such other Party’s products (including the discovery, invention, research, improvement, development, manufacture, or sale thereof), processes, or general business operations (including sales, costs, profits, pricing methods, organization, employee or customer lists and process), whether oral, written, or communicated via electronic media or otherwise disclosed or made available to a Party or to which a Party is given access pursuant to this Agreement by the other Party, and any information obtained through access to any information assets or information systems (including computers, networks, voice mail, etc.), that, if not otherwise described above, is of such a nature that a reasonable person would believe to be confidential (together, “ Confidential Information ”). In addition to the foregoing, this Agreement shall also be deemed to be “Confidential Information.” Recipient shall protect the disclosed Confidential Information by using the same degree of care, but no less than a reasonable degree of care, to prevent the unauthorized use, dissemination, or publication of the Confidential Information as Recipient uses to protect its own Confidential Information of a like nature. Recipient’s obligations shall only extend to (a) information that is marked as confidential at the time of disclosure, (b) information that is unmarked (e.g., orally, visually or tangibly disclosed) but which the Discloser informs the Recipient should be treated as confidential at the time of disclosure, or (c) information that a reasonable person would understand to be confidential. This Agreement imposes no obligation upon Recipient with respect to information that: (1) was in Recipient’s possession before receipt from Discloser as evidenced by its books and records prior to the receipt of such information; (2) is or becomes a matter of public knowledge through no fault of Recipient, or its employees, consultants, advisors, officers or directors or Affiliates; (3) is rightfully received by Recipient from a third party without a duty of



confidentiality; (4) is disclosed by Discloser to a third party without a duty of confidentiality on the third party; (5) is independently developed by Recipient without reference to the Confidential Information; (6) is disclosed under operation of law (including in connection with a regulatory examination of Purchaser or any of its Affiliates); or (7) is disclosed by Recipient with Discloser’s prior written approval. In addition to the foregoing, Purchaser covenants that it will not use, and will not permit any Affiliate to use, in violation of any Applicable Law, any material non-public information that has been provided to it by Seller in Purchaser’s decision to invest in any securities issued by Seller, provided that the Loans and the Purchased Loans shall not be considered securities for the purposes of this Section 6.1(a) . Recipient may disclose Confidential Information to its officers, directors, employees, trustees, members, partners, potential and existing financing sources (including, with respect to Purchaser, any potential or existing investor in, and Person acting as a trustee or service provider in connection with, asset-backed securities for which the Purchased Loans are included in the collateral or trust assets), advisors or representatives (including, without limitation, attorneys, accountants, insurers, rating agencies, consultants, bankers, financial advisors, custodian and backup servicer) (collectively, “ Representatives ”) who need to have access to such Confidential Information. Recipient shall be responsible for any breach of this Section 6.1 by any of its Representatives.

(b)    Loan Documentation Packages may include Confidential Information that also meets the definition of non-public personally identifiable information (“ NPI ”) regarding a Borrower as defined by Title V of the Gramm-Leach-Bliley Act of 1999 and implementing regulations (collectively, the “ GLB Act ”). To the extent that Purchaser has access to NPI through Loan Documentation Packages or any other source, Purchaser agrees that such information will not be disclosed or made available to any third party, agent or employee for any reason whatsoever, other than with respect to: (1) Purchaser’s authorized employees, agents or representatives on a “need to know” basis in order for Purchaser to perform its obligations under this Agreement and other agreements related to the Purchased Loans, provided that such agents or representatives are subject to a confidentiality agreement which shall be consistent with and no less restrictive than the provisions of this Article 6; and (2) as required by law or as otherwise permitted by this Agreement or the GLB Act regarding “Privacy” of NPI, either during the term of this Agreement or after the termination of this Agreement, provided that, prior to any disclosure of NPI as required by Applicable Law, Purchaser shall, if permitted by Applicable Law, (i) not disclose any such information until it has notified Seller in writing of all actual or threatened legal compulsion of disclosure, and any actual legal obligation of disclosure promptly upon becoming so obligated, and (ii) cooperate to the fullest extent possible with all lawful efforts by Seller to resist or limit disclosure. To the extent that Purchaser maintains or accesses any NPI, Purchaser shall comply with all Applicable Law regarding use, disclosure and safeguarding of any and all consumer information and will maintain a comprehensive written information security program, in compliance with Applicable Law, which shall include all necessary measures, including the establishment and maintenance of appropriate policies, procedures and technical, physical, and administrative safeguards, to (w) ensure the security and confidentiality of the NPI, (x) protect against any foreseeable threats or hazards to the security or integrity of NPI, (y) protect against unauthorized access to or use of such information, and (z) ensure appropriate disposal of NPI.

(c)    Should there be any unauthorized release or breach of NPI maintained by a Party (“ Data Breach ”), such Party agrees to immediately provide notice to the other Party of same and shall specify the corrective action that was or will be taken. The breached or releasing Party shall assess the nature and scope of any Data Breach and specifically identify the NPI that has or may have been improperly accessed, released or misused. The breached or releasing Party shall take reasonable and appropriate steps to contain and control any Data Breach relating to the NPI and assist the other Party at the expense of the breached or releasing Party with all reasonably requested steps needed to notify Borrowers of any such Data Breach.

(d)    Following the termination of this Agreement, each Party agrees that it will return or destroy all copies of Confidential Information of the other Party, without retaining any copies thereof, and destroy all copies of any analyses, compilations, studies or other documents prepared by it or for its use containing or reflecting any Confidential Information; provided, however, that each Party may retain such limited copies or materials containing Confidential Information of the other Party for customary document retention and audit purposes, as required by Applicable Law, and subject to the terms of this Agreement.




6.2     No Use of Non-Public Borrower Data

In the course of purchasing and holding Purchased Loans, Purchaser may have access to certain information concerning Borrowers. Such information could include any and all items included in a Loan Document Package and all information included in a listing for an Eligible Loan (the “ Borrower Data ”). Certain of the Borrower Data is published in connection with an Eligible Loan, and other information, included in certain documents in the Loan Document Package, is not publicly disclosed and may constitute NPI (collectively, “ Non-Public Borrower Data ”). Purchaser shall not utilize Non-Public Borrower Data for any purpose not in connection with the transactions contemplated under this Agreement, and shall not contact any Borrower for any purpose.
ARTICLE 7.
REPURCHASE OBLIGATION

7.1     Repurchase for Verified ID Fraud .

In the event that any Purchased Loan sold by Seller to Purchaser hereunder experiences an occurrence of fraud as evidenced by:
(i)    Obtaining an identity theft report (“ ID Theft Report ”) from law enforcement; and

(ii)
preparation of a completed Federal Trade Commission or company-specific equivalent ID Theft Affidavit,

Seller shall repurchase such Purchased Loan at an amount equal to the related Article 7 Repurchase Price within thirty (30) Business Days of its review and approval of the foregoing.
7.2     Repurchase Procedures .

For each repurchase of a Purchased Loan under Section 7.1 , the “ Article 7 Repurchase Price ” to be paid by Seller shall be equal to the original principal balance of the Purchased Loan, minus all principal payments, if any, received by Purchaser with respect to such Purchased Loan after the Purchase Date. Upon receipt of such Article 7 Repurchase Price, Purchaser shall transfer its interest in such repurchased Purchased Loan to Seller on an “ AS-IS, ” “ WHERE-IS ” basis, without any representations or warranties other than with respect to Purchaser’s clear and marketable title to such repurchased Purchased Loan. Any repurchase by Seller pursuant to Section 7.1 shall be made by the wire transfer of immediately available funds to the bank account as designated by Purchaser.
ARTICLE 8.
TERM AND TERMINATION

8.1     Term .

(a)    Either Party may, in its sole discretion, terminate an executed and outstanding Addendum by providing the other Party with at least thirty (30) days prior written notice of the termination date; provided that any Purchase Commitments of Purchaser with respect to Eligible Loans satisfying the Credit Criteria on the applicable Addendum (whether funded or unfunded) outstanding on the termination date shall remain in full force and effect. For the avoidance of doubt, this Agreement and any other outstanding Addenda shall remain in full force and effect unless separately terminated.





(b)    Unless earlier terminated pursuant to this Section 8.1 or Section 8.2 , this Agreement (and, for the avoidance of doubt, all executed and outstanding Addenda) shall terminate on the date that is three (3) years after the Effective Date; provided, that the Parties may agree to extend the term of this Agreement (and, for the avoidance of doubt, all executed and outstanding Addenda) in writing at any time. Either Party may, in its sole discretion, terminate
this Agreement (which, for the avoidance of doubt, shall include the termination of all executed and outstanding Addenda) without cause by providing the other Party with at least thirty (30) days prior written notice of the termination date; provided that any Purchase Commitments of Purchaser (whether funded or unfunded) outstanding on the termination date shall remain in full force and effect.

8.2     Termination .

(a)    Purchaser reserves the right to terminate this Agreement (which, for the avoidance of doubt, shall simultaneously terminate all executed and outstanding Addenda) immediately upon the occurrence of any of the following events (each an “ Event of Default ”); provided that any Purchase Commitments of Purchaser (whether funded or unfunded) outstanding on the termination date shall remain in full force and effect:

(i)
Seller shall fail to perform or observe any material obligation, covenant or agreement contained in this Agreement and such failure shall continue for more than thirty (30) days after Seller’s receipt of Purchaser’s written demand that Seller cure such failure;

(ii)
Seller shall become Insolvent, or there is a substantial cessation of its regular course of business, or a receiver or trustee of Seller’s assets is appointed;

(iii)
Any material representation or warranty of Seller contained in this Agreement (other than under Section 4.1 or 4.2 if Seller is and/or has complied with Section 5.1 ) shall prove to have been materially false or misleading when made, and such misstatement shall not be cured within thirty (30) days after Seller’s receipt of Purchaser’s written demand that Seller cure such misstatement;

(iv)
Seller shall cease to be in good standing with any Regulatory Authority having oversight over the operations of Seller or Seller shall become subject to any regulatory action that would restrict or prohibit Seller from meeting its obligations under the terms of this Agreement;

(v)
There shall occur any change in any federal, state or local law, statute, regulation or order or in any requirement of any Regulatory Authority, which change (x) makes it illegal or impractical for Purchaser to purchase or own, or for Seller to sell, Loans, or (y) is reasonably expected to result in a Material Adverse Change to Seller or Purchaser; or

(vi)
The Servicing Agreement is terminated, or the arrangements under which Seller acquires Loans from all Banks are cancelled, suspended, prohibited or otherwise terminated. Seller shall provide Purchaser with written notice within three (3) Business Days of the occurrence of an Event of Default pursuant to this clause (vi).

In addition, this Agreement and, for the avoidance of doubt, all executed and outstanding Addenda, will automatically terminate if there shall be commenced by or against Seller any voluntary or involuntary bankruptcy petition, or Seller shall make an offer or assignment or compromise for the benefit of creditors.
(b)    Seller reserves the right to terminate this Agreement (and, for the avoidance of doubt, all executed and outstanding Addenda) and any unfunded Purchase Commitments immediately upon the occurrence of any of the following events:




(i)
Seller is required, or a requirement has been imposed upon Seller, to comply with any risk retention rule (or other similar rule of similar effect) in connection with the transactions contemplated by this Agreement or any Multi-Party Agreement;

(ii)
Purchaser fails to fund a Purchaser Online Account in the amount and by the time required under Section 2.2 hereof;

(iii)
Purchaser shall fail to perform or observe any material obligation, covenant or agreement,

contained in this Agreement or the Servicing Agreement and such failure shall continue for more than thirty (30) days after Purchaser’s receipt of Seller’s or Servicer’s written demand that Purchaser cure such failure;

(iv)
Any material representation or warranty of Purchaser contained in this Agreement or the Servicing Agreement, shall prove to have been materially false or misleading when made, and such misstatement shall not be cured within thirty (30) days after Purchaser’s receipt of Seller’s or Servicer’s written demand that Purchaser cure such misstatement;

(v)
Purchaser shall cease to be in good standing with any Regulatory Authority having oversight over the operations of Purchaser or Purchaser shall become subject to any regulatory action that would restrict or prohibit Purchaser from meeting its obligations under the terms of this Agreement;

(vi)
Purchaser shall become Insolvent, or Purchaser ceases to do business as a going concern, or there is a substantial cessation of its regular course of business, or a receiver or trustee of Purchaser’s assets is appointed;

(vii)
The arrangements under which Seller acquires Loans from a Bank are cancelled, suspended, prohibited or otherwise terminated by a Bank for reason other than an event of default or action of Seller;

(viii)
There shall occur any change in any federal, state or local law, statute, regulation or order or in any requirement of any Regulatory Authority, which change (x) makes it illegal or impractical for Purchaser to purchase or own, or for Seller to sell, Loans, or (y) is reasonably expected to result in a Material Adverse Change to Seller or Purchaser; or

(ix)
The Servicing Agreement is terminated, LendingClub is terminated as Servicer, or the arrangements under which Seller acquires Loans from any Bank is cancelled, suspended, prohibited or otherwise terminated.

In addition, this Agreement (and, for the avoidance of doubt, all executed and outstanding Addenda) will automatically terminate if there shall be commenced by or against Purchaser or any related party in the transactions contemplated hereby any voluntary or involuntary bankruptcy petition, or Purchaser shall make an offer or assignment or compromise for the benefit of creditors.
8.3     Effect of Termination .

Upon the termination of this Agreement (which shall, for the avoidance of doubt, include the termination of all executed and outstanding Addenda), all of the obligations of Purchaser to purchase Loans and of Seller to sell Loans shall cease, other than those Eligible Loans that are subject to any outstanding Purchase Commitments. The obligations of Purchaser and Seller hereunder with respect to all outstanding Purchased Loans shall continue in full force and effect until all Purchased Loans have been paid in full or are otherwise discharged or expire. The provisions of Article 5 , Article 6 , Article 7 and Section 9.15 shall survive any termination of this Agreement.




ARTICLE 9.
MISCELLANEOUS


9.1     Notices .

All notices and other communications hereunder will be in writing and will be deemed to have been duly given when delivered in person, by facsimile or email with answer back, by express or overnight mail delivered by a nationally recognized air courier (delivery charges prepaid), or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties as follows:
if to Purchaser:
INSERT ADDRESS
Attention:
Email Address:
With a copy to (which will not constitute notice):
INSERT ADDRESS
Attention:
Email Address:
 
if to Seller:
LendingClub Corporation 71 Stevenson St., Suite 300 San Francisco, CA 94105 Attention: SVP, Institutional Group E-mail Address: jbogan@lendingclub.com

With a copy to (which will not constitute notice):
LendingClub Corporation 71 Stevenson St., Suite 300 San Francisco, CA 94105 Attention: General Counsel E-mail Address: jaltieri@lendingclub.com




or to such other address as the Party to whom notice is given may have previously furnished to the others in writing in the manner set forth above. Any notice or communication delivered in person will be deemed effective upon delivery. Any notice or communication sent by facsimile, email, or air courier will be deemed effective on the first Business Day at the place at which such notice or communication is received following the day on which such notice or communication was sent. Any notice or communication sent by registered or certified mail will be deemed effective on the third Business Day at the place from which such notice or communication was mailed following the day on which such notice or communication was mailed.
9.2     Amendment; Waiver .

Except as otherwise expressly provided herein, Purchaser and Seller may amend this Agreement, from time to time, in a writing signed by duly authorized representatives of Seller and Purchaser. No term or provision of this Agreement may be waived or modified unless such waiver or modification is in writing and signed by the Party against whom such waiver or modification is sought to be enforced.
9.3     Cumulative Rights .

All rights and remedies of the parties hereto under this Agreement shall, except as otherwise specifically provided herein, be cumulative and non-exclusive of any rights or remedies which they may have under any other agreement or instrument, by operation of law, or otherwise.
9.4     Assignment .

The rights and obligations of either Party under this Agreement shall not be assigned without the prior written consent of the other Party, and any such assignment without the prior written consent of the other Party shall be null and void. This Section 9.4 shall not in any way prohibit or limit Purchaser’s ability to assign, pledge, hypothecate or otherwise dispose of Purchased Loans or its other rights under this Agreement relating to the Purchased Loans, subject to any applicable limitations thereon described in this Agreement, the Servicing Agreement and any Multi-Party Agreement.
9.5     Cooperation in Financing Efforts .

In the event that Purchaser seeks to arrange financing to facilitate its purchase of Loans, Seller will cooperate with Purchaser’s efforts, including: (i) considering reasonable amendments to this Agreement (and requesting any required consents or approvals) to contemplate such financing arrangements; (ii) considering a reasonable multi-party or similar agreement with Purchaser and Purchaser’s source of financing (and requesting any required consents or approvals); and (iii) considering consent to Purchaser’s assignment of its obligations under this Agreement (and requesting any required consents or approvals) in connection with a securitization transaction or rights offering. In each case, Seller’s consent to such amendments, modifications or agreements will be in the sole and absolute discretion of Seller and, in addition, will take into account any additional costs, liabilities or operational obligations that may be requested.
9.6     Place of Delivery, Governing Law; Submission to Jurisdiction; Waiver of Jury Trial .

This Agreement shall be deemed in effect when a fully executed counterpart thereof is received by Purchaser and shall be deemed to have been made in the State of Delaware.




THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
EACH PARTY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND/OR STATE COURTS OF THE STATE OF DELAWARE FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY CONSENTS TO PROCESS BEING SERVED IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, OR ANY DOCUMENT DELIVERED PURSUANT HERETO BY THE MAILING OF A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO ITS RESPECTIVE ADDRESS SPECIFIED AT THE TIME FOR NOTICES UNDER THIS AGREEMENT.
EACH PARTY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
9.7     Limitation of Liability .

EXCEPT FOR ACTS OR OMISSION THAT CONSTITUTE FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT SHALL EITHER PARTY OR ANY OF ITS RESPECTIVE AFFILIATES, BENEFICIARIES, ASSIGNEES OR SUCCESSORS (BY ASSIGNMENT OR OTHERWISE) BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER ENTITY FOR ANY LOST PROFITS, COSTS OF COVER, OR OTHER SPECIAL DAMAGES, OR ANY PUNITIVE, EXEMPLARY, REMOTE, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES, UNDER THIS AGREEMENT INCURRED OR CLAIMED BY ANY PARTY OR ENTITY (OR SUCH PARTY OR ENTITY’S OFFICERS, DIRECTORS, STOCKHOLDERS, MEMBERS OR OWNERS), HOWEVER CAUSED, ON ANY THEORY OF LIABILITY.
9.8     Successors and Assigns

Subject to Section 9.4 , this Agreement shall bind and inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.
9.9     Severability .

Any part, provision, representation or warranty of this Agreement that is prohibited or not fully enforceable in any jurisdiction, will be ineffective only to the extent of such prohibition or unenforceability without otherwise invalidating or diminishing either Party’s rights hereunder or under the remaining provisions of this Agreement in such jurisdiction, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable in any respect any such provision in any other jurisdiction.




9.10     Entire Agreement .

As of the Effective Date, Seller and Purchaser hereby acknowledge and agree that this Agreement, together with the exhibits hereto, and any Addenda executed and delivered in connection herewith, represent the complete and entire agreement between the Parties, and shall supersede all prior written or oral statements, agreements or understandings between the Parties relating to the subject matter of this Agreement.
9.11     Further Assurances . Each Party, upon the reasonable written request of the other Party, shall execute and deliver to such other Party any reasonably necessary or appropriate additional documents, instruments or agreements as may be reasonably necessary or appropriate to effectuate the purposes of this Agreement or the consummation of the transactions contemplated hereunder. Each Party also agrees to perform its respective obligations under this Agreement in material compliance with Applicable Law and to reasonably cooperate in good faith with the other in resolving compliance with Applicable Law issues.
9.12     No Joint Venture or Partnership.

Each Party (including any of its respective permitted successors and assignees) acknowledges and agrees that such Party will not hold itself out as an agent, partner or co-venturer of the other Party and that this Agreement and the transactions contemplated hereby including the payment of any fees, any expense reimbursement or any referral fee are not intended and do not create an agency, partnership, joint venture or any other type of relationship between or among the Parties, except to the extent that any independent contractual relationship established hereby.
9.13     Exhibits and Addenda.

The exhibits to this Agreement and any executed and delivered Addenda are hereby incorporated and made a part hereof and are an integral part of this Agreement.
9.14     Costs

Each of Purchaser and Seller shall bear its own costs and expenses in connection with this Agreement, including without limitation any commissions, fees, costs, and expenses, including those incurred in relation to due diligence performed or legal services provided in connection with this Agreement.
9.15     Counterparts

This Agreement may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument. The parties agree that this Agreement and signature pages may be transmitted between them by facsimile or by electronic mail and that faxed and PDF signatures may constitute original signatures and that a faxed or PDF signature page containing the signature (faxed, PDF or original) is binding upon the parties.
9.16      No Petition
Notwithstanding any prior termination of this Agreement, to the fullest extent permitted by Applicable Law, each Party agrees that it shall not institute, or join any other Person in instituting, a petition or a proceeding that causes (a) the other Party to be a debtor under any federal or state bankruptcy or similar insolvency law or (b) a trustee, conservator, receiver, liquidator, or similar official to be appointed for such other Party or any substantial part of any of its property.



9.17     Force Majeure

If any Party anticipates being unable or is rendered unable, wholly or in part, by an extreme and unexpected force outside the control of such Party (including, but not limited to, act of God, legislative enactments, strikes, lock-outs, riots, acts of war, epidemics, fire, communication line or power failure, earthquakes or other disasters) to carry out its obligations under this Agreement, that Party shall give to the other Party in a commercially reasonable amount of time written notice to that effect, the expected duration of the inability to perform and assurances that all available means will be employed to continue and/or restore performance. Upon receipt of the written notice, the affected obligations of the Party giving the notice shall be suspended so long as such Party is reasonably unable to so perform and such Party shall have no liability to the other for the failure to perform any suspended obligation during the period of suspension; however, the other Party may at its option terminate this Agreement.
[ Remainder of Page Intentionally Left Blank ]





N WITNESS WHEREOF, the parties hereto have caused to be duly authorized, executed and delivered, as of the date first above written, this MASTER LOAN PURCHASE AGREEMENT.

PURCHASER:
[______________]


By:__________________________
Name:
Title:
 


SELLER :

LENDINGCLUB CORPORATION


By:_____________________________
Name:
Title:
 

























MASTER LOAN PURCHASE AGREEMENT - Signature Page



STANDARD LOAN PROGRAM
ADDENDUM NO.1 TO MASTER LOAN PURCHASE AGREEMENT
This Addendum No. 1 to Master Loan Purchase Agreement (“ Addendum No. 1 ”) is effective as of the date of execution by Purchaser and Seller. All capitalized terms that are used but not defined herein shall have the meanings ascribed to such terms in the Master Loan Purchase Agreement. All terms and provisions of this Addendum No. 1 shall be incorporated into and shall supplement the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 1. To the extent any provision of this Addendum No. 1 conflicts with any other provision of the Master Loan Purchase Agreement, the provision of this Addendum No. 1 shall govern.

