LendingClub Corp (Form: 10-Q, Received: 11/09/2016 16:26:57)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

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 Street, 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 x 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 x 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	x	Accelerated filer	¨

Non-accelerated filer	¨ (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 x

As of October 31, 2016 , there were 394,289,150 shares of the registrant’s common stock outstanding.

LENDINGCLUB CORPORATION

TABLE OF CONTENTS




PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Income (Loss)	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	38
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	75
Item 4.	Controls and Procedures	76

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	79
Item 1A.	Risk Factors	79
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	86
Item 3.	Defaults Upon Senior Securities	86
Item 4.	Mine Safety Disclosures	86
Item 5.	Other Information	86
Item 6.	Exhibits	87
Signatures		88

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 three subsidiaries:


•	LC Advisors, LLC (LCA), a wholly-owned, 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 wholly-owned company that facilitates education and patient finance loans.


•	RV MP Fund GP, LLC, a wholly-owned subsidiary of LCA that acts as the general partner for a private fund, while LCA acts as the investment manager of this private fund.

LC Trust I (the Trust) is an independent Delaware business trust that acquires loans from the Company and holds them for the sole benefit of certain investors that have purchased a trust certificate (Certificate) issued by the Trust and that are related to specific underlying loans for the benefit of the investor.

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, 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;


•	our ability to maintain investor confidence in the operation of our platform;


•	the likelihood of investors to continue to, directly or indirectly, invest through our platform;


•	our ability to secure additional sources of investor commitments for our platform;


•	ability to secure additional investors without incentives to participate on the platform;


•	interest rates and origination fees on loans charged by issuing banks;


•	expected rates of return for investors;


•	the effectiveness of our platform’s credit scoring models;


•	commitments or investments in loans to support: contractual obligations, such as to Springstone’s issuing bank for Pool B loans or repurchase obligations, regulatory commitments, such as direct mail, short-term marketplace equilibrium, the testing or initial launch of alternative loan terms, programs or channels that we do not have sufficient performance data on, or customer accommodations;


•	transaction fee or other 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 and the relationship between the interim period and full year results;


•	capital expenditures;


•	the impact of new accounting standards;


•	investor, borrower, platform and loan performance-related factors that may affect our revenue;


•	the potential adoption rates and returns related to new products and services;


•	the potential impact of macro-economic developments that could impact borrower and investor behavior;


•	our ability to develop and maintain effective internal controls, and to remediate a material weakness in our internal controls;


•	our ability to recruit and retain quality employees to support future growth in light of past events;


•	our compliance with applicable local, state and Federal laws;


•	our compliance with applicable regulations and regulatory developments or court decisions 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, 2015 , 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.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

LENDINGCLUB CORPORATION

Condensed Consolidated Balance Sheets

(In Thousands, Except Share and Per Share Amounts)

(Unaudited)



	September 30, 2016			December 31, 2015
Assets
Cash and cash equivalents	$	520,767		$	623,531
Restricted cash	139,455			80,733
Securities available for sale	278,949			297,211
Loans at fair value (includes $2,675,002 and $3,022,001 from consolidated trust, respectively)	4,411,626			4,556,081
Loans held for sale	14,744			—
Accrued interest receivable (includes $24,741 and $24,477 from consolidated trust, respectively)	40,801			38,081
Property, equipment and software, net	82,556			55,930
Intangible assets, net	27,373			30,971
Goodwill	35,633			72,683
Other assets	55,833			38,413
Total assets	$	5,607,737		$	5,793,634
Liabilities and Stockholders ’ Equity
Accounts payable	$	7,651		$	5,542
Accrued interest payable (includes $27,597 and $26,719 from consolidated trust, respectively)	44,080			40,244
Accrued expenses and other liabilities	78,177			61,243
Payable to investors	81,376			73,162
Notes and certificates at fair value (includes $2,691,022 and $3,034,586 from consolidated trust, respectively)	4,419,911			4,571,583
Total liabilities	4,631,195			4,751,774
Stockholders’ Equity
Common stock, $0.01 par value; 900,000,000 shares authorized at both September 30, 2016 and December 31, 2015; 394,158,313 and 379,716,630 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively	3,964			3,797
Additional paid-in capital	1,194,637			1,127,952
Accumulated deficit	(201,917		)	(88,218		)
Treasury stock, at cost; 2,282,700 and 0 shares at September 30, 2016 and December 31, 2015, respectively	(19,485		)	—
Accumulated other comprehensive loss	(657		)	(1,671		)
Total stockholders’ equity	976,542			1,041,860
Total liabilities and stockholders’ equity	$	5,607,737		$	5,793,634

See Notes to Condensed Consolidated Financial Statements.

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Operations

(In Thousands, Except Share and Per Share Amounts)

(Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Operating revenue:
Transaction fees	$	100,813		$	100,420		$	321,926		$	258,553
Servicing fees	16,513			8,999			45,058			20,870
Management fees	1,964			2,900			8,562			7,663
Other revenue (expense)	(6,681		)	2,743			(9,281		)	5,140
Total operating revenue	112,609			115,062			366,265			292,226
Net interest income:
Total interest income	171,868			145,833			529,432			389,831
Total interest expense	(169,444		)	(144,659		)	(523,723		)	(387,666		)
Net interest income	2,424			1,174			5,709			2,165
Fair value adjustments - loans, loans held for sale, notes and certificates	(477		)	40			(1,684		)	34
Net interest income and fair value adjustments	1,947			1,214			4,025			2,199
Total net revenue	114,556			116,276			370,290			294,425
Operating expenses: ⁽¹⁾
Sales and marketing	44,901			44,018			161,213			117,989
Origination and servicing	16,332			16,732			56,464			43,639
Engineering and product development	29,428			21,063			82,835			53,175
Other general and administrative	58,940			32,280			150,432			86,937
Goodwill impairment	1,650			—			37,050			—
Total operating expenses	151,251			114,093			487,994			301,740
Income (loss) before income tax expense	(36,695		)	2,183			(117,704		)	(7,315		)
Income tax (benefit) expense	(209		)	1,233			(4,004		)	2,249
Net income (loss)	$	(36,486	)	$	950		$	(113,700	)	$	(9,564	)
Net income (loss) per share:
Basic	$	(0.09	)	$	0.00		$	(0.30	)	$	(0.03	)
Diluted	$	(0.09	)	$	0.00		$	(0.30	)	$	(0.03	)
Weighted-average common shares - Basic	391,453,316			375,982,120			385,037,334			373,605,274
Weighted-average common shares - Diluted	391,453,316			401,934,880			385,037,334			373,605,274


⁽¹⁾	Prior period amounts have been reclassified to conform to the current period presentation. See “ Note 1 – Basis of Presentation ” for additional information.

See Notes to Condensed Consolidated Financial Statements.

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Comprehensive Loss

(In Thousands)

(Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss)	$	(36,486	)	$	950		$	(113,700	)	$	(9,564	)
Other comprehensive income (loss), before tax:
Change in net unrealized gain (loss) on securities available for sale	111			(341		)	1,710			(1,172		)
Other comprehensive income (loss), before tax	111			(341		)	1,710			(1,172		)
Income tax effect	46			—			696			—
Other comprehensive income (loss), net of tax	65			(341		)	1,014			(1,172		)
Comprehensive income (loss)	$	(36,421	)	$	609		$	(112,686	)	$	(10,736	)

See Notes to Condensed Consolidated Financial Statements.

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)



	Nine Months Ended September 30,
	2016			2015
Cash Flows from Operating Activities:
Net loss	$	(113,700	)	$	(9,564	)
Adjustments to reconcile net loss to net cash (used for) provided by operating activities:
Net fair value adjustments of loans, notes and certificates	1,684			(33		)
Change in fair value of loan servicing liabilities	(3,028		)	(3,919		)
Change in fair value of loan servicing assets	7,092			2,467
Stock-based compensation, net	46,434			37,558
Excess tax benefit from share-based awards	62			—
Goodwill impairment charge	37,050			—
Depreciation and amortization	21,374			15,525
Loss (gain) on sales of loans	(10,531		)	(2,136		)
Other, net	3,618			42
Purchase of whole loans to be sold	(3,653,191		)	(2,338,346		)
Proceeds from sales of whole loans	3,635,330			2,338,346
Net change in operating assets and liabilities:
Accrued interest receivable	(2,720		)	(12,282		)
Other assets	(1,570		)	(6,341		)
Due from related parties	120			(139		)
Accounts payable	1,888			(3,071		)
Accrued interest payable	3,835			12,893
Accrued expenses and other liabilities	18,507			22,350
Net cash (used for) provided by operating activities	(7,746		)	53,350
Cash Flows from Investing Activities:
Purchases of loans	(2,086,228		)	(2,736,698		)
Principal payments received on loans	1,783,763			1,280,005
Proceeds from recoveries and sales of charged-off loans	27,451			13,729
Proceeds from sale of loans repurchased	22,274			—
Purchases of securities available for sale	(40,123		)	(402,832		)
Proceeds from maturities, redemptions and paydowns of securities available for sale	59,735			63,198
Investment in Cirrix Capital	(10,000		)	—
Net change in restricted cash	(58,722		)	(112,453		)
Purchases of property, equipment and software, net	(39,044		)	(25,867		)
Net cash used for investing activities	(340,894		)	(1,920,918		)
Cash Flows from Financing Activities:
Change in payable to investors	8,214			112,139
Proceeds from issuances of notes and certificates	2,041,746			2,736,667

LENDINGCLUB CORPORATION

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)



	Nine Months Ended September 30,
	2016			2015
Proceeds from secured borrowings	22,274			—
Repayments of secured borrowings	(22,274		)	—
Principal payments on notes and certificates	(1,770,779		)	(1,268,622		)
Payments on notes and certificates from recoveries/sales of related charged-off loans	(26,871		)	(13,654		)
Repurchases of common stock	(19,485		)	—
Proceeds from stock option exercises and other	10,580			7,680
Proceeds from issuance of common stock for ESPP	2,516			2,694
Excess tax benefit from share-based awards	(62		)	—
Other financing activities	17			90
Net cash provided by financing activities	245,876			1,576,994
Net (Decrease) Increase in Cash and Cash Equivalents	(102,764		)	(290,574		)
Cash and Cash Equivalents, Beginning of Period	623,531			869,780
Cash and Cash Equivalents, End of Period	$	520,767		$	579,206
Supplemental Cash Flow Information:
Cash paid for interest	$	519,690		$	374,760
Non-cash investing activity:
Accruals for property, equipment and software	$	2,610		$	3,466

See Notes to Condensed Consolidated Financial Statements.

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 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 (SMAs) and a fund of which its wholly-owned subsidiary RV MP Fund GP, LLC, is the general partner. Springstone Financial, LLC (Springstone), is a wholly-owned subsidiary of Lending Club that facilitates education and patient finance loans. LC Trust I (the Trust) is an independent Delaware business trust that acquires loans from Lending Club and holds them for the sole benefit of certain investors that have purchased a trust certificate (Certificate) issued by the Trust and that are related to specific underlying loans for the benefit of the investor.

Although the Company's overall business model remains premised on the Company not using its balance sheet and not assuming credit risk for loans facilitated through our marketplace, the Company may use its capital to support contractual obligations (Pool B loans and repurchase obligations), regulatory commitments (direct mail), short-term marketplace equilibrium, customer accommodations, or other needs. The Company's use of its capital on the platform from time to time has been, and will be, on terms that are substantially similar to other investors. Additionally, the Company may use its capital to invest in loans associated with the testing or initial launch of new or alternative loan terms, programs or channels to establish a track record of performance prior to facilitating third-party investments in these loans.

With the announcement of the initial results of the internal board review on May 9, 2016 and additional findings disclosed on June 28, 2016, many investors paused or reduced their investment activity. The Company has been focused on working with these investors to resume their investment activity and on bringing new investors to the platform. During the second quarter of 2016 and the third quarter of 2016 through August 31, 2016 the Company offered incentives to investors in exchange for investment activity. The Company ended these incentives in August of 2016 and did not offer these incentives to investors for investments in loans in the month of September 2016. Additionally, the Company did not have to use a material amount of its own capital to purchase loans in the third quarter of 2016. The Company may enter into strategic arrangements, for example, agreements that involve larger or more long-term forms of committed capital. On November 7, 2016 the Company announced a new addition to the Company’s investor capital mix through an arrangement with a subsidiary of the National Bank of Canada which has approved up to $1.3 billion to be deployed on the Lending Club platform. Subject to certain terms and conditions, the first $325 million has been committed to be deployed on the platform over the next three months.

The failure of the Company to attract investor capital may result in the Company using a greater amount of its own capital to purchase loans on the platform compared to prior periods, or reduce origination volume which could have material adverse impacts on the Company's business, financial condition (including its liquidity), results of operations or ability to sustain and grow loan volume.

The Company believes, based on its projections and ability to reduce loan volume if needed, that its cash on hand, funds available from its line of credit, and its cash flow from operations are sufficient to meet its liquidity needs for the next twelve months.

The accompanying unaudited condensed consolidated financial statements include Lending Club, its subsidiaries (collectively referred to as the Company, we, or us) and the Trust. 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 necessary for the fair statement of the results and financial position for the periods presented. These accounting principles require management to make certain estimates and assumptions that affect the amounts in the

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

accompanying financial statements. These condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the periods presented. These adjustments are of a normal recurring nature. Actual results may differ from those estimates, and results reported in the interim periods are not necessarily indicative of the results for the full year or any other interim period.

In the fourth quarter of 2015, the Company disaggregated the expense previously reported as “General and administrative” into “Engineering and product development” and “Other general and administrative” expense. Additionally, the Company reclassified certain operating expenses between “Sales and marketing,” “Origination and servicing,” “Engineering and product development” and “Other general and administrative” expense to align such classification and presentation with how the Company currently manages the operations and these expenses. These changes had no impact to “Total operating expenses.” Prior period amounts have been reclassified to conform to the current presentation.

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, 2015 (Annual Report) and Form 10-K/A filed on May 17, 2016. The Company's significant accounting policies are included in “ Note 2 – Summary of Significant Accounting Policies. ”

2. Summary of Significant Accounting Policies

The Company's significant accounting policies are discussed 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 significant accounting policies for the nine month period ended September 30, 2016 , except as noted below.

Transaction Fee Revenue

Transaction fees are paid by issuing banks or patient service providers to Lending Club for the work Lending Club performs through its platform and Springstone’s platform in facilitating loans for its issuing bank partners. These fees are recognized as a component of operating revenue at the time of loan issuance. Factors affecting the amount of fees paid to the issuing bank by the borrower and from the bank to the Company include initial loan amount, term, credit quality, and other factors.

Commencing with the origination fee increase announced in March 2016, in the event a borrower prepays a loan in full before maturity, the Company assumes the issuing bank partner's obligation under Utah law to refund the pro-rated amount of the fee received by the bank in excess of 5% . Additionally, the Company may provide refunds to patient finance borrowers when the borrower cancels the loan under certain conditions. Since Lending Club can estimate refunds based on loan cancellation or prepayment experience, the Company records transaction fee revenue net of estimated refunds at the time of loan issuance.

Restricted Cash

Restricted cash consists primarily of checking, money market and certificate of deposit accounts that are: (i) pledged to or held in escrow by the Company’s correspondent banks as security for transactions processed on or related to Lending Club’s platform or activities by certain investors; (ii) pledged through a credit support agreement with a certificate holder; (iii) held in a Rabbi Trust through a grantor trust agreement to satisfy obligations to participants under the Company’s 2016 Cash Retention Bonus Plan (“Cash Retention Plan”). See “ Note 13 – Employee Incentive and Retirement Plans ” for additional information, or (iv) received from investors but not yet applied to their accounts on the platform and transferred to segregated bank accounts that hold investors’ funds.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

Investor cash balances (excluding transactions-in-process) are held in segregated bank or custodial accounts and are not commingled with the Company’s monies or held on the Company’s condensed consolidated balance sheet.

Loans Held for Sale

Loans held by the Company with the intent to sell are reflected on the balance sheet as loans held for sale. Loans held for sale are accounted for at fair value. The Company’s fair value methodology for the measurement of loans held for sale is consistent with that of loans not classified as held for sale. The fair valuation methodology considers projected prepayments and uses the historical actual defaults, losses and recoveries on our loans to project future losses and net cash flows on loans. The fair value adjustments related to loans held for sale are recorded in the period of the fair value changes.

Consolidation of Variable Interest Entities

A variable interest entity (VIE) is a legal entity that does not have sufficient equity at risk to finance its own operations, whose equity holders do not have the power to direct the activities most significantly affecting the economic outcome of those activities, or whose equity holders do not share proportionately in the losses or receive the residual returns of the entity. The determination of whether an entity is a VIE requires a significant amount of judgment. When the Company has a controlling financial interest in a VIE, it must consolidate the results of the VIE’s operations into its condensed consolidated financial statements. A controlling financial interest exists if the Company has both the power to direct the VIE’s activities that most significantly affect the VIE’s economic performance (power) and the obligation to absorb losses or receive benefits that could be potentially significant to the VIE (economics).

LC Trust I

The Company has determined that the Trust is a VIE and that the Company has a controlling financial interest in the Trust and therefore must consolidate the Trust in its condensed consolidated financial statements. The Company established the Trust in February 2011 and funded it with a nominal residual investment. The Company is the only residual investor in the Trust. The purpose of the Trust is to acquire and hold loans for the benefit of investors who have invested in certificates issued by the Trust. The Trust conducts no other business other than purchasing and retaining loans or portions thereof for the benefit of the investment funds and their underlying limited partners. The Trust holds loans, none of which are financed by the Company. The cash flows from the loans held by the Trust are used to repay obligations under the certificates. The Trust’s assets and liabilities were reflected in the Company's condensed consolidated financial statements at September 30, 2016 and December 31, 2015.

In connection with the formation of the investment funds, it was determined that in order to achieve success in raising investment capital, the assets to be invested in by the investment funds must be held by an entity that was separate and distinct from the Company (i.e. bankruptcy remote) in order to reduce this risk and uncertainty. In the event of the Company's insolvency, it is anticipated that the assets of the Trust would not become part of the bankruptcy estate, but that outcome is uncertain.

The Company's capital contributions, which are the only equity investments in the Trust, are insufficient to allow the Trust to finance the purchase of a significant amount of loans without the issuance of certificates to investors. Therefore, the Trust’s capitalization level qualifies the Trust as a VIE. The Company has a financial interest in the Trust because of its right to returns related to servicing fee revenue from the Trust, its right to reimbursement for expenses, and its obligation to repurchase loans from the Trust in certain instances. Additionally, the Company performs or directs activities that significantly affect the Trust’s economic performance through or by (i) operation of the platform that enables borrowers to apply for loans purchased by the Trust; (ii) credit underwriting and

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

servicing of loans purchased by the Trust; (iii) LCA's selection of the loans that are purchased by the Trust on behalf of advised Certificate holders; and (iv) LCA’s role to source investors that ultimately purchase limited partnership interests in a fund or Certificates, both of which supply the funds for the Trust to purchase loans. Collectively, the activities described above allow the Company to fund more loans than would be the case without the existence of the Trust, to collect the related loan transaction fees and for LCA to collect the management fees on the investors’ capital used to purchase certificates. Accordingly, the Company is deemed to have power to direct activities most significant to the Trust and economic interest in the activities because of loan funding and transaction and management fees. Therefore, the Company concluded that it is the primary beneficiary of the Trust and consolidated the Trust’s operations in its condensed consolidated financial statements.

Investment In Cirrix Capital

On April 1, 2016, the Company closed its $10.0 million investment, for an approximate ownership interest of 15% in Cirrix Capital (Investment Fund), a holding company to a family of funds that purchases loans and interests in loans from the Company. Per the partnership agreement, the family of funds can invest up to 20% of their assets outside of whole loans and interests in whole loans facilitated by the Company. At September 30, 2016 , 100% of the family of funds' assets were comprised of whole loans and interests in loans facilitated by Lending Club's platform. At the time the Company made its investment, the Company's then Chief Executive Officer (former CEO) and a board member (together, the Related Party Investors) also had limited partnership interests in the Investment Fund that resulted in an aggregate ownership of approximately 29% in the Investment Fund by the Related Party Investors and the Company. As of September 30, 2016, the Company and a board member had an aggregate ownership interest of approximately 27% in the Investment Fund.

The Company's investment is deemed to be a variable interest in the Investment Fund because of the limited partnership interest shares in the expected returns and losses of the Investment Fund. The expected returns and losses of the Investment Fund result from the net returns of the family of funds owned by the Investment Fund, which are derived from interest income earned from loans and interests in whole loans that are purchased by the family of funds, which are owned by the Investment Fund. Such loans and interests in loans were facilitated by the Company. Additionally, the Investment Fund is considered a VIE.

The Investment Fund passes along credit risk to the limited partners. The Company did not design the Investment Fund’s investment strategy and cannot require the Investment Fund to purchase loans. Additionally, the Company reviewed whether it collectively, with the board member's investment, had power to control the Investment Fund and concluded that it did not based on the unilateral ability of the general partner to exercise power over the limited partnership and the inability of the limited partners to remove the general partner. The Company is not the primary beneficiary of the Investment Fund because the Company does not have the power to direct the activities that most significantly affect the Investment Fund’s economic performance. As a result, the Company does not consolidate the operations of the Investment Fund in the financial statements of the Company. The Company accounts for this investment under the equity method of accounting, which approximates its maximum exposure to loss as a result of its involvement in the Investment Fund. At September 30, 2016 , the Company's investment was $10.1 million , which was recorded in other assets in the condensed consolidated balance sheet. See “ Note 17 – Related Party Transactions ” for additional information.

Separately, the Company is subject to a credit support agreement that requires it to pledge and restrict cash in support of its contingent obligation to reimburse the Investment Fund for net credit losses on loans underlying the interests in whole loans that are in excess of a specified, aggregate net loss threshold. This credit support agreement is deemed to be a variable interest in the Investment Fund because it exposes the Company to potential credit losses on the underlying interests in loans purchased by the Investment Fund. The board member and the Company are excluded from receiving any benefits, if provided, from this credit support agreement. As of September 30, 2016 , the Company has not been required to nor does it anticipate recording losses under this agreement. The Company's

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

maximum exposure to loss under this credit support agreement was limited to $6.0 million and $34.4 million at September 30, 2016 and December 31, 2015 , respectively.

LCA Managed or Advised Private Funds

In conjunction with the adoption of a new accounting standard that amends accounting for consolidations effective January 1, 2016, the Company reviewed its relationship with the private funds managed or advised by LCA and concluded that it does not have a variable interest in the private funds. As of September 30, 2016 , the Company does not hold any investments in the private funds. Certain of the Company's related parties have investments in the private funds, as discussed in “ Note 17 – Related Party Transactions. ” The Company charges the limited partners in the private funds a management fee based on their account balance at month end for services performed as the general manager, including fund administration, and audit, accounting and tax preparation services. Accordingly, the Company's fee arrangements contain only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm’s length. These fees are solely compensation for services provided and are commensurate with the level of effort required to provide those services. The Company does not have any other interests in the private funds and therefore does not have a variable interest in the private funds.

Management regularly reviews and reconsiders its previous conclusions regarding whether it holds a variable interest in potential VIEs, the status of an entity as a VIE, and whether the Company is required to consolidate such VIEs in the condensed consolidated financial statements.

Loan Servicing Rights

As a result of the nature of servicing rights on the sale of loans, the Company is a variable interest holder in certain entities that purchase these loans. For all of these entities, the Company either does not have the power to direct the activities that most significantly affect the VIE's economic performance or does not have a potentially significant economic interest in the VIE. In no case is the Company the primary beneficiary, and as a result, these entities are not consolidated in the Company's condensed consolidated financial statements.

Loan Trailing Fee Liability

In February 2016, the Company revised the agreement with its primary issuing bank to include an additional program fee (Loan Trailing Fee). The Loan Trailing Fee is dependent on the amount and timing of principal and interest payments made by borrowers of the underlying loans, and gives the issuing bank an ongoing financial interest in the performance of the loans it originates. This fee is paid by the Company to the issuing bank partner over the term of the respective loans and is a function of the principal and interest payments. In the event that principal and interest payments are not made, the Company is not required to make this Loan Trailing Fee payment. The Loan Trailing Fee is recorded at fair value with the initial establishment, and any changes, of this liability are netted against transaction fees on the Company's condensed consolidated statement of operations. The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee, which considers assumptions of expected prepayment rates and future credit losses.

Debt

The Company has elected to record certain costs directly related to its secured revolving credit facility as an asset included in other assets on the Company’s condensed consolidated balance sheets. These costs are amortized as interest expense over the contractual term of the secured revolving credit facility. Additionally, in instances where the Company transfers loans to investors that do not meet sale criteria for accounting purposes, such loan sales are accounted for as secured borrowings.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

Adoption of New Accounting Standard

In February 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-02 Consolidation (Topic 810): Amendments to the Consolidation Analysis , which was 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 adoption of this guidance did not have an impact on the Company's financial position, results of operations, earnings per share (EPS) or cash flows.

New Accounting Standards Not Yet Adopted

In August 2016, the FASB issued ASU 2016-15 Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments , which will be effective January 1, 2018, and amends the existing accounting standards for the statement of cash flows. The amendments provide guidance on the following eight cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies; distributions received from equity method investees; beneficial interests in securitization transactions; and, separately identifiable cash flows and application of the predominance principle. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the timing and impact of these amendments on its cash flows.

In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which will be effective January 1, 2020. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. The Company is currently evaluating the impact of this new guidance on its financial position, results of operations, EPS and cash flows.

In March 2016, the FASB issued ASU 2016-09 Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which will be effective January 1, 2017. The guidance simplifies the accounting for share-based payments related to the income tax consequences of share-based awards, the classification of awards in a company's financial statements, and estimating forfeitures of awards. The Company is currently evaluating the impact of this new guidance on its financial position, results of operations, EPS and cash flows.

In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842) that amended guidance related to the lease accounting, which will be effective January 1, 2019. The guidance requires an entity to recognize a right-of-use asset and lease liability for most lease arrangements. The standard also requires additional disclosures related to lease arrangements. The Company is currently evaluating the impact of this new guidance on its financial position, results of operations, EPS, and cash flows.

In January 2016, the FASB issued ASU 2016-01 Financial Instruments - Overall (Subtopic: 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which will be effective January 1, 2018. The amendment changes the accounting for equity investments, changes disclosure requirements related to instruments at amortized cost and fair value, and clarifies how entities should evaluate deferred tax assets for securities classified as available for sale. The Company is currently evaluating the impact of this new guidance on its financial position, results of operations, EPS, and cash flows.

In August 2014, the FASB issued ASU 2014-15 Presentation of Financial Statements - Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , which requires management to assess a company’s ability to continue as a going concern for each annual and interim reporting

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

period, and disclose in its financial statements whether there is substantial doubt about the company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The new standard applies to all companies and is effective for the annual period ending after December 15, 2016, and all annual and interim periods thereafter. The Company does not believe adoption of this accounting standard will have a material effect on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers (Topic 606), which will be effective January 1, 2018. The guidance clarifies that revenue from contracts with customers should be recognized in a manner that depicts both the likelihood of payment and the timing of the related transfer of goods or performance of services. In March 2016, the FASB issued an amendment (ASU 2016-08) to the new revenue recognition guidance clarifying how to determine if an entity is a principal or agent in a transaction. In April (ASU 2016-10) and May (ASU 2016-12) of 2016, the FASB further amended the guidance to include performance obligation identification, licensing implementation, collectability assessment and other presentation and transition clarifications. The effective date and transition requirements for this amendment is the same as those for the new revenue guidance. The Company is currently evaluating the impact of this new guidance on its financial position, results of operations, EPS and cash flows.

3. Net Income (Loss) Per Share and Net Income (Loss) Attributable to Common Stockholders

The following table details the computation of the Company's basic and diluted net income (loss) per share:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
Net income (loss)	$	(36,486	)	$	950	$	(113,700	)	$	(9,564	)
Weighted average common shares - Basic	391,453,316			375,982,120		385,037,334			373,605,274
Weighted average common shares - Diluted	391,453,316			401,934,880		385,037,334			373,605,274
Net income (loss) per share:
Basic	$	(0.09	)	$	—	$	(0.30	)	$	(0.03	)
Diluted	$	(0.09	)	$	—	$	(0.30	)	$	(0.03	)

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

4. Securities Available for Sale

The amortized cost, gross unrealized gains and losses, and fair value of securities available for sale as of September 30, 2016 and December 31, 2015 , were as follows:



September 30, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate debt securities	$	190,008	$	128	$	(112	)	$	190,024
Asset-backed securities	31,480		21		(2		)	31,499
U.S. agency securities	19,603		17		—			19,620
Certificates of deposit	17,502		—		—			17,502
Commercial paper	10,007		—		—			10,007
U.S. Treasury securities	2,492		22		—			2,514
Other securities	7,818		—		(35		)	7,783
Total securities available for sale	$	278,910	$	188	$	(149	)	$	278,949

December 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate debt securities	$	217,243	$	2	$	(1,494	)	$	215,751
Asset-backed securities	54,543		—		(134		)	54,409
U.S. agency securities	16,602		1		(25		)	16,578
U.S. Treasury securities	3,489		—		(4		)	3,485
Other securities	7,005		—		(17		)	6,988
Total securities available for sale	$	298,882	$	3	$	(1,674	)	$	297,211

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

A summary of securities available for sale with unrealized losses as of September 30, 2016 and December 31, 2015 , aggregated by period of continuous unrealized loss, is as follows:



	Less than 12 months					12 months or longer					Total
September 30, 2016	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate debt securities	$	64,078	$	(54	)	$	34,921	$	(58	)	$	98,999	$	(112	)
Asset-backed securities	2,270		(1		)	2,648		(1		)	4,918		(2		)
Other securities	3,816		(1		)	3,968		(34		)	7,784		(35		)
Total securities with unrealized losses ⁽¹⁾	$	70,164	$	(56	)	$	41,537	$	(93	)	$	111,701	$	(149	)

	Less than 12 months					12 months or longer					Total
December 31, 2015	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate debt securities	$	212,018	$	(1,494	)	$	—	$	—		$	212,018	$	(1,494	)
Asset-backed securities	54,409		(134		)	—		—			54,409		(134		)
U.S. agency securities	14,578		(25		)	—		—			14,578		(25		)
U.S. Treasury securities	3,485		(4		)	—		—			3,485		(4		)
Other securities	6,988		(17		)	—		—			6,988		(17		)
Total securities with unrealized losses ⁽¹⁾	$	291,478	$	(1,674	)	$	—	$	—		$	291,478	$	(1,674	)


⁽¹⁾	The number of investment positions with unrealized losses at September 30, 2016 and December 31, 2015 totaled 63 and 141 , respectively.

There were no impairment charges recognized during the first nine months of 2016 and 2015 .

The contractual maturities of securities available for sale at September 30, 2016 , were as follows:



	Within 1 year		After 1 year through 5 years		After 5 years through 10 years		After 10 years		Total
Corporate debt securities	$	67,134	$	122,890	$	—	$	—	$	190,024
Asset-backed securities	7,424		24,075		—		—		31,499
U.S. agency securities	14,609		5,011		—		—		19,620
Certificates of deposit	17,502		—		—		—		17,502
Commercial paper	10,007		—		—		—		10,007
U.S. Treasury securities	—		2,514		—		—		2,514
Other securities	3,816		3,967		—		—		7,783
Total fair value	$	120,492	$	158,457	$	—	$	—	$	278,949
Total amortized cost	$	120,515	$	158,395	$	—	$	—	$	278,910

There were no sales of securities available for sale during the first nine months of 2016 . Proceeds from the sales of securities available for sale during the first nine months of 2015 were $63.2 million resulting in an immaterial net gain.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

5. Loans, Loans Held For Sale, Notes and Certificates, and Loan Servicing Rights

Loans, Loans Held For Sale, Notes and Certificates

The Company sells loans and issues notes and the Trust issues certificates as a means to allow investors to invest in the associated loans. At September 30, 2016 and December 31, 2015 , loans, notes and certificates measured at fair value on a recurring basis were as follows:



	Loans						Notes and Certificates
	September 30, 2016			December 31, 2015			September 30, 2016			December 31, 2015
Aggregate principal balance outstanding	$	4,677,055		$	4,681,671		$	4,684,038		$	4,697,169
Net fair value adjustments	(265,429		)	(125,590		)	(264,127		)	(125,586		)
Fair value	$	4,411,626		$	4,556,081		$	4,419,911		$	4,571,583
Original term	12 - 84 months			12 - 60 months
Interest rates (fixed)	3.54% - 31.89%			4.99% - 29.90%
Maturity dates	≤ June 2023			≤ December 2020

Loans invested in by the Company for which there was no associated note or certificate, had an aggregate principal balance outstanding of $34.2 million and a fair value of $33.0 million at September 30, 2016 .

At September 30, 2016 the aggregate principal balance outstanding and fair value of the Company’s loans held for sale were $ 14.9 million and $ 14.7 million , respectively.

The Company places all loans for all loan products that are contractually past due by 120 days or more on non-accrual status. At September 30, 2016 and December 31, 2015 , loans that were 90 days or more past due (including non-accrual loans) were as follows:



	September 30, 2016						December 31, 2015
	> 90 days past due			Non-accrual loans			> 90 days past due			Non-accrual loans
Outstanding principal balance	$	42,643		$	6,362		$	30,094		$	4,513
Net fair value adjustments	(35,019		)	(5,192		)	(25,312		)	(3,722		)
Fair value	$	7,624		$	1,170		$	4,782		$	791
# of loans (not in thousands)	3,620			562			2,606			382

For all standard and custom personal loan products, the Company's charge-off policy is to charge off loans after 120 days and no later than 150 days past due, or earlier in the event of notification of borrower bankruptcy.

Loan Servicing Rights

At September 30, 2016 , loans underlying loan servicing rights had a total outstanding principal balance of $6.24 billion , original terms between 12 and 84 months , monthly payments with interest rates ranging from 2.99% to 33.15% and maturity dates through May 2023 . At December 31, 2015 , loans underlying loan servicing rights had a total outstanding principal balance of $4.29 billion , original terms between 3 and 84 months , monthly payments with interest rates ranging from 2.99% to 33.15% and maturity dates through December 2022 .

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

6. Fair Value of Assets and Liabilities

The Company records certain assets and liabilities at fair value as listed in the following tables.

Financial Instruments Recorded at Fair Value

The following tables present the fair value hierarchy for assets and liabilities measured at fair value:



September 30, 2016	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Balance at Fair Value
Assets:
Loans	$	—	$	—	$	4,411,626	$	4,411,626
Loans held for sale	—		—		14,744		14,744
Securities available for sale:
Corporate debt securities	—		190,024		—		190,024
Asset-backed securities	—		31,499		—		31,499
U.S. agency securities	—		19,620		—		19,620
Certificates of deposit	—		17,502		—		17,502
Commercial paper	—		10,007		—		10,007
U.S. Treasury securities	—		2,514		—		2,514
Other securities	—		7,783		—		7,783
Total securities available for sale	—		278,949		—		278,949
Servicing assets	—		—		16,255		16,255
Total assets	$	—	$	278,949	$	4,442,625	$	4,721,574

Liabilities:
Notes and certificates	$	—	$	—	$	4,419,911	$	4,419,911
Servicing liabilities	—		—		3,397		3,397
Loan Trailing Fee liability	—		—		3,724		3,724
Total liabilities	$	—	$	—	$	4,427,032	$	4,427,032

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)



December 31, 2015	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Balance at Fair Value
Assets:
Loans	$	—	$	—	$	4,556,081	$	4,556,081
Securities available for sale:
Corporate debt securities	—		215,751		—		215,751
Asset-backed securities	—		54,409		—		54,409
U.S. agency securities	—		16,578		—		16,578
U.S. Treasury securities	—		3,485		—		3,485
Other securities	—		6,988		—		6,988
Total securities available for sale	—		297,211		—		297,211
Servicing assets	—		—		10,250		10,250
Total assets	$	—	$	297,211	$	4,566,331	$	4,863,542

Liabilities:
Notes and certificates	$	—	$	—	$	4,571,583	$	4,571,583
Servicing liabilities	—		—		3,973		3,973
Total liabilities	$	—	$	—	$	4,575,556	$	4,575,556

As the Company's loans and related notes and certificates, loans held for sale, loan servicing rights, and Loan Trailing Fee liability do not trade in an active market with readily observable prices, the Company uses significant unobservable inputs to measure the fair value of these assets and liabilities. Financial instruments are categorized in the 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, changes in fair value for assets and liabilities within the Level 2 or Level 3 categories may include changes in fair value that were attributable to both observable and unobservable inputs. The Company did not transfer any assets or liabilities in or out of Level 3 during the first nine months of 2016 or the year ended December 31, 2015 .

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 the Company's Level 3 fair value measurements at September 30, 2016 and December 31, 2015 :



	September 30, 2016
	Loans, Notes and Certificates ⁽⁴⁾						Servicing Asset/Liability						Loan Trailing Fee Liability
	Minimum		Maximum		Weighted Average		Minimum		Maximum		Weighted Average		Minimum		Maximum		Weighted Average
Discount rates	0.7	%	16.5	%	7.4	%	2.2	%	15.9	%	7.9	%	2.2	%	15.9	%	7.7	%
Net cumulative expected loss rates ⁽¹⁾	0.3	%	32.6	%	13.9	%	0.3	%	32.6	%	12.2	%	0.3	%	32.6	%	12.9	%
Cumulative expected prepayment rates ⁽¹⁾	8.0	%	39.9	%	30.8	%	8.0	%	39.9	%	30.8	%	8.0	%	39.9	%	30.4	%
Total market servicing rates (% per annum on outstanding principal balance) ⁽²⁾	N/A		N/A		N/A		0.63	%	0.90	%	0.63	%	N/A		N/A		N/A

	December 31, 2015
	Loans, Notes and Certificates ⁽⁴⁾						Servicing Asset/Liability						Loan Trailing Fee Liability
	Minimum		Maximum		Weighted Average		Minimum		Maximum		Weighted Average		Minimum		Maximum		Weighted Average
Discount rates	2.9	%	17.5	%	9.0	%	3.5	%	16.3	%	9.4	%	N/A		N/A		N/A
Net cumulative expected loss rates ⁽¹⁾	0.3	%	22.0	%	9.9	%	0.3	%	22.0	%	8.8	%	N/A		N/A		N/A
Cumulative expected prepayment rates ⁽¹⁾	23.4	%	36.4	%	30.8	%	8.0	%	36.4	%	30.5	%	N/A		N/A		N/A
Total market servicing rates (% per annum on outstanding principal balance) ⁽³⁾	N/A		N/A		N/A		0.50	%	0.75	%	0.50	%	N/A		N/A		N/A

N/A Not applicable


⁽¹⁾	Expressed as a percentage of the original principal balance of the loan, note or certificate.


⁽²⁾	Includes collection fees estimated to be paid to a hypothetical third-party servicer.


⁽³⁾	Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of December 31, 2015, the market rate for collection fees was assumed to be 7 basis points for a weighted-average total market servicing rate of 57 basis points.


⁽⁴⁾	Includes loans held for sale.

At September 30, 2016 and December 31, 2015 , the discounted cash flow methodology used to estimate the notes and certificates' fair values used the same projected net cash flows as their related loans. As demonstrated by the following tables below, the fair value adjustments for loans were largely offset by the fair value adjustments of the notes and certificates due to the 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.

The following tables present additional information about Level 3 loans, loans held for sale, notes and certificates measured at fair value on a recurring basis for the third quarters and first nine months of 2016 and 2015 :

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)



	Loans									Notes and Certificates
	Outstanding Principal Balance			Valuation Adjustment			Fair Value			Outstanding Principal Balance			Valuation Adjustment			Fair Value
Beginning balance at June 30, 2016	$	4,765,258		$	(341,087	)	$	4,424,171		$	4,755,846		$	(339,961	)	$	4,415,885
Purchases of loans	1,740,531			—			1,740,531			—			—			—
Issuances of notes and certificates	—			—			—			641,242			—			641,242
Whole loan sales	(1,095,717		)	—			(1,095,717		)	—			—			—
Principal payments	(605,595		)	—			(605,595		)	(601,234		)	—			(601,234		)
Charge-offs	(112,517		)	112,517			—			(111,816		)	111,816			—
Recoveries	—			(10,517		)	(10,517		)	—			(9,955		)	(9,955		)
Change in fair value recorded in earnings	—			(26,503		)	(26,503		)	—			(26,027		)	(26,027		)
Ending balance at September 30, 2016	$	4,691,960		$	(265,590	)	$	4,426,370		$	4,684,038		$	(264,127	)	$	4,419,911
Loans held for sale at September 30, 2016	$	14,905		$	(161	)	$	14,744
Loans at fair value at September 30, 2016	$	4,677,055		$	(265,429	)	$	4,411,626

	Loans									Notes and Certificates
	Outstanding Principal Balance			Valuation Adjustment			Fair Value			Outstanding Principal Balance			Valuation Adjustment			Fair Value
Beginning balance at June 30, 2015	$	3,694,823		$	(57,440	)	$	3,637,383		$	3,717,556		$	(57,432	)	$	3,660,124
Purchases of loans	1,946,455			—			1,946,455			—			—			—
Issuances of notes and certificates	—			—			—			991,926			—			991,926
Whole loan sales	(954,770		)	—			(954,770		)	—			—			—
Principal payments	(481,701		)	—			(481,701		)	(478,189		)	—			(478,189		)
Charge-offs	(55,365		)	55,365			—			(55,346		)	55,346			—
Recoveries	—			(5,919		)	(5,919		)	—			(5,867		)	(5,867		)
Change in fair value recorded in earnings	—			(72,474		)	(72,474		)	—			(72,513		)	(72,513		)
Ending balance at September 30, 2015	$	4,149,442		$	(80,468	)	$	4,068,974		$	4,175,947		$	(80,466	)	$	4,095,481

	Loans									Notes and Certificates
	Outstanding Principal Balance			Valuation Adjustment			Fair Value			Outstanding Principal Balance			Valuation Adjustment			Fair Value
Beginning balance at December 31, 2015	$	4,681,671		$	(125,590	)	$	4,556,081		$	4,697,169		$	(125,586	)	$	4,571,583
Purchases of loans	5,739,419			—			5,739,419			—			—			—
Issuances of notes and certificates	—			—			—			2,041,746			—			2,041,746
Whole loan sales	(3,657,604		)	—			(3,657,604		)	—			—			—
Principal payments	(1,786,623		)	—			(1,786,623		)	(1,770,779		)	—			(1,770,779		)
Charge-offs	(284,903		)	284,903			—			(284,098		)	284,098			—
Recoveries	—			(27,451		)	(27,451		)	—			(26,871		)	(26,871		)
Change in fair value recorded in earnings	—			(397,452		)	(397,452		)	—			(395,768		)	(395,768		)
Ending balance at September 30, 2016	$	4,691,960		$	(265,590	)	$	4,426,370		$	4,684,038		$	(264,127	)	$	4,419,911
Loans held for sale at September 30, 2016	$	14,905		$	(161	)	$	14,744
Loans at fair value at September 30, 2016	$	4,677,055		$	(265,429	)	$	4,411,626

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)



	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	5,075,044			—			5,075,044			—			—			—
Issuances of notes and certificates	—			—			—			2,736,667			—			2,736,667
Whole loan sales	(2,338,346		)	—			(2,338,346		)	—			—			—
Principal payments	(1,280,005		)	—			(1,280,005		)	(1,268,622		)	—			(1,268,622		)
Charge-offs	(143,980		)	143,980			—			(143,935		)	143,935			—
Recoveries	—			(13,729		)	(13,729		)	—			(13,653		)	(13,653		)
Change in fair value recorded in earnings	—			(172,495		)	(172,495		)	—			(172,529		)	(172,529		)
Ending balance at September 30, 2015	$	4,149,442		$	(80,468	)	$	4,068,974		$	4,175,947		$	(80,466	)	$	4,095,481

The following tables present additional information about Level 3 servicing assets and liabilities measured at fair value on a recurring basis for the third quarters and first nine months of 2016 and 2015 :



	Three Months Ended September 30, 2016						Three Months Ended September 30, 2015
	Servicing Assets			Servicing Liabilities			Servicing Assets			Servicing Liabilities
Fair value at beginning of period	$	16,126		$	3,412		$	5,225		$	4,831
Issuances ⁽¹⁾	3,009			712			3,092			1,402
Change in fair value, included in servicing fees	(2,429		)	(727		)	(1,436		)	(1,839		)
Other net changes included in deferred revenue	(451		)	—			368			—
Fair value at end of period	$	16,255		$	3,397		$	7,249		$	4,394

	Nine Months Ended September 30, 2016						Nine Months Ended September 30, 2015
	Servicing Assets			Servicing Liabilities			Servicing Assets			Servicing Liabilities
Fair value at beginning of period	$	10,250		$	3,973		$	2,181		$	3,973
Issuances ⁽¹⁾	12,984			2,452			6,476			4,340
Change in fair value, included in servicing fees	(7,092		)	(3,028		)	(2,467		)	(3,919		)
Other net changes included in deferred revenue	113			—			1,059			—
Fair value at end of period	$	16,255		$	3,397		$	7,249		$	4,394


⁽¹⁾	Represents the offsets to the gains or losses on sales of the related loans, recorded in other revenue.

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 table presents additional information about Level 3 Loan Trailing Fee liability measured at fair value on a recurring basis for the third quarter and first nine months of 2016 :



	Three Months Ended September 30, 2016			Nine Months Ended September 30, 2016
Fair value at beginning of period	$	2,324		$	—
Issuances	1,682			4,180
Cash payment of Loan Trailing Fee	(395		)	(585		)
Change in fair value, included in origination and servicing	113			129
Fair value at end of period	$	3,724		$	3,724

Significant Recurring Level 3 Fair Value Asset and Liability Input Sensitivity

Certain fair valuation adjustments recorded through earnings, related to Level 3 instruments for the third quarter and first nine months of 2016 and 2015 . Generally, changes in the net cumulative expected loss rates, cumulative prepayment rates, and discount rates will have an immaterial net impact on the fair value of loans, notes and certificates, servicing assets and liabilities, and Loan Trailing Fees.

Certain of these unobservable inputs may (in isolation) have either a directionally consistent or opposite impact on the fair value of the financial instrument for a given change in that input. When multiple inputs are used within the valuation techniques for loans, notes and certificates, servicing assets and liabilities, and Loan Trailing Fees, a change in one input in a certain direction may be offset by an opposite change from another input.

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 estimated fair value.

The Company's selection of the most representative market servicing rates for servicing assets and servicing liabilities is inherently judgmental. The Company reviewed estimated third-party servicing rates for its loans and loans in similar credit sectors, as well as market servicing benchmarking analyses provided by third-party valuation firms. The table below shows the impact on the estimated fair value of servicing assets and liabilities, calculated using different market servicing rate assumptions as of September 30, 2016 and December 31, 2015 :



	September 30, 2016						December 31, 2015
	Servicing Assets			Servicing Liabilities			Servicing Assets			Servicing Liabilities
Weighted-average market servicing rate assumptions ⁽¹⁾	0.63		%	0.63		%	0.50		%	0.50		%
Change in fair value from:
Servicing rate increase by 0.10%	$	(4,931	)	$	1,410		$	(3,504	)	$	1,589
Servicing rate decrease by 0.10%	$	5,347		$	(994	)	$	3,610		$	(1,483	)


⁽¹⁾	Represents total market servicing rates, which include collection fees, at September 30, 2016 , and base market servicing rates, which exclude collection fees, at December 31, 2015 . As of December 31, 2015, the market rate for collection fees was assumed to be 7 basis points for a weighted-average total market servicing rate of 57 basis points.

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, Assets, and Liabilities Not Recorded at Fair Value

The following tables present the fair value hierarchy for financial instruments not recorded at fair value:



September 30, 2016	Carrying Amount		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Balance at Fair Value
Assets:
Cash and cash equivalents	$	520,767	$	—	$	520,767	$	—	$	520,767
Restricted cash	139,455		—		139,455		—		139,455
Servicer reserve receivable	2,565		—		2,565		—		2,565
Deposits	865		—		865		—		865
Goodwill	35,633		—		—		35,633		35,633
Total assets	$	699,285	$	—	$	663,652	$	35,633	$	699,285
Liabilities:
Accrued expenses and other liabilities	$	6,051	$	—	$	—	$	6,051	$	6,051
Accounts payable	7,651		—		7,651		—		7,651
Payables to investors	81,376		—		81,376		—		81,376
Total liabilities	$	95,078	$	—	$	89,027	$	6,051	$	95,078



December 31, 2015	Carrying Amount		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Balance at Fair Value
Assets:
Cash and cash equivalents	$	623,531	$	—	$	623,531	$	—	$	623,531
Restricted cash	80,733		—		80,733		—		80,733
Deposits	871		—		871		—		871
Total assets	$	705,135	$	—	$	705,135	$	—	$	705,135
Liabilities:
Accounts payable	$	5,542	$	—	$	5,542	$	—	$	5,542
Payables to investors	73,162		—		73,162		—		73,162
Total liabilities	$	78,704	$	—	$	78,704	$	—	$	78,704

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

7. Property, Equipment and Software, Net

Property, equipment and software, net, consist of the following:



	September 30, 2016			December 31, 2015
Internally developed software	$	69,739		$	40,709
Computer equipment	16,965			14,076
Leasehold improvements	18,382			11,559
Purchased software	7,615			5,336
Furniture and fixtures	6,394			5,086
Construction in progress	4,526			2,870
Total property, equipment and software	123,621			79,636
Accumulated depreciation and amortization	(41,065		)	(23,706		)
Total property, equipment and software, net	$	82,556		$	55,930

Depreciation and amortization expense on property, equipment and software was $6.5 million and $17.8 million for the third quarter and first nine months of 2016 , respectively. Depreciation and amortization expense on property, equipment and software was $4.5 million and $11.4 million for the third quarter and first nine months of 2015 , respectively.