I. Defined Terms

“ Loan ” means an unsecured consumer loan originated by Bank and acquired by Seller, which includes, on a whole loan basis, all right, title and interest of Bank, as holder of both the beneficial and legal title to such loan, including without limitation: (a) the related Loan Document Package, the related Records and all other loan documents, files and records for such Loan; (b) all proceeds from such loan (including without limitation any monthly payments, any prepayments and any other proceeds); (c) all Servicing Rights with respect to such loan; and (d) all other rights, titles, interests, benefits, proceeds, remedies and claims in favor or for the benefit of Bank (or its successors and assigns) arising from or relating to such loan.
“ Credit Criteria ” means the credit criteria and underwriting procedures of the Bank for making unsecured consumer loans that meet the credit threshold made publicly available by Seller, together with any modifications thereto (including, without limitation, modifications to allow such credit policy to be adopted by or applicable to any new Bank added after the Launch Date).
“ Servicing Rights ” has the meaning assigned to such term in the Servicing Agreement.
II. Loan Documents

1.
Truth in Lending Disclosure
2.
Borrower Credit Profile Authorization
3.
Borrower Bank Account Verification
4.
Loan Agreement
5.
Non-Negotiable Promissory Note ( Note: form is included as Exhibit A to Loan Agreement)
6.
Applicable Privacy Notice ( Note: form is included as Exhibit B to Loan Agreement)
7.
Borrower Membership Agreement
8.
Terms of Use

III. Purchase Instructions

The following provisions supplement those contained in Section 2.1 of the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 1:
(a)    In conjunction with the execution of this Addendum No. 1, Purchaser may provide to Seller completed Purchase Instructions (in the form set forth as Exhibit A to the Master Loan Purchase Agreement) regarding the characteristics of Eligible Loans (satisfying the Credit Criteria outlined in this Addendum No. 1) it wishes to purchase. If Purchaser provides Purchase Instructions to Seller, Purchaser shall also notify Seller in writing (via email or mail) of the Maximum Purchase Amount. Any Maximum Purchase Amount and Purchase Instructions provided by Purchaser to Seller shall be effective as of the date they are accepted by Seller in writing in its sole discretion and will apply for each subsequent calendar month during the Term of this Agreement, until canceled by either Party or superseded by a new Maximum Purchase Amount or Purchase Instruction. Purchaser hereby delegates to Seller the authority to make Purchase Commitments and purchase Eligible Loans on behalf of Purchaser through the Purchaser Online Account up to the Maximum Purchase Amount in accordance with any then-current Purchase Instructions. Upon selection of an Eligible Loan in accordance with the Purchase Instructions, Seller commits to offer Purchaser,

MASTER LOAN PURCHASE AGREEMENT - Addendum No. 1 (Standard)


and Purchaser hereby commits to purchase such Eligible Loan; provided, however, that any Non-Offered Loans shall be released and removed from any Purchase Commitment. All purchases pursuant to any Purchase Instructions shall be deemed to be in Purchaser’s sole discretion. Purchaser acknowledges that Seller makes no guaranty or warranty that Eligible Loans meeting the characteristics set forth in the Purchase Instructions will be available in any given month.

(b)    For the avoidance of doubt, if Purchaser executes both Addendum No. 1 (Standard) and Addendum No. 2 (Superprime) and wishes to provide Purchase Instructions for each set of Credit Criteria, Purchaser shall complete and deliver to Seller separate Purchase Instructions with each Addendum.

IV. Representations, Warranties and Covenants

The following representations, warranties and covenants supplement those contained in Section 4.2 of the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 1:
(a)    To the extent Seller makes any material changes or modifications to the Credit Criteria applicable to this Addendum No. 1, such changes or modifications shall be communicated to Purchaser in the same manner and method and to the same extent that such changes or modifications are communicated to the public.

(b)    Based upon the information provided by the applicant, the Borrower under the Purchased Loan is an individual and not a corporation, partnership, association, or similar entity. For purposes of this Section IV(b) , a single member limited liability company or other entity owned or operated by or passing through to an individual shall be deemed an entity and not an individual.

(c)    The Purchased Loan is not a revolving line of credit or similar credit facility and no obligation to make any future advance to the Borrower exists or is contemplated with respect to such Purchased Loan.

(d)    As of the applicable Origination Date, the Purchased Loan is fully amortizing with payments due monthly.

V. Termination

The following provision supplements those contained in Section 8.2(a) of the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 1:
(a)    Purchaser reserves the right to terminate this Addendum No. 1 immediately upon written notice to Seller within five (5) Business Days of receipt of the notice set forth in Section IV(a) of this Addendum No. 1. For the avoidance of doubt, the Master Loan Purchase Agreement and any other outstanding Addenda shall remain in full force and effect.

MASTER LOAN PURCHASE AGREEMENT - Addendum No. 1 (Standard)





IN WITNESS WHEREOF, the parties hereto have executed this Addendum No. 1 as of the last date written below.


PURCHASER:
 
SELLER:
 
[_____________________]
 
LENDINGCLUB CORPORATION
 
 
 
 
 
By: ____________________________
 
By: ____________________________
 
Name:
 
Name:
 
Title:
 
Title:
 
Date:
 
Date:
 






MASTER LOAN PURCHASE AGREEMENT - Addendum No. 1 (Standard)


SUPERPRIME LOAN PROGRAM
ADDENDUM NO. 2 TO MASTER LOAN PURCHASE AGREEMENT
This Addendum No. 2 to Master Loan Purchase Agreement (“ Addendum No. 2 ”) is effective as of the date of execution by Purchaser and Seller. All capitalized terms that are used but not defined herein shall have the meanings ascribed to such terms in the Master Loan Purchase Agreement. All terms and provisions of this Addendum No. 2 shall be incorporated into and shall supplement the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 2. To the extent any provision of this Addendum No. 2 conflicts with any other provision of the Master Loan Purchase Agreement, the provision of this Addendum No. 2 shall govern.
   
I. Defined Terms

“ Loan ” means an unsecured consumer loan originated by Bank and acquired by Seller, which includes, on a whole loan basis, all right, title and interest of Bank, as holder of both the beneficial and legal title to such loan, including without limitation: (a) the related Loan Document Package, the related Records and all other loan documents, files and records for such Loan; (b) all proceeds from such Loan (including without limitation any monthly payments, any prepayments and any other proceeds); (c) all Servicing Rights with respect to such loan; (d) all other rights, titles, interests, benefits, proceeds, remedies and claims in favor or for the benefit of Bank (or its successors and assigns) arising from or relating to such Loan.
“ Credit Criteria ” means the minimum credit criteria designated as Credit Criteria with respect to this Addendum No. 2 and provided by Seller to Purchaser from time to time in Seller’s sole discretion in accordance with the terms of Section IV(a) of this Addendum No. 2. For the avoidance of doubt, “Credit Criteria” for purposes of this Addendum No. 2 shall mean the version most recently provided by Seller to Purchaser.
“ Servicing Rights ” has the meaning assigned to such term in the Servicing Agreement.
II. Loan Documents

1.
Truth in Lending Disclosure
2.
Borrower Credit Profile Authorization
3.
Borrower Bank Account Verification
4.
Loan Agreement
5.
Non-Negotiable Promissory Note ( Note: form is included as Exhibit A to Loan Agreement)
6.
Applicable Privacy Notice ( Note: form is included as Exhibit B to Loan Agreement)
7.
Borrower Membership Agreement
8.
Terms of Use

III. Purchase Instructions

The following provisions supplement those contained in Section 2.1 of the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 2:
(a)    In conjunction with the execution of this Addendum No. 2, Purchaser may provide to Seller completed Purchase Instructions (in the form set forth as Exhibit A to the Master Loan Purchase Agreement) regarding the characteristics of Eligible Loans (satisfying the Credit Criteria outlined in this Addendum No. 2) it wishes to purchase. If Purchaser provides Purchase Instructions to Seller, Purchaser shall also notify Seller in writing (via email or mail) of the Maximum Purchase Amount. Any Maximum Purchase Amount and Purchase Instructions provided by Purchaser to Seller shall be effective as of the date they are accepted by Seller in writing in its sole discretion and will apply for each subsequent calendar month during the Term of this Agreement, until canceled by either Party or superseded by a new Maximum Purchase Amount or Purchase Instruction. Purchaser hereby delegates to Seller the authority to make Purchase Commitments and purchase Eligible Loans on behalf of Purchaser through the Purchaser Online Account up to the Maximum Purchase Amount in accordance with any then-current Purchase Instructions. Upon selection of an Eligible Loan in accordance with the Purchase Instructions, Seller commits to offer Purchaser,

MASTER LOAN PURCHASE AGREEMENT - Addendum No. 2 (Superprime)


and Purchaser hereby commits to purchase such Eligible Loan; provided, however, that any Non-Offered Loans shall be released
and removed from any Purchase Commitment. All purchases pursuant to any Purchase Instructions shall be deemed to be in Purchaser’s sole discretion. Purchaser acknowledges that Seller makes no guaranty or warranty that Eligible Loans meeting the characteristics set forth in the Purchase Instructions will be available in any given month.

(b)    For the avoidance of doubt, if Purchaser executes both Addendum No. 1 (Standard) and Addendum No. 2 (Superprime) and wishes to provide Purchase Instructions for each set of Credit Criteria, Purchaser shall complete and deliver to Seller separate Purchase Instructions with each Addendum.

IV. Representations, Warranties and Covenants

The following representations, warranties and covenants supplement those contained in Section 4.2 of the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 2:
(a)    Seller shall provide written notification to Purchaser at least ten (10) Business Days prior to any material changes or modifications to the Credit Criteria applicable to this Addendum No. 2. In addition to the notice required pursuant to this Section IV(a) , Seller agrees to provide or otherwise make available to Purchaser a copy of the Credit Criteria then in effect upon Purchaser’s reasonable request.

(b)    Based upon the information provided by the applicant, the Borrower of the Purchased Loan is an individual and not a corporation, partnership, association, or similar entity. For purposes of this Section IV(b) , a single member limited liability company or other entity owned or operated by or passing through to an individual shall be deemed an entity and not an individual.

(c)    The Purchased Loan is not a revolving line of credit or similar credit facility and no obligation to make any future advance to the Borrower exists or is contemplated with respect to such Purchased Loan.

(d)    As of the applicable Origination Date, the Purchased Loan is fully amortizing with payments due monthly.

V. Termination

The following provision supplements those contained in Section 8.2(a) of the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 2:
(a)    Purchaser reserves the right to terminate this Addendum No. 2 immediately upon written notice to Seller within five (5) Business Days of receipt of the notice set forth in Section IV(a) of this Addendum No. 2. For the avoidance of doubt, the Master Loan Purchase Agreement and any other outstanding Addenda shall remain in full force and effect.



MASTER LOAN PURCHASE AGREEMENT - Addendum No. 2 (Superprime)




IN WITNESS WHEREOF, the parties hereto have executed this Addendum No. 2 as of the last date written below.


PURCHASER:
 
SELLER:
 
[_____________________]
 
LENDINGCLUB CORPORATION
 
 
 
 
 
By: ____________________________
 
By: ____________________________
 
Name:
 
Name:
 
Title:
 
Title:
 
Date:
 
Date:
 








MASTER LOAN PURCHASE AGREEMENT - Addendum No. 2 (Superprime)


CUSTOM LOAN PROGRAM
ADDDENDUM NO. 3 TO MASTER LOAN PURCHASE AGREEMENT
This Addendum No. 3 to Master Loan Purchase Agreement (“ Addendum No. 3 ”) is effective as of the date of execution by Purchaser and Seller. All capitalized terms that are used but not defined herein shall have the meanings ascribed to such terms in the Master Loan Purchase Agreement. All terms and provisions of this Addendum No. 3 shall be incorporated into and shall supplement the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 3. To the extent any provision of this Addendum No. 3 conflicts with any other provision of the Master Loan Purchase Agreement, the provision of this Addendum No. 3 shall govern.

I. Defined Terms

“ Loan ” means an unsecured, consumer loan originated by Bank and acquired by Seller, which includes, on a whole loan basis, all right, title and interest of Bank, as holder of both the beneficial and legal title to such loan, including without limitation: (a) the related Loan Document Package, the related Records and all other loan documents, files and records for such Loan; (b) all proceeds from such Loan (including without limitation any monthly payments, any prepayments and any other proceeds); (c) all Servicing Rights with respect to such loan; and (d) all other rights, titles, interests, benefits, proceeds, remedies and claims in favor or for the benefit of Bank (or its successors and assigns) arising from or relating to such Loan.
“ Credit Criteria ” means the minimum credit criteria for custom Loans designated as Credit Criteria with respect to this Addendum No. 3 and provided by Seller to Purchaser from time to time in Seller’s sole discretion upon at least ten (10) Business Days’ notice in accordance with the terms of Section IV(a) of this Addendum No. 3. For the avoidance of doubt, “Credit Criteria” for purposes of this Addendum No. 3 shall mean the version most recently provided by Seller to Purchaser.
“ Purchase Requirement ” means a minimum aggregate dollar amount of applicable Purchase Commitments (to the extent Eligible Loans are available, offered by Seller to Purchaser, and subject to any Purchase Limitation) that Purchaser agrees to make in a given calendar month.

“ Servicing Rights ” has the meaning assigned to such term in the Servicing Agreement.

II. Loan Documents

1. Truth in Lending Disclosure
2.
Borrower Credit Profile Authorization
3.
Borrower Bank Account Verification
4.
Loan Agreement
5.
Non-Negotiable Promissory Note ( Note: form is included as Exhibit A to Loan Agreement)
6.
Applicable Privacy Notice ( Note: form is included as Exhibit B to Loan Agreement)
7.
Borrower Membership Agreement
8.
Terms of Use

III. Purchase Requirement

The following provisions supplement those contained in Section 2.2 of the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 3:
(a)    With respect to Eligible Loans offered to Purchaser by Seller pursuant to the Credit Criteria specifications of this Addendum No. 3, Purchaser and Seller shall mutually agree in writing to a Purchase Requirement. At least thirty (30) days prior to the first day of each month, or as otherwise agreed between the Parties in writing, Seller and Purchaser will mutually agree as to the Purchase Requirement for such month. Such Purchase Requirement will go into effect on the first day of such month and will apply for each month going forward until Seller and Purchaser mutually agree in writing to modify such Purchase Requirement. For the avoidance of doubt, Seller may, but is not required to offer to Purchaser, an amount of Eligible Loans equal to the Purchase Requirement and its offer of no Eligible Loans or an amount of Eligible Loans that is less than the Purchase Requirement shall not constitute a breach of this Agreement.


MASTER LOAN PURCHASE AGREEMENT - Addendum No. 3 (Custom)



(b)    Purchaser agrees to make a Purchase Commitment for all Eligible Loans offered to Purchaser by Seller pursuant to the Credit Criteria specifications outlined in this Addendum No. 3 (other than those that become Non-Offered Loans and to the extent Eligible Loans are available) in any given calendar month until such time as Purchaser has made Purchase Commitments for an amount of Eligible Loans (based upon Purchase Price) equal to the Purchase Requirement for such month. Each Eligible Loan offered to Purchaser by Seller, in Seller’s sole discretion, up to the Purchase Requirement will be deemed to be subject to a Purchase Commitment upon offer. After meeting the Purchase Requirement for any calendar month, upon the mutual agreement between Seller and Purchaser and to the extent Eligible Loans are available, Seller may offer, additional Eligible Loans during such month subject to the Purchase Limitation.

IV. Representations, Warranties and Covenants

The following representations, warranties and covenants supplement those contained in Section 4.2 of the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 3:
(a)    Seller shall provide written notification to Purchaser at least ten (10) Business Days prior to any material changes or modifications to the Credit Criteria applicable to this Addendum No. 3. In addition to the notice required pursuant to this Section IV(a) , Seller agrees to provide or otherwise make available to Purchaser a copy of the Credit Criteria then in effect upon Purchaser’s reasonable request.

(b)    Based upon the information provided by the applicant, the Borrower of the Purchased Loan is an individual and not a corporation, partnership, association, or similar entity. For purposes of this Section IV(b), a single member limited liability company or other entity owned or operated by or passing through to an individual shall be deemed an entity and not an individual.

(c)    The Purchased Loan is not a revolving line of credit or similar credit facility and no obligation to make any future advance to the Borrower exists or is contemplated with respect to such Purchased Loan.

(d)    As of the applicable Origination Date, the Purchased Loan is fully amortizing with payments due monthly.

V. Termination

The following provision supplements those contained in Section 8.2(a) of the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria applicable to this Addendum No. 3:
(a)    Purchaser reserves the right to terminate this Addendum No. 3 immediately upon written notice to Seller within five (5) Business Days of receipt of the notice set forth in Section IV(a) of this Addendum No. 3. For the avoidance of doubt, the Master Loan Purchase Agreement and any other outstanding Addenda shall remain in full force and effect.


MASTER LOAN PURCHASE AGREEMENT - Addendum No. 3 (Custom)





IN WITNESS WHEREOF, the parties hereto have executed this Addendum No. 3 as of the last date written below.


PURCHASER:
 
SELLER:
 
[_____________________]
 
LENDINGCLUB CORPORATION
 
 
 
 
 
By: ____________________________
 
By: ____________________________
 
Name:
 
Name:
 
Title:
 
Title:
 
Date:
 
Date:
 






MASTER LOAN PURCHASE AGREEMENT - Addendum No. 3 (Custom)




SMALL BUSINESS LOAN PROGRAM
ADDENDUM NO. 4 TO MASTER LOAN PURCHASE AGREEMENT
This Addendum No. 4 to Master Loan Purchase Agreement (“ Addendum No. 4 ”) is effective as of the date of execution by Purchaser and Seller. All capitalized terms that are used but not defined herein shall have the meanings ascribed to such terms in the Master Loan Purchase Agreement. All terms and provisions of this Addendum No. 4 shall be incorporated into and shall supplement the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 4. To the extent any provision of this Addendum No. 4 conflicts with any other provision of the Master Loan Purchase Agreement, the provision of this Addendum No. 4 shall govern.

I. Program-Specific Defined Terms

“ Loan ” means a business loan originated and issued by Bank to a business entity (including a sole proprietorship) and acquired by Seller, which includes, on a whole loan basis, all right, title and interest of Bank, as holder of both the beneficial and legal title to such loan, including without limitation: (a) the related Loan Document Package, the related Records and all other loan documents, files and records for such loan; (b) all proceeds from such Loan (including without limitation any monthly payments, any prepayments and any other proceeds) and any related Personal Guaranty; (c) any collateral securing any of the foregoing; (d) all Servicing Rights with respect to such loan; and (e) all other rights, titles, interests, benefits, proceeds, remedies and claims in favor or for the benefit of Bank (or its successors and assigns) arising from or relating to such loan.
“ Credit Criteria ” means the minimum credit criteria for business Loans designated as Credit Criteria with respect to this Addendum No. 4 and provided by Seller to Purchaser from time to time in Seller’s sole discretion upon at least ten (10) Business Days’ notice in accordance with the terms of Section IV(a) of this Addendum No. 4. For the avoidance of doubt, “Credit Criteria” for purposes of this Addendum No. 4 shall mean the version most recently provided by Seller to Purchaser.

“ Personal Guaranty ” means, with respect to a Loan satisfying the Credit Criteria outlined in this Addendum No. 4, a guaranty by an individual person of all or any portion of the obligations under such loan, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“ Purchase Requirement ” means a minimum aggregate dollar amount of applicable Purchase Commitments (to the extent Eligible Loans are available, offered by Seller to Purchaser, and subject to any Purchase Limitation) that Purchaser agrees to make in a given calendar month.

“ Servicing Rights ” has the meaning assigned to such term in the Servicing Agreement.

II. Loan Documents

1.
Loan Agreement
2.
Non-Negotiable Promissory Note ( Note: form is included as Exhibit A to Loan Agreement)
3.
Applicable Privacy Notice ( Note: form is included as Exhibit B to Loan Agreement)
4.
Borrower Membership Agreement
5.
Terms of Use
6.
Personal Guaranty
7.
Security Agreement (if applicable)
8.
UCC Financing Statements(s) (if applicable)

III. Purchase Requirement

The following provisions supplement those contained in Section 2.2 of the Master Loan Purchase Agreement with respect to Purchased Loans satisfying the Credit Criteria outlined in this Addendum No. 4:
(a)    With respect to Eligible Loans offered to Purchaser by Seller pursuant to the Credit Criteria specifications of this Addendum No. 4, Purchaser and Seller shall mutually agree in writing to a Purchase Requirement. At least thirty (30) days

MASTER LOAN PURCHASE AGREEMENT - Addendum No. 4 (Small Business)



prior to the first day of each month, or as otherwise agreed between the Parties in writing, Seller and Purchaser will mutually agree as to the Purchase Requirement for such month. Such Purchase Requirement will go into effect on the first day of such month and will apply for each month going forward until Seller and Purchaser mutually agree in writing to modify such Purchase Requirement. For the avoidance of doubt, Seller may, but is not required to offer to Purchaser, an amount of Eligible Loans equal to the Purchase Requirement and its offer of no Eligible Loans or an amount of Eligible Loans that is less than the Purchase Requirement shall not constitute a breach of this Agreement.

(b)    Purchaser agrees to make a Purchase Commitment for all Eligible Loans offered to Purchaser by Seller pursuant to the Credit Criteria specifications outlined in this Addendum No. 4 (other than those that become Non-Offered Loans and to the extent Eligible Loans are available) in any given calendar month until such time as Purchaser has made Purchase Commitments for an amount of Eligible Loans (based upon Purchase Price) equal to the Purchase Requirement for such month. Each Eligible Loan offered to Purchaser by Seller, in Seller’s sole discretion, up to the Purchase Requirement will be deemed to be subject to a Purchase Commitment upon offer. After meeting the Purchase Requirement for any calendar month, upon the mutual agreement between Seller and Purchaser and to the extent Eligible Loans are available, Seller may offer, additional Eligible Loans during such month subject to the Purchase Limitation.

(c)    Seller may strive to allocate Eligible Loans among purchasers participating in the Loan Program covered by this Addendum No. 4 in an equitable manner so that all purchasers have an equitable opportunity to purchase Eligible Loans pursuant to the Credit Criteria specifications outlined in this Addendum No. 4. However, Purchaser acknowledges that Seller may, in its sole and absolute discretion, allocate Eligible Loans to participants in the Small Business Loan Program in a manner that does not result in all participants having an equal distribution of Eligible Loans, whether across grade, term or amount.

IV. Representations, Warranties and Covenants

The following representations, warranties and covenants supplement those contained in Section 4.2 of the Master Loan Purchase Agreement with respect to Purchased Loans satisfying the Credit Criteria outlined in this Addendum No. 4:
(a)    Seller shall provide written notification to Purchaser at least ten (10) Business Days prior to any material changes or modifications to the Credit Criteria applicable to this Addendum No. 4. In addition to the notice required pursuant to this Section IV(a) , Seller agrees to provide or otherwise make available to Purchaser a copy of the Credit Criteria then in effect upon Purchaser’s reasonable request.

(b)    The Purchased Loan is supported by a Personal Guaranty executed and delivered by a guarantor.

(c)    The guarantor making a Personal Guaranty in respect of such Purchased Loan has represented that he or she (1) is a U.S. citizen or permanent resident; (2) is at least 18 years of age; and (3) has a U.S. social security number; and to Seller’s actual knowledge, without independent investigation, no such guarantor representation is untrue.

(d)    The applicable Borrower in respect of such Purchased Loan has represented that it has an account at a U.S. financial institution with a routing transit number; and to Seller’s actual knowledge, without independent investigation, such Borrower representation is not untrue. In addition, the Borrower in respect of such Purchased Loan has represented that it has a valid email account; and to Seller’s actual knowledge, without independent investigation, such Borrower representation is not untrue.

(e)    The applicable Borrower of such Purchased Loan has represented that the proceeds of such Purchased Loan will be used only for a business, commercial, or agricultural purpose, including, without limitation, debt consolidation/refinance, inventory purchase, equipment purchase, working capital, remodel, acquisition of business location, marketing, emergency repairs, or other business purpose; and to Seller’s actual knowledge, without independent investigation, no such Borrower or guarantor representation is untrue.

(f)    Based upon the information provided by the applicant, the Borrower of the Purchased Loan is a corporation, partnership, association, or similar entity, and not an individual. For purposes of this Section IV(f) , a single member limited liability company or other entity owned or operated by or passing through to an individual shall be deemed an entity and not an individual.