8. Other Assets

Other assets consist of the following:



	September 30, 2016		December 31, 2015
Loan servicing assets, at fair value	$	16,255	$	10,250
Prepaid expenses	14,704		16,283
Other investments	10,329		250
Accounts receivable	6,719		4,976
Servicer reserve receivable	2,565		—
Receivable from investors	1,279		1,117
Deferred financing cost	1,097		1,296
Deferred acquisition compensation	642		1,521
Due from related parties ⁽¹⁾	535		655
Deposits	865		871
Tenant improvement receivable	181		778
Other	662		416
Total other assets	$	55,833	$	38,413

⁽¹⁾ Represents management fees due to LCA from certain private funds for which LCA acts as the general partner.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

9. Intangible Assets and Goodwill

Intangible Assets

The Company's intangible asset balance was $27.4 million and $31.0 million at September 30, 2016 and December 31, 2015 , respectively. Amortization expense associated with intangible assets for the third quarter and first nine months of 2016 was $1.2 million and $3.6 million , respectively. Amortization expense associated with intangible assets for the third quarter and first nine months of 2015 was $1.3 million and $ 4.1 million , respectively.

Goodwill

The Company's annual goodwill impairment testing date is April 1. In testing for potential impairment of goodwill, management performed an assessment of each of the Company's reporting units (generally defined as the Company's businesses for which financial information is available and reviewed regularly by management). Only the education and patient finance reporting unit contains goodwill. Due to the complexity and effort required to estimate the fair value of the reporting unit in the second step of the analysis, the fair value estimates were based on preliminary analysis and assumptions as of the end of the second quarter of 2016. Accordingly, we recorded our best estimate of the impairment of $35.4 million during the second quarter of 2016. The Company completed its annual goodwill impairment analysis in the third quarter of 2016 and recorded an additional impairment of $1.7 million for a total charge of $37.1 million for the first nine months of 2016.

In the second quarter of 2016, in conjunction with the annual impairment test, the Company decreased its estimates of future earnings for the education and patient finance reporting unit, observed decreases in valuation multiples (i.e. enterprise value to revenue, and enterprise value to earnings before interest, taxes, depreciation, and amortization (EBITDA)) for peer group companies, and observed a marked decrease in the Company's overall market capitalization due, in substantial part to the resignation of Renaud Laplanche as CEO and Chairman and the events leading up to his resignation. In addition, the Company is subject to litigation and other inquiries related to the events surrounding the resignation of Mr. Laplanche. The publicity resulting from these events has adversely affected the Company’s brand. These factors were a contributor to the determination that the fair value of the reporting unit was less than its carrying value.

The first step of the analysis is to compare the reporting unit’s estimate fair value to its carrying value. Estimating the fair value of the education and patient finance reporting unit was a subjective process involving the use of estimates and judgments, particularly related to future cash flows, discount rates (including market risk premiums) and market valuation multiples, which as discussed above were impacted by a series of events in the second quarter of 2016. The fair value of the reporting unit was determined using the income approach and the market approach, each a commonly used valuation technique. The Company gave consideration to each valuation technique, as either technique can be an indicator of fair value. For the income approach, the Company estimated future cash flows and used such cash flows in a discounted cash flow model (“DCF model”). A DCF model was selected to be comparable to what would be used by market participants to estimate fair value. The DCF model incorporated expected future growth rates, terminal value amounts, and the applicable weighted-average cost of capital to discount estimated cash flows. The projections used in the estimate of fair value are consistent with the Company’s current forecast and long-range plans for this reporting unit. For the market approach, the valuation of the reporting unit was based on an analysis of enterprise value to revenue and enterprise value to EBITDA valuation multiples. The peer group valuation multiples used in the analysis were selected based on management’s judgment.

The second step of the analysis includes allocating the estimated fair value (determined in the first step) of the reporting unit to its assets and liabilities to determine an implied fair value of goodwill. The implied fair value of goodwill was determined in the same manner as the amount of goodwill recognized in an acquisition. That is, the estimated fair value of the reporting unit was allocated to all of the assets and liabilities of the unit (including

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

unrecognized intangibles such as provider relationships) as if the reporting unit had been acquired and the estimated fair value was the purchase price paid.

The Company did not record any goodwill impairment expense in either the third quarter or first nine months of 2015.

10. Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consist of the following:



	September 30, 2016		December 31, 2015
Accrued expenses	$	18,491	$	14,054
Accrued compensation	25,709		28,780
Investor incentives payable	529		—
Deferred rent	8,489		4,615
Transaction fee refund reserve	6,860		578
Deferred revenue	2,665		2,551
Loan servicing liabilities, at fair value	3,397		3,973
Loan Trailing Fee liability, at fair value	3,724		—
Payable to issuing banks	3,454		955
Deferred tax liability	—		3,446
Early stock option exercise and other equity-related liabilities	51		83
Contingent liabilities	—		700
Reimbursement payable to limited partners of private funds	1,013		—
Other	3,795		1,508
Total accrued expenses and other liabilities	$	78,177	$	61,243

11. Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) represents other cumulative gains and losses that are not reflected in earnings. The components of other comprehensive income (loss) were as follows:



Three Months Ended September 30,	2016						2015
	Before Tax		Tax Effect		Net of Tax		Before Tax			Tax Effect		Net of Tax
Change in net unrealized income (loss) on securities available for sale	$	111	$	46	$	65	$	(341	)	$	—	$	(341	)
Other comprehensive income (loss)	$	111	$	46	$	65	$	(341	)	$	—	$	(341	)

Nine Months Ended September 30,	2016						2015
	Before Tax		Tax Effect		Net of Tax		Before Tax			Tax Effect		Net of Tax
Change in net unrealized income (loss) on securities available for sale	$	1,710	$	696	$	1,014	$	(1,172	)	$	—	$	(1,172	)
Other comprehensive income (loss)	$	1,710	$	696	$	1,014	$	(1,172	)	$	—	$	(1,172	)

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

Accumulated other comprehensive loss balances were as follows:



	Total Accumulated Other Comprehensive Loss
Balance at December 31, 2015	$	(1,671	)
Change in net unrealized loss on securities available for sale	1,014
Balance at September 30, 2016	$	(657	)

12. Secured Borrowings

During the second quarter of 2016, the Company repurchased $22.3 million of near-prime loans from a single institutional investor that did not meet a non-credit, non-pricing requirement of the investor, of which $15.1 million were originally sold to the investor prior to March 31, 2016. As a result, these loans were accounted for as secured borrowings at March 31, 2016. During the second quarter of 2016, the Company resold the loans to a different investor at par. This subsequent transfer qualified for sale accounting treatment, and the loans were removed from the Company's condensed consolidated balance sheet and the secured borrowings liability was reduced to zero in the second quarter of 2016. There were no secured borrowing liabilities as of September 30, 2016 .

13. 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 September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Stock options	$	6,208	$	8,101	$	17,632	$	23,314
RSUs	11,143		3,037		25,044		5,262
ESPP	438		491		1,273		1,416
Stock issued related to acquisition	133		1,850		2,441		7,566
Total stock-based compensation expense	$	17,922	$	13,479	$	46,390	$	37,558

The following table presents the Company's stock-based compensation expense recorded in the condensed consolidated statements of operations:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015 ⁽¹⁾		2016		2015 ⁽¹⁾
Sales and marketing	$	1,699	$	2,283	$	5,016	$	5,504
Origination and servicing	1,013		662		2,722		1,987
Engineering and product development	4,931		3,145		13,134		7,886
Other general and administrative	10,279		7,389		25,518		22,181
Total stock-based compensation expense	$	17,922	$	13,479	$	46,390	$	37,558


⁽¹⁾	Prior period amounts have been reclassified to conform to the current period presentation. See “ Note 1 – Basis of Presentation ” for additional information.

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 capitalized $2.2 million and $1.3 million of stock-based compensation expense associated with developing software for internal use during the third quarters of 2016 and 2015 , respectively. The Company capitalized $6.2 million and $3.1 million of stock-based compensation expense associated with developing software for internal use during the first nine months of 2016 and 2015 , respectively.

In addition, the Company recognized $0 and $62 thousand in tax deficits from exercised stock options and RSUs during the third quarter and first nine months of 2016 . There was no net income tax benefit recognized relating to stock-based compensation expense and no tax benefits have been realized from exercised stock options and RSUs due to the full valuation allowance during the third quarter and first nine months of 2015 .

In the second quarter of 2016, the board of directors or the compensation committee of the board of directors, as appropriate, approved incentive retention awards to certain members of the executive management team and other key personnel. These incentive awards consisted of an aggregate of $16.3 million of RSUs and $18.6 million of cash. These incentive retention awards will be recognized as compensation expense ratably through May 2017.

The cash retention awards were granted under the Cash Retention Plan. Under the terms of the Cash Retention Plan, employees who received an award will be eligible to earn a cash retention bonus on the terms and in the amounts specified in their respective cash retention bonus award agreement, subject to continued services and other vesting requirements set forth in such agreement.

Equity Incentive Plans

The Company has two equity incentive plans: the 2007 Stock Incentive Plan (2007 Plan) and the 2014 Equity Incentive Plan (2014 Plan). Upon the Company’s IPO in 2014, the 2007 Plan was terminated and all shares that remained available for future issuance under the 2007 Plan at that time were transferred to the 2014 Plan. As of September 30, 2016 , 26,642,089 options to purchase common stock granted under the 2007 Plan remain outstanding. As of September 30, 2016 , the total number of shares reserved for future grants under the 2014 Plan was 26,525,701 shares, including shares transferred from the 2007 Plan.

Stock Options

The following table summarizes the activities for the Company's stock options during the first nine months of 2016 :



	Number of Options		Weighted- Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value ⁽¹⁾
Outstanding at December 31, 2015	48,208,911		$	3.60
Granted	7,482,011		$	7.22
Exercised	(14,041,282	)	$	0.78
Forfeited/Expired	(8,686,702	)	$	6.61
Outstanding at September 30, 2016	32,962,938		$	4.83	7.0	$	81,007
Vested and expected to vest at September 30, 2016	32,837,306		$	4.83	7.0	$	80,920
Exercisable at September 30, 2016	19,488,544		$	3.52	6.1	$	67,646


⁽¹⁾	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the Company’s closing stock price of $6.18 as reported on the New York Stock Exchange on September 30, 2016 .

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

For the first nine months of 2016 , the Company granted service-based stock options to purchase 7,482,011 shares of common stock with a weighted average exercise price of $7.22 per option share, a weighted average grant date fair value of $3.61 per option share and an aggregate estimated fair value of $27.0 million . Stock options granted during the first nine months of 2016 included 265,987 shares of fully vested stock options granted in lieu of cash bonuses to be paid to certain employees for the 2015 performance period. In the third quarter of 2016, a portion of these options were modified and the cash bonuses were paid.

For the first nine months of 2015 , the Company granted service-based stock options to purchase 1,164,929 shares of common stock with a weighted average exercise price of $20.00 per option share, a weighted average grant date fair value of $9.80 per option share and an aggregate estimated fair value of $11.4 million .

The aggregate intrinsic value of options exercised was $71.0 million and $75.3 million for the first nine months of 2016 and 2015 , respectively. The total fair value of stock options vested for the first nine months of 2016 and 2015 was $25.4 million and $26.0 million , respectively.

As of September 30, 2016 , the total unrecognized compensation cost, net of forfeitures, related to outstanding stock options was $50.4 million , which is expected to be recognized over the next 2.5 years.

The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options granted with the following assumptions:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Expected dividend yield	—		—		—		—
Weighted-average assumed stock price volatility	51.0	%	48.7	%	51.6	%	49.4	%
Weighted-average risk-free interest rate	1.28	%	1.67	%	1.34	%	1.61	%
Weighted-average expected life (in years)	6.25		6.25		6.15		6.25

Restricted Stock Units

The following table summarizes the activities for the Company's RSUs during the first nine months of 2016 :



	Number of RSUs		Weighted- Average Grant Date Fair Value
Unvested at December 31, 2015	4,443,399		$	15.23
RSUs granted	35,556,344		$	6.12
RSUs vested	(1,917,809	)	$	11.44
RSUs forfeited/expired	(4,003,552	)	$	9.13
Unvested at September 30, 2016	34,078,382		$	6.66
Expected to vest after September 30, 2016	33,386,970		$	9.47

For the first nine months of 2016 , the Company granted 35,556,344 RSUs with an aggregate fair value of $217.7 million .

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 September 30, 2016 , there was $212.5 million of unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over the next 3.3 years.

Employee Stock Purchase Plan

The Company’s ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount 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 721,918 shares of common stock under the ESPP during the first nine months of 2016 . No shares were purchased during the third quarter of 2016 . As of September 30, 2016 , a total of 6,195,036 shares remain reserved for future issuance. The Company's employees purchased 211,256 shares under the ESPP during the third quarter and first nine months of 2015.

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. On May 11, 2016 and June 11, 2015, we used the following assumptions in estimating the fair value of the grant under the ESPP which are derived using the same methodology applied to stock option assumptions:



	Nine Months Ended September 30,
	2016		2015
Expected dividend yield	—		—
Weighted-average assumed stock price volatility	58.9	%	38.8	%
Weighted-average risk-free interest rate	0.4	%	0.1	%
Weighted-average expected life (in years)	0.50		0.42

Share Repurchases

On February 9, 2016 , the board of directors approved a share repurchase program under which Lending Club may repurchase up to $150.0 million of the Company’s common shares in open market or privately negotiated transactions in compliance with Securities and Exchange Act Rule 10b-18 . This repurchase plan is valid for one year and does not obligate the Company to acquire any particular amount of common stock, and may be suspended at any time at Lending Club’s discretion. In the first quarter of 2016 , the Company repurchased 2,282,720 shares of its common stock at a weighted average purchase price of $8.52 per share for an aggregate purchase price of $19.5 million . There were no shares repurchased during the second quarter or third quarter of 2016 and the Company does not currently intend to repurchase additional shares in the near term.

Retirement Plan

Upon completing 90 days of service, employees may participate in the Company’s qualified retirement plan that is governed by section 401(k) of the IRS Code. Participants may elect to contribute a portion of their annual compensation up to the maximum limit allowed by federal tax law. In the first quarter of 2016 , the Company approved an employer match of up to 4% of an employee’s eligible compensation with a maximum annual match of $5,000 per employee. The total expense for the employer match for the third quarters of 2016 and 2015 was $0.8 million and $0.5 million , respectively. The total expense for the employer match for the first nine months of 2016 and 2015 was $3.2 million and $1.5 million , respectively.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

Severance Costs

On June 22, 2016, the Board of Directors (the "Board") of the Company approved a plan to reduce the number of employees, which includes payment of severance benefits to certain employees whose positions were affected. The plan authorized the reduction of up to 179 positions, or approximately 12% of the Company's workforce. The purpose of the action was to reduce costs, streamline operations and more closely align staffing with anticipated loan volumes. As a result, the Company recorded $2.7 million in severance costs, which were comprised predominately of cash severance, and paid $0.1 million during the second quarter of 2016. All of the remaining $2.6 million of severance costs was paid in the third quarter of 2016. No such costs were recorded in the third quarters of 2016 and 2015 and first nine months of 2015.

The following table presents the Company's severance expense recorded in the condensed consolidated statements of operations:



	Nine Months Ended September 30, 2016
Sales and marketing	$	772
Origination and servicing	1,174
Engineering and product development	134
Other general and administrative	650
Total severance expense	$	2,730

14. Income Taxes

For the third quarter and first nine months of 2016 , the Company recorded income tax benefit of $0.2 million and $4.0 million , respectively. For the third quarter and first nine months of 2015 , the Company recorded income tax expense of $1.2 million and $2.2 million , respectively. The income tax benefit in the third quarter and first nine months of 2016 included the recognition of a full valuation allowance against deferred tax assets and the tax effects of unrealized gains credited to other comprehensive income associated with the Company's available for sale portfolio. In addition, the income tax benefit in the first nine months of 2016 included the tax effect of the impairment of tax deductible goodwill, which occurred during the second quarter of 2016.

The Company continues to recognize a full valuation allowance against net deferred tax assets. This determination was based on the assessment of the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. As of September 30, 2016 and December 31, 2015 , the valuation allowance was $35.4 million and $25.3 million , respectively.

15. Commitments and Contingencies

Operating Lease Commitments

The Company's corporate headquarters are located in San Francisco, California, and consist of approximately 169,000 square feet of space under lease agreements, the longest of which is expected to expire in June 2022 . Under these lease agreements, the Company has an option to extend nearly all of the space for five years.

In April 2015 , the Company entered into a lease agreement for approximately 112,000 square feet of additional office space in San Francisco, California. The lease agreement commenced in the second quarter of 2015 with

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

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 26,000 square feet in Westborough, Massachusetts, under a lease agreement that expires in July 2021 .

Total facilities rental expense for the third quarter and first nine months of 2016 was $3.7 million and $10.5 million , respectively. Total facilities rental expense for the third quarter and first nine months of 2015 was $2.0 million and $5.0 million , respectively. Minimum lease payments for the third quarter and first nine months of 2016 was $3.4 million and $8.3 million , respectively. Minimum lease payments for the third quarter and first nine months of 2015 was $1.5 million and $4.1 million , respectively.

As of September 30, 2016 , the Company pledged $0.8 million of cash and $4.7 million in letters of credit as security deposits in connection with its lease agreements.

The Company's future minimum payments under non-cancelable operating leases in excess of one year as of September 30, 2016 , were as follows:



	Minimum Rental Payments
2016	$	3,661
2017	15,092
2018	16,053
2019	15,621
2020	16,523
Thereafter	57,201
Total	$	124,151

Loan Purchase Obligation

Under the Company's loan account program with WebBank, a Utah-chartered industrial bank that serves as the Company's primary issuing bank, WebBank retains ownership of the loans facilitated through Lending Club's marketplace for two business days after origination. As part of this arrangement, the Company has committed to purchase the loans at par, at the conclusion of the two business days. As of September 30, 2016 and December 31, 2015 , the Company was committed to purchase loans with an outstanding principal balance of $55.5 million and $77.6 million at par, respectively.

Loan Repurchase Obligations

The Company has historically limited its loan or note repurchase obligations to events of verified identity theft or in connection with certain customer accommodations. As institutional investors seek to securitize loans purchased through the marketplace, the Company has increased the circumstances and the required burden of proof of economic harm under which the Company is obligated to repurchase loans from these investors. We believe these repurchase obligations are customary and consistent with institutional loan and securitization market standards.

In addition to and distinct from the repurchase obligations described in the preceding paragraph, the Company performs certain administrative functions for a variety of retail and institutional investors, including executing, without discretion, loan investments as directed by the investor. To the extent loans do not meet the investor's

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

investment criteria at the time of issuance, or are transferred to the investor as a result of a system error by the Company, the Company is obligated to repurchase such loans at par. As a result of these obligations, we repurchased $39.5 million in loans during the first nine months of 2016.

Loan Funding and Purchase Commitments

During the second quarter of 2016, the Company purchased a total of $134.9 million in loans to fulfill regulatory requirements and to support short-term market place equilibrium as discussed below. The Company purchased $0.4 million in loans in the third quarter of 2016 to fulfill regulatory requirements or to support short-term market place equilibrium.

As required by applicable regulations, the Company is required to purchase loans resulting from direct marketing efforts if such loans are not otherwise invested in by investors on the platform. During the third quarter of 2016 , the Company did not purchase any such loans. Additionally, loans in the process of being facilitated and originated by the Company's issuing bank partner at September 30, 2016 , were substantially funded in October 2016 . As of the date of this report, no loans remained without investor commitments and the Company was not required to purchase any of these loans.

Following the events of May 9, 2016, the Company opted to use its own capital to support short-term marketplace equilibrium and purchased $99.5 million in loans during the second quarter of 2016.

As of September 30, 2016, the Company held $34.2 million of loans on its balance sheet.

In addition, if neither Springstone nor the Company can arrange for other investors to invest in or purchase Pool B loans that Springstone facilitates and that are originated by an issuing bank partner, Springstone and the Company are contractually committed to purchase these loans.

The Company and the issuing bank have entered into purchase agreements with three investors to purchase Pool B loans or participation interests in Pool B loans. As of January 5, 2016, any contractual minimum purchase requirements by these three investors had expired. During the first nine months of 2016 , the Company was not required to purchase any Pool B loans or interests in such loans. In connection with these purchase agreements, the Company has deposited $9.0 million into an account at the bank to secure potential, future purchases of these loans, if any.

Credit Support Agreement

The Company is subject to a credit support agreement with Cirrix Capital (Investment Fund). The credit support agreement requires the Company to pledge and restrict cash in support of its contingent obligation to reimburse the Investment Fund for net credit losses on loans underlying the Investment Fund's certificates that are in excess of a specified, aggregate net loss threshold. As of September 30, 2016 , $3.4 million was pledged and restricted to support this contingent obligation. The Company's maximum exposure to loss under this credit support agreement was limited to $6.0 million at September 30, 2016 .

As of September 30, 2016 and December 31, 2015 , the net credit losses pertaining to the Investment Fund's certificates have not exceeded the specified threshold, nor are future net credit losses expected to exceed the specified threshold, and thus no liability has been recorded. The Company currently does 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.

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

Legal

Securities Class Actions. During the first nine months of 2016, five putative class action lawsuits alleging violations of federal securities laws were filed in California Superior Court, San Mateo County, naming as defendants the Company, current and former directors, certain officers, and the underwriters in the December 2014 initial public offering (the IPO). All of these actions were consolidated into a single action (Consolidated State Court Action), entitled In re LendingClub Corporation Shareholder Litigation , No. CIV537300. In August 2016, plaintiffs filed a First Amended Consolidated Complaint ("FACC") alleging violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (Securities Act) based on allegedly false and misleading statements in the IPO registration statement and prospectus. Plaintiffs seek to represent a class of persons who purchased or otherwise acquired the Company’s securities pursuant and/or traceable to the IPO registration statement and prospectus, and seek unspecified compensatory damages, costs and expenses, including attorneys’ fees, and other further relief as the Court may deem just and proper. Defendants demurred to the FACC, and in September 2016, the Court overruled those demurrers with respect to the Section 11 and 15 claims, and sustained the demurrers with leave to amend as the Section 12(a)(2) claim. The Court has not yet set a date for plaintiffs to file their Second Amended Consolidated Complaint. The Company believes that the plaintiffs’ allegations are without merit, and intends to vigorously defend against the claims.

In May 2016, two related putative securities class actions (entitled Evellard v. LendingClub Corporation, et al. , No. 16-CV-2627-WHA, and Wertz v. LendingClub Corporation, et al. , No. 16-CV-2670-WHA) were filed in the United States District Court for the Northern District of California, naming as defendants the Company and certain of its officers and directors. Both actions asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and one of them asserted claims under Sections 11 and 15 of the Securities Act similar to those alleged in the Consolidated State Court Action. In mid-August 2016, the two actions were consolidated into a single action. Plaintiffs seek unspecified compensatory damages, costs and expenses, including attorneys’ fees, and other further relief as the Court may deem just and proper. Plaintiffs’ deadline to file a consolidated complaint is December 9, 2016. The Company believes that the plaintiffs’ allegations are without merit, and intends to vigorously defend against the claims.

Derivative Lawsuits . In May 2016 and August 2016, respectively, two putative shareholder derivative actions were filed in California Superior Court ( Avila v. Laplanche, et al. , No. CIV538758 and Dua v. Laplanche, et al. , CGC-16-553731) against certain of the Company’s current and former officers and directors and naming the Company as a nominal defendant. These actions were voluntarily dismissed without prejudice by plaintiffs in October 2016.. In June 2016, another putative shareholder derivative action, entitled Stadnicki v. Laplanche, et al. , No. 16-CV-3072-WHA, was filed in the United States District Court for the Northern District of California against certain of the Company’s current and former officers and directors and naming the Company as a nominal defendant. This action was voluntarily dismissed without prejudice by plaintiff in August 2016.

Federal Consumer Class Action. In April 2016, a putative class action lawsuit was filed in federal court in New York, alleging that persons received loans, through the Company's platform, that exceeded states' usury limits in violation of state usury and consumer protection laws, and the federal RICO statute. The defendants, in addition to the Company, are WebBank, Steel Partners Holdings, L.P. and the Lending Club Members Trust. The Company has agreed to indemnify WebBank and Steel Partners Holdings, L.P. against certain liabilities in connection with this matter. The plaintiff seeks treble damages, attorneys' fees, and injunctive relief. The Company has filed a motion to compel arbitration on an individual basis, which is now pending. The Company believes that the plaintiff's allegations are without merit, and intends to defend this matter vigorously.

On February 23, 2016, Phoenix Licensing, L.L.C. and LPL Licensing, L.L.C. filed a complaint for patent infringement against the Company in the U.S. District Court for the Eastern District of Texas. The complaint alleges infringement of U.S. Patent Nos. 8,234,184, 6,999,938, 5,987,434, 8,352,317, and 7,860,744 by generating

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

customized marketing materials, replies, and offers to client responses. The Company believes the plaintiffs allegations are without merit, and intends to defend this matter vigorously.

On May 9, 2016, following the announcement of the board review described elsewhere in this filing, the Company received a grand jury subpoena from the U.S. Department of Justice (DOJ). The Company was also contacted by the SEC and Federal Trade Commission ("FTC"). The Company continues cooperating with the DOJ, SEC, FTC and any other governmental or regulatory authorities or agencies. No assurance can be given as to the timing or outcome of these matters.

In addition to the foregoing, the Company is subject to, and may continue to be subject to legal proceedings and regulatory actions in the ordinary course of business, including inquiries by state regulatory bodies related to the Company's marketplace lending model. These include inquiries from the California Department of Business Oversight, the New York Department of Financial Services and the West Virginia Attorney General's office. Based on the early stages of the matters above, the Company cannot provide a reasonable estimate of any potential liability arising from any such matter.

16. Segment Reporting

The Company defines operating segments to be components of the Company for which discrete financial information is evaluated regularly by the Company’s chief operating decision maker (CODM). For purposes of allocating resources and evaluating financial performance, the Company’s CODM reviews financial information by the product types of personal loans, and education and patient finance loans. These product types are aggregated and viewed as one operating segment, and therefore, one reportable segment due to their similar economic characteristics, product economics, production process, and regulatory environment.

All of the Company’s revenue is generated in the United States. No individual customer accounted for 10% or more of consolidated net revenue for any of the periods presented.

17. Related Party Transactions

Related party transactions must be reviewed and approved by the Audit Committee of the Company’s board of directors when not conducted in the ordinary course of business subject to the standard terms of the Company’s online marketplace or certificate investment program. Related party transactions may include any transaction between entities under common control or with a related person occurring since the beginning of the Company’s latest fiscal year, or any currently proposed transaction involving the Company where the amount involved exceeds $120,000 . This review also includes any material amendment or modification to an existing related party transaction. The Company has defined related persons as members of the board of directors, executive officers, principal owners of the Company’s outstanding stock and any immediate family members of each such related persons, as well as any other person or entity with significant influence over the Company’s management or operations.

Several of the Company's executive officers and directors (including immediate family members) have made deposits and withdrawals to their investor accounts and purchased loans, notes and certificates or have investments in private funds managed by LCA. The Company believes all such transactions by related persons were made in the ordinary course of business and were transacted on terms and conditions that were not more favorable than those obtained by similarly situated third-party investors.

At December 31, 2015, Mr. Laplanche, the Company's former CEO and Chairman, and a board member owned approximately 2.0% and 10% , respectively, of limited partnership interests in the Investment Fund, a holding

LENDINGCLUB CORPORATION

Notes to Condensed Consolidated Financial Statements

(Tabular Amounts in Thousands, Except Share and Per Share Amounts, Ratios, or as Noted)

(Unaudited)

company that participates in a family of funds with other unrelated third parties and purchases whole loans and interests in loans from the Company.

During the first nine months of 2016 , this family of funds purchased $212.0 million of whole loans and interests in whole loans. During the first nine months of 2016 , the Company earned $1.3 million in servicing fees and $51 thousand in management fees from this family of funds, and paid interest of $6.2 million to the family of funds. The Company believes that the sales of whole loans and interests in whole loans, and the servicing and management fees charged were on terms and conditions that were not more favorable than those obtained by other third-party investors.

On April 1, 2016, the Company closed its $10.0 million investment, for an approximate ownership interest of 15% in the Investment Fund. At the time the Company made its investment, the Company's Related Party Investors also had limited partnership interests in the Investment Fund that resulted in an aggregate ownership of approximately 29% in the Investment Fund. As of September 30, 2016 , the Company and a board member had an aggregate ownership interest of approximately 27% in the Investment Fund.

18. Subsequent Events

The Company has evaluated the impact of events that have occurred subsequent to September 30, 2016 , 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.

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, 2015 (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. Qualified 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. The capital to invest in the loans enabled through our marketplace comes directly from a wide range of investors, including retail investors, high-net-worth individuals and family offices, banks and finance companies, insurance companies, hedge funds, foundations, pension plans and university endowments, and through a variety of investment channels. Although the Company's overall business model remains premised on the Company not using its balance sheet and assuming credit risk for loans facilitated through our marketplace, the Company may use its capital to support contractual obligations (Pool B loans and repurchase obligations), regulatory commitments (direct mail), support short-term marketplace equilibrium, customer accommodations, or other needs. The Company's use of its capital on the platform from time to time has been, and will be, on terms that are substantially similar to other investors. Additionally, the Company may use its capital to invest in loans associated with the testing or initial launch of new or alternative loan terms, programs or channels to establish a track record of performance prior to facilitating third-party investments in these loans.

We generate revenue from transaction fees from our marketplace’s role in accepting and decisioning applications for our bank partners to enable loan originations, servicing fees from investors for matching available loan assets with capital, and management fees from investment funds and other managed accounts.

Generally, the transaction fees we receive from issuing banks in connection with our marketplace’s role in facilitating loan originations range from 1% to 7% of the initial principal amount of the loan as of September 30, 2016 . In addition, for education and patient finance loans, transaction fees may exceed 7% as they include fees earned from issuing banks and service providers. 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 of up to 1.3% per annum on the month-end principal balance of loans serviced. Certificate holders do not pay a servicing fee, but pay a monthly management fee of up to 1.5% per annum of the month-end balance of assets under management.

Since beginning operations in 2007 , our marketplace has facilitated approximately $22.7 billion in loan originations. These loans were facilitated through the following investment channels: (i) the issuance of member payment dependent notes, (ii) the sale of trust certificates, or (iii) the sale of whole loans to qualified investors. Approximately $4.3 billion of our loan originations since inception were invested in through member payment dependent notes, $6.6 billion were invested in through trust certificates and $11.8 billion were invested in through

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)

whole loan sales. In the third quarter of 2016 , our marketplace facilitated approximately $2.0 billion of loan originations, of which approximately $0.3 billion were invested in through member payment dependent notes, $0.4 billion were invested in through trust certificates and $1.3 billion were invested in through whole loan sales.

Board Review

As previously disclosed in the Company’s Form 10-Q for the quarter ended March 31, 2016 and the Company's Form 10-Q for the quarter ended June 30, 2016, in light of the circumstances relating to $22.3 million of near-prime loan sales in private transactions with a single institutional investor, as described below, and related issues involving data integrity and contract approval monitoring and review processes, we conducted a review under the supervision of an independent sub-committee of the board of directors and with the assistance of independent outside counsel and other advisors. The review also focused on investment transactions in the Investment Fund by us and two related persons and the other matters described below.

We believe that this review and the review of the additional items discussed below, which were previously disclosed in the Company's current report on Form 8-K filed on June 28, 2016, are substantially complete, although it is possible that additional issues may arise as part of the Company’s response to ongoing government requests for information.

After the end of the first quarter, we became aware that approximately $15.1 million and $7.2 million in near-prime loans were sold to a single institutional investor in March and April 2016, respectively. The loans in question failed to conform to the investor's express instructions as to a non-credit, non-pricing element. Certain personnel apparently were aware that the sale did not meet the investor's criteria. In one case, involving $3.0 million in loans, an application date was changed in a live Company database in an attempt to appear to meet the investor's requirement, and the balance of the loans were sold in direct contravention of the investor's direction. The change in application date was promptly remediated. The financial impact of the sales of these $22.3 million in near-prime loans would have been to increase reported gains on sales of loans by approximately $150,000, and to derecognize the loans from the condensed consolidated balance sheet.

In April 2016, we repurchased these loans at par. As the original transfers to the investor did not meet sale criteria for accounting purposes, the transactions in March 2016 were recorded as secured borrowings and the loans sold to the investor in March were included in loans at fair value on our condensed consolidated balance sheet as of March 31, 2016. In April 2016, we resold these loans at par to a different investor who was aware of the reason for the original repurchase.

In connection with this review, the Company concluded that, as of June 30, 2016, the Company’s internal control over financial reporting was ineffective due to a material weakness and, therefore, the Company’s disclosure controls and procedures were also ineffective. The Company made a similar conclusion with respect to its internal control over financial reporting as of March 31, 2016, as disclosed in our Form 10-Q for the quarter ended March 31, 2016 and its internal control over financial reporting as of December 31, 2015, as disclosed in our Form 10-K/A for the year ended December 31, 2015. For more information about our material weakness and these control issues and proposed remediation steps, see “ Item 4 - Controls and Procedures .”

As a further part of this review, an additional independent advisor was retained. The advisor analyzed certain loan data elements from whole loans issued and sold during the second quarter of 2014 through the first quarter of 2016. Excluding the $3.0 million of loans noted above, the advisor observed that 99.99% of the remaining loans display either no changes or changes explained by the normal course of business. We took various control remediation steps, including termination or resignation of senior managers in May 2016 involved in these non-compliant loan sales, and intend to take additional control and other remediation steps in the coming months.

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)

Subsequent to this review, on May 6, 2016, the board of directors accepted the resignation of Renaud Laplanche, our Chairman and CEO. The Company initially appointed Scott Sanborn, its President, as acting CEO and John C. (Hans) Morris, a director, as Executive Chairman. On June 28, 2016, the Company announced that the board of directors appointed Scott Sanborn as the Company's Chief Executive Officer and President, effective June 27, 2016, and that Hans Morris would step down from his temporary role as Executive Chairman. On that date the Company also announced that Mr. Morris had been appointed the independent Chairman of the Board.

The board’s review also discovered that the investment parameters of one of the funds advised by LC Advisors ("LCA"), specifically with respect to the allocation of 60-month loans held by the fund, was out of tolerance. Although the portfolio composition of the fund was disclosed monthly to the investors of the fund, it was not disclosed to our board. The board review also noted that our former CEO and our former Chief Financial Officer (CFO) had pledged some of their Company shares to secure personal loans from a third-party financial institution, which was not disclosed to the board during subsequent deliberations, prior to the discussion referred to below. In January 2016, the reduction in the Company’s share price forced them to refinance. In order to avoid selling shares, the former CEO requested temporary financing, secured by real estate, from an entity related to a director of the Company. Separately, the former CEO then offered to lend an amount to the former CFO to also permit her to refinance her loan. These temporary financing arrangements were discussed with the members of the Audit Committee. The officers obtained new financing from unrelated third parties within three weeks to pay off their temporary financing arrangements. In the opinion of the Company these lending arrangements were executed on normal market terms and, because the Company had no financial involvement in them, did not require approval under the Company’s policy on related party transactions.

As disclosed in the Company’s current report on Form 8-K filed on June 28, 2016, the Company identified two items that necessitated additional review. The two items identified as part of this additional review were:

The first item was a review of methodologies used to determine the net asset values and monthly return figures reported for six private investment funds (the "Funds") managed by the Company’s subsidiary, LCA. The investment assets held by the Funds are essentially loans facilitated through the Company’s platform and are “level 3 assets”, for which no quoted market price is available and whose fair value is therefore subjective and is determined by LCA estimates and calculations.

The Company determined that adjustments were made to the valuation of the Funds' assets that were not consistent with generally accepted accounting principles. These adjustments affected the direction and the specific returns reported in monthly statements sent to limited partners. We will reimburse limited partners who, during the life of any fund, entered or exited the funds and who were adversely impacted by these adjustments. This reimbursement is expected to cost approximately $1.0 million in total, covering the period from inception of the Funds (the earliest of which was March 2011) through May 31, 2016. At September 30, 2016, the Funds had aggregate total assets of $888.0 million. LCA is providing each Fund’s respective limited partners revised return figures that exclude prior adjustments.

The Company and LCA engaged an independent valuation firm, with specific expertise in the valuation of marketplace assets, to provide valuation services to the Funds.

In addition, as discussed above, the investment parameters of one of the LCA Funds, with respect to the allocation of 60-month loans, were exceeded. The Company’s review also found that this was due to non-adherence to the fund’s investment strategy, including in part due to the purchase of loans in the first quarter of 2016 that were about to expire on the Lending Club platform.

The Company and LCA have made several changes to improve the governance and the operations of the Funds as a result of this additional review. In June 2016, LCA established a majority independent Governing Board (the "LCA

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)

Board") for the Funds. The LCA Board will provide fiduciary oversight and make binding determinations for certain actions and activities of the Funds including approval of valuation policies and procedures, and review and adherence to respective investment strategies. Further, we are realigning responsibilities for accounting and financial reporting for the Funds within the Company.

In the second item, the Company identified 32 loans made in the second half of December 2009 through the Lending Club platform, totaling approximately $722,800 in originations and $25,000 in revenue, to the Company’s former CEO, Renaud Laplanche, and three of his family members. All but three of these loans were repaid in full in January and February of 2010, with the remaining three loans held to maturity and paid in full. The Company’s review has found that these loans were issued in order to help increase reported platform loan volume for December 2009. Based on the review, the Company is confident that there are no other situations in which Mr. Laplanche inappropriately originated loans in his or his family’s name during periods after December 2009.

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. The loans facilitated through our marketplace are originated by our issuing bank partners using proprietary risk algorithms to analyze an applicant’s risk profile that are based upon the issuing bank’s underwriting guidelines and credit policy. Additionally, loan applications are evaluated against and must comply with the underwriting standards of the originating banks.

Our marketplace’s credit decisioning and scoring models are evaluated on a regular basis and the additional data on loan history experience, borrower behavior, economic factors and prepayment trends that we accumulate are leveraged to continually improve the models. If the platform is unable to effectively evaluate borrowers’ credit worthiness, 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 worthiness 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 (expressed as a percent of original loan balances) through September 30, 2016 , by booking year, for all grades and 36 or 60 month terms of standard program loans for each of the years shown.

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)

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)

Loan Portfolio Information and Credit Metrics

The Company classifies the loans held on its balance sheet into three major loan products: standard program personal loans, custom program personal loans and other loans. The majority of the loans facilitated on our platform and retained on the balance sheet are standard program personal loans which represent loans made to prime borrowers that are publicly available to note investors and through certificates to private investors. Custom program personal loans include all other personal loans that are not eligible for our standard program and are available only to private investors. Other loans is comprised of education and patient finance loans, small business loans, and small business lines of credit. The loans on the balance sheet are financed by notes issued by the Company, certificates issued by the Trust or invested in directly by the Company.

Fair Value and Delinquencies

The outstanding principal balance, fair value and percentage of these loans that are delinquent, by loan product are as follows:



	September 30, 2016						December 31, 2015
(in millions, except percentages)	Outstanding Principal Balance		Fair Value ⁽²⁾		Delinquent Loans ⁽²⁾		Outstanding Principal Balance		Fair Value ⁽²⁾		Delinquent Loans ⁽²⁾
Personal loans - standard program	$	4,378.4	94.6	%	3.0	%	$	4,376.7	97.4	%	2.2	%
Personal loans - custom program	291.2		90.4		5.3		271.2		95.8		2.4
Other loans ⁽¹⁾	22.4		96.1		4.4		33.8		98.2		2.4
Total	$	4,692.0	94.3	%	3.1	%	$	4,681.7	97.3	%	2.2	%

⁽¹⁾ Components of other loans are each less than 10% of the outstanding loan balance presented individually and in the aggregate.

⁽²⁾ Expressed as a percent of outstanding principal balance.

Declines in the fair value of loans from December 31, 2015 to September 30, 2016 were primarily due to increases in the yields required by investors to purchase the Company’s loans, notes and certificates, and an increase in expected credit losses.

Net Annualized Charge-Off Rates

The following tables show annualized net charge-off rates, which is an alternative measure of the credit performance of the Company’s portfolio from the graphs above. The net cumulative lifetime charge-off rates show total charge-offs as a function of original principal balance, while these tables show the annualized net charge-off rates that reflect the charged-off balance of loans in a specific period as a percentage of the average outstanding balance of the loans during the periods presented.

The annualized net charge-off rates for personal loans for both standard and custom programs in total for the last completed quarters below, are as follows:

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 Platform ⁽¹⁾	September 30, 2015		December 31, 2015		March 31, 2016		June 30, 2016		September 30, 2016
Personal Loans-Standard Program:
Annualized net charge-off rate	4.2	%	4.7	%	5.0	%	4.9	%	6.1	%
Weighted average age in months	9.2		9.3		9.5		10.3		11.3

Personal Loans-Custom Program:
Annualized net charge-off rate	5.9	%	7.0	%	8.2	%	8.6	%	11.0	%
Weighted average age in month	6.6		6.9		7.3		8.4		9.1




Loans retained on balance sheet	September 30, 2015		December 31, 2015		March 31, 2016		June 30, 2016		September 30, 2016
Personal Loans-Standard Program:
Annualized net charge-off rate	5.0	%	5.4	%	6.2	%	6.5	%	8.2	%
Weighted average age in months	10.2		10.3		10.9		12.1		12.9

Personal Loans-Custom Program:
Annualized net charge-off rate	3.9	%	4.4	%	5.6	%	8.2	%	14.0	%
Weighted average age in month	4.8		5.1		5.8		8.4		10.9

⁽¹⁾ Total platform comprises all loans facilitated through the marketplace including whole loans sold and loans financed by notes and certificates.

The increase in the annualized net charge-off rate in the third quarter of 2016 is due to an increase in the average age of the loans and higher observed actual charge-offs. We generally expect charge-off rates to increase with loan age, as new loans generally have fewer credit losses than seasoned loans. Prior to 2016, the Company’s loan portfolio grew significantly as the volume of loans facilitated increased. As a result, the average age of the portfolio, and with it the average charge-off rate, stayed low during that period. In 2016, loan originations have grown at a slower rate, causing average loan age to increase thereby driving an increase in the aggregate annualized charge-off rate metric.

Additionally, we have also observed higher delinquencies and charge-offs in populations characterized by high indebtedness, an increased propensity to accumulate debt, and lower credit scores. Starting in the third quarter of 2016, this trend can now be observed across grades, although it is less notable in lower risk grades and more notable in higher risk grades, particularly grade E, F, and G. In the third quarter of 2016, we also observed higher delinquencies in 2015 and early 2016 vintages, which coincides with an increase in consumer indebtedness in the U.S.

The annualized net charge-off rates for standard program loans are higher for the retained loans compared to the total platform level for each period because of a difference in grade distribution for the two portfolios. The proportion of grade A and B loans is about 30% of the retained loan portfolio compared to about 42% for the total platform level. This difference in loan grade distribution results in higher net charge-off rates for the loans on the balance sheet, as grade A and B loans have lower expected and actual credits losses.

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 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 investors, we have introduced automated investing, application programming interface (API), investment funds and separately managed accounts that make investing in loans easier. Failure to invest in and 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 have dedicated 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. As a result of our recent events and reduced investor confidence, it may be more difficult for us to attract additional strategic relationships. We recently made investments in compliance and programs to improve investor confidence and anticipate that we will continue such investments as we continue to build our compliance infrastructure and invest in reputational risk management.

From time to time, we may enter into strategic relationships that may impact whether certain standard program loans are made available for investing through our marketplace. For example, we have a strategic partnership relationship with a consortium of community banks for our marketplace 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 criteria are then made available for investment through the marketplace. All other loans will continue to be available on our marketplace and accessible on an equal basis and are originated by our issuing banks.

Regulatory Environment

The regulatory environment for credit and online marketplaces such as ours is complex, evolving and uncertain, creating both challenges and opportunities that could affect our financial performance. We and the loans facilitated through our marketplace are subject to extensive and complex rules and regulations, licensing and examination by various federal, state and local government authorities designed to, among other things, protect borrowers (such as truth in lending, equal credit opportunity, fair credit reporting and fair debt collection practices) and investors. Our primary issuing bank, WebBank, is subject to oversight by the FDIC and the State of Utah. The other two issuing banks are NBT Bank and Comenity Capital Bank. NBT Bank is subject to oversight by the OCC and the New York Department of Financial Services, and Comenity Capital Bank is subject to oversight by the FDIC and the Utah Department of Financial Institutions. These authorities impose obligations and restrictions on our activities and the loans facilitated through our marketplace. For example, these rules limit the fees that may be assessed on the loans, require extensive disclosure to, and consents from, the borrowers and lenders, prohibit discrimination and unfair and deceptive acts or practices and may impose multiple qualification and licensing obligations on our activities.

We expect to continue to spend significant resources to comply with these and other federal and state laws and various licensing requirements. Our marketplace incorporates a number of automated features to help comply with

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)

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 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 and held that a nonbank assignee of a loan originated by a national bank was not entitled to the benefits of federal preemption of claims of usury. 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. The defendant petitioned the U.S. Supreme Court to review the decision and in March 2016, the Court invited the Solicitor General to file a brief expressing the views of the U.S. on the petition. The Solicitor General filed an amicus brief that stated the Second Circuit decision was incorrect, but that the case was not yet ready to be heard by the Supreme Court. In June 2016, the Supreme Court declined to hear the case. The Federal District Court is now hearing the case in regards to Midland’s alternative claim regarding choice of law, which if successful, could allow Midland to prevail and the loan to be enforceable as issued.

While we believe that our program is factually distinguishable from the case, we have revised our agreement with our primary issuing bank to further distinguish the operation of the program from the court’s analysis of the facts in Madden. Under the revised program structure, an additional component of the program fee arrangement was created. This additional program fee component is dependent on the amount and timing of principal and interest payments made by borrowers of the underlying loans. Under this revised program structure the majority of the bank's revenue is therefore tied to the terms and performance of the loans. The bank also maintains an ongoing contractual relationship with borrowers, who may seek additional credit through the Lending Club program in the future.

In August 2016, a federal district court in the Central District of California considered a case brought by the Consumer Finance Protection Bureau (“CFPB”) against CashCall, Inc. In that case, CashCall had an arrangement with a tribal lender associated with the Cheyenne River Sioux Tribe in which loans were offered to borrowers at APR’s that could exceed 300 percent. The district court ruled that, under the facts presented in the case, CashCall should be deemed the “true lender” and could not charge interest rates in excess of state usury laws. A few weeks later, in September 2016 in Bethune v. National Solutions, Inc. , also in the federal district court in the Central District of California, the court considered a program in which a national bank had a bank partnership with a non-bank, the Student Loan Marketing Association, in which borrowers could receive loans originated by the bank through the SMLA. The court in Bethune rejected the argument that the SMLA was the “true lender,” holding that the face of the borrower transactions showed that the bank had originated the loans and any further analysis to look behind the face of the transaction was inappropriate. We believe that our program is factually distinguishable from the CashCall situation.

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. We, along with many other interested groups, submitted responses to the Treasury’s RFI by the September 30, 2015 deadline.

On May 10, 2016, the U.S. Treasury Department released a white paper on the online marketplace lending industry to continue the work initiated by the RFI. The white paper includes several recommendations to the federal government and private sector participants to encourage safe growth and access to credit. We cannot predict whether any legislation or proposed rulemaking will actually be introduced or how any legislation or rulemaking will impact our business and results of operations going forward. In September 2016, representatives of the Office of the Comptroller of the Currency (the “OCC”) stated that the agency intends to complete work on a framework by which

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)

it will consider innovative financial platforms such as marketplace lenders. In October 2016, the OCC announced the creation of a separate Office of Innovation within the OCC to assist banks and non-banks in considering innovative financial products, services and platforms.

In December 2015, the California Department of Business Oversight (DBO) sent an online survey to fourteen marketplace lenders, including us, requesting information about our business model, online platform, loan performance and investor funding process. In May 2016, the DBO requested additional information from us and other survey participants.

While we are subject to the regulatory and enforcement authority of the Consumer Financial Protection Bureau (CFPB), as a facilitator, servicer or acquirer of consumer credit, the CFPB has recently announced that it intends to expand its supervisory authority, through the use of “larger participant rules,” to cover larger marketplace lenders, non-bank installment lenders and auto lenders. The CFPB has announced larger participant rules for auto lenders but has not yet announced specifics regarding its proposed rulemaking for installment loan lenders and, consequently, there continues to be uncertainty as to how the CFPB’s strategies and priorities, including any final rules, will impact our unsecured installment loan business and our results of operations going forward.

In addition, as a result of events surrounding the resignation of our CEO, we have received inquiries from governmental entities, and we continue to cooperate fully. Responding to inquiries of this nature are costly and time consuming, can generate negative publicity, and could have a material and adverse effect on our business.

Current Economic and Business Environment

Our marketplace has a number of levers at its disposal to adjust to changing market conditions, including the ability to quickly adapt underwriting models and dynamically increase or decrease pricing to provide an appropriate level of loss coverage to investors. Consistent with observations earlier this year, we have continued to observe higher delinquencies in populations characterized by high indebtedness, an increased propensity to accumulate debt, and lower credit scores. Starting in the third quarter of 2016 this trend can now be observed across grades, although it is less notable in lower risk grades and more notable in higher risk grades, particularly grades E, F and G. In the third quarter of 2016, standard program personal loan grades E, F, and G accounted for approximately 8% of platform volume. Additionally, in the third quarter of 2016, we observed higher delinquencies in 2015 and early 2016 vintages, which coincides with an uptick in consumer indebtedness in the U.S.

In response to our observations of borrower performance, and taking into account a cautious economic outlook from our platform investors and ourselves, platform interest rates were raised by a weighted average of approximately 135 basis points from November 2015 to June 2016, primarily in more economically sensitive loan grades D through G. Effective October 14, 2016, the Company increased interest rates by a weighted average total of 26 basis points. These interest rate increases were concentrated in Grades F and G with marginal changes in other grades.

In addition to the increased interest rates, the origination fee paid by borrowers was also increased in March of 2016. These combined rates and fee increases may negatively impact the volume of loans facilitated through our marketplace.