(g)    The Purchased Loan is not a revolving line of credit or similar credit facility and no obligation to make any future advance to the Borrower exists or is contemplated with respect to such Purchased Loan.

MASTER LOAN PURCHASE AGREEMENT - Addendum No. 4 (Small Business)




(h)    As of the applicable Origination Date, the Purchased Loan is fully amortizing with payments due monthly.

V. Termination

The following provision supplements those contained in Section 8.2(a) of the Master Loan Purchase Agreement with respect to Purchased Loans satisfying the Credit Criteria outlined in this Addendum No. 4:
(a)    Purchaser reserves the right to terminate this Addendum No. 4 immediately upon written notice to Seller within five (5) Business Days of receipt of the notice set forth in Section IV(a) of this Addendum No. 4. For the avoidance of doubt, the Master Loan Purchase Agreement and any other outstanding Addenda shall remain in full force and effect.

MASTER LOAN PURCHASE AGREEMENT - Addendum No. 4 (Small Business)






IN WITNESS WHEREOF, the parties hereto have executed this Addendum No. 4 as of the last date written below.

PURCHASER:
 
SELLER:
 
[_____________________]
 
LENDINGCLUB CORPORATION
 
 
 
 
 
By: ____________________________
 
By: ____________________________
 
Name:
 
Name:
 
Title:
 
Title:
 
Date:
 
Date:
 





















MASTER LOAN PURCHASE AGREEMENT - Addendum No. 4 (Small Business)




MULTI-DRAW LINE OF CREDIT LOAN PROGRAM
ADDENDUM NO. 5 TO MASTER LOAN PURCHASE AGREEMENT
This Addendum No. 5 to Master Loan Purchase Agreement (“ Addendum No. 5 ”) is effective as of the date of execution by Purchaser and Seller. All capitalized terms that are used but not defined herein shall have the meanings ascribed to such terms in the Master Loan Purchase Agreement. All terms and provisions of this Addendum No. 5 shall be incorporated into and shall supplement the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 5. To the extent any provision of this Addendum No. 5 conflicts with any other provision of the Master Loan Purchase Agreement, the provision of this Addendum No. 5 shall govern.

I. Program-Specific Defined Terms

“ Credit Criteria ” means the minimum credit criteria for Loans designated as Credit Criteria with respect to this Addendum No. 5 and provided by Seller to Purchaser from time to time in Seller’s sole discretion upon at least ten (10) Business Days’ notice in accordance with the terms of Section IV(a) of this Addendum No. 5. For the avoidance of doubt, “Credit Criteria” for purposes of this Addendum No. 5 shall mean the version most recently provided by Seller to Purchaser.
“ Loan ” means a single loan advance under a Line of Credit originated and issued by Bank to a business entity (including a sole proprietorship) under the Multi-Draw Line of Credit Loan Program and acquired by Seller, which includes, on a whole loan basis, all right, title and interest of Bank, as holder of both the beneficial and legal title to such loan, including without limitation: (a) the related Loan Document Package, the related Records and all other loan documents, files and records for such loan advance; (b) all proceeds from such loan advance (including without limitation any monthly payments, any prepayments and any other proceeds) and any related Personal Guaranty; (c) any collateral securing any of the foregoing; (d) all Servicing Rights with respect to such loan advance; and (e) all other rights, titles, interests, benefits, proceeds, remedies and claims in favor or for the benefit of Bank (or its successors and assigns) arising from or relating to such loan advance.
“ Line of Credit ” means each unconditionally cancellable, multi-draw revolving line of credit offered to a Borrower pursuant to the applicable Line Agreement (as defined in Section II of this Addendum No. 5) for purposes of the Multi-Draw Line of Credit Loan Program.
“ Multi-Draw Line of Credit Loan Program ” means Seller’s program of facilitating Loans to Borrowers that are business entities (including sole proprietorships) and offering sale of such Loans or investment in the income associated with such Loans to investors; provided , that each Loan offered for sale to investors under the Multi-Draw Line of Credit Loan Program corresponds to a single “loan advance” issued under a Borrower’s Line of Credit pursuant to the applicable Line Agreement (as defined in Section II of this Addendum No. 5).
“ Personal Guaranty ” means, with respect to a Loan satisfying the Credit Criteria outlined in this Addendum No. 5, a guaranty by an individual person of all or any portion of the obligations under such loan, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“ Purchase Requirement ” means a minimum aggregate dollar amount of applicable Purchase Commitments (to the extent Eligible Loans are available, offered by Seller to Purchaser, and subject to any Purchase Limitation) that Purchaser agrees to make in a given calendar month.

“ Servicing Rights ” has the meaning assigned to such term in the Servicing Agreement.

II. Loan Documents

1.
Line Agreement (Multi-Draw Revolving Line of Credit)
2.
Non-Negotiable Promissory Note ( Note: form is included as Exhibit A to Line Agreement)
3.
Borrower Membership Agreement
4.
Terms of Use
5.
Personal Guaranty


MASTER LOAN PURCHASE AGREEMENT - Addendum No. 5 (Multi-Draw Line of Credit Loan Program)


III. Purchase Requirement and Loan Program Mechanics

The following provisions supplement those contained in Section 2.2 of the Master Loan Purchase Agreement with respect to Purchased Loans satisfying the Credit Criteria outlined in this Addendum No. 5:
(a)    With respect to Eligible Loans offered to Purchaser by Seller pursuant to the Credit Criteria specifications of this Addendum No. 5, Seller and Purchaser shall mutually agree in writing to a Purchase Requirement. At least thirty (30) days prior to the first day of each month, or as otherwise agreed between the Parties in writing, Seller and Purchaser will mutually agree as to the Purchase Requirement for such month. Such Purchase Requirement will go into effect on the first day of such month and will apply for each month going forward until Seller and Purchaser mutually agree in writing to modify such Purchase Requirement. For the avoidance of doubt, Seller may, but is not required to offer to Purchaser, an amount of Eligible Loans equal to the Purchase Requirement and its offer of no Eligible Loans or an amount of Eligible Loans that is less than the Purchase Requirement shall not constitute a breach of this Agreement.

(b)    Purchaser agrees to make a Purchase Commitment for all Eligible Loans offered to Purchaser by Seller pursuant to the Credit Criteria specifications outlined in this Addendum No. 5 (other than those that become Non-Offered Loans and to the extent Eligible Loans are available) in any given calendar month until such time as Purchaser has made Purchase Commitments for an amount of Eligible Loans (based upon Purchase Price) equal to the Purchase Requirement for such month. Each Eligible Loan offered to Purchaser by Seller, in Seller’s sole discretion, up to the Purchase Requirement will be deemed to be subject to a Purchase Commitment upon offer. After meeting the Purchase Requirement for any calendar month, upon the mutual agreement between Seller and Purchaser and to the extent Eligible Loans are available, Seller may offer, additional Eligible Loans during such month subject to the Purchase Limitation.

(c)    Seller may strive to allocate Eligible Loans among purchasers participating in the Loan Program covered by this Addendum No. 5 in an equitable manner so that all purchasers have an equitable opportunity to purchase Eligible Loans pursuant to the Credit Criteria specifications outlined in this Addendum No. 5. However, Purchaser acknowledges that Seller may, in its sole and absolute discretion, allocate Eligible Loans to participants in the Multi-Draw Line of Credit Loan Program in a manner that does not result in all participants having an equal distribution of Eligible Loans, whether across grade, term or amount.

(d)    Purchaser acknowledges that each Eligible Loan offered to Purchaser by Seller pursuant to the terms of this Addendum No. 5 constitutes a single “loan advance” made to a Borrower under such Borrower’s Line of Credit pursuant to the applicable Line Agreement. As a result, multiple investor participants in the Multi-Draw Line of Credit Loan Program may purchase Eligible Loans constituting “loan advances” issued under the same Line of Credit to a given Borrower. Purchaser further acknowledges that any payments received from a Borrower shall be treated as a payment against the entire Line of Credit under the Line Agreement and allocated pro rata among Purchaser and any other investors owning Loans corresponding to “loan advances” issued under the same Line of Credit as follows:

(i)
Billed fees; then
(ii)
Billed interest; then
(iii)
Billed principal; then
(iv)
Unbilled principal; then
(v)
Unbilled fees; then
(vi)
Unbilled interest.

For the avoidance of doubt, “pro rata” for purposes of each waterfall calculation above shall be separately based on each payment category. By way of example only, if Purchaser owns a Purchased Loan corresponding to a “loan advance” issued under a Line of Credit (and at least one additional “loan advance” has been extended to the Borrower under the Line of Credit), Purchaser’s “pro rata” allocation of “billed interest” in waterfall scenario (i) above with respect to that Purchased Loan would be calculated as (a) the amount of billed interest owed to Purchaser with respect to that Purchased Loan, divided by (b) the total amount of billed interest owed under that Line of Credit, multiplied by (c) the lesser of (i) the total payment received less any billed fees and (ii) the total billed interest under the Line of Credit. Notwithstanding the foregoing, all distributions and payments owed to Purchaser with respect to Purchased Loans shall be made by Servicer in accordance with the terms of the Servicing Agreement.

MASTER LOAN PURCHASE AGREEMENT - Addendum No. 5 (Multi-Draw Line of Credit Loan Program)




IV. Representations, Warranties and Covenants

The following representations, warranties and covenants supplement those contained in Section 4.2 of the Master Loan Purchase Agreement with respect to Purchased Loans satisfying the Credit Criteria outlined in this Addendum No. 5:
(a)    Seller shall provide written notification to Purchaser at least ten (10) Business Days prior to any material changes or modifications to the Credit Criteria applicable to this Addendum No. 5. In addition to the notice required pursuant to this Section IV(a) , Seller agrees to provide or otherwise make available to Purchaser a copy of the Credit Criteria then in effect upon Purchaser’s reasonable request.

(b)    The Purchased Loan is supported by a Personal Guaranty executed and delivered by a guarantor.

(c)    The guarantor making a Personal Guaranty in respect of such Purchased Loan has represented that he or she (1) is a U.S. citizen or permanent resident; (2) is at least 18 years of age; and (3) has a U.S. social security number; and to Seller’s actual knowledge, without independent investigation, no such guarantor representation is untrue.

(d)    The applicable Borrower in respect of such Purchased Loan has represented that it has an account at a U.S. financial institution with a routing transit number; and to Seller’s actual knowledge, without independent investigation, such Borrower representation is not untrue. In addition, the Borrower in respect of such Purchased Loan has represented that it has a valid email account; and to Seller’s actual knowledge, without independent investigation, such Borrower representation is not untrue.

(e)    The applicable Borrower of such Purchased Loan has represented that the proceeds of such Purchased Loan will be used only for a business, commercial, or agricultural purpose, including, without limitation, debt consolidation/refinance, inventory purchase, equipment purchase, working capital, remodel, acquisition of business location, marketing, emergency repairs, or other business purpose; and to Seller’s actual knowledge, without independent investigation, no such Borrower or guarantor representation is untrue.

(f)    Based upon the information provided by the applicant, the Borrower of the Purchased Loan is a corporation, partnership, association, or similar entity, and not an individual. For purposes of this Section IV(f) , a single member limited liability company or other entity owned or operated by or passing through to an individual shall be deemed an entity and not an individual.

(g)    Seller represents and warrants that each Borrower and each other holder of a Loan under the same Line of Credit as such Purchased Loan (including Seller and its Affiliates, if applicable) has agreed to, and Seller shall cause any future holder of any such Loan to agree to, the same priority and sharing of payments as set forth in Section III(d) of this Addendum No. 5.

(h)    As of the applicable Origination Date, the Purchased Loan is fully amortizing with payments due monthly.

V. Termination

The following provision supplements those contained in Section 8.2(a) of the Master Loan Purchase Agreement with respect to Purchased Loans satisfying the Credit Criteria outlined in this Addendum No. 5:
(a)    Purchaser reserves the right to terminate this Addendum No. 5 immediately upon written notice to Seller within five (5) Business Days of receipt of the notice set forth in Section IV(a) of this Addendum No. 5. For the avoidance of doubt, the Master Loan Purchase Agreement and any other outstanding Addenda shall remain in full force and effect.


MASTER LOAN PURCHASE AGREEMENT - Addendum No. 5 (Multi-Draw Line of Credit Loan Program)




IN WITNESS WHEREOF, the parties hereto have executed this Addendum No. 5 as of the last date written below.

PURCHASER:
 
SELLER:
 
[_____________________]
 
LENDINGCLUB CORPORATION
 
 
 
 
 
By: ____________________________
 
By: ____________________________
 
Name:
 
Name:
 
Title:
 
Title:
 
Date:
 
Date:
 



MASTER LOAN PURCHASE AGREEMENT - Addendum No. 5 (Multi-Draw Line of Credit Loan Program)



SINGLE DRAW LINE OF CREDIT LOAN PROGRAM
ADDENDUM NO. 6 TO MASTER LOAN PURCHASE AGREEMENT
This Addendum No. 6 to Master Loan Purchase Agreement (“ Addendum No. 6 ”) is effective as of the date of execution by Purchaser and Seller. All capitalized terms that are used but not defined herein shall have the meanings ascribed to such terms in the Master Loan Purchase Agreement. All terms and provisions of this Addendum No. 6 shall be incorporated into and shall supplement the Master Loan Purchase Agreement with respect to Loans satisfying the Credit Criteria outlined in this Addendum No. 6. To the extent any provision of this Addendum No. 6 conflicts with any other provision of the Master Loan Purchase Agreement, the provision of this Addendum No. 6 shall govern.

I. Program-Specific Defined Terms

“ Credit Criteria ” means the minimum credit criteria for Loans designated as Credit Criteria with respect to this Addendum No. 6 and provided by Seller to Purchaser from time to time in Seller’s sole discretion upon at least ten (10) Business Days’ notice in accordance with the terms of Section IV(a) of this Addendum No. 6. For the avoidance of doubt, “Credit Criteria” for purposes of this Addendum No. 6 shall mean the version most recently provided by Seller to Purchaser.

“ Loan ” means a single loan advance under a Line of Credit originated and issued by Bank to a business entity (including a sole proprietorship) under the Single Draw Line of Credit Loan Program and acquired by Seller, which includes, on a whole loan basis, all right, title and interest of Bank, as holder of both the beneficial and legal title to such loan, including without limitation: (a) the related Loan Document Package, the related Records and all other loan documents, files and records for such loan advance; (b) all proceeds from such loan (including without limitation any monthly payments, any prepayments and any other proceeds) and any related Personal Guaranty; (c) any collateral securing any of the foregoing; (d) all Servicing Rights with respect to such loan advance; and (e) all other rights, titles, interests, benefits, proceeds, remedies and claims in favor or for the benefit of Bank (or its successors and assigns) arising from or relating to such loan advance.
“ Line of Credit ” means each unconditionally cancellable, single draw non-revolving line of credit offered to a Borrower pursuant to the applicable Loan Agreement (as defined in Section II of this Addendum No. 6) for purposes of the Single Draw Line of Credit Loan Program.
“ Personal Guaranty ” means, with respect to a Loan satisfying the Credit Criteria outlined in this Addendum No. 6, a guaranty by an individual person of all or any portion of the obligations under such loan, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“ Purchase Requirement ” means a minimum aggregate dollar amount of applicable Purchase Commitments (to the extent Eligible Loans are available, offered by Seller to Purchaser, and subject to any Purchase Limitation) that Purchaser agrees to make in a given calendar month.

“ Servicing Rights ” has the meaning assigned to such term in the Servicing Agreement.

“ Single Draw Line of Credit Loan Program ” means Seller’s program of facilitating Loans to Borrowers that are business entities (including sole proprietorships) and offering sale of such Loans or investment in the income associated with such Loans to investors; provided , that each Loan offered for sale to investors under the Single Draw Line of Credit Loan Program corresponds to the only “loan advance” issued under a Borrower’s Line of Credit pursuant to the applicable Loan Agreement (as defined in Section II of this Addendum No. 6).

II. Loan Documents

1.
Loan Agreement
2.
Non-Negotiable Promissory Note ( Note: form is included as Exhibit A to Loan Agreement)
3.
Applicable Privacy Notice ( Note: form is included as Exhibit B to Loan Agreement)
4.
Borrower Membership Agreement
5.
Terms of Use
6.
Personal Guaranty

MASTER LOAN PURCHASE AGREEMENT - Addendum No. 6 (Single Draw Line of Credit Loan Program)



III. Purchase Requirement and Loan Program Mechanics

The following provisions supplement those contained in Section 2.2 of the Master Loan Purchase Agreement with respect to Purchased Loans satisfying the Credit Criteria outlined in this Addendum No. 6:
(a)    With respect to Eligible Loans offered to Purchaser by Seller pursuant to the Credit Criteria specifications of this Addendum No. 6, Seller and Purchaser shall mutually agree in writing to a Purchase Requirement. At least thirty (30) days prior to the first day of each month, or as otherwise agreed between the Parties in writing, Seller and Purchaser will mutually agree as to the Purchase Requirement for such month. Such Purchase Requirement will go into effect on the first day of such month and will apply for each month going forward until Seller and Purchaser mutually agree in writing to modify such Purchase Requirement. For the avoidance of doubt, Seller may, but is not required to offer to Purchaser, an amount of Eligible Loans equal to the Purchase Requirement and its offer of no Eligible Loans or an amount of Eligible Loans that is less than the Purchase Requirement shall not constitute a breach of this Agreement.

(b)    Purchaser agrees to make a Purchase Commitment for all Eligible Loans offered to Purchaser by Seller pursuant to the Credit Criteria specifications outlined in this Addendum No. 6 (other than those that become Non-Offered Loans and to the extent Eligible Loans are available) in any given calendar month until such time as Purchaser has made Purchase Commitments for an amount of Eligible Loans (based upon Purchase Price) equal to the Purchase Requirement for such month. Each Eligible Loan offered to Purchaser by Seller, in Seller’s sole discretion, up to the Purchase Requirement will be deemed to be subject to a Purchase Commitment upon offer. After meeting the Purchase Requirement for any calendar month, upon the mutual agreement between Seller and Purchaser and to the extent Eligible Loans are available, Seller may offer, additional Eligible Loans during such month subject to the Purchase Limitation.

(c)    Seller may strive to allocate Eligible Loans among purchasers participating in the Loan Program covered by this Addendum No. 6 in an equitable manner so that all purchasers have an equitable opportunity to purchase Eligible Loans pursuant to the Credit Criteria specifications outlined in this Addendum No. 6. However, Purchaser acknowledges that Seller may, in its sole and absolute discretion, allocate Eligible Loans to participants in the Single Draw Line of Credit Loan Program in a manner that does not result in all participants having an equal distribution of Eligible Loans, whether across grade, term or amount.

IV. Representations, Warranties and Covenants

The following representations, warranties and covenants supplement those contained in Section 4.2 of the Master Loan Purchase Agreement with respect to Purchased Loans satisfying the Credit Criteria outlined in this Addendum No. 6:
(a)    Seller shall provide written notification to Purchaser at least ten (10) Business Days prior to any material changes or modifications to the Credit Criteria applicable to this Addendum No. 6. In addition to the notice required pursuant to this Section IV(a) , Seller agrees to provide or otherwise make available to Purchaser a copy of the Credit Criteria then in effect upon Purchaser’s reasonable request.

(b)    The Purchased Loan is supported by a Personal Guaranty executed and delivered by a guarantor.

(c)    The guarantor making a Personal Guaranty in respect of such Purchased Loan has represented that he or she (1) is a U.S. citizen or permanent resident; (2) is at least 18 years of age; and (3) has a U.S. social security number; and to Seller’s actual knowledge, without independent investigation, no such guarantor representation is untrue.

(d)    The applicable Borrower in respect of such Purchased Loan has represented that it has an account at a U.S. financial institution with a routing transit number; and to Seller’s actual knowledge, without independent investigation, such Borrower representation is not untrue. In addition, the Borrower in respect of such Purchased Loan has represented that it has a valid email account; and to Seller’s actual knowledge, without independent investigation, such Borrower representation is not untrue.

(e)    The applicable Borrower of such Purchased Loan has represented that the proceeds of such Purchased Loan will be used only for a business, commercial, or agricultural purpose, including, without limitation, debt consolidation/refinance, inventory purchase, equipment purchase, working capital, remodel, acquisition of business location, marketing, emergency repairs, or other business purpose; and to Seller’s actual knowledge, without independent investigation, no such Borrower or guarantor representation is untrue.

MASTER LOAN PURCHASE AGREEMENT - Addendum No. 6 (Single Draw Line of Credit Loan Program)




(f)    Based upon the information provided by the applicant, the Borrower of the Purchased Loan is a corporation, partnership, association, or similar entity, and not an individual. For purposes of this Section IV(f) , a single member limited liability company or other entity owned or operated by or passing through to an individual shall be deemed an entity and not an individual.

(g)    As of the applicable Origination Date, the Purchased Loan is fully amortizing with payments due monthly.

V. Termination

The following provision supplements those contained in Section 8.2(a) of the Master Loan Purchase Agreement with respect to Purchased Loans satisfying the Credit Criteria outlined in this Addendum No. 6:
(a)    Purchaser reserves the right to terminate this Addendum No. 6 immediately upon written notice to Seller within five (5) Business Days of receipt of the notice set forth in Section IV(a) of this Addendum No. 6. For the avoidance of doubt, the Master Loan Purchase Agreement and any other outstanding Addenda shall remain in full force and effect.


MASTER LOAN PURCHASE AGREEMENT - Addendum No. 6 (Single Draw Line of Credit Loan Program)




IN WITNESS WHEREOF, the parties hereto have executed this Addendum No. 6 as of the last date written below.

PURCHASER:
 
SELLER:
 
[_____________________]
 
LENDINGCLUB CORPORATION
 
 
 
 
 
By: ____________________________
 
By: ____________________________
 
Name:
 
Name:
 
Title:
 
Title:
 
Date:
 
Date:
 








MASTER LOAN PURCHASE AGREEMENT - Addendum No. 6 (Single Draw Line of Credit Loan Program)




EXHIBIT A
PURCHAE INSTRUCTIONS

Pursuant to Section 2 of the Master Loan Purchase Agreement between Seller and Purchaser, Purchaser provides these Purchase Instructions, which Purchase Instructions shall supersede any and all prior Purchase Instructions.

Purchaser wishes to make Purchase Commitments for Eligible Loans across Loan grades and terms in accordance with the following percentages with respect to its participation in the:

¨ Standard Loan Program (Addendum No. 1)
¨ Super Prime Loan Program (Addendum No. 2)

 
GRADE :
Grade AA
(Not available in 5yr term)
Grade A
Grade B
Grade C
Grade D
Grade E
Grade F
Grade G
____%
____%
____%
____%
____%
____%
____%
____%


TERM :
____ % 24-Month
+
____ % 36-Month
+
____% 60-Month
+
____% 84-Month
=
100%
(AA and A product only)
 
 
 
 
 
(AA product only)
 
 


ADDITIONAL INSTRUCTIONS (OPTIONAL):
•
__________________________________________________________
•
__________________________________________________________

PURCHASER:
 
SELLER:
 
[_____________________]
 
LENDINGCLUB CORPORATION
 
 
 
 
 
By: ____________________________
 
By: ____________________________
 
Name:
 
Name:
 
Title:
 
Title:
 
Date:
 
Date:
 




MASTER LOAN PURCHASE AGREEMENT - Exhibit A

Exhibit 10.4













 



MASTER LOAN SERVICING AGREEMENT


Dated as of ___________, 20______

by and between

LENDINGCLUB CORPORATION,
as Servicer
and

[_______________],
as Purchaser







This MASTER LOAN SERVICING AGREEMENT, dated as of [______], 20[__] (the “ Effective Date ”), by and between LendingClub Corporation, a Delaware corporation (“ LendingClub ”), as servicer (in such capacity, the “ Servicer ”) and [__________] , a [______________], as a purchaser (in such capacity, the “ Purchaser” ).
RECITALS
WHEREAS, LendingClub and Purchaser have entered into that certain Master Loan Purchase Agreement dated as of [______], 20[__] and of even date herewith (the “ Purchase Agreement ”), pursuant to which Purchaser will acquire from LendingClub, from time to time, certain loans evidenced by promissory notes and the related loan documents; and
WHEREAS, Purchaser desires that LendingClub service the loans acquired by Purchaser pursuant to the terms of the Purchase Agreement, and LendingClub and Purchaser desire to set forth the terms and conditions under which LendingClub will service such loans on behalf of Purchaser and its successors and assignees.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, and for other good and reasonable consideration, the receipt and adequacy of which are hereby acknowledged, Purchaser and Servicer hereby agree as follows:
ARTICLE I
DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below:
“ Accepted Servicing Practices ” means, with respect to each Loan, the servicing, administration and collections with respect to such Loan in the same manner and with the same care, skill, prudence and diligence with which Servicer services and administers loans similar to, such Loan in the ordinary course of its business, and in all events consistent with Applicable Law, the terms of the Loan Documents and commercially reasonable servicing practices in the loan servicing industry. Notwithstanding the foregoing, (i) referral of a Delinquent Loan to a Collection Agent shall be deemed to constitute commercially reasonable servicing practices; (ii) Servicer shall have the right, at any time and from time to time and in a manner otherwise consistent with the Accepted Servicing Practices, to amend or waive any term of such Loan or, in the case of a Loan that is more than 120 days delinquent, to cancel such Loan, in each case without the consent of Purchaser, provided that such amendment or waiver is, in Servicer’s reasonable determination, a practical way to obtain a reasonable recovery from such Loan; and (iii) Servicer shall not be prevented from implementing new programs, whether on an intermediate, pilot or permanent basis, or on a regional or nationwide basis, or from modifying its standards, policies and procedures as long as, in each case, Servicer does or would implement such programs or modify its standards, policies and procedures in respect of comparable Loans serviced and administered by Servicer in the ordinary course of its business.
“ ACH ” has the meaning assigned to such term in Section 3.2(e) hereof.
“ Addendum ” has the meaning assigned to such term in the Purchase Agreement.
“ Affiliate ” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Persons, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“ Agreement ” means this Master Loan Servicing Agreement, including all exhibits and schedules attached hereto or delivered in connection herewith, as such agreement may be amended, supplemented and modified from time to time.


“ AML-BSA Laws ” means, collectively, (i) the Bank Secrecy Act of 1970, as supplemented by the USA Patriot Act, and any rules and regulations promulgated thereunder; (ii) the Office of Foreign Assets Control’s (“ OFAC ”) rules and regulations regarding the blocking of assets and the prohibition of transactions involving Persons or countries designated by OFAC; and (iii) any other Applicable Laws relating to customer identification, anti-money laundering or preventing the financing of terrorism and other forms of illegal activity, each as amended.
“ Ancillary Fees ” means all ancillary fees and other compensation derived from the Loans after the Purchase Date to the extent not otherwise prohibited by this Agreement, the related Loan Documents or Applicable Law, which shall include (i) all ancillary fees charged to Borrowers, including, but not limited to, insufficient fund charges, name change fees and other similar Borrower fees, and (ii) all ancillary fees charged to Purchaser, including, but not limited to, collection and other fees paid to Collection Agents (or to Servicer where Servicer has collected amounts due on a Delinquent Loan), administrative fees, reporting fees and other such fees and expenses. Servicer shall be entitled to all Ancillary Fees collected on the Loans. Notwithstanding the foregoing, Ancillary Fees do not include Servicing Fees and all payments with respect to principal, interest, default interest, origination or similar fees and late fees attributable to the Loan.
“ Applicable Law ” means all federal, state and local laws, statutes, rules, regulations and orders applicable to any Loan or any Party or relating to or affecting the servicing, collection or administration of any Loan, and all requirements of any Regulatory Authority having jurisdiction over a Party with respect to its activities hereunder, as any such laws, statutes, regulations, orders and requirements may be amended and in effect from time to time during the term of this Agreement.
“ Bank ” means a bank, savings association, or credit union chartered in the United States, or a foreign depository institution acting through a U.S. bank branch, regulated by and subject to the authority of a Regulatory Authority.
“ Borrower ” means, with respect to each Loan, each Person or other obligor (including any co-borrower, co-maker, co-signor or guarantor) who is obligated under the terms of such Loan.
“ Borrower Information ” means any personally identifiable information or records in any form (oral, written, graphic, electronic, machine-readable, or otherwise) relating to a Borrower, including, but not limited to: a Borrower’s name, address, telephone number, account number, or transactional account history, account status; the fact that the Borrower has a relationship with Purchaser or Servicer; and any other personally identifiable information.
“ Business Day ” means any day other than: (a) a Saturday or Sunday; (b) a legal or federal holiday; and (c) a day on which banking and savings and loan institutions in San Francisco, California, New York, New York, or the State of Utah are required or authorized by law or Regulatory Authority to be closed for business.
“ Change in Control ” means the occurrence of either of the following: (i) Servicer merges or consolidates with any other Person and after giving effect to such merger or consolidation, Servicer is not the surviving entity, or (ii) any event or condition occurs which results in any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a person or group that owns the majority of the common stock of Servicer as of the Effective Date, becoming or obtaining rights (whether by means of warrants, options or otherwise) to become the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of more than 50% of the outstanding common stock of, or otherwise obtain voting control over, Servicer.
“ Charge Off Policy ” means the policy of Servicer for the charge off of loans included in its servicing portfolio, a complete and correct copy of which is attached hereto as Exhibit B , which policy may be modified or amended from time to time by Servicer in accordance with Accepted Servicing Practices and with notice thereof to Purchaser within five (5) Business Days (or such lesser number of days as may be agreed to by Purchaser) after such modification or amendment.
“ Charged Off Loan ” has the meaning set forth in Section 3.2(c) herein.



“ Charged Off Loan Broker ” means a broker of a Charged Off Loan, under an agreement between such broker and Servicer to which Purchaser is contractually joined as a seller thereunder.
“ Charged Off Loan Purchaser ” means a purchaser of a Charged Off Loan, under an agreement between such purchaser and Servicer to which Purchaser is contractually joined as a seller thereunder.
“ Charged Off Loan Servicing Fee ” has the meaning set forth in Exhibit A to this Agreement.
“ Claims Notice ” has the meaning assigned to such term in Section 5.3(b) hereof.
“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.
“ Collection Agent ” means Servicer, if applicable, or any Person(s) designated by Servicer for the purpose of making collections in respect of Loans; provided, that Servicer may not designate for such purpose any Person entitled to impose a statutory lien upon any Loan to secure payment for services rendered by such Person.
“ Delinquent ” means, with respect to a Loan, the Monthly Payment due on a Due Date is not made by the close of business on the day prior to the next succeeding Due Date.
“ Discloser ” has the meaning set forth in Section 3.3(a) herein.
“ Due Date ” means, with respect to any Loan, the day of the calendar month on which the Monthly Payment is due on a Loan, exclusive of any grace period.
“ Errors and Omissions Insurance ” means Errors and Omissions Insurance to be maintained by Servicer in accordance with Section 3.5 .
“ Indemnified Party ” has the meaning set forth in Section 5.3(c) herein.
“ Indemnified Purchaser Party ” has the meaning set forth in Section 5.3(a) .
“ Indemnified Servicer Party ” has the meaning set forth in Section 5.3(b) .
“ Indemnifying Party ” has the meaning set forth in Section 5.3(c) .
“ Indemnity Deductible ” shall mean, for any date of determination, [__]% of the aggregate original principal balances of all Loans sold to Purchaser pursuant to the terms of the same Addendum as of the most recent month end.
“ Information Security Program ” means written policies and procedures adopted and maintained to (i) ensure the security and confidentiality of Borrower Information; (ii) protect against any anticipated threats or hazards to the security or integrity of the Borrower Information; (iii) protect against unauthorized access to or use of the Borrower Information that could result in substantial harm or inconvenience to any Borrower and (iv) that fully comply with the applicable provisions of the Privacy Requirements.
“ LendingClub ” means LendingClub Corporation.
“ Liquidated Loan ” means a Loan which has been liquidated, whether by way of a payment in full, a disposition, a refinance, a compromise, a sale to a Charged Off Loan Purchaser or any other means of liquidation of such Loan.
“ Liquidation Proceeds ” means cash proceeds, if any, received in connection with the liquidation of a Liquidated Loan, net of any Charged Off Loan Broker fees or Charged Off Loan Servicing Fees.



“ Loan ” means each Purchased Loan (as defined in the Purchase Agreement).
“ Loan Interest Rate ” means the per annum rate used to calculate interest due on the outstanding principal balance of such Loan.
“ Loan Documents ” has the meaning assigned to such term in the Purchase Agreement.
“ Loan Document Package ” has the meaning assigned to such term in the Purchase Agreement.
“ Loan Modification ” means, with respect to any Loan, any waiver, modification or variance of any term or any consent to the postponement of strict compliance with any term or any other grant of an indulgence or forbearance to the related Borrower in accordance with the Accepted Servicing Practices pursuant to Section 3.1 .
“ Loan Schedule ” means the schedule of Loans prepared and maintained by Servicer and made available to Purchaser through online access or other computer transmission that identifies each of the Loans being serviced hereunder.
“ Losses ” has the meaning set forth in Section 5.3(a) .
“ Material Adverse Change ” means, with respect to any Person, any material adverse change in the business, financial condition, operations, or properties of such Person that would substantially prevent or impair the Person’s ability to perform any of its obligations under this Agreement (which impairment cannot be timely cured, to the extent a cure period is applicable).
“ Material Adverse Effect ” means, with respect to a Party, (a) a Material Adverse Change with respect to such Party and its Affiliates taken as a whole; or (b) a material adverse effect upon the legality, validity, binding effect or enforceability of this Agreement with respect to such Party.
“ Monthly Payment ” means, with respect to any Loan, the amount of the scheduled monthly payment of principal and/or interest on a Loan.
“ Nonperforming Loan ” means any Loan in respect of which at least two (2) Monthly Payments are Delinquent.
“ P&I Election Instructions ” has the meaning set forth in Section 3.2(e) herein.
“ Party ” means either Servicer or Purchaser, as the context so requires.
“ Parties ” means Servicer and Purchaser together.
“ Person ” means any individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, unincorporated organization or other entity, including any government agency, commission, board, department, bureau or instrumentality.
“ Principal Prepayment ” means, with respect to any Loan, any payment or other recovery of principal on such Loan which is received in advance of the scheduled Due Date for the payment of such principal amount.
“ Privacy Requirements ” means (i) Title V of the Gramm-Leach-Bliley Act, 15 U.S.C. 6801 et seq.; (ii) federal regulations implementing such act and codified at 12 CFR Parts 40, 216, 332, and 573 and 16 C.F.R. Part 313; (iii)


Interagency Guidelines Establishing Standards For Safeguarding Obligor Information and codified at 12 C.F.R. Parts 30, 208, 211, 225, 263, 308, 364, 568, and 570, and 16 C.F.R. Part 314; and (iv) other applicable federal, state and local laws, rules, regulations, and orders relating to the privacy and security of Borrower Information including, but not limited to, information security requirements promulgated by the Massachusetts Office of Consumer Affairs and Business Regulation and codified at 201 C.M.R. Part 17.00.
“ Proceeds ” has the meaning set forth in Section 3.2(e) herein.
“ Promissory Note ” means, with respect to each Loan, the note or other evidence of the indebtedness of a Borrower.
“ Purchase Agreement ” means the Purchase Agreement as defined in the recitals above, as the same may be amended or otherwise modified from time to time.
“Purchase Date” means, with respect to each Loan, the date that such Loan is purchased by Purchaser under the Purchase Agreement.
“ Purchaser ” has the meaning set forth in the introductory paragraph.
“ Purchaser Claims Notice ” has the meaning assigned to such term in Section 5.3(a) hereof.
“ Purchaser Event of Default ” has the meaning set forth in Section 7.1(b) .
“ Purchaser Online Account ” means each online account established by Purchaser, as described in the Purchase Agreement.
“ Recipient ” has the meaning set forth in Section 3.3(a) herein.
“ Regulatory Authority ” means any United States federal, state, county, municipal or local governmental or regulatory authority, agency, board, body, commission, instrumentality, court, tribunal or quasi-governmental authority having jurisdiction over a Party.
“ Representatives ” has the meaning set forth in Section 3.3(a) herein.
“ Repurchase Price ” means, for any Loan, the original principal balance of the Loan, less all amounts received with respect to payments of principal on such Loan after the applicable Purchase Date.
“ Repurchase Procedure ” means, with respect to a Loan subject to a Specified Indemnity Claim, the process by which Servicer shall purchase, or shall cause the purchase of, such Loan from Purchaser for the applicable Repurchase Price.
“ Resale Differential ” has the meaning set forth in Section 5.3(a) .
“ Resale Period ” has the meaning set forth in Section 5.3(a) .
“ Resale Price ” means, with respect to any sale of a Loan to a third party in accordance with the Resale Procedure, the fair market value of such Loan as of the date of such sale.
“ Resale Procedure ” means, with respect to a Loan subject to a Specified Indemnity Claim, the process by which Servicer shall arrange for and Purchaser shall agree to the sale of such Loan by Purchaser to a third party for a purchase price equal to the Resale Price.
“ Servicer ” means LendingClub, or its successor in interest or permitted assigns, in its capacity as the servicer under this Agreement, or any successor to Servicer under this Agreement as herein provided.



“ Servicer Claims Notice ” has the meaning assigned to such term in Section 5.3(b) hereof.
“ Servicer Event of Default ” has the meaning set forth in Section 7.1(a) .
“ Servicer Physical Payment Address ” means Servicer’s address where it maintains its books and records for the Servicing Files and, with respect to LendingClub in its capacity as Servicer, is (as of the Effective Date): 71 Stevenson St., Suite 300, San Francisco, CA 94105.
“ Servicing Compensation ” means the compensation payable to Servicer hereunder consisting of (a) the Servicing Fees and (b) the Ancillary Fees.
“ Servicing Fee ” shall have the meaning assigned thereto in Exhibit A attached hereto.
“ Servicing File ” means, with respect to each Loan, the items, documents, files and records pertaining to the servicing of such Loan, including, but not limited to, the computer files, data tapes, books, records, notes, copies of the Loan Documents and all additional documents generated as a result of or utilized in originating and/or servicing such Loan, which are delivered to or generated by Servicer.
“ Servicing Rights ” means, with respect to any Loan, any and all of the following rights arising under this Agreement: (a) any and all rights to service such Loan; (b) the rights to payment of the Servicing Fee and any Ancillary Fees (including any collection fees) with respect to such Loan; (c) the rights to all agreements or documents creating, defining or evidencing any such servicing rights to the extent they relate to such servicing rights and all rights of Servicer thereunder; (d) the rights to collect all payments of the Servicing Fee and any Ancillary Fees (including any collection fees) as provided herein; and (e) the rights to maintain and use any and all Servicing Files and other data and information pertaining to such Loan, or pertaining to the past, present or prospective servicing of such Loan.
“ Specified Indemnity Claim ” has the meaning set forth in Section 5.3(a) .
“ Subcontractor ” means any Person to whom Servicer delegates its duties hereunder pursuant to Section 2.2 hereof, including any Charged Off Loan Purchaser or Charged Off Loan Broker; provided, that Servicer may not so delegate its duties to any Person entitled to impose a statutory lien upon any Loan to secure payment for services rendered by such Person.
ARTICLE II
PURCHASER’S ENGAGEMENT OF SERVICER TO PERFORM SERVICING

2.1     Contract for Servicing; Possession of Servicing Files.

From and after each Purchase Date and until the earlier of: (i) such date as all Loans become Liquidated Loans; or (ii) the termination of this Agreement in accordance with Section 7.1 , below, Purchaser appoints and contracts with Servicer as an independent contractor, subject to the terms of this Agreement, for the servicing of the Loans. Such appointment is irrevocable, except in the instances described in Section 7.1 below. Purchaser is the owner of the Servicing Rights relating to each Loan serviced by Servicer hereunder; except that Servicing Rights shall not include the customer relationship with, or the right to market to, Borrower, which rights shall remain with Servicer.


Subject to the terms of this Agreement, Servicer shall have, as Purchaser’s independent contractor, all Servicing Rights associated with the Loans. Servicer shall establish and maintain a Servicing File with respect to each Loan in order to service such Loan pursuant to this Agreement, and such Servicing File is and shall be held in trust by Servicer on behalf of and for the benefit of Purchaser, as purchaser thereof. Each Loan Document and the contents of the Servicing File shall be vested in Purchaser, and the ownership of all records and documents with respect to the related Loan prepared by or which come into the possession or control of Servicer shall immediately vest in Purchaser and shall be retained and maintained, in trust, by Servicer at the will of Purchaser in such custodial capacity only. Each Servicing File shall be maintained electronically and shall be appropriately identified or recorded to reflect the ownership of the related Loan by Purchaser. Servicer shall release from its custody the contents of any Servicing File retained by it only in accordance with this Agreement, and Purchaser shall thereafter hold such Servicing File in accordance with the terms of this Agreement. To the extent that original documents are not required for purposes of realization of Loan proceeds, documents maintained by Servicer will be in digital format.
Servicer shall maintain the Servicing Files and the Loan Documents electronically, and such files and documents may be accessed through the Purchaser Online Account(s) or at the Servicer Physical Payment Address or such other physical location as designated by Servicer in writing; provided, however, that in no event shall such physical location be located outside the continental United States.
Record title to each Loan and the related Promissory Note shall remain in the name of Purchaser. Control and ownership of each Loan shall be established by an electronic record of such Loan that: (i) contains an identifiable and authoritative copy of the Loan Documents; (ii) identifies Purchaser as the purchaser of the Loan; (iii) is made available to Purchaser through the applicable Purchaser Online Account; (iv) is not altered to add or change the identification of Purchaser as purchaser of the Loan without the participation of Purchaser; and (v) is not revised except in accordance with the terms of this Agreement, the Loan Documents, or with the written consent of Purchaser, or unless required by Applicable Law. Servicer shall maintain such electronic record for each Loan as bailee and custodian on behalf of Purchaser at all times during the term of this Agreement.
2.2     Assignment and Delegation of Duties.

Servicer may assign or delegate any of its duties and obligations hereunder to any Subcontractors or Collection Agents; provided that, unless otherwise agreed to between Servicer and Purchaser, Servicer shall remain responsible for the performance of such duties and obligations in accordance with the terms of this Agreement and shall be liable for the acts or omissions of any such Subcontractor or Collection Agent in performing the same, and any such assignment or delegation will not relieve Servicer of its liabilities and responsibilities with respect to such duties and obligations under this Agreement, and shall not constitute a resignation within the meaning of Section 6.3 hereof.
2.3     Assistance and Cooperation of Purchaser.

If any actions of Purchaser are necessary or appropriate in connection with the servicing and administration of the Loans hereunder, then Purchaser shall use its commercially reasonable efforts to perform such actions in a timely manner and to cooperate with and assist Servicer in connection with such actions; provided that, notwithstanding anything to the contrary contained in this Agreement and except as specified above, Servicer shall have the exclusive right to maintain and develop the customer relationship with, and the right to market to, any Borrower; and provided further that, so long as LendingClub remains Servicer under this Agreement, neither Purchaser nor any Person acting on behalf of Purchaser shall contact any Borrower without the prior written consent of Servicer, unless Purchaser or its designee (or an Affiliate thereof) is acting as a Collection Agent on behalf of Servicer.



ARTICLE III
SERVICING OF LOANS

3.1      Servicer to Service.
Servicer, as an independent contractor, shall service and administer each Loan from and after the related Purchase Date in accordance with Applicable Law, the Accepted Servicing Practices and the terms of this Agreement and shall have full power and authority, acting alone or through the utilization of Subcontractors, to do any and all things in connection with such servicing and administration as limited by the terms of this Agreement and Accepted Servicing Practices. Servicer’s general obligations with respect to the servicing of Loans hereunder shall include, without limitation, the following:
(a)    Maintaining a bank account, address, or other electronic or physical facility to which Borrower is instructed to send payments due under the terms of each Loan;

(b)    Attempting to collect Borrower payments from that address on the schedule set forth in the applicable Loan Documents;

(c)    Correctly posting Proceeds from all collected Borrower payments to the applicable Purchaser Online Account;

(d)    Maintaining a toll free number (staffed between normal business hours during its regular Business Days) for Borrowers to call with inquiries with respect to the Loans, and responding to such inquiries;

(e)    Responding to inquiries by any Regulatory Authority with respect to the Loans (provided, however, that Servicer shall give Purchaser, as soon as reasonably practicable, prior written notice of and the opportunity to participate in any such inquiry);

(f)    Investigating and maintaining collection procedures for delinquencies, and delivering any reports on delinquencies as may be agreed upon by the Parties; and

(g)    Processing final payments provided by Borrowers on the Loans.

Any material change made to the Accepted Servicing Practices involving the practices and procedures followed by Servicer shall be communicated to Purchaser in the same method and manner as such change is communicated to the public; provided, that if such material change only relates to a Loan Program for which Servicer does not in the ordinary course of business make public communications, Servicer shall notify Purchaser at least 10 Business Days prior to the making of such change.
Servicer may grant, permit or facilitate any Loan Modification for any Loan in accordance with the Accepted Servicing Practices and provided that such Loan Modification is, in Servicer’s reasonable determination, a practical way to obtain a reasonable recovery from such Loan. Servicer shall notify Purchaser through the applicable Purchaser Online Account of any Loan Modification granted, permitted or facilitated by Servicer. Servicer shall not charge any Borrower any fees not contemplated in the Loan Documents without giving effect to any Loan Modifications or other amendments or modifications directed by Servicer in accordance with this Agreement.