In April 2016 and again in June 2016, we eliminated underperforming populations from the platform's credit policy that was mainly characterized by high indebtedness, an increased propensity to accumulate debt and lower credit scores. Together, these actions accounted for eliminating approximately 9% of total loan volume on an annualized

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)

basis. In line with actions taken throughout 2016, on October 12, 2016, the credit underwriting criteria was tightened to no longer approve loans for certain sub-segments of borrowers who meet a combination of several risk factors such as high revolving debt, multiple recently opened installment loans, and higher risk scores on our proprietary scorecard. As a result of this credit underwriting change, we believe that approximately 1% of borrowers who previously would have been able to obtain a loan under prior underwriting criteria will no longer be approved.

As a result of the circumstances surrounding the loan sales noted above under "Board Review", a number of investors that, in the aggregate, have contributed a significant amount of funding on the platform, paused their investments in loans through the platform as they perform audit and validation tests on their portfolios, or are otherwise reluctant to invest. The Company saw existing investors re-engage and commence investing in loans late in the second quarter of 2016 and that engagement continued into the third quarter of 2016 as total loan originations in the third quarter of 2016 were $2.0 billion. The Company's incentives provided to whole loan investors previously disclosed continued in the third quarter of 2016, however, such incentives ceased effective September 1, 2016. The Company may enter into strategic arrangements, for example, agreements that involve larger or more long-term forms of committed capital. On November 7, 2016 the Company announced a new addition to the Company’s investor capital mix through an arrangement with a subsidiary of the National Bank of Canada which has approved up to $1.3 billion to be deployed on the Lending Club platform. Subject to certain terms and conditions, the first $325 million has been committed to be deployed on the platform over the next three months.

We believe it is uncertain whether the trend of returning investors will continue or what impact it may have on our business, results of operations, financial condition or our stockholders. It is possible that these investors may not all return to our platform or may not return at their previous scale. We continue to meet with current and prospective platform investors in order to increase the amount of capital committed to the platform.

Additionally, we continue to actively explore ways to increase investor engagement in our platform and obtain additional investment capital for the platform loans.

The use of the Company's balance sheet as a source of initial funding was significantly reduced in the third quarter of 2016 compared to the second quarter of 2016. The Company purchased a total of $0.4 million in loans to fulfill regulatory requirements or to support short-term marketplace equilibrium in the third quarter of 2016, down from $134.9 million in the second quarter of 2016. The Company was able to find additional investors in these loans, or previously funded loans, and resold $135.5 million in the second quarter of 2016.

The outstanding principal balance of loans for which the Company remained invested in as of September 30, 2016 amounted to $ 34.2 million .

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, compliance 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 volume, timing and quality of loan applications, investment appetite, investor confidence in our data, controls and processes and available investment capital from investors, platform loan processing and originations, and the subsequent performance of loans, which directly impacts our servicing fees, can affect our revenue in any particular period. 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:

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)


•	market confidence in our data, controls, and processes,


•	announcements of governmental inquiries or private litigation,


•	the mix of loans,


•	cost,


•	availability or the timing of the deployment of investment capital by investors,


•	the availability and 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,


•	seasonality in demand for our platform and services, which is generally lower in the first and fourth quarters,


•	and other factors.

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 banks and the proceeds are delivered to the borrower. Our receipt of a transaction fee is not impacted by who or how a loan is invested in.

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									Nine Months Ended September 30,
	September 30, 2016			June 30, 2016			September 30, 2015			2016			2015
Loan originations	$	1,972,034		$	1,955,401		$	2,235,647		$	6,677,468		$	5,782,496
Operating revenue ⁽¹⁾	$	112,609		$	102,391		$	115,062		$	366,265		$	292,226
Net loss ⁽²⁾	$	(36,486	)	$	(81,351	)	$	950		$	(113,700	)	$	(9,564	)
Contribution ⁽³⁾⁽⁴⁾	$	54,088		$	34,096		$	57,257		$	156,326		$	138,089
Contribution margin ⁽³⁾⁽⁴⁾	48.0		%	33.3		%	49.8		%	42.7		%	47.3		%
Adjusted EBITDA ⁽³⁾	$	(11,147	)	$	(30,116	)	$	21,157		$	(16,035	)	$	45,202
Adjusted EBITDA margin ⁽³⁾	(9.9		)%	(29.4		)%	18.4		%	(4.4		)%	15.5		%


⁽¹⁾	See “ Factors That Can Affect Revenue ” for more information regarding operating revenue.


⁽²⁾	See “ Results of Operations ” for more information regarding operating revenue and net loss.


⁽³⁾	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 “ Reconciliations of Non-GAAP Financial Measures .”


⁽⁴⁾	Prior period amounts have been reclassified to conform to the current period presentation. See “ Results of Operations – Operating Expenses ” for additional information.

Loan Originations

We believe 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. Factors that could affect loan originations include investor confidence in our platform and internal processes, the amount of our capital available to invest in loans, interest rate and economic environment; the competitiveness of our products, primarily based on our platform's rates and fees; 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.

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 Company's originations and weighted average transactions fees (as a percent of origination balance) by its major and material loan products are as follows:



	Three Months Ended
	September 30, 2016				June 30, 2016				September 30, 2015
(in millions, except percentages)	Origination Volume		Weighted Average Transaction Fees		Origination Volume		Weighted Average Transaction Fees		Origination Volume		Weighted Average Transaction Fees
Personal loans - standard program	$	1,404.6	5.1	%	$	1,443.4	4.9	%	$	1,701.8	4.4	%
Personal loans - custom program	353.2		5.5		295.7		5.4		345.1		4.9
Other loans ⁽¹⁾	214.2		4.4		216.3		4.4		188.7		4.7
Total	$	1,972.0	5.1	%	$	1,955.4	4.9	%	$	2,235.6	4.5	%

⁽¹⁾ Components of other loans are less than 10% of the origination volume presented individually.



	Nine Months Ended
	September 30, 2016				September 30, 2015
(in millions, except percentages)	Origination Volume		Weighted Average Transaction Fees		Origination Volume		Weighted Average Transaction Fees
Personal loans - standard program	$	4,935.2	4.8	%	$	4,444.2	4.4	%
Personal loans - custom program	1,108.1		5.2		826.5		4.9
Other loans ⁽¹⁾	634.2		4.4		511.8		4.4
Total	$	6,677.5	4.8	%	$	5,782.5	4.5	%

⁽¹⁾ Components of other loans are less than 10% of the origination volume presented individually.

Loans Serviced On Our Platform

The following table provides the outstanding principal balance of loans serviced at the end of the periods indicated, by the method that the loans were financed (in millions):



	September 30, 2016		December 31, 2015
Notes	$	1,818	$	1,573
Certificates	2,840		3,105
Whole loans sold	6,242		4,289
Other ⁽¹⁾	34		3
Total	$	10,934	$	8,970


⁽¹⁾	Includes loans invested in by the Company for which there were no associated notes or certificates.

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 table sets forth the condensed consolidated statements of operations data for each of the periods presented:



	Three Months Ended								Change (%)
	September 30, 2016			June 30, 2016			September 30, 2015		Q3 2016 vs Q3 2015		Q3 2016 vs Q2 2016
Operating revenues:
Transaction fees	$	100,813		$	96,605		$	100,420	—	%	4	%
Servicing fees	16,513			11,603			8,999		83	%	42	%
Management fees	1,964			3,053			2,900		(32	)%	(36	)%
Other revenue	(6,681		)	(8,870		)	2,743		N/M		N/M
Total operating revenue	112,609			102,391			115,062		(2	)%	10	%
Net interest income and fair value adjustments	1,947			1,049			1,214		60	%	86	%
Total net revenue	114,556			103,440			116,276		(1	)%	11	%
Operating expenses ⁽¹⁾ :
Sales and marketing	44,901			49,737			44,018		2	%	(10	)%
Origination and servicing	16,332			20,934			16,732		(2	)%	(22	)%
Engineering and product development	29,428			29,209			21,063		40	%	1	%
Other general and administrative	58,940			53,457			32,280		83	%	10	%
Goodwill impairment	1,650			35,400			—		N/M		N/M
Total operating expenses	151,251			188,737			114,093		33	%	(20	)%
Income (loss) before income tax expense	(36,695		)	(85,297		)	2,183		N/M		N/M
Income tax (benefit) expense	(209		)	(3,946		)	1,233		N/M		N/M
Net income (loss)	$	(36,486	)	$	(81,351	)	$	950	N/M		N/M

N/M - Not meaningful.


⁽¹⁾	Prior period amounts have been reclassified to conform to the current period presentation. See “ Results of

Operations – Operating Expenses ” for additional information.

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)



	Nine Months Ended September 30,
	2016			2015			Change (%)
Operating revenues:
Transaction fees	$	321,926		$	258,553		25	%
Servicing fees	45,058			20,870			116	%
Management fees	8,562			7,663			12	%
Other revenue	(9,281		)	5,140			N/M
Total operating revenue	366,265			292,226			25	%
Net interest income and fair value adjustments	4,025			2,199			83	%
Total net revenue	370,290			294,425			26	%
Operating expenses ⁽¹⁾ :
Sales and marketing	161,213			117,989			37	%
Origination and servicing	56,464			43,639			29	%
Engineering and product development	82,835			53,175			56	%
Other general and administrative	150,432			86,937			73	%
Goodwill impairment	37,050			—			N/M
Total operating expenses	487,994			301,740			62	%
Loss before income tax expense	(117,704		)	(7,315		)	N/M
Income tax (benefit) expense	(4,004		)	2,249			N/M
Net loss	$	(113,700	)	$	(9,564	)	N/M


⁽¹⁾	Prior period amounts have been reclassified to conform to the current period presentation. See “ Results of

Operations – Operating Expenses ” for additional information.

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								Change (%)
	September 30, 2016			June 30, 2016			September 30, 2015		Q3 2016 vs Q3 2015		Q3 2016 vs Q2 2016
Transaction fees	$	100,813		$	96,605		$	100,420	—	%	4	%
Servicing fees	16,513			11,603			8,999		83	%	42	%
Management fees	1,964			3,053			2,900		(32	)%	(36	)%
Other revenue	(6,681		)	(8,870		)	2,743		N/M		N/M
Total operating revenue	112,609			102,391			115,062		(2	)%	10	%
Net interest income and fair value adjustments	1,947			1,049			1,214		60	%	86	%
Total net revenue	$	114,556		$	103,440		$	116,276	(1	)%	11	%



	Nine Months Ended September 30,
	2016			2015		Change (%)
Transaction fees	$	321,926		$	258,553	25	%
Servicing fees	45,058			20,870		116	%
Management fees	8,562			7,663		12	%
Other revenue	(9,281		)	5,140		N/M
Total operating revenue	366,265			292,226		25	%
Net interest income and fair value adjustments	4,025			2,199		83	%
Total net revenue	$	370,290		$	294,425	26	%

N/M - Not meaningful.

Our primary sources of revenue consist of fees received for transactions through or related to our marketplace and include transaction, servicing and management fees. The analysis below is presented for the following periods: Third quarter of 2016 compared to the third quarter of 2015 (Quarter Over Quarter), third quarter of 2016 compared to the second quarter of 2016 (Sequential), and the first nine months of 2016 compared to the first nine months of 2015 (Nine Months Over Nine Months).

Transaction Fees

Transaction fees are fees paid by issuing banks or education and patient 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. As of September 30, 2016 , these fees ranged from 1% to 7% of the initial principal amount of a loan. In addition, for education and patient finance loans, transaction fees may exceed 7% as they include fees earned from issuing banks and the service providers.

In March 2016, we increased the transaction fee that we earn from our primary issuing bank partner for certain prime and near-prime C through G graded loans from 5% to 6%, B graded loans from 4% to 5%, and A graded loans by approximately 1% at each subgrade level for grades A2 to A5. Depending upon the customer impact of these fee changes, these fees may be modified in order to maintain overall platform balance between borrowers and investors.

In October 2016 , we recognized approximately $3.9 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 third quarter of 2016 . In

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)

October 2015, we recognized approximately $11.7 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 third quarter of 2015 .

Quarter Over Quarter : Transaction fees were $100.8 million and $100.4 million for the third quarters of 2016 and 2015 , respectively. Higher average transactions fees in the third quarter of 2016 resulting from the March 2016 fee increases discussed above were offset by lower origination volume in the comparative quarters. The average transaction fee as a percentage of the initial principal balance of the loan was 5.1% and 4.5% for the third quarters of 2016 and 2015 , respectively, driven by a change in the mix of loans issued and the increase in transaction fees noted above. This was offset by a 12% decrease in loan origination volume during the third quarter of 2016 compared to the same quarter of 2015.

Sequential : Transaction fees were $100.8 million and $96.6 million for the third and second quarter of 2016 , respectively, an increase of 4% . The increase was primarily driven by higher average transaction fees in the third quarter of 2016 as a result of a change in the mix of loan originations towards lower grades that carry higher transaction fees. The average transaction fee as a percentage of the initial principal balance of the loan was 5.1% and 4.9% for the third and second quarter of 2016 , respectively.

Nine Months Over Nine Months : Transaction fees were $321.9 million and $258.6 million for the first nine months of 2016 and 2015 , respectively, an increase of 25% . The increase was due to an increase in loans facilitated through our marketplace from $5.8 billion for the first nine months of 2015 to approximately $6.7 billion for the first nine months of 2016 , an increase of 15% , as well as higher average transaction fees in the first nine months of 2016 resulting from the March 2016 fee increases discussed above. The average transaction fee as a percentage of the initial principal balance of the loan was 4.8% and 4.5% for the first nine months of 2016 and 2015 , respectively.

Servicing Fees

Servicing fees paid to us vary based on investment channel. Servicing fees compensate 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 various servicing rates paid by note and whole loan investors in the applicable investment channels, the outstanding principal balance of 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 includes the change in fair value of our servicing assets and liabilities associated with loans that we sell.

Servicing rights are recorded as either an asset or liability depending on the degree to which the contractual loan servicing fee is above or below, respectively, an estimated market rate loan servicing fee. During the second quarter of 2016, the Company increased its assumption of the market rate of loan servicing from 57 basis points per annum to 63 basis points per annum, based on review of estimated third party servicing rates and market servicing benchmarking analyses provided by two third party valuation firms. The increase in the assumption of a market rate of loan servicing caused the value of the Company’s servicing rights to decrease. The recording of the change in fair value of servicing rights does not affect the contractual servicing rates that the Company collects from the whole loan investors on a monthly basis.

Quarter Over Quarter : Servicing fee revenue was $16.5 million and $9.0 million for the third quarter s of 2016 and 2015, respectively, an increase of 83%. The increase was primarily due to increases in both the balances of whole loans sold and the loan balances that underlie the notes and certificates. Additionally, servicing fee revenue increased due to higher contractual collection fees.

Sequential : Servicing fee revenue increased by $4.9 million during the third quarter of 2016 compared to the second quarter of 2016 due to increased servicing fees related to whole loans sold and notes of $1.9 million plus a

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)

$3.0 million lower decrease in the fair value of servicing assets and liabilities. The fair value decrease in the second quarter of 2016 resulted from an increase in the assumption of the market rate of loan servicing. There was no such adjustment in the third quarter of 2016.

Nine Months Over Nine Months : Servicing fee revenue was $45.1 million and $20.9 million for the first nine months of 2016 and 2015, respectively, an increase of 116%. The increase was due to increases in both the balances of whole loans sold and the loan balances that underlie the notes and certificates.

The table below illustrates the composition of servicing fees by source for each period presented:



	Three Months Ended								Change (%)
	September 30, 2016			June 30, 2016			September 30, 2015		Q3 2016 vs Q3 2015		Q3 2016 vs Q2 2016
Servicing fees related to whole loans sold	$	12,980		$	11,392		$	4,935	N/M		14	%
Note servicing fees	5,236			4,883			3,661		43	%	7	%
Servicing fees before change in fair value of servicing assets and liabilities	18,216			16,275			8,596		112	%	12	%
Change in fair value of servicing assets and liabilities, net	(1,703		)	(4,672		)	403		N/M		N/M
Total servicing fees	$	16,513		$	11,603		$	8,999	83	%	42	%



	Nine Months Ended September 30,
	2016			2015		Change (%)
Servicing fees related to whole loans sold	$	33,872		$	11,022	N/M
Note servicing fees	15,251			8,396		82	%
Servicing fees before change in fair value of servicing assets and liabilities	49,123			19,418		153	%
Change in fair value of servicing assets and liabilities, net	(4,065		)	1,452		N/M
Total servicing fees	$	45,058		$	20,870	116	%

Management Fees

Investors in funds managed by LCA, pay a monthly management fee based on the month-end balance of their assets under management, up 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 of up to 1.2% per annum of the month-end balance of their assets under management. Any of these fees may be waived or reduced at the discretion of LCA. A significant portion of the management fees is earned from the funds that are managed by LCA. We currently anticipate that the assets under management associated with these funds will decrease as a result of a significant amount of redemption requests received. This potential reduction will negatively affect management fee revenue. At September 30, 2016, the aggregate assets of these funds were $0.9 billion and outstanding aggregate redemption requests totaled $588.2 million.

Quarter Over Quarter : Management fees were $2.0 million and $2.9 million for the third quarters of 2016 and 2015 , respectively, a decrease of 32% . The decrease in management fees was primarily due to a reimbursement of prior management fees to some investors.

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)

Sequential : Management fees were $2.0 million and $ 3.1 million for the third and second quarter of 2016 , respectively, a decrease of 36% due to a reimbursement of management fees overages.

Nine Months Over Nine Months : Management fees were $8.6 million and $7.7 million for the first nine months of 2016 and 2015 , respectively, an increase of 12% . The increase in management fees was primarily due to an increase in the total assets under management and outstanding certificate balances.

Other Revenue

Other revenue primarily consists of gains and losses on sales of whole loans and referral revenue. In connection with whole loan sales, in addition to the transaction and servicing fees earned with respect to 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. Referral revenue consists of fees earned from third-party companies when customers referred by us complete specified actions with such third-party companies.

The table below illustrates the composition of other revenue for each period presented:



	Three Months Ended								Change (%)
	September 30, 2016			June 30, 2016			September 30, 2015		Q3 2016 vs Q3 2015		Q3 2016 vs Q2 2016
Gain (loss) on sales of loans	$	(11,519	)	$	(10,447	)	$	1,685	N/M		10	%
Referral revenue	1,548			1,510			987		57	%	3	%
Other	3,290			67			71		N/M		N/M
Other revenue (loss)	$	(6,681	)	$	(8,870	)	$	2,743	N/M		(25	)%



	Nine Months Ended September 30,
	2016			2015		Change (%)
Gain (loss) on sales of loans	$	(17,267	)	$	2,140	N/M
Referral revenue	4,590			2,906		58	%
Other	3,396			94		N/M
Other revenue (loss)	$	(9,281	)	$	5,140	N/M

Quarter Over Quarter : Other revenue (loss) was $(6.7) million and $2.7 million for the third quarters of 2016 and 2015 , respectively. The sale of loans in the third quarter of 2016 resulted in approximately $10.7 million of incentives provided to investors. Prior to the second quarter of 2016 the Company had not historically provided such incentives.

Sequential : Other revenue (loss) was $(6.7) million and $(8.9) million for the third and second quarter of 2016 , respectively.

Nine Months Over Nine Months : Other revenue (loss) was $(9.3) million and $5.1 million for the first nine months of 2016 and 2015 , respectively. As noted above, incentives were provided to investors commencing in the second quarter of 2016 resulting in approximately $14.0 million and $10.7 million of incentives provided in the second and third quarters of 2016, respectively.

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 Interest Income and Fair Value Adjustments



	Three Months Ended
	September 30, 2016			June 30, 2016			September 30, 2015
Net interest income	$	2,424		$	2,089		$	1,174
Net fair value adjustments	(477		)	(1,040		)	40
Net interest income and fair value adjustments	$	1,947		$	1,049		$	1,214



	Nine Months Ended September 30,
	2016			2015
Net interest income	$	5,709		$	2,165
Net fair value adjustments	(1,684		)	34
Net interest income and fair value adjustments	$	4,025		$	2,199

Except as set forth below, we generally do not assume principal or interest rate 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 corresponding 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 note and certificate holders. Interest income on loans the Company purchased is recorded in the condensed consolidated statement of operations without corresponding interest expense.

During the second quarter of 2016, the Company purchased a total of $134.9 million in loans to fulfill regulatory requirements and to support short-term marketplace equilibrium. The Company was able to find additional investors in these loans, or previously funded loans, and resold $135.5 million of these loans before June 30, 2016. The Company purchased $0.4 million in loans in the third quarter of 2016 to fulfill regulatory requirements or to support short-term market place equilibrium.

The outstanding principal balance of loans for which the Company remained invested in as of September 30, 2016 amounted to $34.2 million . The Company recorded a negative fair valuation adjustment on the loans it had remained invested in as of September 30, 2016 of approximately $1.0 million and $0.5 million during the second and third quarter of 2016, respectively. See “ Part I – Financial Information – Item 1 – Financial Statements – Note 12 – Secured Borrowings ” for additional information.

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 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 table provides additional detail related to net interest income and fair value adjustments:



	Three Months Ended									Change (%)
	September 30, 2016			June 30, 2016			September 30, 2015			Q3 2016 vs Q3 2015
Interest income:
Loans	$	170,627		$	178,452		$	144,663		18	%
Securities available for sale	810			750			899			(10	)%
Cash and cash equivalents	431			483			271			59	%
Total interest income	171,868			179,685			145,833			18	%
Interest expense:
Notes and certificates	(169,444		)	(177,596		)	(144,659		)	17	%
Total interest expense	(169,444		)	(177,596		)	(144,659		)	17	%
Net interest income	$	2,424		$	2,089		$	1,174		106	%
Average outstanding balances:
Loans	$	4,728,934		$	4,836,993		$	3,930,221		20	%
Notes and certificates	$	4,720,781		$	4,832,056		$	3,951,541		19	%



	Nine Months Ended September 30,
	2016			2015			Change (%)
Interest income:
Loans	$	525,723		$	387,697		36	%
Securities available for sale	2,302			1,447			59	%
Cash and cash equivalents	1,407			687			105	%
Total interest income	529,432			389,831			36	%
Interest expense:
Notes and certificates	(523,723		)	(387,666		)	35	%
Total interest expense	(523,723		)	(387,666		)	35	%
Net interest income	$	5,709		$	2,165		N/M
Average outstanding balances:
Loans	$	4,791,999		$	3,512,666		36	%
Notes and certificates	$	4,794,868		$	3,530,424		36	%

N/M - Not meaningful.

Interest income from loans was $170.6 million and $144.7 million for the third quarters of 2016 and 2015 , respectively. The increase in interest income was primarily due to the increase in the outstanding balances of loans. Interest income from loans was $525.7 million and $387.7 million for the first nine months of 2016 and 2015 , respectively. The increase in interest income was primarily due to the increase in the outstanding balances of loans.

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 expense for notes and certificates was $169.4 million and $144.7 million for the third quarters of 2016 and 2015 , respectively. The increase in interest expense was primarily due to the increase in the outstanding balances of notes and certificates. Interest expense for notes and certificates was $523.7 million and $387.7 million for the first nine months of 2016 and 2015 , 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: The changes in fair value of loans, notes and certificates are shown on our condensed consolidated statement of operations on a net basis. Due to the payment dependent feature of the notes and certificates, fair value adjustments on loans that are invested in by third-parties through the marketplace are offset by the fair value adjustments on the notes and certificates, resulting in no net effect on our earnings. Fair value adjustments on loans the Company purchases have an effect on earnings. In the first quarters of 2016 and 2015, fair value adjustments on such loans were immaterial. 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 net fair value adjustments were immaterial for the third quarters of and first nine months of 2016 and 2015 . 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.

Operating Expenses

Our operating expenses consist of sales and marketing, origination and servicing, engineering and product development and other general and administrative expenses as described below.

Sales and Marketing: Sales and marketing expense consists primarily of borrower and investor acquisition efforts including costs attributable to marketing and selling our products. This includes costs of building general brand awareness, and salaries, benefits and stock-based compensation expense related to our sales and marketing team.

Origination and Servicing: Origination and servicing expense consists of salaries, benefits and stock-based compensation expense and vendor costs attributable to activities that most directly relate to originating and servicing loans for borrowers and investors. These costs relate to the credit, collections, customer support and payment processing teams and related vendors.

Engineering and Product Development: Engineering and product development expense consists primarily of salaries, benefits and stock-based compensation expense for engineering and product management teams, and the cost 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.

Other General and Administrative: Other general and administrative expense consists primarily of salaries, benefits and stock-based compensation expense for our accounting, finance, legal, human resources and facilities teams, and professional services fees. Other general and administrative expense also includes facilities and compensation expenses related to the acquisition of Springstone.

In the fourth quarter of 2015, we disaggregated the expense previously reported as “General and administrative” into “Engineering and product development” and “Other general and administrative” expense. Additionally, we reclassified certain operating expenses between “Sales and marketing,” “Origination and servicing,” “Engineering and product development” and “Other general and administrative” expense to align such classifications and

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)

presentations with how we currently manage the operations and these expenses. These changes had no impact to “Total operating expenses.” Prior period amounts have been reclassified to conform to the current presentation.

In light of the significant decrease in the trading price of our common stock in May 2016, we began offering incentive retention awards to certain members of the executive management team and other key personnel that totaled $34.9 million that will be recognized as compensation expense ratably through May 2017. In addition, we have incurred and expect to continue to incur significant legal and other expenses in connection with the inquiries and private litigation that has risen and may continue to arise from the internal review of the sub-committee of the board of directors discussed above.



	Three Months Ended						Change %
	September 30, 2016		June 30, 2016		September 30, 2015 ⁽¹⁾		Q3 2016 vs Q3 2015		Q3 2016 vs Q2 2016
Sales and marketing	$	44,901	$	49,737	$	44,018	2	%	(10	)%
Origination and servicing	16,332		20,934		16,732		(2	)%	(22	)%
Engineering and product development	29,428		29,209		21,063		40	%	1	%
Other general and administrative	58,940		53,457		32,280		83	%	10	%
Goodwill impairment	1,650		35,400		—		N/M		N/M
Total operating expenses	$	151,251	$	188,737	$	114,093	33	%	(20	)%

N/M - Not meaningful.


⁽¹⁾	Prior period amounts have been reclassified to conform to the current period presentation.

Sales and marketing expense was $44.9 million and $44.0 million for the third quarters of 2016 and 2015 , respectively, an increase of 2% . The increase was primarily due to a $1.1 million increase in variable marketing expenses. On a sequential basis, sales and marketing expense was $44.9 million and $49.7 million for the third quarter of 2016 compared to the second quarter of 2016 , respectively, a decrease of 10% . The decrease was primarily due to a $3.1 million decrease in non-recurring advisory fee and a $1.2 million decrease in personnel-related expenses associated with lower headcount levels, and severance costs.

Origination and servicing expense was $16.3 million and $16.7 million for the third quarters of 2016 and 2015 , respectively, a decrease of 2% . The decrease was primarily due to a $0.5 million decrease in loan processing costs, partially offset by a $0.3 million increase in personnel-related expenses associated with higher headcount levels. On a sequential basis, origination and servicing expense was $16.3 million and $20.9 million for the third quarter of 2016 compared to the second quarter of 2016 , respectively, a decrease of 22% . The decrease was primarily due to a $2.3 million decrease in personnel-related expenses associated with lower headcount levels and severance costs.

Engineering and product development expense was $29.4 million and $21.1 million for the third quarters of 2016 and 2015 , respectively, an increase of 40% . The increase was primarily driven by investment in our platform and product development, which included a $5.3 million increase in personnel-related expenses resulting from increased headcount and increased salaries, and a $2.4 million increase in equipment, software and depreciation expense. On a sequential basis, engineering and product development expense was $29.4 million and $29.2 million for the third quarter of 2016 compared to the second quarter of 2016 , respectively, an increase of 1% . The increase was primarily driven by investment in our platform and product development, which included a $0.9 million increase in personnel-related expenses resulting from retention costs, offset by a $0.7 million decrease in equipment, software and depreciation expense.

We capitalized $9.8 million and $7.5 million in software development costs in the third quarters of 2016 and 2015 , respectively.

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 general and administrative expense was $58.9 million and $32.3 million for the third quarters of 2016 and 2015 , respectively, an increase of 83% . The increase was primarily due to a $13.8 million increase in legal, audit, communications, and advisory fees associated with the board review and government inquiries discussed above, including investigating the matters identified in the board review, supporting investor due diligence activities, remediation efforts and pending and potential future litigation matters. The increase was also due to a $7.2 million increase in salaries and stock-based compensation expense related to increased headcount, and salaries of newly hired executives, as we invested in infrastructure and support teams, a $2.8 million operational loss related to certain service providers of our patient and educational finance business, and a $2.1 million increase in facilities expense.

On a sequential basis, other general and administrative expense was $58.9 million and $53.5 million for the third quarter of 2016 compared to the second quarter of 2016 , respectively, an increase of 10% . The increase was primarily due to a $2.9 million increase in stock-based compensation expense primarily driven by retention costs, and a $2.8 million operational loss related to certain service providers of our patient and educational finance business. The increase was also due to a $0.3 million increase in legal, audit, communications, and advisory fees associated with the board review discussed above, including investigating the matters identified in the board review, supporting investor due diligence activities, remediation efforts and litigation matters that have arisen, and may continue to arise.



	Nine Months Ended September 30,
	2016		2015 ⁽¹⁾		Change (%)
Sales and marketing	$	161,213	$	117,989	37	%
Origination and servicing	56,464		43,639		29	%
Engineering and product development	82,835		53,175		56	%
Other general and administrative	150,432		86,937		73	%
Goodwill impairment	37,050		—		N/M
Total operating expenses	$	487,994	$	301,740	62	%

N/M - Not meaningful.


⁽¹⁾	Prior period amounts have been reclassified to conform to the current period presentation.

Sales and marketing expense was $161.2 million and $118.0 million for the first nine months of 2016 and 2015 , respectively, an increase of 37% . The increase was primarily due to $34.9 million increase in variable marketing that drove higher loan originations, a $4.3 million increase in personnel-related expense associated with higher headcount levels, retention costs, severance costs, and a $2.8 million increase in non-recurring advisory fees.

Origination and servicing expense was $56.5 million and $43.6 million for the first nine months of 2016 and 2015 , respectively, an increase of 29% . The increase was due to a $4.7 million increase in consumer reporting agency and loan processing costs, both driven by higher loan originations and a higher outstanding balance of loans serviced, and a $7.5 million increase in personnel-related expenses associated with higher headcount levels, retention costs, and severance costs.

Engineering and product development expense was $82.8 million and $53.2 million for the first nine months of 2016 and 2015 , respectively, an increase of 56% . The increase was primarily driven by investment in our platform and product development, which included a $18.2 million increase in personnel-related expenses resulting from increased headcount, retention costs, and a $9.0 million increase in equipment, software and depreciation expense.

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 capitalized $29.9 million and $18.1 million in software development costs in the first nine months of 2016 and 2015 , respectively.

Other general and administrative expense was $150.4 million and $86.9 million for the first nine months of 2016 and 2015 , respectively, an increase of 73% . The increase was primarily due to a $29.1 million increase in legal, audit, communications, and advisory fees associated with the board review discussed above, including investigating the matters identified in the board review, supporting investor due diligence activities, remediation efforts and litigation matters that have arisen, and may continue to arise. The increase is also due to a $21.4 million increase in salaries and stock-based compensation expense related to increased headcount as we invested in infrastructure and support teams, retention costs, severance costs, as well as a $6.8 million increase in facilities expense.

Goodwill Impairment

Goodwill impairment consists of a charge for the excess of the fair value of goodwill over the carrying value of the education and patient finance reporting unit.

In the second quarter of 2016 and in the third quarter of 2016, the Company recorded a goodwill impairment charge of $35.4 million and $1.7 million , respectively, related to the education and patient finance reporting unit, for a total charge of $37.1 million for the first nine months of 2016. There were no goodwill charges in the first quarter of 2016 or the first nine months of 2015. See Note 9 Intangible Assets and Goodwill for a further description of this impairment. If the performance of the education and patient finance reporting unit fails to meet current expectations, it is possible that the carrying value of this reporting unit, even after the current impairment charge, will exceed its fair value, which could result in further recognition of a noncash impairment of goodwill that could be material.

Income Taxes

For the third quarter and first nine months of 2016 we recorded income tax benefit of $0.2 million and $4.0 million , respectively. For the third quarter and first nine months of 2015 , we recorded income tax expense of $1.2 million and $2.2 million , respectively. The income tax benefit in the third quarter and first nine months of 2016 included the recognition of a full valuation allowance against deferred tax assets and the tax effects of unrealized gains credited to other comprehensive income. In addition, the income tax benefit in the first nine months of 2016 included the tax effects of the impairment of tax deductible goodwill, which occurred during the second quarter of 2016.

We continued to record a valuation allowance against the net deferred tax assets. As of September 30, 2016 , the valuation allowance was $35.4 million . We intend to continue maintaining a full valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.

Non-GAAP Financial Measures

We use certain non-GAAP financial measures in evaluating our operating results. We believe that contribution, contribution margin, adjusted EBITDA and adjusted EBITDA margin help identify trends in our core business results and allow for greater transparency with respect to key metrics used by our management in its decision making.

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. These non-GAAP measures should not be viewed as substitutes for, or superior to, net income (loss) as prepared in accordance with GAAP. In evaluating these non-GAAP measures, you should be aware that in the future we will incur expenses similar to the

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)

adjustments in this presentation. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents which include the following:


•	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.

Contribution and Contribution Margin

Contribution is a non-GAAP financial measure that is calculated as operating revenue less “sales and marketing” and “origination and servicing” expenses on the Company’s Statement of Operations, adjusted to exclude non-cash stock-based compensation expense within these captions. These costs represent the costs that are most directly related to generating such operating revenue. Contribution Margin is a non-GAAP financial measure calculated by dividing Contribution by total operating revenue.

Contribution and Contribution Margin are measures of overall direct product profitability that our management and board of directors find useful, and believe investors may find useful, in understanding the relationship between costs most directly associated with revenue generating activities and the related revenue, and remaining amount available to support our costs of engineering and product development and other general and administrative expense to evaluate our operating performance and trends. While we believe Contribution and Contribution Margin are useful for the reasons above, they should not be used as an overall measure of our profitability, as they exclude engineering and product development and other general and administrative expenses which are required to run our business. Factors that affect our Contribution and Contribution Margin include revenue mix, variable marketing expenses and origination and servicing expenses.

The following table shows the calculation of contribution and contribution margin.



	Three Months Ended									Nine Months Ended
	September 30, 2016			June 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
Operating Revenue	$	112,609		$	102,391		$	115,062		$	366,265		$	292,226
Less: Sales and marketing ⁽¹⁾	44,901			49,737			44,018			161,213			117,989
Less: Origination and servicing ⁽¹⁾	16,332			20,934			16,732			56,464			43,639
Total direct expenses	$	61,233		$	70,671		$	60,750		$	217,677		$	161,628
Add: Stock-based compensation ⁽²⁾	$	2,712		$	2,376		$	2,945		$	7,738		$	7,491
Contribution ⁽¹⁾	$	54,088		$	34,096		$	57,257		$	156,326		$	138,089
Contribution margin ⁽¹⁾	48.0		%	33.3		%	49.8		%	42.7		%	47.3		%


⁽¹⁾	Prior period amounts have been reclassified to conform to the current period presentation. See “ Results of Operations – Operating Expenses ” for additional information.


⁽²⁾	Contribution also excludes stock-based compensation expense included in the sales and marketing and origination and servicing expense categories.

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 presents a reconciliation of net income (loss) to contribution for each of the periods indicated:



	Three Months Ended									Nine Months Ended
	September 30, 2016			June 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
Net income (loss)	$	(36,486	)	$	(81,351	)	$	950		$	(113,700	)	$	(9,564	)
Net interest income and fair value adjustments	(1,947		)	(1,049		)	(1,214		)	(4,025		)	(2,199		)
Engineering and product development expense ⁽¹⁾	29,428			29,209			21,063			82,835			53,175
Other general and administrative expense ⁽¹⁾	58,940			53,457			32,280			150,432			86,937
Goodwill impairment	1,650			35,400			—			37,050			—
Stock-based compensation expense ⁽¹⁾⁽²⁾	2,712			2,376			2,945			7,738			7,491
Income tax (benefit) expense	(209		)	(3,946		)	1,233			(4,004		)	2,249
Contribution ⁽¹⁾	$	54,088		$	34,096		$	57,257		$	156,326		$	138,089
Total operating revenue	$	112,609		$	102,391		$	115,062		$	366,265		$	292,226
Contribution margin ⁽¹⁾	48.0		%	33.3		%	49.8		%	42.7		%	47.3		%


⁽¹⁾	Prior period amounts have been reclassified to conform to the current period presentation. See “ Results of Operations – Operating Expenses ” for additional information.


⁽²⁾	Contribution also excludes stock-based compensation expense included in the sales and marketing and origination and servicing expense categories.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA is a non-GAAP financial measure that includes operating revenue less certain non-recurring expenses including interest, and certain non-cash expenses including amortization and depreciation, and stock-based compensation expense. Adjusted EBITDA margin is a non-GAAP financial measure calculated by dividing adjusted EBITDA by total operating revenue.

The Company believes that adjusted EBITDA is an important measure of operating performance because it allows management, investors and our board to evaluate and compare our core operating results, including our return on capital and operating efficiencies, from period to period by removing the impact of asset base (depreciation and amortization), other non-operating, and share-based compensation, tax consequences, and our capital structure (interest expense from any outstanding debt). Additionally the Company utilizes Adjusted EBITDA as an operating performance measure as an input into the Company’s calculation of the annual bonus plan. In addition to its use by management, Adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of our company and other companies in our industry as well as in the broader financial services and technology industries.

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 presents a reconciliation of net income (loss) to Adjusted EBITDA for each of the periods indicated:



	Three Months Ended									Nine Months Ended
	September 30, 2016			June 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
Net income (loss)	$	(36,486	)	$	(81,351	)	$	950		$	(113,700	)	$	(9,564	)
Net interest income and fair value adjustments	(1,947		)	(1,049		)	(1,214		)	(4,025		)	(2,199		)
Acquisition and related expense	294			293			937			880			1,634
Depreciation expense:
Engineering and product development	5,362			4,917			3,808			14,772			9,813
Other general and administrative	1,104			993			708			3,003			1,636
Amortization of intangible assets	1,163			1,180			1,256			3,599			4,075
Goodwill impairment	1,650			35,400			—			37,050			—
Stock-based compensation expense	17,922			13,447			13,479			46,390			37,558
Income tax (benefit) expense	(209		)	(3,946		)	1,233			(4,004		)	2,249
Adjusted EBITDA ⁽¹⁾	$	(11,147	)	$	(30,116	)	$	21,157		$	(16,035	)	$	45,202
Total operating revenue	$	112,609		$	102,391		$	115,062		$	366,265		$	292,226
Adjusted EBITDA margin	(9.9		)%	(29.4		)%	18.4		%	(4.4		)%	15.5		%


⁽¹⁾	Prior period amounts have been reclassified to conform to the current period presentation. See “ Results of Operations – Operating Expenses ” for additional information.

Operating expenses include the following amounts of stock based compensation for the periods presented.



	Three Months Ended						Nine Months Ended
	September 30, 2016		June 30, 2016		September 30, 2015		September 30, 2016		September 30, 2015
Sales and marketing	$	1,699	$	1,413	$	2,283	$	5,016	$	5,504
Origination and servicing	1,013		963		662		2,722		1,987
Engineering and product development	4,931		4,480		3,145		13,134		7,886
Other general and administrative	10,279		6,591		7,389		25,518		22,181
Total stock-based compensation expense ⁽¹⁾	$	17,922	$	13,447	$	13,479	$	46,390	$	37,558


⁽¹⁾	Prior period amounts have been reclassified to conform to the current period presentation. See “ Results of Operations – Operating Expenses ” for additional information.

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)

Servicing Fees Before Changes in Fair Value of Assets and Liabilities

Servicing and management fee revenue associated with the servicing portfolio, excluding fair market value accounting adjustments, is a non-GAAP financial measure that is calculated as servicing fees less the fair market value accounting adjustment. The Company has elected to account for servicing assets and liabilities at fair value with changes in fair value recorded through earnings in the period of change. The Company believes this is a useful non-GAAP financial measure because it reflects the amount of fees actually collected and represents the true economic benefit of our servicing arrangements. We believe that the fair value adjustments to the servicing assets and liabilities is less useful in particular because the Company does not trade or transfer such servicing assets or liabilities.

The following table presents a reconciliation of servicing fees to servicing fees before change in fair value of servicing assets and liabilities.



	Three Months Ended							Nine Months Ended
	September 30, 2016		June 30, 2016		September 30, 2015			September 30, 2016		September 30, 2015
Servicing fees	$	16,513	$	11,603	$	8,999		$	45,058	$	20,870
Change in fair value of servicing assets and liabilities	1,703		4,672		(403		)	4,065		(1,452		)
Servicing fees before change in fair value of servicing assets and liabilities	$	18,216	$	16,275	$	8,596		$	49,123	$	19,418

Investments by Investment Channel and Investor Concentration

The following table shows the percentage of loan originations funded by investment channel for the periods presented.



	September 30, 2015		December 31, 2015		March 31, 2016		June 30, 2016		September 30, 2016
Originations by Investor Type:
Managed accounts	36	%	38	%	30	%	35	%	55	%
Self-managed, individuals	15	%	13	%	15	%	17	%	14	%
Banks	26	%	23	%	34	%	28	%	13	%
Other institutional investors	23	%	26	%	21	%	20	%	18	%
Total	100	%	100	%	100	%	100	%	100	%

The following table provides the percentage of loans invested in by the ten largest investors during each of the previous five quarters (by dollars invested):



	September 30, 2015		December 31, 2015		March 31, 2016		June 30, 2016		September 30, 2016
Percentage of Loans Invested In by Ten Largest Investors (by $ invested)	58	%	58	%	51	%	62	%	72	%

For the quarter ended September 30, 2016 , no single investor accounted for more than 26% of the loans invested in through our marketplace. The composition of the top ten investors may vary from period to period. In addition to

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)

these investors, private funds associated with LCA and publicly issued member payment dependent notes accounted for approximately 2% and 15% , respectively, of investment capital provided through our marketplace during the period.

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)

Liquidity and Capital Resources

Liquidity

The following table sets forth certain cash flow information for the periods presented:



	Nine Months Ended September 30,
Condensed Cash Flow Information:	2016			2015
Net cash (used for) provided by operating activities	$	(7,746	)	$	53,350

Cash flow used for loan investing activities ⁽¹⁾	(252,740		)	(1,442,964		)
Cash flow used for all other investing activities	(88,154		)	(477,954		)
Net cash used for investing activities	(340,894		)	(1,920,918		)

Cash flow provided by note/certificate, and secured borrowings financing ⁽¹⁾	244,096			1,454,391
Cash flow provided by all other financing activities	1,780			122,603
Net cash provided by financing activities	245,876			1,576,994
Net decrease in cash and cash equivalents	$	(102,764	)	$	(290,574	)


⁽¹⁾	Cash flow used for loan investing activities includes the purchase of loans and repayment of loans facilitated through our marketplace. Cash flow provided by note/certificate and secured borrowings 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.

Our short-term liquidity needs generally relate to our working capital requirements. These liquidity needs are generally met through cash generated from the operations of facilitating loan originations. If the recent pause in investor funding on our platform, as described above, continues, cash generated from facilitating loan originations could decline, in which case we may need to use our cash and cash equivalents on hand, which was $520.8 million at September 30, 2016 , to meet our working capital needs. The Company additionally had $278.9 million of available for sale securities at September 30, 2016 . As shown in the table above, the Company had negative operating cash flow for the first nine months of 2016. The net loss during the first nine months of 2016, including cash expenses for legal, audit, communications, and advisory fees associated with the board review and government inquiries discussed above, including investigating the matters identified in the board review, supporting investor due diligence activities, remediation efforts and pending and potential future litigation matters, along with the purchases of loans the Company intends to sell, contributed to the negative operating cash flow for the nine months of 2016. Generally, there has been no material impact on our liquidity position as of September 30, 2016, related to the purchase of loans in the first nine months of 2016; as such, loans generally were funded by proceeds from the issuance of corresponding notes and certificates, or such loans have been sold on the same day to whole loan investors.

As a result of recent events arising out of our board review noted above, we are actively exploring ways to restore investor confidence in our platform and obtain investment capital for the platform. See “ Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations – Current Economic and Business Environment. ”

Additionally, given the payment dependent structure of the notes and certificates, principal and interest payments on notes and certificates are paid only when received from borrowers on the corresponding retained loans, resulting in no material impact to our liquidity. During the second quarter of 2016, the Company purchased a total of $134.9 million in loans to fulfill regulatory requirements and to support short-term marketplace equilibrium. The Company was able to find additional investors in these loans, or previously funded loans, and resold $135.5 million

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)

of these loans before June 30, 2016. The Company purchased $0.4 million in loans in the third quarter of 2016 to fulfill regulatory requirements or to support short-term market place equilibrium. The outstanding principal balance of loans for which the Company remained invested in as of September 30, 2016 amounted to $34.2 million . See “ Item 4 – Controls and Procedures. ”

Cash and cash equivalents are primarily held in institutional money market funds and interest-bearing deposit accounts at investment grade financial institutions. Cash and cash equivalents were $520.8 million and $623.5 million as of September 30, 2016 and December 31, 2015 , respectively. Changes in the balance of cash and cash equivalents during the first nine months of 2016 were primarily a result of timing related to working capital requirements or investments in or out of our securities available for sale portfolio and changes in restricted cash and other investments.

Restricted cash consists primarily of checking, money market and certificate of deposit accounts that are: (i) pledged to or held in escrow by the Company’s correspondent banks as security for transactions processed on or related to our platform or activities by certain investors; (ii) pledged through a credit support agreement with a certificate holder; (iii) held in a Rabbi Trust through a grantor trust agreement to satisfy obligations to partnerships under the Company's 2016 Cash Retention Bonus Plan, or (iv) received from investors but not yet been applied to their accounts on the platform and transferred to segregated bank accounts that hold investors’ funds. Restricted cash was $139.5 million and $80.7 million at September 30, 2016 and December 31, 2015 , respectively. The increase is primarily attributable to additional transactions related to our platform or with certain investors.

In April 2015, we invested in securities classified as available for sale. The fair value of securities available for sale as of September 30, 2016 was $278.9 million . At September 30, 2016 , these securities include corporate debt securities, asset-backed securities, U.S. agency securities, U.S. Treasury securities and other securities. All securities were rated investment grade (defined as a rating equivalent to a Moody’s rating of “Baa3” or higher, or a Standard & Poor’s rating of “BBB-” or higher) and there were no significant unrealized losses. These securities provided $2.7 million of interest income for the first nine months of 2016 . These securities continue to be available to meet liquidity needs.

Our available liquidity resources may also be provided by external sources. On December 17, 2015 , we entered into a credit and guaranty agreement with several lenders for an aggregate $120 million secured revolving credit facility (Credit Facility). In connection with the credit agreement, we entered into a pledge and security agreement with Morgan Stanley Senior Funding, Inc., as collateral agent. Proceeds of loans made under the Credit Facility may be borrowed, repaid and reborrowed until December 17, 2020 . Repayment of any outstanding proceeds are payable on December 17, 2020 , but may be prepaid without penalty. We did not have any loans outstanding under the Credit Facility during the first nine months of 2016 .

On February 9, 2016 , our board of directors approved a share repurchase program under which we may repurchase up to $150 million of our common shares in open market or privately negotiated transactions in compliance with Securities and Exchange Act Rule 10b-18 . This repurchase program is valid for one year and does not obligate the Company to acquire any particular amount of common stock, and may be suspended at any time at Lending Club’s discretion. During the nine months ended September 30, 2016 , we repurchased 2,282,720 shares of our common stock for an aggregate purchase price of $19.5 million . See “ Part I – Financial Information – Item 1 – Financial Statements – Note 13 – Employee Incentive and Retirement Plans ” for additional information.

Historically, our overall business model has not been premised on using our balance sheet and assuming credit risk for loans facilitated by our marketplace. In order to support contractual obligations (Pool B loans and repurchase obligations), regulatory commitments (direct mail), short-term marketplace equilibrium, customer accommodations or other needs, we may use our capital on the platform from time to time on terms that are substantially similar to other investors. Additionally, we may use our capital to invest in loans associated with the testing or initial launch of

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)

new or alternative loan terms, programs or channels to establish a track record of performance prior to facilitating third-party investments in these loans.

With the announcement of the initial results of the internal board review on May 9, 2016 and additional findings disclosed on June 28, 2016, many investors paused or reduced their investment activity. The Company has been focused on working with these investors to resume their investment activity and on bringing new investors to the platform. During the second quarter of 2016 and the third quarter of 2016 through August 31,2016 the Company offered incentives to investors in exchange for investment activity. The Company did not offer incentives to investors for investments in loans in the month of September 2016. Although the Company did not have to use a material amount of its own capital to purchase loans in the third quarter of 2016, the failure of the Company to attract investor capital may result in the Company using a greater amount of its own capital to purchase loans on the platform compared to prior periods, or reduce origination volume. These actions may have material adverse impacts on the Company's business, financial condition (including its liquidity), results of operations or ability to sustain and grow loan volume. For a description of recent developments and their potential impact to our liquidity and capital resources, see “ Current Economic and Business Environment ” above.

We believe based on our projections and ability to reduce loan volume if needed, that our cash on hand, funds available from our line of credit, and our cash flow from operations is expected to be sufficient to meet our liquidity needs for the next twelve months.

Capital Resources

Capital expenditures were $39.0 million , or 10.5% of total net revenue, and $25.9 million , or 9.0% of total net revenue, for the first nine months of 2016 and 2015 , respectively. Capital expenditures in 2016 are expected to be approximately $59.0 million , primarily related to continued investment in infrastructure and technology.

Off-Balance Sheet Arrangements

As of September 30, 2016 , a total of $4.7 million in standby letters of credit were outstanding related to certain financial covenants required for our leased facilities. To date, no amounts have been drawn against the letters of credit, which renew annually and expire at various dates through July 2026. There were no off-balance sheet arrangements during the first nine months of 2015 .