In furtherance of the foregoing, Servicer is hereby authorized and empowered to execute and deliver on behalf of itself and Purchaser, all notices or instruments of satisfaction, cancellation or termination, or of partial or full release, discharge and all other comparable instruments, with respect to the Loans; provided, however, that Servicer shall not be entitled to release, discharge, terminate or cancel any Loan or the related Loan Documents unless (i) such Loan is a Charged Off Loan, (ii) Servicer shall have received payment in full of all principal, interest and fees owed by the Borrower related thereto, or (iii) Servicer accepts a reduced payment of principal, interest and fees owed on such Loan that is a Nonperforming Loan, in each case in accordance with the Accepted Servicing Practices. If reasonably required by Servicer, Purchaser shall furnish Servicer with any powers of attorney and other documents necessary or appropriate to enable Servicer to carry out its servicing and administrative duties under this Agreement, and Servicer shall indemnify and hold Purchaser harmless for any costs, liabilities or expenses incurred by Purchaser in connection with any use of such power of attorney by Servicer or its agents in breach of this Agreement.
Notwithstanding anything to the contrary herein, Servicer shall comply with the commercially reasonable written instructions of Purchaser necessary to comply with any regulatory requirements applicable to, or agreed to by, Purchaser or any supervisory rules agreed to or imposed on Purchaser and delivered to Servicer from time to time with respect to the servicing of the Loans. It is understood by the Parties hereto that in the event of any conflict between this Agreement and Purchaser’s written instructions, Purchaser’s written instructions shall control; provided, however, that in the event that there is a conflict between Purchaser’s written instructions and any Applicable Law, the Accepted Servicing Practices, or the Loan Documents, Servicer shall use commercially reasonable efforts to provide Purchaser with prompt notice of such conflict, and in such case, the Applicable Law, the Accepted Servicing Practices or the Loan Documents shall control, in the foregoing order of priority, to resolve the conflict.
3.2      Collection of Payments and Liquidation of Loans.
(a)     Collection of Payments. Continuously from the related Purchase Date until the date each Loan becomes a Liquidated Loan or otherwise ceases to be subject to this Agreement, in accordance with the Accepted Servicing Practices, Servicer shall use commercially reasonable efforts to collect all Monthly Payments and any other payments due under each of the Loans when the same shall become due and payable.
(b)     Loss Mitigation. With respect to any Loan, in accordance with the Accepted Servicing Practices, Servicer shall use commercially reasonable efforts to realize upon Loans in such a manner that reasonably attempts to maximize the receipt of principal and interest for Purchaser, including pursuing any Loan Modification pursuant to Section 3.1 or pursuing other loss mitigation or other default recovery actions consistent with the Accepted Servicing Practices.
(c)     Charged Off Loans. Promptly following any Loan satisfying the charge off criteria as set forth in its Charge Off Policy, Servicer shall, in accordance with the Charge Off Policy, charge off the related Loan (the date of such charge off being the “ Charge Off Date ” and each such Loan, a “ Charged Off Loan ”). Servicer may, but is not required to, facilitate the sale and transfer of the Loan and the Loan Documents for such Charged Off Loan to a Charged Off Loan Purchaser (other than Charged Off Loans that are deemed non-conforming or ineligible for purchase by such Charged Off Loan Purchaser) and Servicer shall be relieved of its ongoing servicing and collection obligations hereunder, except with respect to causing any proceeds to be deposited into the applicable Purchaser Online Account pursuant to Sections 3.2(e) and (f) .
(d)     Power of Attorney. Concurrent with the signing of this Agreement, Purchaser shall deliver a fully executed, notarized Power of Attorney in the form attached hereto as Exhibit C, naming Servicer as Purchaser’s attorney-in-fact to: (i) carry out the terms of Section 3.2(c) in connection with the sale and transfer of a Charged Off Loan; (ii) execute a joinder agreement in a form approved by Purchaser joining Purchaser to an agreement or agreements between Servicer and (A) a Charged Off Loan Broker and (B) a Charged Off Loan Purchaser; and (iii) take any action and execute any instruments or documents that Servicer may deem reasonably necessary or advisable to transfer and convey each of the Charged Off Loans from Purchaser to a Charged Off Loan Purchaser or its successors or assignees in accordance with this Agreement and the Purchase Agreement.


(e)     Establishment of and Deposits to the Applicable Purchaser Online Account.
Prior to its purchase of Loans, Purchaser shall establish the related Purchaser Online Account(s), in accordance with the terms of the Purchase Agreement. Purchaser shall grant and provide Servicer with rights to cause funds to be deposited into and withdrawn from the Purchaser Online Account(s) for the purpose of performing its servicing functions pursuant to this Agreement, including without limitation by way of automated clearing house (“ ACH ”) transfer.
Servicer shall cause to be deposited into the applicable Purchaser Online Account within four (4) Business Days (or two (2) Business Days for purposes of Loans purchased pursuant to the terms of either Addendum No. 5 (Multi-Draw Line of Credit Loan Program) or Addendum No. 6 (Single Draw Line of Credit Loan Program), if applicable) of the receipt of payment by Servicer (but not by an agent of Servicer, Subcontractor or Collection Agent) the following collections received from the Loans and payments made by the related Borrowers after each Purchase Date (clauses (i) through (v) below, collectively, the “ Proceeds ”):
(i)
all payments on account of principal on the Loans, including all Principal Prepayments;
(ii)
all payments on account of interest and fees (excluding Ancillary Fees) on the Loans;
(iii)
all Liquidation Proceeds;
(iv)
to the extent not otherwise included in any other clauses of this Section 3.2(e) , any net proceeds from the Loans whether by any Subcontractor or Collection Agent; and
(v)
any other collections from the Loans and any other amounts required to be deposited or transferred into the applicable Purchaser Online Account pursuant to this Agreement;
provided, however, that Servicer or Bank shall be entitled to withhold and retain any interest and fees that accrued on any Loans prior to their respective Purchase Dates. Following the deposit of Proceeds due to Purchaser into a Purchaser Online Account, Servicer will distribute or reinvest principal and interest Proceeds in accordance with Purchaser’s elections set forth on Exhibit D to this Agreement (the “ P&I Election Instructions ”). The P&I Election Instructions provided by Purchaser to Servicer in connection with the execution of this Agreement shall be effective as of the date they are accepted by Servicer in writing in its sole discretion and will apply for each subsequent calendar month during the term of this Agreement, unless superseded by new P&I Election Instructions.
Notwithstanding the above, Liquidation Proceeds due to Purchaser from the sale of Charged Off Loans sold on behalf of Purchaser will be retained by Servicer until the expiration of any period during which any Charged Off Loan Purchaser is contractually permitted to require repurchase by Purchaser under any agreement relating to the sale of Charged Off Loans to which Purchaser has been contractually joined pursuant to Section 3.2(d) .
In the event that Servicer receives any payments on any Loans directly from or on behalf of the Borrower or any payments at a Servicer Physical Payment Address, Servicer shall receive all such payments in trust for the sole and exclusive benefit of Purchaser, and shall cause to be deposited into the applicable Purchaser Online Account within four (4) Business Days (or two (2) Business Days for purposes of Loans purchased pursuant to the terms of either Addendum No. 5 (Multi-Draw Line of Credit Loan Program) or Addendum No. 6 (Single Draw Line of Credit Loan Program) Loan Program), if applicable) of receipt by Servicer (but not by an agent of Servicer, Subcontractor or Collection Agent) all such payments described in this Section 3.2 (in the form so received).
Notwithstanding the foregoing, (a) payments in the nature of Servicing Compensation may be retained by Servicer and need not be deposited into the Purchaser Online Account(s), and (b) Servicer may net any amounts that it is entitled to hereunder against any funds for deposit to the Purchaser Online Account(s) in accordance with Section 3.2(f) . Any benefit derived from funds deposited into the Purchaser Online Account(s) shall accrue to the benefit of Purchaser.


If applicable, in addition and subject to the foregoing, for purposes of Loans purchased pursuant to the terms of Addendum No. 5 (Multi-Draw Line of Credit Loan Program) (as such Addendum is described in further detail in the Purchase Agreement), Servicer agrees to allocate collections received from the Loans and payments made by the related Borrowers after each Purchase Date in accordance with the terms of Section III(d) of Addendum No. 5 (Multi-Draw Line of Credit Loan Program).
(f)     Permitted Netting and Withdrawal of Proceeds.
Servicer shall, from time to time, be allowed to offset against Proceeds prior to deposit into the applicable Purchaser Online Account and, if necessary, withdraw from the applicable Purchaser Online Account funds for the following purposes:
(i)
to pay itself the earned and unpaid Servicing Compensation on such dates as determined by Servicer, subject to providing prior notice as described below; or
(ii)
to remove funds transferred in error or funds that are required to be returned for any reason (including for the avoidance of doubt, a Borrower’s failed ACH payment or a Borrower’s
ACH payment that is returned after settlement), subject in each case to providing information regarding the offset or withdrawal as described below.    
In the case of clause (i) above, prior to the netting or withdrawal or, in the case of clause (ii) above, within five (5) Business Days after the netting or withdrawal, Servicer shall provide Purchaser with information regarding any netting or withdrawal of funds subject to clauses (i) or (ii) above, together with reasonable supporting details. Servicer shall keep and maintain, in a digital format reasonably acceptable to Purchaser, separate accounting records, on a Loan by Loan basis, for the purpose of substantiating any deposits into and withdrawals from the applicable Purchaser Online Account or netting of Proceeds as permitted above.
(g)     Credit/Other Reporting.
Servicer shall accurately and fully furnish, in accordance with the Fair Credit Reporting Act and its implementing regulations, as well as Servicer’s own policies and practices, accurate and complete information (e.g., favorable and unfavorable) on its Borrower credit files to each of the following credit repositories, as applicable: Trans Union, LLC and Experian Information Solution, Inc.
Servicer shall deliver or otherwise make available to Purchaser or its designee the following reports in a digital format during the term of this Agreement:
(i)
A monthly statement with respect to the previous month that includes a list of all Loans and the delinquency status of all Loans, including a list of any Loans that were fully repaid or became Charged Off Loans during such month. The report will be delivered within the first 15 days of each month;

(ii)
A daily report listing certain characteristics of any Loans; and

(iii)
Such other information as may be reasonably agreed to by the Parties.




3.3      Confidentiality/Protecting Customer Information.
(a)     Confidential Information. During the term of this Agreement, a Party (the “ Recipient ”) may receive or have access to certain information of the other Party (the “ Discloser ”) including, though not limited to, records, documents, proprietary information, technology, software, trade secrets, financial and business information, or data related to such other Party’s products (including the discovery, invention, research, improvement, development, manufacture, or sale thereof), processes, or general business operations (including sales, costs, profits, pricing methods, organization, employee or customer lists and process), whether oral, written, or communicated via electronic media or otherwise disclosed or made available to a Party or to which a Party is given access pursuant to this Agreement by the other Party, and any information obtained through access to any information assets or information systems (including computers, networks, voice mail, etc.), that, if not otherwise described above, is of such a nature that a reasonable person would believe to be confidential (together, “ Confidential Information ”). In addition to the foregoing, this Agreement shall also be deemed to be “Confidential Information.” Recipient shall protect the disclosed Confidential Information by using the same degree of care, but no less than a reasonable degree of care, to prevent the unauthorized use, dissemination, or publication of the Confidential Information as Recipient uses to protect its own Confidential Information of a like nature. Recipient’s obligations shall only extend to (a) information that is marked as confidential at the time of disclosure, (b) information that is unmarked (e.g., orally, visually or tangibly disclosed) but which the Discloser informs the Recipient should be treated as confidential at the time of disclosure, or (c) information that a reasonable person would understand to be confidential. This Agreement imposes no obligation upon Recipient with respect to information that: (1) was in Recipient’s possession before receipt from Discloser as evidenced by its books and records prior to the receipt of such information; (2) is or becomes a matter of public knowledge through no fault of Recipient, or its employees, consultants, advisors, officers or directors or Affiliates; (3) is rightfully received by Recipient from a third party without a duty of confidentiality; (4) is disclosed by Discloser to a third party without a duty of confidentiality on the third party; (5) is independently developed by Recipient without reference to the Confidential Information; (6) is disclosed under operation of law (including in connection with a regulatory examination of the Purchaser or any of its Affiliates); or (7) is disclosed by Recipient with Discloser’s prior written approval. In addition to the foregoing, Purchaser covenants that it will not use, in violation of any Applicable Law, any material non-public information that has been provided to it by Servicer in Purchaser’s decision to invest in any securities issued by Servicer, provided that the Loans shall not be considered securities for the purposes of this Section 3.3(a) . Recipient may disclose Confidential Information to its officers, directors, employees, trustees, members, partners, potential and existing financing sources (including, with respect to Purchaser, any potential or existing investor in, and Person acting as a trustee or service provider in connection with, asset-backed securities for which the Loans are included in the collateral or trust assets), advisors or representatives (including, without limitation, attorneys, accountants, insurers, rating agencies, consultants, bankers, financial advisors, custodian and backup servicer) (collectively, “ Representatives ”) who need to have access to such Confidential Information. Recipient shall be responsible for any breach of this Section 3.3(a) by any of its Representatives.
(b)     Additional Confidentiality and Security. In addition to its general obligation to comply with Applicable Law and the obligations of Section 3.3(a) , the Parties shall also adhere to the following requirements regarding the confidentiality and security of Borrower information and Loan Documents:
(i)
Protection And Security Of Individual Borrower Information Under Gramm-Leach-Bliley Act .

(1)
Each Party shall maintain at all times an Information Security Program.

(2)
Each Party shall assess, manage, and control risks relating to the security and confidentiality of Borrower Information, and shall implement the standards relating to such risks in the manner set forth in the applicable provisions of the Privacy Requirements.


(3)
Without limiting the scope of the above, each Party shall use at least the same physical and other security measures to protect all Borrower Information in such Party’s possession or control, as such Party uses for its own confidential and proprietary information.

(4)
At Servicer’s reasonable request, Servicer may review and request details with respect to Purchaser’s Information Security Program.

(ii)
Compliance With Privacy Requirements . The Parties shall comply with all applicable Privacy Requirements.

(iv)
Unauthorized Access to Borrower Information . In the event Purchaser knows or reasonably believes that there has been any unauthorized access to Borrower Information in the possession or control of Purchaser that compromises (or threatens to compromise) the security, confidentiality or integrity of such Borrower Information, Purchaser shall take the following actions:

(1)
promptly notify Servicer of such unauthorized access;

(2)
identify to Servicer what specific Borrower Information may have been accessed, including (if applicable) the name and account number of each affected Borrower;

(3)
take commercially reasonable steps to remedy the circumstances that permitted any such unauthorized access to occur and promptly notify Servicer of such steps;

(4)
take commercially reasonable steps to prohibit further disclosure of Borrower Information and promptly notify Servicer of such steps;

(5)
upon Servicer’s request, share with such other Party the results of any computer forensics analysis of any unauthorized access; and

(6)
cooperate with Servicer as reasonably necessary to facilitate compliance with any Applicable Laws and regulations regarding unauthorized access of Borrower Information.
The Parties agree that any breach or threatened breach of this Section 3.3(b) of this Agreement could cause not only financial harm, but also irreparable harm to Servicer; and that money damages may not provide an adequate remedy for such harm. In the event of a breach or threatened breach of this Section 3.3(b) of this Agreement by Purchaser, Servicer shall, in addition to any other rights and remedies it may have, be entitled to (1) terminate this Agreement and any and all other agreements between Purchaser and Servicer immediately; (2) seek equitable relief, including, without limitation, an injunction (without the necessity of posting any bond or surety) to restrain such breach; and (3) pursue all other remedies Servicer may have at law or in equity.
Following the termination of this Agreement, each Party agrees that it will destroy all copies of Confidential Information of the other Party, without retaining any copies thereof, and destroy all copies of any analyses, compilations, studies or other documents prepared by it or for its use containing or reflecting any Confidential Information; provided, however, that each Party may retain such limited copies or materials containing Confidential Information of the other Party for customary document retention and audit purposes, as required by Applicable Law. Any Confidential Information retained pursuant to this provision shall remain subject to the terms of this Agreement.



3.4
No Use of Non-Public Borrower Data.
In the course of purchasing and holding Loans, Purchaser may have access to certain information concerning Borrowers. Such information could include any and all items included in a Loan Document Package and all information included in a listing for an Eligible Loan (the “ Borrower Data ”). Certain of the Borrower Data is published in connection with an Eligible Loan, and other information, included in certain documents in the Loan Document Package, is not publicly disclosed and may constitute NPI (collectively, “ Non-Public Borrower Data ”). Purchaser will not utilize, and will not permit any Affiliate to utilize, Non-Public Borrower Data for any purpose not in connection with the transactions contemplated under this Agreement, and will not contact any Borrower for any purpose.
3.5      Insurance.
Servicer shall maintain, at its own expense, “Errors and Omissions” insurance, with broad coverage on all officers, employees or other persons under Servicer’s direct control and excluding any Subcontractors and Collection Agents, acting in any capacity requiring such Persons to handle funds, money, documents or papers relating to the Loans (“ Servicer Employees ”). No provision of this Section 3.4 requiring such Errors and Omissions Insurance Policy shall diminish or relieve Servicer from its duties and obligations as set forth in this Agreement.
Servicer shall (on behalf of itself and its Affiliates and Subcontractors) at all times and at its sole cost and expense, also keep in full force and effect until one (1) year after termination of this Agreement, (i) comprehensive general liability insurance policies providing coverage in an amount totaling at least Three Million Dollars ($3,000,000.00) (satisfied through any combination of primary and secondary policies and including any umbrella policy) and (ii) workers compensation insurance in compliance with Applicable Law. 
Unless otherwise agreed to by Purchaser, all insurance policies will be with insurers rated a minimum of “A minus” by A.M. Best.
Upon the request of Purchaser, Servicer shall cause to be delivered to Purchaser a certificate of insurance evidencing such required coverages.
3.6      Bankruptcies .
In the event that a Borrower files any bankruptcy proceedings, Servicer may (but shall not be required to) represent Purchaser’s interest in any bankruptcy proceedings relating to the Borrower in accordance with the Accepted Servicing Practices.
ARTICLE IV
GENERAL SERVICING PROCEDURES

4.1      Satisfaction of Loans and Release of Loan Documents.
Upon the receipt of all payments in satisfaction of any Loan in accordance with the proviso clause in the first sentence of Section 3.2(b) , Servicer shall release or otherwise deliver a satisfaction, cancellation or termination notice or instrument for the related Loan Documents to the Borrower. Servicer shall provide appropriate notification to the Borrower of the satisfaction in full of such Loan and the cancellation and/or termination of the related Promissory Note, as required by Applicable Law or any Governmental Authority, or otherwise in accordance with the provision of services hereunder, within the time frame so prescribed.



4.2      Servicing Compensation.
Servicer and Purchaser acknowledge and agree that as consideration to Servicer for servicing the Loans subject to this Agreement, Purchaser shall be responsible for paying Servicer all Servicing Fees and Ancillary Fees in respect of each Loan that is the subject of this Agreement during any month or part thereof, in each case as and when the same shall become due and payable to Servicer.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS

5.1      Representations and Warranties of Servicer.
As a condition to the consummation of the transactions contemplated hereby, Servicer hereby makes the following representations, warranties and covenants to Purchaser:
(a) Due Organization, Licensing and Qualification . Servicer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware to carry on its business as now being conducted and is qualified and in good standing in each state where a property is located if the laws of such state require qualification in order to conduct business of the type conducted by Servicer, except to the extent that the failure to obtain or maintain any such qualification would not reasonably be expected to have a Material Adverse Effect with respect to Servicer.

(b) Authority and Binding Agreement . Servicer has the full corporate power and authority to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and performance of this Agreement (including all instruments of transfer to be delivered pursuant to this Agreement) by Servicer, and the consummation of the transactions contemplated hereby have been duly and validly authorized; this Agreement evidences the valid, binding and enforceable obligation of Servicer.

(c) Ability to Perform . Assuming full and complete performance by Purchaser with its covenants and obligations hereunder, Servicer does not believe, nor does it have any reason or cause to believe, that it cannot perform
in all material respects its covenants and obligations contained in this Agreement.

(d) No Consent or Approval Required . No consent, approval, license, registration, authorization or order of any Regulatory Authority is required for the execution, delivery and performance by Servicer of, or compliance by Servicer with this Agreement, including the servicing of each Loan hereunder, or if required, such consent, approval, license, registration, authorization or order has been obtained prior to the related Purchase Date for such Loan except where the failure to obtain such consent, approval, license, registration, authorization or order would not be expected to have a Material Adverse Effect with respect to Servicer.

(e) No Proceedings . There are no judgments, proceedings or investigations pending against Servicer or, to the best knowledge of Servicer, threatened in writing against Servicer, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over Servicer or its properties: (i) asserting the invalidity of this Agreement; (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement; or (iii) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect with respect to Servicer.

(f) Accuracy of Information . The outstanding principal balance, payment history and charge off status of such Loan made available by Servicer to Purchaser through the Purchaser Online Account or through Servicer’s online platform as to such Loan is reported accurately in all material respects; provided, that Servicer does not make any representation or warranty as to the correctness of any information provided by Borrower.


(g) Ordinary Course of Business . The consummation of the transactions contemplated by this Agreement is in the ordinary course of business of Servicer.

(h) No Conflicts . Neither the execution and delivery of this Agreement, the acquisition and performance of the servicing responsibilities by Servicer, the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, will conflict with or result in a breach of any of the terms, conditions or provisions of Servicer’s charter or by-laws or any legal restriction or any agreement or instrument to which Servicer is now a party or by which it is bound, or constitute a default or result in an acceleration under any of the foregoing, unless such conflict or breach could not be expected to have a Material Adverse Effect with respect to Servicer on a consolidated basis, materially impair or interfere with the ability of Servicer to service the Loans, or materially impair the aggregate value or collectability of the Loans.

(i) No Default . Servicer is not in default under, and no event or condition exists that after the giving of notice or lapse of time or both, would constitute an event of default under any material mortgage, indenture, contract, agreement, judgment or other undertaking, to which Servicer is a party.

(j) Data Integrity . All material information provided by Servicer to Purchaser through Servicer’s platform relating to the servicing of each Loan is true, correct and consistent, in all material respects, with the information obtained or generated by Servicer in connection with its servicing of each such Loan, except as would not be expected to have a Material Adverse Effect with respect to Servicer. The forgoing is not intended to be a verification of any information provided by the related Borrower (A) that has been obtained in connection with the underwriting and acquisition of each such Loan or (B) that is not otherwise verified as part of the servicing of such Loan by Servicer in connection with the performance of its duties and obligations hereunder, and Servicer makes no representation or warranty as to the accuracy or truthfulness of such information. Purchaser acknowledges that it is assuming the risk of any incorrect or false information provided by a Borrower.

(k) No Material Change . There has been no Material Adverse Change with respect to Servicer that would affect Servicer’s ability to perform under this Agreement since the date of Servicer’s most recent financial statements, which are made publicly available through filings with the United States Securities and Exchange Commission.

(l) Compliance with Law and Accepted Servicing Practices . Servicer (i) is in material compliance with all Applicable Laws, including all applicable AML-BSA Laws, and (ii) is not in violation of any order of any Regulatory
Authority or other board or tribunal, except, in the case of both (i) and (ii), where any such noncompliance or violation would not reasonably be expected to have or result in a Material Adverse Effect with respect to Servicer; and Servicer has not received any notice that Servicer is not in material compliance in any respect with any of the requirements of any of the foregoing; Servicer has maintained in all material respects all records required to be maintained by any applicable Regulatory Authority; and Servicer is in material compliance with the Accepted Servicing Practices.

(m) Solvency . Servicer is solvent and there shall not have been commenced by or against the Servicer any voluntary or involuntary bankruptcy petition, nor has Servicer made an offer or assignment or compromise for the benefit of creditors.

(n) Tax Returns . Servicer has filed all tax returns (federal, state and local) required to be filed by it, such tax returns are true and accurate in all material respects, and Servicer has paid or made adequate provision for the payment of all taxes and other assessments and governmental charges.

(o) No Modification . Servicer has not amended the terms of the Loan Documents except as permitted by and in accordance with the Accepted Servicing Practices or the Loan Documents.




5.2      Representations, Warranties and Covenants of Purchaser.
As a condition to the consummation of the transactions contemplated hereby, and at all times prior to the termination of this Agreement, Purchaser hereby makes the following representations, warranties and covenants to Servicer:
(a)     Due Organization, Licensing and Qualification . Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and is in good standing with every regulatory body having jurisdiction over its activities of Purchaser, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect with respect to Purchaser. If Purchaser is a Bank, (i) Purchaser is chartered under U.S. federal or state banking laws, or (ii) Purchaser is a foreign depository institution that will act for purposes of this Agreement solely through United States branches that are subject to U.S. federal or state banking laws.
(b)     Authority and Binding Agreement . Purchaser has the full corporate power and authority to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and performance of this Agreement (including all instruments of transfer to be delivered pursuant to this Agreement) by Purchaser and the consummation of the transactions contemplated hereby have been duly and validly authorized; this Agreement evidences the valid, binding and enforceable obligation of Purchaser and all requisite corporate action has been taken by Purchaser to make this Agreement valid and binding upon Purchaser in accordance with its terms;
(c)     Ability to Perform . Assuming full and complete performance by Servicer with its covenants and obligations hereunder, Purchaser does not believe, nor does it have any reason or cause to believe, that it cannot perform in all material respects its covenants and obligations contained in this Agreement;
(d)     Ability to Service . To the extent that Purchaser or its designee may be designated as a Collection Agent at any time, or otherwise take any responsibility in the servicing of Loans, Purchaser or such designee has experience servicing Loans, with the facilities, procedures and experienced personnel necessary for the sound servicing of Loans hereunder;
(e)     No Consent or Approval Required . No consent, approval, license, registration, authorization or order of any Regulatory Authority is required for the execution, delivery and performance by Purchaser of, or compliance by Purchaser with this Agreement, including the holding of each Loan hereunder, or if required, such consent, approval, license, registration, authorization or order has been obtained prior to the related Purchase Date for such Loan.
5.3      Indemnification and Notice of Claims.
(a) Servicer’s Indemnification.

(i)     Indemnified Purchaser Party . Servicer shall indemnify and hold harmless Purchaser and its Affiliates, trustees, directors, officers, employees, members, managers, representatives, stockholders and agents (each, an “ Indemnified Purchaser Party ”) from and against any claims, losses, damages, liabilities, costs and expenses (including, but not limited to, reasonable attorneys’ fees incurred in connection with the defense of any actual, or threatened action, proceeding or claim, or any investigations with respect thereto) (collectively, “ Losses ”) to the extent that such Losses arise out of, and are imposed upon any such Indemnified Purchaser Party by reason of, (a) any material breach by Servicer of any covenant, agreement, representation or warranty of Servicer contained in this Agreement or (b) Servicer’s gross negligence or willful misconduct in the performance of its duties under this Agreement.




(ii)     Exceptions . Notwithstanding Section 5.3(a)(i) above, Servicer shall have no obligation to do any of the following: (A) except for acts or omissions that constitute fraud, gross negligence or willful misconduct of Servicer or its employees or agents, indemnify any Indemnified Purchaser Party for any punitive damages or for any actual or lost profits of such Indemnified Purchaser Party, regardless of whether Servicer knew or was aware of such possible Losses; (B) indemnify or hold harmless an Indemnified Purchaser Party from and against any Losses to the extent such Losses result from the negligence or willful misconduct of or material breach of this Agreement by any potential Indemnified Purchaser Party; (C) indemnify any Indemnified Purchaser Party from and against any Losses resulting from any material breach by Servicer of any covenant or agreement of Servicer contained in Sections 3.1, 3.2 and 5.1 (any claim with respect thereto, a “ Specified Indemnity Claim ”) if such Specified Indemnity Claim can be and is fully satisfied through the Repurchase Procedure or Resale Procedure pursuant to Section 5.3(a)(v) ; (D) indemnify any Indemnified Purchaser Party with respect to any Specified Indemnity Claim unless (i) the Loan(s) with respect to which such Losses are payable have become Charged Off Loan(s); and (ii) the Loan(s) with respect to which such Losses are payable have been Charged Off Loan(s) for no more than 90 calendar days; (E) indemnify any Indemnified Purchaser Party with respect to any Specified Indemnity Claim for any amount in excess of the outstanding principal balance(s) of the applicable Loan(s) on the date the Loan(s) become Charged Off Loan(s); or (F) indemnify any Indemnified Purchaser Party with respect to a Specified Indemnity Claim if the aggregate amount of all such Specified Indemnity Claims under this Agreement, the Purchase Agreement and any Multi-Party Agreement with respect to the applicable Addendum is less than or equal to the Indemnity Deductible. For the avoidance of doubt, Servicer shall only be obligated to indemnify an Indemnified Purchaser Party with respect to Specified Indemnity Claims made after the applicable Indemnity Deductible has been satisfied and only for amounts in excess of the applicable Indemnity Deductible; provided, that if an Indemnity Deductible is satisfied but also exceeded by a particular Specified Indemnity Claim, Servicer shall only be obligated to indemnify an Indemnified Purchaser Party with respect to the portion of the Specified Indemnity Claim that exceeds the applicable Indemnity Deductible.

(iii)     Purchaser Claims Notice . Purchaser shall be responsible for making any claim for indemnity pursuant to this Section 5.3(a) on behalf of any Indemnified Purchaser Party. Purchaser shall provide prompt written notice (a “ Purchaser Claims Notice ”) to Servicer describing any claim for indemnity pursuant to Section 5.3(a)(i) within sixty (60) days after the date on which (1) Purchaser or (2) any other Person to whom such Loan shall have been sold, transferred or assigned, receives notice of, becomes aware of (or should have become aware of in the diligent exercise of their duties) or knows of the applicable breach. Furthermore, Purchaser shall include in each Purchaser Claims
Notice regarding a Specified Indemnity Claim, for each affected Loan, (A) a certification of an authorized officer of Purchaser as to the satisfaction of each of the conditions to indemnification set forth in Section 5.3(a)(v) and (vi) and (B) sufficient information and supporting documentation as may necessary to describe the relevant details of the Specified Indemnity Claim and the underlying Loan (to the extent not otherwise known to Servicer).

(iv)     Servicer Response Process . If Servicer disagrees with the claim set forth in a Purchaser Claims Notice, Servicer shall formally dispute the claim in a writing delivered to Purchaser within sixty (60) days of receipt of such Purchaser Claims Notice. If Servicer does not elect to dispute the claim (and the applicable Indemnity Deductible has been satisfied), Servicer shall do one of the following within ninety (90) days of its receipt of the Purchaser Claims Notice: (A) make payment of the applicable indemnification amount to Purchaser, (B) commence the Repurchase Procedure, or (C) commence the Resale Procedure. Notwithstanding the foregoing, Servicer may only elect to carry out the Repurchase Procedure or the Resale Procedure (1) with respect to a Specified Indemnity Claim and (2) to the extent that any material breach giving rise to such claim has not been cured by Servicer within ninety (90) of receipt of the related Purchaser Claims Notice.



(v)     Specified Indemnity Claims .

(1)     General . Servicer shall have no obligation to indemnify or hold harmless any Indemnified Purchaser Party from and against any Losses to the extent such Losses result from any Specified Indemnity Claim unless (A) such breach shall have materially and adversely affected the interest of Purchaser in the related Loan, (B) Purchaser or, at its option, its subsequent transferee or assignee can transfer good and marketable title to the affected Loan on the date it is to be repurchased by Servicer for the Repurchase Price or, at the direction of Servicer, sold to a third party for the Resale Price, (C) Purchaser is the party requesting such indemnification, and (D) Purchaser shall have provided a Purchaser Claims Notice in respect thereof in accordance with the terms of Section 5.3(a)(iii) hereof. In addition, Purchaser shall cause each Person to whom a Loan is sold, transferred or assigned to agree in writing to provide prompt written notice to Purchaser of such Person’s notice or knowledge of the occurrence of any breach of any covenant or agreement of Servicer contained in Sections 3.1, 3.2 and 5.1 .

(2)     Repurchase Procedure . Subject to Section 5.3(a)(i)-(ii) , if Servicer elects and implements the Repurchase Procedure with respect to a Loan, Servicer shall have no further indemnity obligations to Purchaser for any breach of this Agreement with respect to such Loan. Servicer shall finalize and/or complete the Repurchase Procedure and pay the related Repurchase Price to Purchaser within 120 days of Servicer’s receipt of the related Purchaser Claims Notice.

(3)     Resale Procedure . Subject to Section 5.3(a)(i)-(ii) , if Servicer elects and implements the Resale Procedure with respect to a Loan, Servicer shall pay to Purchaser an amount equal to the positive difference, if any, between (x) the outstanding principal balance of such Loan as of the date of such resale and (y) the related Resale Price (any such positive difference, a “ Resale Differential ”). Subject to the following paragraph, Servicer shall finalize and/or complete the Resale Procedure, pay any due and owed Resale Differential payments to Purchaser and arrange for payment in full of the Resale Price by the applicable buyer(s) to Purchaser within 120 days of Servicer’s receipt of the related Purchaser Claims Notice (“ Resale Period ”).

For the avoidance of doubt, the obligations of Servicer with respect to a Specified Indemnity Claim for which it has elected the Resale Procedure are not satisfied until the applicable
Resale Price (together with any due and owed Resale Differential) has been received by the Purchaser (or its designee) by wire transfer into the account Purchase shall specify prior to such sale (or such other payment method reasonably acceptable to Purchaser). Notwithstanding the Resale Period, in the event any proposed buyer fails to make the requisite payment of the Resale Price, Servicer shall remain obligated to pay the full Resale Price (less any previously paid Resale Differential made in anticipation of a successful Resale Procedure sale) within sixty (60) days of Servicer’s receipt of notice from Purchaser (or its designee) of such failed payment.
(vi)     Assignment and Multi-Party Agreements . For the avoidance of doubt, (a) Purchaser hereby acknowledges that it bears the risk of non-payment by the obligors of the Loans and associated credit-related losses in respect thereof, and indemnification shall not be available for any such non-payment or associated losses under this Agreement, (b) to the extent that that any rights of Purchaser hereunder, or under the Purchase Agreement (including any executed Addenda) or any Multi-Party Agreement are assigned or otherwise transferred to a third party in accordance with the terms of this Agreement or such other agreements, as applicable, any such assignee or beneficiary shall not, unless consented to in writing by Servicer, be permitted to claim indemnification hereunder and, in the case any such consent shall have been provided by Servicer, shall be bound by the limits on indemnification contained in this Section 5.3(a) as if such assignee or beneficiary were Purchaser, and such assignee or beneficiary may only claim indemnity in conjunction with, or in place of, Purchaser and (c) multiple recoveries for any single breach shall not be permitted.



(b)     Purchaser’s Indemnification. Purchaser shall indemnify and hold harmless Servicer and its Affiliates, trustees, directors, officers, employees, members, managers, representatives, stockholders and agents (each, an “ Indemnified Servicer Party ”) from and against any Losses incurred by Servicer in connection with this Agreement, except to the extent that such Losses arise out of, and are imposed upon any such Indemnified Servicer Party by reason of, (a) any material breach by Servicer of any covenant, agreement, representation or warranty of Servicer contained in this Agreement or (b) Servicer’s gross negligence or willful misconduct in the performance of its duties under this Agreement. Servicer shall provide prompt written notice (a “ Servicer Claims Notice ”, and together with a Purchaser Claims Notice and as the context suggests, each a “ Claims Notice ”) to Purchaser of any claim for indemnity pursuant to this Section 5.3(b) . In the case of any claim for indemnity made pursuant to this Section 5.3(b) , if Purchaser does not dispute the claim made by Servicer in writing within sixty (60) days of receipt of the related Servicer Claims Notice, Purchaser shall make payment of the applicable indemnification amount to Servicer within ninety (90) days of receipt of the related Servicer Claims Notice. Notwithstanding the foregoing , Purchaser shall have no obligation to do any of the following: (i) except for acts or omissions that constitute fraud, gross negligence or willful misconduct of Purchaser or its employees or agents, indemnify any Indemnified Servicer Party for any punitive damages or for any actual or lost profits of such Indemnified Servicer Party, regardless of whether Purchaser knew or was aware of such possible Losses; or (ii) indemnify or hold harmless an Indemnified Servicer Party from and against any Losses to the extent such Losses result from the negligence or willful misconduct of or breach of this Agreement by any Indemnified Servicer Party.

(c)     Notice of Claims. Each Party against whom a claim for indemnity pursuant to this Section 5.3(c) shall have been made (each, an “ Indemnifying Party ”) shall have the right to defend the Person seeking such indemnity (each, an “ Indemnified Party ”) with counsel of such Indemnifying Party’s choice in respect of any third party claim, so long as (i) such counsel is reasonably satisfactory to the Indemnified Party, (ii) the Indemnifying Party shall have provided written notice to the Indemnified Party, within thirty (30) days after receipt by the Indemnifying Party of the related Claims Notice, indicating that the Indemnifying Party will indemnify the Indemnified Party in accordance with the terms of this Section 5.3 and (iii) the Indemnifying Party conducts the defense of the third party claim or matter actively and diligently. The Indemnified Party shall have the right to retain separate co-counsel at its sole cost and expense and participate in the defense of any such claim or matter. Knowledge by an Indemnified Party of any breach or non-compliance hereunder shall not constitute a waiver of such Indemnified Party’s rights and remedies under this Agreement, provided that such Indemnified Party shall have notified the applicable Indemnifying Party of such breach or non-compliance in a timely manner. No express or implied waiver by an Indemnified Party of any default hereunder
shall in any way be, or be construed to be, a waiver of any other default. The failure or delay of an Indemnified Party to exercise any of its rights granted hereunder regarding any default shall not constitute a waiver of any such right as to any other default, and any single or partial exercise of any particular right granted to an Indemnified Party hereunder shall not exhaust the same or constitute a waiver of any other right provided herein.

ARTICLE VI
ADDITIONAL COVENANTS

6.1.
Existence, Qualification.

Servicer shall keep in full effect its existence, rights and franchises, and shall obtain and preserve its licenses or other approvals to service the Loans and its qualifications to do business in each jurisdiction in which such licenses, approvals and qualifications are or shall be necessary to protect the validity and enforceability of this Agreement and to perform the servicing of the Loans under this Agreement, except where such failure could not be expected to have a Material Adverse Effect with respect to Servicer.



6.2.
Limitation on Liability of Servicer and Others.

Neither Servicer nor any of the directors, officers, employees or agents of Servicer shall have any liability to Purchaser for taking any action or refraining from taking any action in good faith pursuant to this Agreement, or for errors in judgment, provided, however, that this provision shall not protect Servicer or any such Person against any material breach of any covenants, warranties or representations made herein or any liability for Servicer’s gross negligence or willful misconduct. Servicer and any director, officer, employee or agent of Servicer may rely in good faith, without investigation, on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising hereunder. Servicer shall not be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its duties to service the Loans in accordance with this Agreement and which in its opinion may involve it in any expense or liability, provided, however, that Servicer may undertake any such action which it may deem necessary or desirable in respect of this Agreement and the rights and duties of the Parties hereto. In such event, notwithstanding anything to the contrary herein, Servicer shall be entitled to full and prompt reimbursement from Purchaser for the reasonable legal expenses and costs of such action.
6.3     Limitation on Resignation by Servicer.

Servicer shall not resign from the obligations and duties hereby imposed on it except by mutual consent of Servicer and Purchaser or upon Servicer’s reasonable determination that its duties hereunder are no longer permissible under Applicable Law and such incapacity cannot be cured by Servicer without unreasonable costs or expenses. Any such determination permitting the resignation of Servicer shall be in the reasonable discretion of Servicer.

6.4     Relationship With Customers.

Purchaser acknowledges that LendingClub will maintain an ongoing relationship with the Borrower of each Loan, and Purchaser agrees that it will have no marketing rights with respect to any Borrower.

6.5     Business Continuity and Disaster Recovery Plan.

Servicer shall, at its own expense, design, implement, and maintain a business continuity and disaster recovery program and viable response and recovery capabilities for the services provided hereunder. As part of its periodic assessment of availability risks, Servicer shall consider the need for geographic diversification of document storage, software/data backup storage, and workplace and systems recovery, as described in the Federal Financial Institutions Examination Council’s Business Continuity Planning IT Examination Handbook. At a minimum, Servicer’s core processing facilities and operations will include full weekly backup and daily incremental backup to ensure minimal exposure to systems failure. Servicer will make commercially reasonable efforts to ensure the continuity of operations. Upon Purchaser’s request, Servicer shall provide a copy of its business continuity and disaster recovery program summary to Purchaser and/or permit Purchaser to review Servicer’s business continuity and disaster recovery plans at Servicer’s location. Servicer shall regularly, but no less than annually, test its business continuity and disaster recovery capabilities. Servicer shall update its plans in a timely manner. In the event of a natural or other disaster beyond Servicer’s control that interrupts Servicer’s performance of any services described hereunder for any period, Servicer shall respond to such disaster in a commercially reasonable time period in accordance with the procedures contained in the business continuity and disaster recovery plans in order to resume performance of such services.



6.6     Cooperation in Financing Efforts.

In the event that Purchaser seeks to arrange financing to facilitate its purchase or maintenance of Eligible Loans, as described in the Purchase Agreement, Servicer will cooperate with Purchaser’s efforts, including: (i) considering reasonable amendments to this Agreement (and requesting any required consents or approvals) to contemplate such financing arrangements; (ii) considering a reasonable multi-party or similar agreement with Purchaser and Purchaser’s source of financing (and requesting any required consents or approvals); and (iii) considering consent to Purchaser’s assignment of its obligations under this Agreement and the Purchase Agreement (and requesting any required consents or approvals) in connection with a securitization transaction. In each case, Servicer’s consent to such amendments, modifications or agreements will be in the sole and absolute discretion of Servicer and, in addition, will take into account any additional costs, liabilities or operational obligations that may be requested.

ARTICLE VII
TERMINATION

7.1      Termination for Event of Default.
(a) This Agreement shall be terminable at the sole option of Purchaser upon the occurrence of any of the following events, to the extent such events have a Material Adverse Effect with respect to Servicer (each, a “ Servicer Event of Default ”):

(i)
failure by Servicer to duly observe or perform in any material respect any of its covenants, obligations or agreements set forth in this Agreement that continues unremedied for a period of thirty (30) days after the earlier of the date upon which Servicer knew of such failure or its receipt of written notice of such failure, requiring the same to be remedied, from Purchaser; or

(ii)
failure by Servicer to maintain licenses, approvals, qualifications and authorizations to do business or service any Loans in any jurisdiction where the related Borrowers are residents, to the extent required under Applicable Law, and such failure continues unremedied for a period of thirty (30) days after the earlier of the date upon which Servicer received written notice of such failure from any Regulatory Authority; or

(iii)
a decree or order of a court or agency or supervisory authority or Regulatory Authority having jurisdiction for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, including bankruptcy, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against Servicer and such decree or order shall have remained in force undischarged or unstayed for a period of thirty (30) days; or

(iv)
Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to Servicer or of or relating to all or substantially all of its property; or

(v)
any representation or warranty made by Servicer shall prove to be untrue or incomplete in any material respect such as to create a Material Adverse Effect with respect to Servicer on a consolidated basis, which continues unremedied for a period of thirty (30) days after receipt by Servicer of written notice of such failure, requiring the same to be remedied, from Purchaser; or




(vi)
any failure by Servicer to make any undisputed payment, transfer or deposit into the Purchaser Online Account(s) as required by this Agreement which continues unremedied for a period of five (5) Business Days after Servicer’s receipt of notice of such failure from Purchaser; or

(vii)
any Regulatory Authority shall have condemned, seized or appropriated, or to have assumed custody or control of, all or any substantial part of the property of Servicer, or shall have taken any action to displace the management of Servicer or to curtail its authority in the conduct of the business of Servicer, or takes any action in the nature of enforcement to remove, limit or restrict the licensing or approval of Servicer as a servicer of loans;

In addition, this Agreement will automatically terminate if (A) Servicer shall make an offer or assignment or compromise for the benefit of its creditors, or (B) there shall be commenced by or against Servicer any voluntary or involuntary bankruptcy, insolvency or similar proceedings and, in the case of an involuntary proceeding, either such proceedings remain undismissed or unstayed for a period of sixty (60) days or any of the actions sought in such proceedings shall occur.
In each and every case that the Servicer Event of Default is continuing, in addition to whatsoever rights that Purchaser may have at law or equity to damages, including injunctive relief and specific performance, Purchaser may, by notice in writing to Servicer, terminate all the rights and obligations of Servicer under this Agreement and in and to the servicing contract established hereby and the proceeds thereof, except as incurred prior to the effective date of such termination.
(b) This Agreement shall be terminable at the sole option of Servicer, upon the occurrence any of the following events (each, a “ Purchaser Event of Default ”):

(i)
failure by Purchaser to duly observe or perform in any material respect any of its covenants, obligations or agreements set forth in this Agreement that continues unremedied for a period of thirty (30) days after the earlier of the date upon which Purchaser knew of such failure or its receipt of written notice of such failure, requiring the same to be remedied, from Servicer;

(ii)
failure by Purchaser to satisfy its obligations to compensate Servicer for its servicing activities as set forth in this Agreement that continues unremedied for a period of thirty (30) days after the earlier of the date upon which Purchaser knew of such failure or its receipt of written notice of such failure, requiring the same to be remedied, from Servicer;

(iii)
failure by Purchaser to maintain licenses, approvals, qualifications and authorizations to do business, to the extent required under Applicable Law, and such failure continues unremedied for a period of thirty (30) days after the earlier of the date upon which Purchaser received written notice of such failure from any Regulatory Authority;

(iv)
a decree or order of a court or agency or supervisory authority or Regulatory Authority having jurisdiction for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, including bankruptcy, marshalling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against Purchaser and such decree or order shall have remained in force undischarged or unstayed for a period of thirty (30) days; or




(v)
Purchaser shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to Purchaser or of or relating to all or substantially all of its property.

Upon receipt by either Party of such written notice of termination, or upon automatic termination, all authority and power of Servicer under this Agreement, whether with respect to the Loans or otherwise, shall pass to and be vested in Purchaser or its designee, and all Servicing Rights with respect to Loans shall be immediately assigned, transferred and conveyed to Purchaser or its designee. Servicer shall prepare, execute and deliver to Purchaser (or its designee) any and all documents and other instruments, place in such successor’s possession all Servicing Files, and, in a timely manner, do or cause to be done all other acts or things necessary or appropriate to effect the purposes of such notice of termination, including but not limited to the transfer of the Loans and related Loan Documents and servicing data. Servicer shall, in a timely manner, cooperate with Purchaser (or its designee) in effecting the termination of the servicing responsibilities and rights hereunder and the transfer of the servicing functions and the Servicing Files, including without limitation, the transfer to such successor for administration by it of all cash amounts which shall at the time be credited by Servicer to the applicable Purchaser Online Account(s) or thereafter received with respect to the Loans. Servicer shall be entitled only to any accrued and unpaid Servicing Compensation and Ancillary Fees through the effective date of such termination.
By a written notice, either Party may waive any default by the other in the performance of its obligations hereunder and its consequences. Upon any waiver of a past default, such default shall cease to exist, and any Servicer Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto except to the extent expressly so waived.
7.2      Transfer to Purchaser.
Simultaneously with the termination of Servicer’s responsibilities and duties under this Agreement pursuant to Section 7.1 , Purchaser shall (i) succeed to and assume all of Servicer’s responsibilities, rights, duties and obligations under this Agreement simultaneously with the termination of Servicer’s responsibilities, duties and liabilities under this Agreement or (ii) appoint a successor to succeed to all rights and assume all of the responsibilities, duties and liabilities of Servicer under this Agreement simultaneously with the termination of Servicer’s responsibilities, duties and liabilities under this Agreement. In the event that Servicer’s duties, responsibilities and liabilities under this Agreement should be terminated pursuant to Section 7.1 , Servicer shall discharge such duties and responsibilities during the period from the date it acquires knowledge of such termination until the earlier of: (x) the effective date it receives notice from Purchaser that a successor servicer has assumed such duties and responsibilities; or (y) the date that is thirty (30) days following the date of notification of termination; with the same degree of diligence and prudence that it is obligated to exercise under this Agreement, and shall take no action whatsoever that might impair or prejudice the rights or financial condition of its successor.
Within thirty (30) days of a termination pursuant to Section 7.1 , Servicer shall prepare, execute and deliver to Purchaser or the successor entity and place in Purchaser’s or such successor’s possession all Servicing Files, and, in a timely manner, do or cause to be done all other acts or things necessary or appropriate to effect the purposes of such notice of termination, including but not limited to the transfer of the Servicing Files and related documents. Servicer shall, in a timely manner, cooperate with Purchaser in effecting the termination of Servicer’s responsibilities and rights hereunder and the transfer of servicing responsibilities to Purchaser or the successor entity, including without limitation, the transfer to Purchaser or the successor entity for administration by it of all cash amounts which shall at the time be credited by Servicer to the applicable Purchaser Online Account(s) or thereafter received with respect to the Loans.