Contingencies

The Company's contingencies as of September 30, 2016 are included in “ Part I – Financial Information – Item 1 – Financial Statements – Note 15 – 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 nine months of of 2016 , except as noted below.

Goodwill and Intangible Assets

Goodwill represents the fair value of acquired businesses in excess of the aggregate fair value of the identified net assets acquired. Goodwill is not amortized but is tested for impairment annually or whenever indications of impairment exist. Our annual impairment testing date is April 1. Impairment exists whenever the carrying value of

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)

goodwill exceeds its implied fair value. Adverse changes in impairment indicators such as loss of key personnel, increase regulatory oversight, or unplanned changes in our operations could result in impairment. We recognized $ 1.7 million and 37.1 million of goodwill impairment expense during the third quarter and first nine months of 2016 , respectively. We did not recognize any goodwill impairment during the third quarter and first nine months of 2015 , respectively.

We can elect to qualitatively assess goodwill for impairment if it is more likely than not that the fair value of a reporting unit (generally defined as a component of a business for which financial information is available and reviewed regularly by management) exceeds its carrying value. A qualitative assessment may consider macroeconomic and other industry-specific factors, such as trends in short-term and long-term interest rates and the ability to access capital, or company-specific factors, such as market capitalization in excess of net assets, trends in revenue generating activities and merger or acquisition activity.

If we do not qualitatively assess goodwill we compare a reporting unit’s estimated fair value to its carrying value. We estimate the fair value of a reporting unit using both an income approach and a market approach. When applying the income approach, we use a discounted cash flow model, which requires the estimation of cash flows and an appropriate discount rate. We project cash flows expected to be generated by the reporting unit inclusive of an estimated terminal value. The discount rate assumption contemplates a weighted-average cost of capital based on both market observable and company-specific factors. The discount rate is risk-adjusted to include any premiums related to equity price volatility, size, and projected capital structure of publicly traded companies in similar lines of business. The market approach estimates the fair value of a reporting unit based on certain market value multiples of publicly traded companies in similar lines of business, such as total enterprise value to revenue, or to EBITDA. Under the market approach, we also consider fair value implied from any relevant and comparable market transactions. Both approaches include reliance on long-term growth rates, and revenue and earnings projections.

We recorded a goodwill impairment during the second and third quarter of 2016 after completing the annual impairment test. See “ Part I – Financial Information – Item 1 – Financial Statements – Note 9 –Intangible Assets and Goodwill ” for additional information.

Intangible assets are amortized over their useful lives in a manner that best reflects their economic benefit, which may include straight-line or accelerated methods of amortization. Intangible assets are reviewed for impairment quarterly and whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We do not have any indefinite-lived intangible assets.

Consolidation of Variable Interest Entities

A variable interest entity (VIE) is a legal entity that does not have sufficient equity at risk to finance its own operations, whose equity holders do not have the power to direct the activities most significantly affecting the economic outcome of those activities, or whose equity holders do not share proportionately in the losses or receive the residual returns of the entity. The determination of whether an entity is a VIE requires a significant amount of judgment. When we have a controlling financial interest in a VIE, it must consolidate the results of the VIE’s operations into its condensed consolidated financial statements. A controlling financial interest exists if we have both the power to direct the VIE’s activities that most significantly affect the VIE’s economic performance (power) and the obligation to absorb losses or receive benefits that could be potentially significant to the VIE (economics).

LC Trust I

We have determined that LC Trust I (the Trust) is a VIE and that we have a controlling financial interest in the Trust and therefore we must consolidate the Trust in its condensed consolidated financial statements. We established the Trust in February 2011 and funded it with a nominal residual investment. We are the only residual investor in the

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)

Trust. The purpose of the Trust is to acquire and hold loans for the benefit of investors who have invested in certificates issued by the Trust. The Trust conducts no other business other than purchasing and retaining loans or portions thereof for the benefit of the investment funds and their underlying limited partners. The Trust holds loans, none of which are financed by us. The cash flows from the loans held by the Trust are used to repay obligations under the certificates. The Trust’s assets and liabilities were reflected in the condensed consolidated financial statements at September 30, 2016 and December 31, 2015 .

In connection with the formation of the investment funds, it was determined that in order to achieve success in raising investment capital, the assets to be invested in by the investment funds must be held by an entity that was separate and distinct from us (i.e. bankruptcy remote) in order to reduce this risk and uncertainty. In the event of our insolvency, it is anticipated that the assets of the Trust would not become part of the bankruptcy estate, but that outcome is uncertain.

Our capital contributions, which are the only equity investments in the Trust, are insufficient to allow the Trust to finance the purchase of a significant amount of loans without the issuance of certificates to investors. Therefore, the Trust’s capitalization level qualifies the Trust as a VIE. We have a financial interest in the Trust because of our right to returns related to servicing fee revenue from the Trust, our right to reimbursement for expenses, and our obligation to repurchase loans from the Trust in certain instances. Additionally, we perform or direct activities that significantly affect the Trust’s economic performance through or by (i) operation of the platform that enables borrowers to apply for loans purchased by the Trust; (ii) credit underwriting and servicing of loans purchased by the Trust; (iii) LCA's selection of the loans that are purchased by the Trust on behalf of advised Certificate holders; and (iv) LCA’s role to source investors that ultimately purchase limited partnership interests in a fund or Certificates, both of which supply the funds for the Trust to purchase loans. Collectively, the activities described above allow us to fund more loans than would be the case without the existence of the Trust, to collect the related loan transaction fees and for LCA to collect the management fees on the investors’ capital used to purchase certificates. Accordingly, we are deemed to have power to direct activities most significant to the Trust and economic interest in the activities because of loan funding and transaction and management fees. Therefore, we concluded that we are the primary beneficiary of the Trust and consolidated the Trust’s operations in our condensed consolidated financial statements.

Investment In Cirrix Capital

On April 1, 2016, we closed our $10.0 million investment, for an approximate ownership interest of 15% in Cirrix Capital (Investment Fund), a holding company to a family of funds that purchases loans and interests in loans from us. Per the partnership agreement, the family of funds can invest up to 20% of their assets outside of whole loans and interests in whole loans facilitated by us. At September 30, 2016, 100% of the family of funds' assets were comprised of whole loans and interests in loans facilitated by Lending Club's platform. At the time we made our investment, our then Chief Executive Officer (former CEO) and a board member (together, the Related Party Investors) also had limited partnership interests in the Investment Fund that resulted in an aggregate ownership of approximately 29% in the Investment Fund by the Related Party Investors and us. As of September 30, 2016, we and a board member had an aggregate ownership interest of approximately 27% in the Investment Fund.

Our investment is deemed to be a variable interest in the Investment Fund because the limited partnership interest shares in the expected returns and losses of the Investment Fund. The expected returns and losses of the Investment Fund result from the net returns of the family of funds owned by the Investment Fund, which are derived from interest income earned from loans and interests in whole loans that are purchased by the Investment Fund. Such loans and interests in loans were facilitated by us. Additionally, the Investment Fund is considered a VIE. We are not the primary beneficiary of the Investment Fund because we do not have the power to direct the activities that most significantly affect the Investment Fund’s economic performance. As a result, we do not consolidate the operations of the Investment Fund in our financial statements. We account for this investment under the equity method of accounting, which approximates its maximum exposure to loss as a result of its involvement in the

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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)

Investment Fund. At September 30, 2016, our investment was $10.1 million , which was recorded in other assets in the condensed consolidated balance sheet.

Separately, we are subject to a credit support agreement that requires us to pledge and restrict cash in support of our contingent obligation to reimburse the Investment Fund for net credit losses on loans underlying the interests in whole loans that are in excess of a specified, aggregate net loss threshold. The Related Party Investors and us are excluded from receiving any benefits, if provided, from this credit support agreement. As of September 30, 2016, we have not been required to nor do we anticipate recording losses under this agreement. In conjunction with our determination that we have a variable interest in a VIE, the Investment Fund, we are required to disclose our maximum exposure to loss under this credit support agreement, which was limited to $6.0 million and $34.4 million at September 30, 2016 and December 31, 2015 , respectively.

The Investment Fund passes along credit risk to the limited partners. We did not design the Investment Fund’s investment strategy and cannot require the Investment Fund to purchase loans. Additionally, we reviewed whether we collectively, with the board member's investment, had power to control the Investment Fund and concluded that we did not based on the unilateral ability of the general partner to exercise power over the limited partnership and the inability of the limited partners to remove the general partner. See “ Note 17 – Related Party Transactions ” for additional information.

LCA Managed or Advised Private Funds

In conjunction with the adoption of a new accounting standard that amends accounting for consolidations effective January 1, 2016, we reviewed our relationship with the private funds managed or advised by LCA and concluded that we do not have a variable interest in the private funds. As of September 30, 2016, we do not hold any investments in the private funds. Certain of our related parties have investments in the private funds, as discussed in “ Part I – Financial Information – Item 1 – Financial Statements – Note 17– Related Party Transactions. ” We charge the limited partners in the private funds a management fee based on their account balance at month end for services performed as the general manager, including fund administration, and audit, accounting and tax preparation services. Accordingly, our fee arrangements contain only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm’s length. These fees are solely compensation for services provided and are commensurate with the level of effort required to provide those services. We do not have any other interests in the private funds and therefore we do not have a variable interest in the private funds.

Management regularly reviews and reconsiders its previous conclusion regarding whether it holds variable interest in potential VIEs, the status of an entity as a VIE, and whether we are required to consolidate such VIEs in the condensed consolidated financial statements.

There have been no other significant changes to these critical accounting policies and estimates during the first nine months of 2016 .

Loan Servicing Rights

As a result of the nature of servicing rights on the sale of loans, the we are a variable interest holder in certain entities that purchase these loans. For all of these entities we either do not have the power to direct the activities that most significantly affect the VIE's economic performance or we do not have a potentially significant economic interest in the VIE. In no case are we the primary beneficiary and as a result none of these entities are consolidated on our consolidated financial statements.

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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 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 or interest rates.

Except for the loans invested in by the Company, we generally do not assume principal or interest rate risk on loans funded through our marketplace because loan 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. Accordingly, we believe that we do not have any material exposure to changes in the net fair value of these combined loan, note and certificate portfolios as a result of changes in interest rates. For loans that are invested in by the Company, the Company has exposure to interest rate risk.

During the second quarter of 2016, the Company purchased a total of $134.9 million of loans to fulfill regulatory requirements and to support short-term marketplace equilibrium. The Company was able to find additional investors in these loans, or previously funded loans, and resold $135.5 million of these loans before June 30, 2016. The Company purchased $0.4 million in loans in the third quarter of 2016 to fulfill regulatory requirements or to support short-term market place equilibrium. The outstanding principal balance of loans for which the Company remained invested in as of September 30, 2016 was $34.2 million . See “ Part I – Financial Information – Item 1 – Financial Statements – Note 12 – Secured Borrowings ” for additional information. We do not believe the interest rate risk associated with these loans held as of September 30, 2016 is material. We will experience increased exposure to interest rate risk if we increase the amount of our capital used to invest in loans given the pausing of investment by platform investors based upon the outcome of the review described above. See “ Part I – Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Current Economic and Business Environment ” and “ Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Liquidity. ” 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. The Company recorded a negative fair value adjustment related to the loans the Company invested in as of September 30, 2016 of approximately 1.0 million and $0.5 million during the second and third quarter of 2016, respectively.

We had cash and cash equivalents of $520.8 million as of September 30, 2016 . 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 holds securities available for sale. At September 30, 2016 , the fair value of our securities available for sale portfolio was $278.9 million , consisting of corporate debt securities, asset-backed securities, U.S. agency securities, certificates of deposit, commercial paper, U.S. Treasury securities 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 limits and monitors

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maturities, credit ratings, and concentrations within the investment portfolio. Changes in U.S. interest rates affect the interest earned on our 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 $1.5 million in the fair value of our securities available for sale as of September 30, 2016 . A hypothetical 100 basis point decrease in interest rates would result in an increase of approximately $1.5 million in the fair value of our securities available for sale as of September 30, 2016 . Any realized gains or losses resulting from such interest rate changes would only be recorded if we sold the securities prior to maturity and the securities were not considered other-than-temporarily impaired.

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 (CEO) and Chief Financial Officer (CFO), 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 September 30, 2016 . This evaluation is performed to determine if our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities and Exchange Act of 1934, as amended, is accumulated and communicated to management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission's rules and forms.

As previously disclosed, during the second quarter of 2016, we identified a material weakness in our internal control over financial reporting, as described further in “ Changes in Internal Control Over Financial Reporting ” below. As a result of the circumstances giving rise to the material weakness described below, the Company's CEO and CFO have concluded that the Company's disclosure controls and procedures were not effective at a level that provides reasonable assurance that the objectives of disclosure controls and procedures were met as of September 30, 2016.

The identified material weakness is the result of the aggregation of control deficiencies related to the Company’s “tone at the top,” which manifested in three primary areas described further below.

Changes in Internal Control Over Financial Reporting

During the second quarter of 2016, and in connection with a board review, with the assistance of independent outside counsel and other advisors, regarding specific near-prime loan sales and other compliance matters described elsewhere herein, we identified a material weakness in our internal control over financial reporting. As a result, the Company has concluded that, as of September 30, 2016, the Company's internal control over financial reporting was ineffective. See “ Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Board Review .” In addition, the Company concluded that the deficiencies aggregating to this material weakness existed at the end of 2015 and therefore that its internal control over financial reporting was ineffective as of December 31, 2015 and amended its Annual Report on Form 10-K for the year ended December 31, 2015 accordingly. The Company made a similar conclusion with respect to its internal control over financial reporting as of March 31, 2016 and June 30, 2016, as disclosed in our Form 10-Q for the quarter ended March 31, 2016 and June 30, 2016, respectively.

The material weakness relates to the aggregation of control deficiencies in the Company's "tone at the top" and manifested in three primary areas described further below. The control environment, which includes the Company’s Code of Conduct and Ethics Policy, is the responsibility of senior management, and sets the tone of our organization, influences the control consciousness of employees, and is the foundation for the other components of internal control over financial reporting. Although each area described below involved its own deficiencies, a

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significant contributing factor to all of the deficiencies aggregating to a material weakness was the Company’s lack of an appropriate tone at the top set by certain former members of senior management. The Company took immediate and significant steps to address this material weakness through the resignation or termination of certain senior managers and the resignation of the Company’s former CEO. The Company initially appointed Scott Sanborn as acting CEO and Hans Morris as Executive Chairman. On June 28, 2016, the Company announced that the Board appointed Scott Sanborn as the Company's Chief Executive Officer and President, effective June 27, 2016, and that Hans Morris would step down from his temporary role as Executive Chairman. On that date the Company also announced that Mr. Morris had been appointed the independent Chairman of the Board. The Company believes that making these changes was a critical step toward addressing the tone at the top concerns that contributed to the material weakness it has identified. On August 2, 2016 the Company accepted the resignation of the CFO and appointed Bradley Coleman as principal accounting officer and interim CFO. On September 19, 2016, the Company hired Thomas W. Casey as CFO. Bradley Coleman will continue in his role as Principal Accounting Officer and Corporate Controller.

In particular, as previously disclosed in our Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016, the material weakness relates to a lack of sufficient controls that allowed the following:

•

Sales of near-prime loans : During March and April of 2016, the Company effected sales of $22.3 million of near-prime loans in private transactions with an institutional investor that certain senior managers of the Company apparently were aware were not compliant with a specific non-credit, non-pricing requirement of the investor. In one case, involving approximately $3.0 million in loans, an application date was changed in a live Company database in an attempt to appear to meet the investor's requirement, and the balance of the loans was sold in direct contravention of the investor's direction. Employees involved in the sales of the near-prime loans that did not meet the investor's non-credit, non-pricing requirement were terminated or have resigned their positions.

Management determined that the Company’s control deficiencies resulting from the Company’s “tone at the top” permitted the circumvention of controls designed to ensure that investor portfolios are reviewed for adherence, and do adhere, to the investor’s instructions. Additionally, management determined that incremental to existing change management processes, the Company had not designed and implemented an additional level of review and approval for live database changes that impact high risk fields to provide reasonable assurance that all loans allocated comply with investor instructions.

As previously reported in our Form 10-Q for the quarter ended March 31, 2016, certain senior managers involved in the sales of near-prime loans that did not meet the investor’s non-credit, non-pricing requirement were terminated or resigned in May of 2016. In addition, in the second quarter of 2016, to further improve our internal controls we updated our Code of Conduct and Ethics Policy. In the third quarter of 2016 we strengthened our data management controls by creating a data change classification matrix and plan to change approval process in the fourth quarter over live database changes of high risk fields prior to changes being made.

•

Review of related party transactions : The Board did not have the information required to review and approve or disapprove investments made by its former CEO in 2015 and 2016, and a member of its board of directors in 2015, in a holding company for a family of funds (Cirrix Capital, L.P.) that purchases loans and interests in loans from the Company in accordance with Company policies, including the Code of Conduct and Ethics. Although the Company was aware of these investments before they were made, the investments were not reported by the Company or by the respective investors to the board's Audit Committee or Risk Committee. In addition, the investments were not listed in questionnaires designed to identify such related party investments and provided to the Company by the former CEO and board member.

As a result, relevant information was not provided to the financial accounting and reporting function on a timely basis. This could have caused - but in this case did not cause - a failure to ensure that appropriate financial reporting of the transactions was made in all material respects in a timely manner. In addition, in

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March 2016 the Risk Committee approved an investment by the Company in Cirrix Capital, L.P. without all committee members being aware of the prior investments by the former CEO and the board member.

As a result of control deficiencies in the Company's "tone at the top" management determined that the Company's controls were not effective to ensure that information about related party investments known by certain members of management was adequately conveyed to other members of management and, ultimately, to the relevant committees of the board, including the audit and risk committees, on a timely basis. In addition, management determined that the Company’s process to identify related party investments may not have been adequately designed to ensure that such investments were appropriately reported.

In the third quarter of 2016, we initiated a preliminary update to the Related Party Policy and communicated it to the directors. Additionally, we have trained all directors and officers on the revised Related Party Policy and new quarterly questionnaire that is used to report and communicate related transactions. We have also enhanced controls designed to ensure that a current list of related parties and other relevant information, if applicable, is communicated to appropriate functions.

•

Lack of transparent communication and appropriate oversight of investor contract amendments : In 2015 and more extensively during the first quarter of 2016, the Company entered into contract amendments with platform investors, related to existing business arrangements. The Company failed in a number of cases to appropriately document or obtain authorizations of these amendments, assess the impact such amendments could have on pre-existing agreements and to communicate these amendments to the appropriate departments. As a result, the Company’s accounting function was not always made aware of these amendments on a timely basis in order to enable it to assess the extent of any corresponding financial impacts or disclosure requirements in a timely manner.

Certain contract amendments were executed without transparent communication and appropriate oversight, reflecting the deficiencies in tone at the top. Specifically, management had not implemented existing controls over contract governance to include governance of investor contract amendments. Management determined that the Company had detective controls in place to identify amendments to contracts and to govern the documentation, authorization, communication and monitoring of investor agreements and contract amendments. However, management determined that, as a result of a design deficiency, the Company lacked key preventative controls designed to ensure that these processes and procedures were consistently followed for amendments to contracts.

In the fourth quarter of 2016 we expect to implement or enhance new processes and controls that are designed to ensure that our investor contracts, including contract amendments, adhere to enhanced requirements established by the Risk Committee of the Board. We also plan to enhance our third-party contract management system to strengthen our controls surrounding the governance, review and ongoing monitoring for contract provisions and amendments.

The control improvements noted above to remediate and close this material weakness are subject to the Company’s internal control testing and assessment process to ensure such controls are operating for a sufficient period of time and operating effectively.

While the material weakness described herein creates a reasonable possibility that an error in financial reporting may go undetected, after review and the performance of additional analysis and other procedures, no material adjustments, restatement or other revisions to our previously issued financial statements were required.

As part of the board review referenced above, the board retained an additional independent advisor who reviewed application data for all other whole loans applied for in the first quarter of 2016 and confirmed the accuracy of such data on the Company’s systems, for all data other than the non-credit, non-pricing element that was changed as to $3.0 million of near-prime loans to a single investor described above.

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Subject to the foregoing, no other 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 third quarter of 2016 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of legal proceedings, see “ Part 1 – Financial Information – Item 1 – Financial Statements – Note 15 – Commitments and Contingencies – Legal, ” which is incorporated herein by reference.

Item 1A. Risk Factors

During the first nine months of 2016 , there have been no material changes to the risk factors in “ Part I – Item 1A – Risk Factors ” in the Company's Annual Report, except as noted below.

Our business could be materially and adversely harmed as a result of the announcement of the results of our internal review and the resignation of our Chief Executive Officer (CEO).

As a result of recent events, numerous law firms have filed or have announced that they are looking into potentially filing lawsuits. As a result, we will be subject to significant litigation in the near future. In addition, we have been contacted by regulatory authorities requesting information related to the events surrounding the resignation of our former CEO, and we are cooperating fully with those inquiries. Litigation and inquiries of this nature are costly and time consuming, can generate negative publicity and could have a material and adverse effect on our business.

There can be no assurances as to the final outcome of any of these matters. The cost of defending any investigation or lawsuit is costly and can impose a significant burden on management and employees. Any litigation to which we are a party may result in onerous or unfavorable judgments that may not be reversed upon appeal or in payments of substantial monetary damages or fines, or we may decide to settle lawsuits on similarly unfavorable terms, which could adversely affect our business, financial conditions, or results of operations.

Unfavorable media coverage could negatively affect our business.

We have received a high degree of media coverage related to the results of our review and resignation of our former CEO. Unfavorable publicity regarding the events described herein has resulted in investors pausing their investments through the platform and may result in, a slowdown in investor demand on our platform. If this negatively publicity were to persist, it could further harm our reputation, and materially and adversely affect our business in the future.

A decline in social and economic conditions may adversely affect our customers, which may negatively impact our business and results of operations.

As a credit marketplace, we believe our customers are more highly susceptible to uncertainties and negative trends in the markets driven by, among other factors, general social and economic conditions in the United States and abroad. These social and economic factors may affect the ability or willingness of borrowers to make payments on their loans, and consequently, impact the credit performance of the loans, notes and certificates.

Lending Club monitors a variety of economic, credit and competitive indicators so that borrowers can benefit from meaningful savings compared to alternatives, and investors can continue to find attractive risk-adjusted returns compared to other fixed income investments or investment alternatives. Economic factors include interest rates, unemployment levels, gasoline prices, adjustments in monthly payments adjustable-rate mortgages and other debt

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payments, the rate of inflation and consumer perceptions of economic conditions. Social factors include changes in consumer confidence levels and changes in attitudes with respect to incurring debt and the stigma of personal bankruptcy. In the third quarter of 2016, we continued to observe mixed economic data, including an increased propensity for consumers to accumulate debt due to low interest rates, which caused us to remain cautious in our overall credit performance outlook.

These external economic conditions and resulting trends or uncertainties could adversely impact our customer's ability or desire to participate on our marketplace as borrowers or investors, and consequently could negatively affect our business and results of operations. See “ Part 1 – Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Current Economic and Business Environment. ”

Following the announcement of our board review and resignation of our former CEO, we experienced a slowdown in a significant amount of investment capital available on our platform. While some of these investors have returned, it is still possible that we may be unable to attract additional investors to invest in loans, or we may need to grant investors significant inducements in order to attract capital or use our own capital.

As a result of the circumstances relating to our board review into certain private loan sales to a single institutional investor in contravention of its requirements and other matters, and the resignation of our former CEO, a number of investors that account for, in the aggregate, a significant amount of investment capital on the platform, have paused their investments in loans through the platform. While many of these investors have returned, many have invested at reduced levels, and it is possible that some investors may not resume investing through our platform. As a result, we may use a greater amount of our own capital, compared to past experience, to invest in loans.

During the third quarter of 2016 the Company offered incentives to investors to obtain additional capital for the platform. The Company has been focused on working with investors to resume their investment activity and bringing new investors to the platform. If these investors pause their investment activity again, the Company may need to provide further incentives, and enter into different additional incentive structures or terms, including the use of the Company's equity, to attract investor capital to the platform. Failure to attract investor capital on reasonable terms may result in the Company having to use additional capital to invest in loans or reduce origination volume. In order to obtain additional investor capital to our platform, we may need to enter into various arrangements with new or existing investors. These arrangements may have a number of different structures and terms, including equity or debt transactions, alternative fee arrangements or other inducements including equity. These structures may enable us or third-parties to purchase loans through the platform. Such actions may have a material impact on our business and results of operations and may be costly or dilutive to existing stockholders. There is no assurance that we will be able to enter into any of these transactions, or if we do, what the final terms will be. These actions likely may have material adverse impacts on the Company's business, financial condition (including its liquidity), results of operations and ability to sustain and grow loan volume.

A relatively small number of investors account for a large dollar amount of investment in loans funded through our marketplace and we may be required to increase our repurchase obligations to attract additional investors. Historically, we have limited our loan or note repurchase obligations to events of verified identity theft or in connection with certain customer accommodations. To attract additional investors, some of which are beginning to purchase loans, and seek to subsequently securitize such loans, we have increased the circumstances and the required burden of proof of economic harm under which we are obligated to repurchase loans from these investors.