7.3      Survival.
The provisions of Sections 3.3, 5.3, 8.3, 8.4, 8.5 and 8.14 shall survive any termination of this Agreement.
ARTICLE VIII
MISCELLANEOUS PROVISIONS

8.1.
Notices.

All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given if (a) mailed, by registered or certified mail, return receipt requested, to the appropriate Party hereto at the address below, or (b) transmitted by facsimile transmission or by electronic mail with acknowledgment, to the appropriate Party hereto at the facsimile number or the electronic mail address provided below:
If to Purchaser:
[Address]
Attention:
Email:
If to Servicer:
LendingClub Corporation
71 Stevenson St., Suite 300
San Francisco, CA 94105
Attention: SVP, Institutional Group
Email: jbogan@lendingclub.com

With a copy to (which will not constitute notice):

LendingClub Corporation 71 Stevenson St., Suite 300 San Francisco, CA 94105 Attention: General Counsel Email: jaltieri@lendingclub.com
or to such other address as the Party to whom notice is given may have previously furnished to the others in writing in the manner set forth above. Any notice or communication delivered in person will be deemed effective upon delivery. Any notice or communication sent by facsimile, email, or air courier will be deemed effective on the first Business Day at the place at which such notice or communication is received following the day on which such notice or communication was sent. Any notice or communication sent by registered or certified mail will be deemed effective on the third Business Day at the place from which such notice or communication was mailed following the day on which such notice or communication was mailed.
8.2.
Severability.

Any part, provision, representation or warranty of this Agreement that is prohibited or not fully enforceable in any jurisdiction, will be ineffective only to the extent of such prohibition or unenforceability without otherwise


invalidating or diminishing either Party’s rights hereunder or under the remaining provisions of this Agreement in such jurisdiction, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable in any respect any such provision in any other jurisdiction.
8.3.
Place of Delivery and Governing Law.

This Agreement shall be deemed in effect when a fully executed counterpart thereof is received by Purchaser in the State of Delaware and shall be deemed to have been made in the State of Delaware.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
8.4.
Submission to Jurisdiction; Waiver of Jury Trial.

EACH PARTY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY CONSENTS TO PROCESS BEING SERVED IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, OR ANY DOCUMENT DELIVERED PURSUANT HERETO BY THE MAILING OF A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO ITS RESPECTIVE ADDRESS SPECIFIED AT THE TIME FOR NOTICES UNDER THIS AGREEMENT.
EACH PARTY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
8.5.
LIMITATION OF LIABILITY.

EXCEPT FOR ACTS OR OMISSION THAT CONSTITUTE FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT SHALL EITHER PARTY OR ANY OF ITS RESPECTIVE AFFILIATES, BENEFICIARIES, ASSIGNEES OR SUCCESSORS (BY ASSIGNMENT OR OTHERWISE) BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER ENTITY FOR ANY LOST PROFITS, COSTS OF COVER, OR OTHER SPECIAL DAMAGES, OR ANY PUNITIVE, EXEMPLARY, REMOTE, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES, UNDER THIS AGREEMENT INCURRED OR CLAIMED BY ANY PARTY OR ENTITY (OR SUCH PARTY OR ENTITY’S OFFICERS, DIRECTORS, STOCKHOLDERS, MEMBERS OR OWNERS), HOWEVER CAUSED, ON ANY THEORY OF LIABILITY.



8.6.
Further Agreements.

Purchaser and Servicer each agree to execute and deliver to the other such reasonable and appropriate additional documents, instruments or agreements as may be necessary or appropriate to effectuate the purposes of this Agreement.
8.7.
Successors and Assigns; Assignment of Servicing Agreement.

This Agreement shall bind and inure to the benefit of and be enforceable by Servicer and Purchaser and the respective successors and assigns of Servicer and Purchaser. Except as otherwise provided in this Agreement, the rights
and obligations of either Party under this Agreement shall not be assigned without the prior written consent of the other Party, and any such assignment without the prior written consent of the other Party shall be null and void.
8.8.
Amendment; Waiver.

Except as otherwise expressly provided herein, Purchaser and Servicer may amend this Agreement, from time to time, in a writing signed by duly authorized officers of Servicer and Purchaser; provided, however, that Servicer may reduce or otherwise waive its rights under Exhibit A in a writing signed by a duly authorized officer of Servicer. No term or provision of this Agreement may be waived or modified unless such waiver or modification is in writing and signed by the Party against whom such waiver or modification is sought to be enforced.
8.9.
Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.
8.10.
Costs.

Each of Purchaser and Servicer shall bear its own costs and expenses in connection with this Agreement, including without limitation any commissions, fees, costs, and expenses, including those incurred in relation to due diligence performed or legal services provided in connection with this Agreement.
8.11.
Counterparts.

This Agreement may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument. The Parties agree that this Agreement and signature pages may be transmitted between them by facsimile or by electronic mail and that faxed and PDF signatures may constitute original signatures and that a faxed or PDF signature page containing the signature (faxed, PDF or original) is binding upon the Parties.
8.12.
No Joint Venture or Partnership.
 
Each Party hereto (including any of its respective permitted successors and assignees) acknowledges and agrees that such Party will not hold itself out as an agent, partner or co-venturer of any other Party hereto and that this Agreement and the transactions contemplated hereby, including the payment of any fees or the reimbursement of any expenses, is not intended and does not create an agency, partnership, joint venture or any other type of relationship between or among the Parties hereto, except to the extent that any independent contractual relationship established hereby.


8.13.
Entire Agreement.

As of the Effective Date, each Party hereby acknowledges and agrees that this Agreement, together with the exhibits hereto, represents the complete and entire agreement between the Parties, and shall supersede all prior written or oral statements, agreements or understandings between the Parties relating to the subject matter of this Agreement.
8.14.
No Petition.

Notwithstanding any prior termination of this Agreement, to the fullest extent permitted by Applicable Law, each Party agrees that it shall not institute, or join any other Person in instituting, a petition or a proceeding that causes (a) the other Party to be a debtor under any federal or state bankruptcy or similar insolvency law or (b) a trustee, conservator, receiver, liquidator, or similar official to be appointed for such other Party or any substantial part of any of its property.

8.15.
Force Majeure.

If any Party anticipates being unable or is rendered unable, wholly or in part, by an extreme and unexpected force outside the control of such Party (including, but not limited to, act of God, legislative enactments, strikes, lock-outs, riots, acts of war, epidemics, fire, communication line or power failure, earthquakes or other disasters) to carry out its obligations under this Agreement, that Party shall give to the other Party in a commercially reasonable amount of time written notice to that effect, the expected duration of the inability to perform and assurances that all available means will be employed to continue and/or restore performance. Upon receipt of the written notice, the affected obligations of the Party giving the notice shall be suspended so long as such Party is reasonably unable to so perform and such Party shall have no liability to the other for the failure to perform any suspended obligation during the period of suspension; however, the other Party may at its option terminate this Agreement.


[Signature Page Follows]

                        
                            




IN WITNESS WHEREOF, the parties hereto have caused to be duly authorized, executed and delivered, as of the date first above written, this MASTER LOAN SERVICING AGREEMENT.
LendingClub Corporation
(Servicer)
By:
_____________________________
Name:
_______________________
Title:
_______________________
[__________________]
(Purchaser)
By:
_______________________________
Name:
_________________________
Title: __________________________


                    
    

MASTER LOAN SERVICING AGREEMENT - Signature Page




EXHIBIT A

SERVICING FEE
Servicing Fee : With respect to LendingClub acting as Servicer, and as determined for each calendar month (as of the last day of each such month), the Servicing Fee shall be equal to the product of (1) 1/12, (2) the outstanding principal balance of all Loans being serviced by Servicer under the Servicing Agreement as of the end of each month (collectively, the “ Assets ”), and (3) a “Fee Percentage” equal to a number of basis points (the “ Fee Percentage ”) depending upon the amount of Assets, calculated as follows:

Amount of Assets          Fee Percentage              Addendum
Any Amount            [____] basis points ([___]%)        No. [__]
Any Amount            [____] basis points ([___]%)        No. [__]
Any Amount            [____] basis points ([___]%)        No. [__]

The Servicing Fee shall be payable by Purchaser (or any subsequent holder of the Loans) monthly in arrears.
Charged Off Loan Servicing Fee: The Servicing Fee with respect to Charged Off Loans shall be up to 35% (or such other percentage as is made publicly available by Servicer) of Liquidation Proceeds from the sale of Charged Off Loans sold on behalf of Purchaser.
 


MASTER LOAN SERVICING AGREEMENT - Exhibit A


 

EXHIBIT B

CHARGE OFF POLICY


MASTER LOAN SERVICING AGREEMENT - Exhibit B



EXHIBIT C

POWER OF ATTORNEY

From [____________], as Purchaser, to
LendingClub Corporation, as Servicer


KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the Loan Servicing Agreement, dated as of [______], 20__, between LendingClub Corporation, a Delaware corporation (“ LendingClub ”), as servicer (in such capacity, the “ Servicer ”) and [__________] , a [______________] as a purchaser (in such capacity, the “ Purchaser ”) (the “ Loan Servicing Agreement ”).

WHEREAS, in connection with the Loan Servicing Agreement, Purchaser agrees to constitute and appoints Servicer and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact of Purchaser with full power and authority in the place and stead of Purchaser, and in the name of Purchaser or in its own name, from time to time, for the purpose of carrying out the terms of the Loan Servicing Agreement as related to the Charged Off Loans and complying with the terms of the related Loan Document Packages, and to take any action and execute any instruments or documents that Servicer may deem reasonably necessary or advisable to accomplish the purposes of the Loan Servicing Agreement as related to the Charged Off Loans and complying with the terms of the related Loan Document Packages.

Capitalized terms used and not defined herein have the meanings assigned to them in the Loan Servicing Agreement.

NOW, THEREFORE, Purchaser does hereby:

1.
constitute and appoint Servicer and any officer or agent thereof (which are referred to herein collectively as “ Attorneys ” and individually as “ Attorney ”) with full power of substitution, as its true and lawful attorney-in-fact of Purchaser with full power and authority in the place and stead of Purchaser, and in the name of Purchaser or in its own name, from time to time:

(a)
to carry out the terms of Section 3.2(c) in connection with the sale and transfer of a Charged Off Loan;

(b)
to execute a joinder agreement in a form approved by Purchaser joining Purchaser to an agreement or agreements between Servicer and (A) a Charged Off Loan Broker and (B) a Charged Off Loan Purchaser;

(c)
to take any action and execute any instruments or documents that Servicer may deem reasonably necessary or advisable to transfer and convey each of the Charged Off Loans from Purchaser to a Charged Off Loan Purchaser or its successors or assignees in accordance with the Loan Servicing Agreement and the Purchase Agreement.

2.
Further authorize and empower each such Attorney, for and in the place and stead of Purchaser and in the name of Purchaser: (a) to file and record this Power of Attorney with the appropriate public officials; and (b) to appoint and name such substitute attorneys with all authority and powers hereunder, provided that such substitute attorneys are duly elected and qualified officers of Purchaser.

Purchaser covenants and grants to the Attorneys full authority and power to execute any documents and instruments and to do and perform any act that is necessary or appropriate to effect the intent and purposes of the foregoing authority and powers hereunder. Purchaser further ratifies and confirms each act that the Attorneys shall lawfully do or cause to be done in accordance with the authority and powers granted hereunder. The foregoing authority and powers granted hereunder shall not be deemed breached by reason of any action or omission of any Attorneys appointed hereunder. Purchaser covenants and agrees that, from time to time at the request of Servicer, Purchaser shall execute instruments confirming all of the foregoing authority and powers of any Attorneys.




MASTER LOAN SERVICING AGREEMENT - Exhibit C

Without actual notice to the contrary, any person may rely on authorities and powers granted hereunder and any actions
of the Attorneys taken pursuant to such authorities and powers as the valid, binding and enforceable actions of Servicer and that all conditions hereunder to the exercise of such actions by the Attorneys have been completed and are satisfied. No person to whom this Power of Attorney is presented, as authority for Attorney to take any action or actions contemplated hereby, shall be required to inquire into or seek confirmation from Purchaser as to the authority of Attorney to take any action described herein, or as to the existence of or fulfillment of any condition to this Power of Attorney, which is intended to grant to Attorney unconditionally the authority to take and perform the actions contemplated herein, and Purchaser irrevocably waives any right to commence any suit or action, in law or equity, against any person or entity which acts in reliance upon or acknowledges the authority granted under this Power of Attorney.

This Power of Attorney is revocable by Purchaser upon thirty (30) days’ written notice to Servicer.

MASTER LOAN SERVICING AGREEMENT - Exhibit C



IN WITNESS WHEREOF, this Power of Attorney is executed by Purchaser on this _____ day of __________, 20__.


[___________________],
as Purchaser





By:                        
Name:
Title:




ACKNOWLEDGMENT


STATE OF ________________        §
                        
COUNTY OF ______________        §


On the _____ day of ___________________, 201_, before me personally appeared the above-named _________________________________ of [ Company ], to me known and known to me to be the ____________________________ of said company, and acknowledged said instrument so executed to be his/her free act and deed in said capacity and the free act and deed of said company.


_________________________________                                            Notary Public
Printed Name:                    
My Commission Expires:             


MASTER LOAN SERVICING AGREEMENT - Exhibit C

EXHIBIT D

ELECTION TO REINVEST OR DISTRIBUTE PRINCIPAL AND INTEREST

Pursuant to Section 3.2(e) of the Master Loan Servicing Agreement, Purchaser makes the following elections regarding the reinvestment or disbursement of principal and interest Proceeds.

Select one of the three following options:

¨ (1) Distribute principal and interest
For option #1, please also select distribution (a) timing and (b) payment type:
(a)
¨ Monthly ACH*
(b)
¨ Daily ACH**
(c)
¨ Monthly Wire*

¨ (2) Distribute interest only ( monthly wire payments only)***

¨ (3) Reinvest principal and interest ****

______________________
*Monthly P&I distributions will be made on or around the 10 th of each month.
**Daily ACH requires that Purchaser input additional information via Purchaser’s investor account on Servicer’s website.
***Distributions of net interest income only ( i.e. , net of fees and charge offs) will be made via wire payments on or around the 10 th of each month. Principal will be reinvested in accordance with the terms of the Purchase Agreement.
****Principal and interest will be reinvested in accordance with the terms of the Purchase Agreement.

If Purchaser has previously made elections regarding the monthly reinvestment or disbursement of principal and interest, Purchaser acknowledges and agrees that the election set forth above shall supersede and replace any such prior elections in their entirety and, once effective, shall serve as the sole and complete election regarding the reinvestment or distribution of principal and interest applicable to each Purchaser Online Account.

This election shall have no force or effect unless signed and dated by Purchaser below and acknowledged as received and accepted by Servicer where indicated.


PURCHASER:                     
[_____________________]                 


By: ____________________________        
Name:                            
Title:    


MASTER LOAN SERVICING AGREEMENT - Exhibit D


Exhibit 10.5
Investor Agreement

The following terms constitute a binding agreement ("Agreement") between you and LendingClub Corporation, a Delaware corporation ("Lending Club", "we" or "us"). This Agreement will govern all purchases or other acquisitions of Lending Club Member Payment Dependent Notes ("Notes") that you may make from time to time through Lending Club, FOLIOfn Investments, Inc., or any other entity, person, or platform. Please carefully read this Agreement, the terms of use ("Terms of Use") on Lending Club's website at www.lendingclub.com and the Prospectus and print and retain a copy of these documents for your records. By signing electronically below, you agree to the following terms together with the Terms of Use, consent to our privacy policy, agree to transact business with us and receive communications relating to the Notes electronically, and agree to have any dispute with us resolved by binding arbitration .
If you are purchasing or otherwise acquiring Note(s) through FOLIOfn Investments, Inc. or any other entity, person, or platform (i.e., means other than through our website), you agree to be bound by the terms of this Agreement and the Note(s) as if you had purchased the Notes directly through our website.





We filed a registration statement on Form S-3 (No. 333-198323) (as amended from time to time, the "Registration Statement") with the SEC to register the Notes that we offer and sell. The Registration Statement includes a prospectus related to the offering of the Notes by Lending Club (as supplemented from time to time, the "Prospectus"), which is publicly filed with the SEC and available on EDGAR (and which can be accessed through our website). By signing this agreement, you acknowledge (i) that the Prospectus has been made available electronically to you, (ii) that you have read and understand the Prospectus and (iii) that any Notes you have purchased or may purchase or acquire, regardless of whether such purchase or acquisition is through Lending Club, FOLIOfn Investments, Inc., or any other entity, person, or platform, are issued pursuant and subject to the terms of the Prospectus. The Registration Statement and Prospectus will be updated continuously in connection with any filings and related disclosures that we make with the SEC, which will be available on EDGAR. You understand and agree that your continued purchase of Notes on or after the date that we have made any such updates constitutes your acknowledgment (i) that the revised Prospectus is publicly available on EDGAR, (ii) that you have read and understand the revised Prospectus and (iii) that any Notes you continue to purchase, regardless of whether such purchase is through Lending Club, FOLIOfn Investments, Inc., or any other entity, person, or platform, are issued pursuant and subject to the terms of the revised Prospectus.We may make changes to this Agreement from time to time. If we do this, we will post the changed Investor Agreement in your Lending Club account or on our website, the applicable third-party entity or platform will be responsible for posting the changed Investor Agreement in your third-party account, or we will deliver (or the applicable third-party entity or platform will be responsible for delivering) the changed Investor Agreement to your email address in accordance with sections 15 and 16 of this Agreement. The date the Investor Agreement was last revised will be indicated at the top of the Agreement. You understand and agree that if you continue to place orders of Notes on or after the date that we have made any such changes (regardless of whether you place the order(s) through Lending Club, FOLIOfn Investments, Inc., or any other entity, person, or platform), such order placement constitutes your acceptance of and agreement to the terms of the new Investor Agreement.
In consideration of the covenants, agreements, representations and warranties hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:
1. Purchase of Notes. Subject to the terms and conditions of this Agreement, (i) we will provide you (either directly through our website or indirectly via a third-party entity, person, or platform) or (ii) if applicable, we have provided the party from which you will purchase or acquire or have purchased or acquired the Notes through FOLIOfn Investments, Inc., the opportunity through our website:





•
To review requests for consumer loans ("Member Loans") that Lending Club has received from its borrower members (collectively, "Borrower Members"; for the avoidance of doubt, a “Borrower Member” shall mean each person or other obligor (including any co-borrower, co-maker, co-signor or guarantor) who is obligated under the terms of a single Member Loan);
•
To purchase Notes with minimum denominations of $25 through our website, each such Note corresponding to, and dependent for payment on, a specific Member Loan designated by you or such party; and
•
To instruct Lending Club to apply the proceeds from the sale of each Note to fund the corresponding Member Loan.
The Notes shall be issued, or, if applicable, have been issued, pursuant to an indenture (the "Indenture") between Lending Club and Delaware Trust Company (formerly CSC Trust Company of Delaware), a Delaware state chartered trust company, the trustee under the Indenture for the Notes (the "Trustee"). The form of Note is an exhibit to the Indenture. The Indenture is publicly filed with the SEC and available on EDGAR (and can be accessed through our website).
You can only commit to purchase a Note prior to the origination of the corresponding Member Loan by our issuing bank. At the time you commit to purchase a Note, you must have sufficient funds in your applicable investment account (either in your Lending Club account or in your account with the third-party entity, person, or platform, as applicable) to complete the purchase, and you will not have access to those funds after you make a purchase commitment unless and until Lending Club notifies you (either directly or indirectly) that the Member Loan will not be issued. Once you make a purchase commitment, it is irrevocable regardless of whether or not the full amount of the Borrower Member loan request is funded. If the Member Loan is not issued by our issuing bank, then Lending Club will inform you and release you from your purchase commitment. The terms of this paragraph do not apply to Notes purchased through FOLIOfn Investments, Inc. (as the Member Loans affiliated with such Notes will have been issued prior to the purchase(s)), but will apply to all other purchases of new Notes.
2. Issuance. If you have committed to purchase a Note pursuant to the terms of the last paragraph of section 1, the Note will be sold to you (either directly or indirectly) immediately after Lending Club purchases the corresponding Member Loan. Lending Club purchases each Member Loan two business days after the Member Loan is issued by our issuing bank, which period may be up to five calendar days where the first or second business day precedes a holiday weekend. As a result of this process, you (or the party from which you purchased the Note through FOLIOfn Investments, Inc.) will hold each Note purchased for less than one month before the first payment is due, making the first payment due to you (or the party from which you purchased the Note through FOLIOfn Investments, Inc.) slightly smaller than monthly payments due subsequently.





Member Loans are generally issued by our issuing bank when the aggregate amount of investor commitments equal the full amount of the loan requested by the Borrower Member unless (1) the Borrower Member declines the Member Loan, in which case Lending Club will release you from your commitment to purchase a corresponding Note; (2) the Member Loan request receives insufficient investment commitments during the 14-day Member Loan posting period; or (3) the loan request is canceled by Lending Club for reasons relating to the operation and integrity of our website (i.e. there is attempted fraud, the Borrower Member fails to verify information upon request by Lending Club, etc.).
3. Terms of the Notes. All Notes purchased or acquired through our website or any other entity, person or platform shall have the terms and conditions described in the Prospectus, the Indenture and the form of Note, which are publicly filed with the SEC and available on EDGAR.
The stated interest rate, maturity and other terms of each Member Loan is described in the Borrower Member loan request as well as in the form of Borrower Agreement, Loan Agreement and Promissory Note available on our website. If you are purchasing or acquiring a Note indirectly through a platform or entity other than Lending Club, please note that Lending Club is not responsible for information provided by such platform. You understand and acknowledge that we may in our sole discretion, at any time and from time to time, amend or waive any term of a Member Loan, and we may in our sole discretion discharge or cancel any Member Loan that is more than 120 days delinquent.





PAYMENT ON THE NOTES, IF ANY, DEPENDS ENTIRELY ON THE RECEIPT OF PAYMENTS BY LENDING CLUB FROM THE RESPECTIVE BORROWER MEMBER(S) IN RESPECT OF THE CORRESPONDING MEMBER LOAN. LENDING CLUB 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 MEMBER UNDER A MEMBER LOAN TO WHICH YOU COMMITTED NET OF THE FOLLOWING: (A) A ONE (1) PERCENT SERVICE CHARGE ON ANY BORROWER PAYMENTS RECEIVED BY LENDING CLUB; (B) AN UP TO 35% COLLECTION FEE ON BORROWER PAYMENTS RECEIVED AS A RESULT OF SUCCESSFUL COLLECTION EFFORTS IF NO LITIGATION IS INVOLVED; OR (C) A COLLECTION FEE OF 30% OF AN ATTORNEYS' HOURLY FEES PLUS COSTS AS A RESULT OF SUCCESSFUL COLLECTION EFFORTS IF LITIGATION IS INVOLVED AND, IN THE CASE OF THE FIRST MONTH'S PAYMENT, ACCRUED INTEREST FOR THE NUMBER OF CALENDAR DAYS FROM THE DATE THE MEMBER LOAN IS ISSUED TO THE DATE IT IS PURCHASED BY US AND YOUR NOTE IS ISSUED. IN ADDITION, IF YOU ARE INDIRECTLY PURCHASING OR ACQUIRING A NOTE THROUGH A PLATFORM OR ENTITY OTHER THAN LENDING CLUB, THE AMOUNT YOU RECEIVE ON YOUR NOTE, IF ANY, MAY ALSO BE LESS ADDITIONAL SERVICE AND/OR TRANSACTION FEES CHARGED BY THE PLATFORM OR ENTITY, AS SUCH FEES ARE OUTLINED IN YOUR AGREEMENT(S) WITH SUCH PLATFORM OR ENTITY. LENDING CLUB DOES NOT MAKE ANY REPRESENTATIONS AS TO A BORROWER MEMBER'S ABILITY TO PAY AND DOES NOT ACT AS A GUARANTOR OF ANY CORRESPONDING MEMBER LOAN PAYMENT OR PAYMENTS BY ANY BORROWER MEMBER.
4. Limited Repurchase Obligation for Identity Fraud. If the Member Loan designated for the proceeds of your purchase of a Note was obtained as a result of identity theft or fraud on the part of the purported Borrower Member, we will (a) provide notification either directly or indirectly to you as soon as reasonably practicable upon our becoming aware of such a situation; and (b) repurchase your Note by crediting your account for the outstanding principal balance of your Note. For the avoidance of doubt, (i) if you purchased the Note indirectly through a third-party platform or entity, we will work with such third party to credit your investment account through that entity or platform for the outstanding principal balance of your Note, and (ii) if you purchased the Note through FOLIOfn Investments, Inc., we will credit the Lending Club account that you established in order to purchase Notes through FOLIOfn Investments, Inc. We may, in our reasonable discretion, require proof of the identity theft, such as a copy of the police report filed by the person whose identity was wrongfully used to obtain the fraudulently-induced Member Loan, before we credit your applicable account and repurchase your Note. You agree that you will have no rights with respect to any such Notes except the crediting of the purchase price to your applicable account.




5. Your Covenants and Acknowledgments. You agree that you have no right to, and shall not, make any attempt, directly or through any third party, to contact or collect from the Borrower Members on your Notes or the corresponding Member Loans. YOU UNDERSTAND AND ACKNOWLEDGE THAT BORROWER MEMBERS MAY DEFAULT ON THEIR PAYMENT OBLIGATIONS UNDER THE MEMBER LOANS AND THAT SUCH DEFAULTS WILL REDUCE THE AMOUNTS, IF ANY, YOU MAY RECEIVE UNDER THE TERMS OF ANY NOTES YOU HOLD ASSOCIATED WITH SUCH MEMBER LOANS. You and Lending Club agree that the Notes are intended to be indebtedness of Lending Club 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, regardless of whether you purchase the Notes through Lending Club, FOLIOfn Investments, Inc., or any other entity, person, or platform. You agree that any information you may provide to us, whether directly or indirectly, may be used by us in accordance with the terms of our privacy policy. You further acknowledge that any personal data and information that you may provide to a third-party entity or platform may be shared with us in accordance with the terms of our agreements with such third parties, and such personal data and information may also be used by us in accordance with the terms of our privacy policy.





6. Your Financial Suitability Acknowledgments, Representations, Warranties and Covenants. Regardless of whether you will purchase or acquire the Notes through Lending Club, FOLIOfn Investments, Inc., or any other entity, person, or platform, you represent and warrant that you satisfy the minimum financial suitability standards applicable to the state in which you reside; and you covenant that you will abide by the maximum investment limits, each as set forth below or as may be set forth in the Prospectus or any prospectus supplement that we publicly file with the SEC. You agree to provide any additional documentation reasonably requested directly by us or indirectly on our behalf by FOLIOfn Investments, Inc. or any other applicable entity, person or platform, as may be required by the securities administrators or regulators of any state, to confirm that you meet such minimum financial suitability standards and have satisfied any maximum investment limits. You understand and acknowledge that: (i) except as set forth in (ii) or (iii), you have an annual gross income of at least $70,000 and a net worth (exclusive of home, home furnishings and automobile) of at least $70,000; or (b) have a net worth of at least $250,000 (determined with the same exclusions); (ii) if you reside in California, you (a) have an annual gross income of at least $85,000 and a net worth of at least $85,000 (exclusive of home, home furnishings and automobile); (b) have a net worth of at least $200,000 (determined with the same exclusions); or (c) can invest no more than $2,500 in Notes if you do not meet either of the tests set forth in (a) or (b); or (iii) if you reside in Kentucky, you are an "Accredited Investor" as determined pursuant to Rule 501(a) of Regulation D under the Securities Act of 1933, as described here (iv) regardless of your state of residence, you agree that you will not purchase Notes in an amount in excess of 10% of your net worth, determined exclusive of the value of your home, home furnishings and automobile. You understand that the Notes will not be listed on any securities exchange, that there may be no, or only a limited, trading 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. Furthermore, if you purchase or otherwise acquire and hold Notes indirectly through a third-party entity or platform, you understand and acknowledge that you are prepared to hold the Notes that you purchase until the Notes mature, regardless of whether the relationship between Lending Club and such third party is terminated prior to maturity of the Notes. In such case, you agree to be bound by the terms of this Agreement as a direct holder of Notes (i.e., as if you had purchased the Notes directly through our website) and agree to cooperate with Lending Club in order to activate and utilize your Lending Club account (rather than your third-party account) for purposes of holding the Notes until maturity.





7. Limitation on Addition of Additional Funds to Your Account without Prior Consent of Lending Club. To help ensure that the Lending Club platform is available to as many participants as possible, you agree that you may not place an initial purchase order of Notes (which, for the avoidance of doubt, shall include purchase orders placed through FOLIOfn Investments, Inc. and any other applicable entity, person or platform) in the amount of Five Million Dollars ($5,000,000) or more without the prior consent of Lending Club. In addition, if a subsequent addition of funds (e.g., receipt of principal or interest payments) to your account(s) would bring the total aggregate value of your funds directly or indirectly allocated to your Lending Club account (including principal investments and accrued interest) to an amount of Five Million Dollars ($5,000,000) or more, you may not place an additional purchase order for Notes or allocate additional funds directly or indirectly to your Lending Club account (which, for the avoidance of doubt, shall include additional funding through FOLIOfn Investments, Inc. and any other applicable entity, person or platform) without the prior written consent of Lending Club. In addition to the foregoing, you agree that you may not place purchase orders of Notes (which, for the avoidance of doubt, shall include purchase orders placed through FOLIOfn Investments, Inc. and any other applicable entity, person or platform) corresponding to more than 25% of the total amount of any single Member Loan without the prior consent from Lending Club.
8. Lending Club's Representations and Warranties. Lending Club represents and warrants to you, as of the date of this Agreement and as of any date that you commit to purchase Notes (regardless of whether you are committing to purchase Notes through Lending Club, FOLIOfn Investments, Inc. or any other applicable entity, person or platform), 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 Lending Club; (c) the Indenture has been duly authorized by Lending Club and qualified under the Trust Indenture Act of 1939 and constitutes a valid and binding agreement of Lending Club, enforceable against Lending Club in accordance with its terms, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency or similar laws; (d) the Notes have been duly authorized and, following payment of the purchase price by you and electronic execution, authentication and delivery to you (which, for the avoidance of doubt, shall include purchases through FOLIOfn Investments, Inc. and any other applicable entity, person or platform), will constitute valid and binding obligations of Lending Club enforceable by you against Lending Club in accordance with their terms, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency or similar laws; (e) it has complied in all material respects with applicable federal, state and local laws in connection with the offer and sale of the Notes; and (f) Lending Club has made commercially reasonable efforts to verify the identity of the Borrower Members obligated on the Member Loans that correspond to the Notes.
9. Your Representations and Warranties. You represent and warrant to Lending Club, as of the date of this Agreement and as of any date that you commit to purchase Notes (regardless of whether you are committing to




purchase Notes through Lending Club, FOLIOfn Investments, Inc. or any other applicable entity, person or platform), that: (a) you have the power to enter into and perform your obligations under this Agreement; (b) this Agreement has been duly authorized, executed and delivered by you; (c) you are committing to purchase Notes only for your own account and are not acquiring Notes for the account of any other person, whether directly or indirectly; (d) all personal information you have provided to Lending Club in connection with your Lending Club account, including but not limited to your name, current residential address and Social Security number or taxpayer identification number, is complete and accurate; (e) you have received the Prospectus, the Indenture and the form of the Note; (f) in connection with this Agreement, you have complied in all material respects with applicable federal, state and local laws; and (g) you have made your decisions in connection with your consideration of any loan requests on our website in compliance with the Equal Credit Opportunity Act, 15 U.S.C. 1601 et seq., as implemented by Regulation B, as may be amended from time to time, and any applicable state or local laws, regulations, rules or ordinances concerning credit discrimination.
10. Prohibited Activities. You agree that you will not do the following, in connection with any loans, Notes, or other transactions involving or potentially involving Lending Club:
a. Represent yourself to any person, as a director, officer, employee or affiliated person of Lending Club, unless you are such director, officer or employee;
b. Charge, or attempt to charge, any Borrower Member any fee in exchange for your agreement to purchase or recommend a Borrower Member's Member Loan 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 purchase or recommend a Borrower Member's Member Loan listing;
c. Engage in any activities in connection with a Member Loan 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 and counseling Borrower Members on credit issues or loan options; or
d. Violate any applicable federal, state or local laws, including but not limited to, the Equal Credit Opportunity Act and other fair lending laws, the Truth in Lending Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, federal and state consumer privacy laws, state usury and loan fee statutes, state licensing laws and state unfair and deceptive trade practices statutes.





11. No Advisory Relationship. You acknowledge and agree that the purchase and sale (or other acquisition) of the Notes contemplated by this Agreement is an arms-length transaction between you and Lending Club. In connection with the purchase and sale (or other acquisition) of the Notes, Lending Club is not acting as your agent or fiduciary. Lending Club assumes no advisory or fiduciary responsibility in your favor in connection with the purchase and sale (or other acquisition) of the Notes. Lending Club has not provided you with any legal, accounting, regulatory or tax advice with respect to the Notes. You have consulted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate.
12. Limitations on Damages. 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 THIS AGREEMENT MAY HAVE UPON THE FOREIGN, FEDERAL, STATE OR LOCAL TAX LIABILITY OF THE OTHER.
13. Further Assurances. 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.
14. Entire Agreement. Except as otherwise expressly provided herein, this Agreement represents the entire agreement between you and Lending Club regarding the subject matter hereof and supersedes all prior or contemporaneous communications, promises and proposals, whether oral, written or electronic, between us.
15. Consent to Electronic Transactions and Disclosures.
As Lending Club only operates online, it is necessary for you to consent to transact business with us online and electronically. As part of doing business with us, therefore, we also need you to consent to our giving you certain disclosures electronically, either via our website, a third-party website or platform or to the verified email address you provided during registration (as such address is updated in accordance with the terms of section 15(c)). By entering into this Agreement, you consent to receive electronically all documents, communications, notices, contracts and agreements arising from or relating in any way to your or our rights, obligations or services under this Agreement (each, a " Disclosure " ). This document informs you of your rights concerning Disclosures.





a. Electronic Communications. Any Disclosures will be provided to you electronically, either on our website, a third-party website or platform, or via electronic mail to the verified email address you provided during registration (as such address is updated in accordance with the terms of section 15(c)). Your consent to electronic delivery will apply to all future tax informational returns and forms unless consent is withdrawn by you. Lending Club will cease providing tax statements (either directly or indirectly) to you electronically if you provide a notice to withdraw consent, if you cease to be an investor, or if regulations change to prohibit the form of delivery. If you have already purchased one or more Notes, all previously agreed to terms and conditions will remain in effect, and we (or the applicable third party) will send Disclosures to your verified home address provided during registration (as such address is updated in accordance with the terms of section 15(c)).
If you would like to withdraw your consent to electronic delivery from us, or if for any reason you would like a paper copy of your Disclosures from us after you have consented to electronic delivery, you may submit a request by:
•
email to compliance@lendingclub.com
•
calling Member Support at 888-596-3157 or
•
sending a written request to:    
LendingClub Corporation
71 Stevenson St., Suite 300,
San Francisco, CA 94105
For the avoidance of doubt, you must separately withdraw consent to electronic delivery from any third-party entities or platforms through which you may have purchased or will purchase Notes.
Please note that requesting a paper copy of your disclosure will not be treated as a withdrawal of consent.
b. Hardware and Software Requirements . Before you decide to do business electronically with us, you should consider whether you have the required hardware and software capabilities described below.
In order to access and retain Disclosures electronically from us, you must satisfy the following computer hardware and software requirements: access to the Internet; an email account and related software capable of receiving email through the Internet; supported Web browsing software (as outlined in the Terms of Use); and hardware capable of running this software. Notwithstanding the foregoing, Lending Club assumes no responsibility in connection with the hardware and software requirements of any third-party entities or platforms, and it is your responsibility to contact such third parties, if applicable, to determine if you satisfy the computer hardware and software requirements for access to or retention of Disclosures provided by such third parties .





c. Contact Information Changes. You will keep us informed of any change in your email or home mailing address so that you can continue to receive all Disclosures in a timely fashion. If your registered email address, residence or telephone number changes, you must notify us of the change by sending an email to support@lendingclub.com or calling 888-596-3157. You may also update your registered residence address and telephone number on our website, if applicable.
The decision to do business with us electronically is yours. If you do not consent to electronic delivery of specific Disclosures, you will receive paper communications in the mail, which will be delivered to the address that we currently have on file, which shall be the address you provided during registration (as such address is updated in accordance with the terms of this section 15(c)).
You will print a copy of this Agreement for your records and you agree and acknowledge that you can access, receive and retain all Disclosures electronically sent via email or posted on our website or a third-party website.
16. Other Notices. All Disclosures will be transmitted to you in accordance with the terms of section 15 above, and shall be deemed to have been duly given and effective upon transmission or posting (whether delivered directly by Lending Club or indirectly by the applicable third-party entity or platform). All notices, required disclosures and other communications from the Trustee to you will be transmitted to you only by email to the email address you provided during registration (as such address is updated in accordance with the terms of section 15(c)) . Unless otherwise provided in this Agreement, you shall send all notices or other communications required to be given hereunder to Lending Club via email at compliance@lendingclub.com or by writing to: LendingClub Corporation, 71 Stevenson St. Suite 300, San Francisco, CA 94105, Attention: Compliance. You may call Lending Club at 888-596-3157, but calling may not satisfy your obligation to provide notice hereunder or otherwise preserve your rights.
17. Miscellaneous. The terms of this Agreement shall survive until the maturity of the Notes purchased by you. Notwithstanding the foregoing, Lending Club may in its sole discretion, with or without cause, immediately and without prior notice, take one or more of the following actions: (i) terminate this Agreement by giving you notice pursuant to the terms of sections 15 and 16 of this Agreement; or (ii) terminate or suspend your right to purchase Notes or otherwise participate on the Lending Club platform immediately and without notice. Any Notes you purchase or acquire prior to the effective date of any such action by Lending Club shall remain in full force and effect in accordance with their terms.





The parties acknowledge that there are no third party beneficiaries to this Agreement. You may not assign, transfer, sublicense or otherwise delegate your rights or responsibilities under this Agreement to any person without Lending Club'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 without regard to any principle of conflict of laws that would require or permit the application of the laws of any other jurisdiction. Any waiver of a breach of any provision of this Agreement will not be a waiver of any 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 at any time subsequent to the date hereof, any of the provisions of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality and unenforceability of such provision shall have no effect upon and shall not impair the enforceability of any other provisions of this Agreement. The headings in this Agreement are for reference purposes only and shall not affect the interpretation of this Agreement in any way.
18. Indemnification by You. In addition to your indemnification obligations set forth in Lending Club’s Terms of Use, you agree to indemnify, defend, protect and hold harmless Lending Club, any affiliates, any subsidiaries and their respective officers, directors, members, shareholders, employees and agents (the “Lending Club Parties”) 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 applicable laws; or (ii) resulting from your acts, omissions and representations (and those of your employees, agents or representatives) relating to the Lending Club Parties. Your obligation to indemnify the Lending Club Parties shall survive termination of this Agreement, regardless of the reason for termination.






19. Arbitration.
a. Either party to this Agreement may, at its sole election, require that the sole and exclusive forum and remedy for resolution of a Claim be final and binding arbitration pursuant to this section 19 (the "Arbitration Provision"), unless you opt out as provided in section 19(b) below. As used in this Arbitration Provision, "Claim" shall include any past, present or future claim, dispute or controversy involving you (or persons claiming through or connected with you), on the one hand, and Lending Club (or persons claiming through or connected with Lending Club), on the other hand, relating to or arising out of this Agreement, any Note, our website and/or the activities or relationships that involve, lead to or result from any of the foregoing, including (except to the extent provided otherwise in the last sentence of section 19(f) below) the validity or enforceability of this Arbitration Provision, any part thereof, or the entire Agreement. Claims are subject to arbitration regardless of whether they arise from contract; tort (intentional or otherwise); a constitution, statute, common law or principles of equity; or otherwise. Claims include matters arising as initial claims, counter-claims, cross-claims, third-party claims or otherwise. The scope of this Arbitration Provision is to be given the broadest possible interpretation that is enforceable.
b. You may opt out of this Arbitration Provision for all purposes by sending an arbitration opt-out notice to LendingClub Corporation, 71 Stevenson St. Suite 300, San Francisco, CA 94105, Attention: Loan Processing Department, that is received at the specified address within 30 days of the date of your electronic acceptance of the terms of this Agreement. The opt out notice must clearly state that you are rejecting arbitration; identify the Agreement to which it applies by date; provide your name, address and social security number; and be signed by you. You may send the opt-out notice in any manner you see fit as long as it is received at the specified address within the specified time. No other methods can be used to opt out of this Arbitration Provision. If the opt out notice is sent on your behalf by a third party, such third party must include evidence of his or her authority to submit the opt out notice on your behalf.
c. The party initiating arbitration shall do so with the American Arbitration Association (the "AAA") or JAMS. The arbitration shall be conducted according to, and the location of the arbitration shall be determined in accordance with, the rules and policies of the administrator selected, except to the extent the rules conflict with this Arbitration Provision or any countervailing law. In the case of a conflict between the rules and policies of the administrator and this Arbitration Provision, this Arbitration Provision shall control, subject to countervailing law, unless all parties to the arbitration consent to have the rules and policies of the administrator apply.





d. If we elect arbitration, we shall pay all the administrators filing costs and administrative fees (other than hearing fees). If you elect arbitration, filing costs and administrative fees (other than hearing fees) shall be paid in accordance with the rules of the administrator selected, or in accordance with countervailing law if contrary to the administrator's rules. We shall pay the administrators hearing fees for one full day of arbitration hearings. Fees for hearings that exceed one day will be paid by the party requesting the hearing, unless the administrator’s rules or applicable law require otherwise, or you request that we pay them and we agree to do so. Each party shall bear the expense of its own attorneys' fees, except as otherwise provided by law. If a statute gives you the right to recover any of these fees, these statutory rights shall apply in the arbitration notwithstanding anything to the contrary herein.
e. Within 30 days of a final award by the arbitrator, any party may appeal the award for reconsideration by a three-arbitrator panel selected according to the rules of the arbitrator administrator. In the event of such an appeal, any opposing party may cross-appeal within 30 days after notice of the appeal. The panel will reconsider de novo all aspects of the initial award that are appealed. Costs and conduct of any appeal shall be governed by this Arbitration Provision and the administrators rules, in the same way as the initial arbitration proceeding. Any award by the individual arbitrator that is not subject to appeal, and any panel award on appeal, shall be final and binding, except for any appeal right under the Federal Arbitration Act ("FAA"), and may be entered as a judgment in any court of competent jurisdiction.
f. We agree not to invoke our right to arbitrate an individual Claim you may bring in Small Claims Court or an equivalent court, if any, so long as the Claim is pending only in that court. NO ARBITRATION SHALL PROCEED ON A CLASS, REPRESENTATIVE OR COLLECTIVE BASIS (INCLUDING AS PRIVATE ATTORNEY GENERAL ON BEHALF OF OTHERS), EVEN IF THE CLAIM OR CLAIMS THAT ARE THE SUBJECT OF THE ARBITRATION HAD PREVIOUSLY BEEN ASSERTED (OR COULD HAVE BEEN ASSERTED) IN A COURT AS CLASS REPRESENTATIVE, OR COLLECTIVE ACTIONS IN A COURT. Unless consented to in writing by all parties to the arbitration, no party to the arbitration may join, consolidate, or otherwise bring claims for or on behalf of two or more individuals or unrelated corporate entities in the same arbitration unless those persons are parties to a single transaction. Unless consented to in writing by all parties to the arbitration, an award in arbitration shall determine the rights and obligations of the named parties only, and only with respect to the claims in arbitration, and shall not (a) determine the rights, obligations or interests of anyone other than a named party, or resolve any Claim of anyone other than a named party; nor (b) make an award for the benefit of, or against, anyone other than a named party. No administrator or arbitrator shall have the power or authority to waive, modify or fail to enforce this section 19(f), and any attempt to do so, whether by rule, policy, arbitration decision or otherwise, shall be invalid and unenforceable. Any challenge to the validity of this section 19(f) shall be determined exclusively by a court and not by the administrator or any arbitrator.




g. This Arbitration Provision is made pursuant to a transaction involving interstate commerce and shall be governed by and enforceable under the FAA. The arbitrator will apply substantive law consistent with the FAA and applicable statutes of limitations. The arbitrator may award damages or other types of relief permitted by applicable substantive law, subject to the limitations set forth in this Arbitration Provision. The arbitrator will not be bound by judicial rules of procedure and evidence that would apply in a court. The arbitrator shall take steps to reasonably protect confidential information.
h. This Arbitration Provision shall survive (i) suspension, termination, revocation, closure or amendments to this Agreement and the relationship of the parties; (ii) the bankruptcy or insolvency of any party or other person; and (iii) any transfer of any loan or Note or any other promissory note(s) which you owe, or any amounts owed on such loans or notes, to any other person or entity. If any portion of this Arbitration Provision other than section 19(f) is deemed invalid or unenforceable, the remaining portions of this Arbitration Provision shall nevertheless remain valid and in force. If an arbitration is brought on a class, representative or collective basis, and the limitations on such proceedings in section 19(f) are finally adjudicated pursuant to the last sentence of section 19(f) to be unenforceable, then no arbitration shall be had. In no event shall any invalidation be deemed to authorize an arbitrator to determine Claims or make awards beyond those authorized in this Arbitration Provision.
THE PARTIES ACKNOWLEDGE THAT THEY HAVE A RIGHT TO LITIGATE CLAIMS THROUGH A COURT BEFORE A JUDGE, BUT WILL NOT HAVE THAT RIGHT IF ANY PARTY ELECTS ARBITRATION PURSUANT TO THIS ARBITRATION PROVISION. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THEIR RIGHTS TO LITIGATE SUCH CLAIMS IN A COURT UPON ELECTION OF ARBITRATION BY ANY PARTY.
20. Waiver of Jury Trial. THE PARTIES HERETO WAIVE A TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS AGREEMENT, THE CORRESPONDING MEMBER LOAN OR ANY OTHER AGREEMENTS RELATED THERETO.
 





Exhibit 31.1
Certification
I, Renaud Laplanche, certify that:
 
1.
I have reviewed this Quarterly Report on Form 10-Q of LendingClub Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: August 5, 2015
 
/s/ RENAUD LAPLANCHE
Renaud Laplanche
Chief Executive Officer
(principal executive officer)




Exhibit 31.2
Certification
I, Carrie Dolan, certify that:

1.
I have reviewed this Quarterly Report on Form 10-Q of LendingClub Corporation:
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 5, 2015
 
 
/s/ CARRIE DOLAN
Carrie Dolan
Chief Financial Officer
(principal financial officer and principal accounting officer)




Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of LendingClub Corporation (the “Company”) on Form 10-Q for the quarter ended June 30, 2015 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 5, 2015
 
/s/ R ENAUD  L APLANCHE
Renaud Laplanche
Chief Executive Officer
(principal executive officer)
 
/ S / C ARRIE  D OLAN
Carrie Dolan
Chief Financial Officer
(principal financial officer and principal accounting officer)