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While these repurchase obligations are consistent with institutional loan market standards for loans that may be securitized, such repurchase obligations could negatively affect our business and results of operation.

In addition, if a large number of our existing investors ceased utilizing our marketplace over a short period of time, our business could be temporarily interrupted and we may decide to use our capital to fulfill regulatory or contractual purchase obligations or support short-term marketplace equilibrium as new investors complete the administrative and diligence updating processes necessary to enable their investments. We may use our capital to invest in loans associated with the testing or initial launch of alternative loan terms, programs or channels to establish a track record of performance prior to facilitating third-party investments in these loans.

Misconduct and errors by our employees and third-party service providers could harm our business and reputation.

We are exposed to many types of operational risk, including the risk of misconduct and errors by our employees, such as the change to application dates for $3.0 million in loans as described below, and other third-party service providers. Our business depends on our employees and third-party service providers to process a large number of increasingly complex transactions, and if any of our employees or third-party service providers take, convert or misuse funds, documents or data or fail to follow protocol when interacting with borrowers and investors, we could be liable for damages, be subject to repurchase obligations and subject to regulatory actions and penalties. We could also be perceived to have facilitated or participated in the illegal misappropriation of funds, documents or data, or the failure to follow protocol, and therefore be subject to civil or criminal liability. Because our subsidiary, LCA, is the general partner or investment manager for a series of private funds and we have a limited partnership interest in Cirrix Capital L.P. family of funds, we could be perceived as having a conflict of interest regarding access to loans versus other platform investors. We believe that we have controls and processes in place as to mitigate this issue.

Any of these occurrences could result in our diminished ability to operate our business, potential liability to borrowers and investors, inability to attract future borrowers and investors, reputational damage, regulatory intervention and financial harm, which could negatively impact our business, financial condition and results of operations.

After the end of the first quarter of 2016, the Company became aware that approximately $22.3 million in near-prime loans were sold to a single institutional investor in March and April 2016, in contravention of the investor’s express instructions as to a non-credit and non-pricing element. Certain personnel apparently were aware that the sales did not meet the investor’s criteria. In one case, involving $3.0 million in loans, a non-credit, non-pricing attribute was changed in a live Company database in an attempt to appear to meet the investor’s requirement, and the balance of the loans were sold in direct contravention of the investor’s director. As a result of the board’s review into these and other matters, certain senior managers and our then-CEO resigned or were terminated. In April 2016, we repurchased these loans from the investor. See “ Part 1 – Item 4 – Controls and Procedures. ”

If we fail to retain our key personnel, we may not be able to achieve our anticipated level of growth and our business could suffer.

In addition to attracting and retaining highly skilled employees in general, our future performance depends, in part, on our ability to attract and retain key personnel, including our executive officers, senior management team and other key personnel, all of whom would be difficult to replace. The loss of the services of our executive officers or members of our senior management team, and the process to replace any of them, would involve significant time and expense and distraction that may significantly delay or prevent the achievement of our business objectives or impair our operations or results.

Subsequent to March 31, 2016, following an internal board review of certain loan sales and other matters, our CEO resigned, and certain senior managers either resigned or were terminated. We also implemented a reduction in workforce in June 2016 and attrition has been higher than usual in the months since the reduction in force. With any

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change in leadership and reduction in workforce, there is a risk to retention of employees, including other members of senior management, as well as the potential for disruption to business operations, initiatives, plans and strategies. In light of the circumstances surrounding these employee actions, we have offered significant additional compensation to retain certain employees, but we cannot predict whether we ultimately will be able to retain these or other employees in the future, or whether we will have to incur substantial additional cost to do so. In addition, in light of these recent events and their potential overall effect on our business and stock price, key executive officers or senior management may opt to depart the company to pursue other opportunities, which could significantly delay or prevent the achievement of our business objectives or impair our operations or results. See “ Part 1 – Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Board Review. ”

Our stock price has been and will likely continue to be volatile.

As a result of recent events, our stock price has declined significantly since the end of the first quarter of 2016 and has exhibited substantial volatility. Recent developments notwithstanding, our stock price may fluctuate in response to a number of events and factors, such as quarterly operating results; changes in our financial projections provided to the public or our failure to meet those projections; changes in the credit performance on our platform; the public's reaction to our press releases, other public announcements and filings with the SEC; significant transactions, or new features, products or services by us or our competitors; changes in financial estimates and recommendations by securities analysts; media coverage of our business and financial performance; the operating and stock price performance of, or other developments involving, other companies that investors may deem comparable to us; trends in our industry; any significant change in our management; and general economic conditions.

In addition, the stock market in general, and the market prices for companies in our industry, have experienced volatility that often has been unrelated to operating performance. These broad market and industry fluctuations may adversely affect the price of our stock, regardless of our operating performance. Price volatility over a given period may cause the average price at which we repurchase our own stock to exceed the stock’s price at a given point in time. Volatility in our stock price also impacts the value of our equity compensation, which affects our ability to recruit and retain employees. In addition, some companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We have been the target of this type of litigation and may continue to be a target in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could harm our business.

If we fail to meet expectations related to future growth, profitability, or other market expectations, our stock price may decline significantly, which could have a material adverse impact on investor confidence and employee retention. A sustained decline in our stock price and market capitalization could lead to impairment charges.

We have identified a material weakness in our internal control over financial reporting that could, if not remediated, result in material misstatements in our financial statements.

During the second quarter of 2016, we identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis. As described in "Item 4 - Controls and Procedures" , we have concluded that our internal control over financial reporting was not effective as of June 30, 2016 due to material weakness. Specifically, our identified material weakness related to (i) appropriate system controls, or review and oversight by other personnel, to detect and prevent sales of loans in direct contravention of the loan agreement, (ii) failure to identify related party transactions so as to ensure proper review and approval or disapproval by the Audit Committee or the board, and (iii) failure to appropriately document, authorize, communicate and monitor amendments to investor contracts. Based upon that discovery, and in connection with the board review of specific near-prime loan sales to an investor and other unrelated compliance matters described elsewhere herein, the Company's CEO and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were not effective at a level that provides reasonable assurance that the objectives of disclosure controls and procedures were met as of September 30, 2016. As described in “Item 4 –

LENDINGCLUB CORPORATION

Controls and Procedures,” the Company determined that the material weakness existed as of March 31, 2016 and December 31, 2015 and amended its Annual Report on Form 10-K for the year ended December 31, 2015, solely for the purpose of amending management’s assessment of internal control over financial reporting. This amendment will have impact on the financial statements included therein.

Giving full consideration to this weakness, and the additional analyses and other procedures we performed to ensure that our consolidated financial statements included in this Quarterly Report on Form 10-Q were prepared in accordance with U.S. generally accepted accounting principles (GAAP), our management has concluded that our consolidated financial statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods disclosed in conformity with GAAP. While the material weakness described above creates a reasonable possibility that an error in financial reporting may go undetected, after review and the performance of additional analysis and other procedures, no material adjustments, restatement or other revisions to our previously issued financial statements were required.

As further described in "Item 4 – Controls and Procedures,” we are taking specific steps to remediate the material weakness that we identified; however, the material weakness will not be remediated until the necessary controls have been implemented and we have determined the controls to be operating effectively. Because the reliability of the internal control process requires repeatable execution, the successful remediation of this material weakness will require review and evidence of effectiveness prior to concluding that the controls are effective. In addition, we may need to take additional measures to address the material weakness or modify the remediation steps, and we cannot be certain that the measures we have taken, and expect to take, to improve our internal controls will be sufficient to address the issues identified, to ensure that our internal controls are effective or to ensure that the identified material weakness will not result in a material misstatement of our annual or interim consolidated financial statements. Implementing any appropriate changes to our internal controls may distract our officers and employees from other management duties and require material cost to implement new process or modify our existing processes. Moreover, other material weaknesses or deficiencies may develop or be identified in the future. If we are unable to correct the material weakness or deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report financial information accurately and within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission, will be adversely affected. This failure could negatively affect the market price and trading liquidity of our common stock, lead to delisting, cause investors to lose confidence in our reported financial information, subject us to civil and criminal investigations and penalties, and generally materially and adversely impact our business and financial condition.

There continues to be uncertainty as to how the Consumer Financial Protection Bureau's (CFPB) actions or the actions of any other federal or state regulator could impact our business or that of our issuing banks.

The CFPB, which commenced operations in July 2011, has broad authority over the businesses in which we engage. This includes authority to write regulations under federal consumer financial protection laws, such as the Truth in Lending Act and the Equal Credit Opportunity Act, and to enforce those laws against and examine large financial institutions, such as our issuing banks, for compliance. The CFPB is authorized to prevent “unfair, deceptive or abusive acts or practices” through its regulatory, supervisory and enforcement authority. To assist in its enforcement, the CFPB maintains an online complaint system that allows consumers to log complaints with respect to various consumer finance products, including the loan products we facilitate. This system could inform future CFPB decisions with respect to its regulatory, enforcement or examination focus.

While we are subject to the regulatory and enforcement authority of the CFPB, as a facilitator, servicer or acquirer of consumer credit, the CFPB has recently announced that it intends to expand its supervisory authority, through the use of “larger participant rules,” to cover the markets for consumer installment loans and auto title loans. The CFPB is also considering whether rules to require registration of these or other non-depository lenders would facilitate supervision. The CFPB has not announced specifics regarding its proposed rulemaking and, consequently, there continues to be uncertainty as to how the CFPB’s strategies and priorities, including any final rules, will impact our businesses and our results of operations going forward.

LENDINGCLUB CORPORATION

In December 2015, the California Department of Business Oversight sent an online survey to fourteen marketplace lenders, including us, requesting information about our business model, online platform, loan performance and investor funding process. In May 2016, the DBO requested additional information from us and other survey participants. We submitted our response to this additional information in June 2016.

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, or (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, or (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. 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 and held that a nonbank assignee of a loan originated by a national bank was not entitled to the benefits of federal preemption of claims of usury. The Second Circuit denied the defendant’s motion to reconsider the decision and remanded the case to address choice of law matters. 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. The defendant petitioned the U.S. Supreme Court to review the decision and in March 2016, the Court invited the Solicitor General to file a brief expressing the views of the U.S. on the petition. The Solicitor General filed an amicus brief that stated the Second Circuit decision was incorrect, but that the case was not yet ready to be heard by the Supreme Court. In June 2016, the Supreme Court declined to hear the case. The Federal District Court is not hearing the case in regards to Midland’s alternative claim regarding choice of laws, which if successful, could create potential liability under state statutes such as usury and consumer protection statutes. The petition was denied in June 2016.

There has been (and may continue to be) other litigation which has challenged lending arrangements where a bank has made a loan and then sells and assigns it to an entity that is engaged in assisting with the origination and servicing of a loan. For example, the CFPB recently alleged that the defendants in Consumer Financial Protection Bureau v. CashCall, Inc., et al (C.D. Cal August 31, 2016) engaged in unfair, deceptive, and abusive acts and practices by servicing and collecting loans that state licensing and state usury laws had rendered partially or wholly uncollectible. The court in that case held that to identify the true lender of a loan the totality of the circumstances

LENDINGCLUB CORPORATION

and a “predominant economic interest” test should be considered. If a similar test were applied in a case regarding our platform, there is no assurance the court would determine that our issuing bank partners have the predominant economic interest in loans facilitated through our platform.

In April 2016, a putative class action lawsuit was filed in federal court in New York, alleging that persons received loans, through our platform, that exceeded states' usury limits in violation of state usury and consumer protection laws, and the federal RICO statute.

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, including the voiding of loans and repayment of principal and interest to borrowers and investors. 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. Further, if we were unable to partner with another issuing bank, we would have to substantially modify our business operations from the manner currently contemplated and would be required to maintain state-specific licenses and only provide a limited range of interest rates for personal loans, all of which would substantially reduce our operating efficiency and attractiveness to investors and possibly result in a decline in our operating results.

The announcement of our internal board review and resignation of our former CEO has resulted in government inquiries, books and records demands and private litigation and could result in government enforcement actions and private litigation that could have a material adverse impact on our results of operations, result in substantial costs and divert management’s attention.

We are regularly subject to claims, lawsuits (including class actions and individual lawsuits), government investigations, and other proceedings in the ordinary course of business. The number and significance of these disputes and inquiries have increased as a result of our internal board review and resignation of our former CEO.

We have received a grand jury subpoena from the U.S. Department of Justice (“DOJ”) and have been contacted by the SEC and other governmental entities. We continue to cooperate with the DOJ, SEC and any other governmental or regulatory authorities or agencies. In the first and second quarter of 2016, several putative class action lawsuits and shareholder derivative actions were filed. The Company believes the plaintiffs’ actions are without merit and intends to vigorously defend against the claims. No assurance can be given as to the timing or outcome of these, or other matters. Responding to inquiries and lawsuits of this nature is costly and time-consuming to management, can generate negative publicity, and could have a material adverse impact on our results of operation. See “ Part 1 - Financial Information - Item 1 - Financial Statements - Note 15 - Commitments and Contingencies - Legal ” for additional information regarding these matters.

Any delay in the implementation of our technology systems could disrupt our operations and cause unanticipated increases in our costs .

We believe the technology platform that powers our online marketplace enables us to deliver innovative solutions to borrowers and investors and provides a significant time and cost advantage over traditional banks that run on legacy systems. The satisfactory performance, reliability and availability of our technology and our underlying network infrastructure are critical to our operations, customer service, reputation and our ability to attract new and retain existing borrowers and investors. In addition, our future growth prospects are highly dependent on our ability to implement changes to our technology platform to support the future demands of our customers and industry. Our failure to implement changes to our technology platform and adapt to our customers’ changing technological needs and requirements or to hire and retain a sufficient number of engineers and maintain our engineering, and technological expertise could have a material adverse effect on our operations.

LENDINGCLUB CORPORATION

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

None.

LENDINGCLUB CORPORATION

Item 6. Exhibits

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 Master Loan Purchase Agreement					X
10.2	Form of Master Loan Servicing Agreement					X
10.3	Form of Borrower Loan 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

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:	November 9, 2016	/s/ SCOTT SANBORN
		Scott Sanborn
		Chief Executive Officer and President

Date:	November 9, 2016	/s/ THOMAS W. CASEY
		Thomas W. Casey
		Chief Financial Officer

Exhibit 10.1

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., “Prime,” “Super Prime,” “Near Prime,” “Small Business”, “Multi-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.

MASTER LOAN PURCHASE AGREEMENT – Page A

“ 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 7.3 .

“ 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.

“ Bank Program ” means Seller’s program for acquiring Loans from Bank.

“ 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.

MASTER LOAN PURCHASE AGREEMENT – Page B

“ 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 .

“ 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

MASTER LOAN PURCHASE AGREEMENT – Page C

(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) .

MASTER LOAN PURCHASE AGREEMENT – Page D

“ 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, county, municipal or local agency or regulatory authority, agency, board, body, commission, instrumentality, court, tribunal or quasi-governmental authority having jurisdiction over a Party, any Loan or any Borrower.

“ Securitization Transaction ” means any transaction involving any of (1) a sale or other transfer of some or all of the Purchased Loans directly or indirectly by the Purchaser to an issuing entity in connection with an issuance of publicly offered or privately placed, rated or unrated asset-backed securities, (2) an issuance of publicly offered or privately placed, rated or unrated securities, the payments on which are determined primarily by reference to one or more portfolios of loans consisting, in whole or in part, of some or all of the Purchased Loans, (3) the creation of participation interests in some or all of the Purchased Loans or (4) any similar transaction.

“ Seller ” has the meaning set forth in the introductory paragraph.

“ Seller Claims Notice ” has the meaning set forth in Section 5.2 .

MASTER LOAN PURCHASE AGREEMENT – Page E

“ 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.

“ 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.

“ Whole Loan Transfer ” means any sale or transfer by the Purchaser of some or all of the Purchased Loans, other than a Securitization Transaction and other than sales of Charged Off Loans pursuant to the Servicing Agreement.

(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

MASTER LOAN PURCHASE AGREEMENT – Page F


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 “Prime” Loan Program and the “Near Prime” 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 Purchaser 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

MASTER LOAN PURCHASE AGREEMENT – Page G

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

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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 does not agree to such modifications, amendments or replacement documents for such Eligible Loan; provided, however that Purchaser shall provide such agreement (or confirm its objection) within one (1) Business Day of Purchaser’s receipt of such notice from Seller.


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) In connection with the sale and conveyance of the Purchased Loans, Seller agrees, to indicate or cause to be indicated in its books, records and computer files that the Purchased Loans have been sold to Purchaser.

(b) 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.

(c) 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.

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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 that 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

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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:

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(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.

(b) 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).

(c) 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 by Seller from Bank and the sale of the Purchased Loans by Seller 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.

(d) 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, will result in the creation or imposition of any lien, charge or encumbrance on the Purchased Loan Collateral except for the security interest granted by Seller pursuant to Section 3.2(a) .

(e) 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. The consideration received by Seller upon the sale of the Purchased Loans constitutes reasonably equivalent value (as such term is used in Section 548 of the Bankruptcy Code) and fair consideration (as such term is defined and used in the New York Debtor and Creditor Law Sections 272-279) for such Purchased Loans.

(f) No consent, approval, authorization, registration, filing or order of any court or governmental authority is required for the execution, delivery and performance by Seller of, or compliance by Seller with, this Agreement, or the consummation of the transactions contemplated hereby, or if any such consent, approval, authorization, registration, filing or order is required, Seller has obtained it or (if such requirement is not currently in effect) as of the applicable Purchase Date Seller will have obtained 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 do not materially conflict with, result in a material breach of or constitute a material 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.

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(h) 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 or on its ability to consummate the transactions contemplated hereby or on the Purchased Loans.

(i) Seller has provided or made available 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 or the applicable Purchase Date.

(j) 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.

(k) 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.

(l) 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.

(m) 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) Such Purchased Loan and the transfer of such Purchased Loan pursuant to this Agreement 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

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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 in respect of any payment due thereunder.

(e) Each of the applicable Loan Documents is complete in all material respects as of the Purchase Date and, if applicable, such Loan Documents include all amendments, supplements and modifications thereto as of such date. 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) No selection procedures intentionally designed to have an adverse effect on Purchaser were utilized by Seller in selecting each Purchased Loan from those loans owned or otherwise permitted to be acquired by Seller or any of its Affiliates from the Bank or those loans otherwise originated through the Bank Program.

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

(i) The terms of such Purchased Loan require the applicable Borrower to make equal periodic monthly payments which (if made) will fully amortize the amount financed over its term to maturity.

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

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(k) 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.

(l) The Purchased Loan was originated by a Bank and acquired by Seller from, such Bank not less than two nor more than five Business Days prior to its Purchase Date in accordance with the terms of the related loan sale agreement with such Bank.

(m) 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, which origination fees have been paid to or retained by the Bank.

(n) 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 sold or owned by, or in possession or control of Seller, has the same loan identification number or loan listing number as such Purchased Loan.

(o) 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 Purchased Loan from Bank to Seller under the Bank Purchase Documents or Seller to Purchaser under this Agreement, or if such notice, consent or approval is required, it has been obtained, except in each case as would not be expected to have a Material Adverse Effect on such Purchased Loan.

(p) Assuming the competency and capacity of the Borrower, as of the Origination Date, 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).

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

(r) The Purchased Loan has not been originated in any jurisdiction in which, and is not subject to the laws of any jurisdiction under which, the sale, transfer, assignment, setting over, conveyance or pledge of such Loan would be unlawful or void. Neither Seller nor any of its Affiliates has entered into any agreement with the related Borrower that prohibits, restricts or conditions the assignment of such Purchased Loan.

(s) Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the applicable Borrower, directly or indirectly, for the payment of any amount required to be paid by such Borrower pursuant to the terms of the related Purchased Loan. Such Purchased Loan does not contain any provisions that may constitute a “buydown” provision.

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(t) Such Purchased Loan was executed electronically and Seller has possession of the electronic records evidencing such Loan. There exists a Loan Document Package containing the items specified herein. Such Loan Document Package is in the possession of Seller and will be delivered by Seller to the Servicer, as custodian for Purchaser, on or promptly after the Purchase Date, and no other Person will have an “authoritative copy” of any Loan Document.

(u) Any information provided by Seller to Purchaser in relation to a Purchased Loan is consistent in all material respects with the information provided to Seller by the Borrower of such Purchased Loan. Such Purchased Loan has been fully funded and none of the Bank, Seller or Purchaser has any obligation under the related Loan Documents to advance any additional funds to the related Borrower. Seller has performed its customary verification of Borrower information in accordance with the applicable Credit Criteria.

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, perform all its obligations hereunder, and to carry out the transactions contemplated hereby. 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 or general equitable principles (whether considered in a proceeding in equity or at law).

(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.

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(d) 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, will result in the creation or imposition of any lien, charge or encumbrance of any nature (except pursuant to Section 3.2(a) or 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, either Purchaser has obtained the same or its failure to do so would not have a Material Adverse Effect.

(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 or constitute a material default under, and are not 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 that would have a Material Adverse Effect on Purchaser.

(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.

(k) If Purchaser plans or intends to sell, assign, transfer, pledge, hypothecate or otherwise dispose of Purchased Loan(s) or any other rights under this Agreement relating to the Purchased Loans, Purchaser (subject to the immediately following sentence) will only use Seller’s publicly available information to describe Seller and its products (including the Purchased Loans) in any such solicitation. Purchaser shall otherwise obtain Seller’s prior written consent with respect

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to any additional descriptions, information or materials concerning or relating to Seller and its products (including the Purchased Loans) in any such solicitation.

(l) Purchaser will not violate any Applicable Laws in the consummation of the transactions contemplated hereby, 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 and state unfair and deceptive trade practices statutes.

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, (a) any material breach by Seller of any covenant, agreement, representation or warranty of Seller contained in this Agreement, or (b) Seller’s gross negligence or willful misconduct in the performance of its duties under 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 or (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.

(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 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 Purchaser has or receives notice of or otherwise has actual knowledge of the applicable breach to the extent such breach is 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 thirty (30) days of receipt of such Purchaser Claims Notice. If Seller does not elect to dispute the claim, Seller shall within sixty (60) days of its receipt of the Purchaser Claims Notice pay the applicable indemnification amount to Purchaser and/or other applicable Indemnified Purchaser

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Party; provided , that if the indemnity claim relates solely to a breach by Seller of its representations and warranties in Section 4.2 in relation to one or more Purchased Loans, Seller may, in lieu of paying the indemnity amount, repurchase such Purchased Loan(s) from Purchaser or (if possible and if Purchaser so agrees) cure the applicable breach in all material respects pursuant to Section 7.2 , and upon the completion of such repurchase or cure Seller shall have no further liability to the Indemnified Purchaser Parties in relation to such breach.

(e) 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 the transfer was made in a Securitization Transaction or Whole Loan Transfer or unless otherwise consented to in writing by Seller, be permitted to claim indemnification hereunder and, if the transfer made in a Securitization Transaction or a Whole Loan Transfer or 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 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 Purchaser of Sections 2.2, 2.4, 4.3 and Article 6 of this Agreement or the willful misconduct or gross negligence of Purchaser in the performance of its duties under 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 thirty (30) days of receipt of the related Seller Claims Notice, Purchaser shall make payment of the applicable indemnification amount to Seller within sixty (60) days of receipt of the related Seller Claims Notice.

(b) Notwithstanding Section 5.2(a) above, 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.

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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 and participate in the defense of any such claim or matter; provided that any related attorneys’ fees shall not be indemnifiable Losses unless the Indemnifying Party and the Indemnified Party are both defendants in the matter for which the indemnity is sought and the Indemnified Party shall have been advised by counsel representing the Parties an actual conflict of interest would arise in such counsel’s continued representation of both Parties. 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 unless such Indemnified Party shall have failed to notify the applicable Indemnifying Party of such breach or non-compliance in a timely manner 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

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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

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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:

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(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) days of its review and approval of the foregoing.

7.2 Repurchase for Breach of Loan Representations, Warranties and Covenants

If Seller receives notice of or becomes aware of any of a breach of any representation or warranty contained in Section 4.2 hereto by Seller with respect to a Purchased Loan sold to Purchaser by Seller, which breach has a Material Adverse Effect on the Purchased Loan, Seller shall repurchase such Purchased Loan from Purchaser within thirty (30) days of the date of such discovery or notice unless such breach has been cured by Seller during that 30-day period. Purchaser agrees to give Seller prompt written notice if it discovers, or is notified by any Person (other than Seller) of, any breach described in this Section 7.2 ; provided that any delay in providing such notice shall not excuse Seller from its repurchase obligation.


7.3	Repurchase Procedures .

For each repurchase of a Purchased Loan under Section 7.1 and Section 7.2 the “ Article 7 Repurchase Price ” to be paid by Seller shall be equal to the original Purchase Price 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 (which representation and warranty shall be deemed made upon an assumption that Seller conveyed clear and marketable title to such Purchased Loan to Purchaser on the Purchase Date). Any repurchase by Seller pursuant to Section 7.1 and Section 7.2 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.

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(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)

(x) Any material representation or warranty of Seller contained in this Agreement shall prove to have been materially false or misleading when made (and such misstatement, if with respect to Section 4.2 , has a Material Adverse Effect on the applicable Purchased Loans), and (y) such misstatement shall not be cured within thirty (30) days after Seller’s receipt of Purchaser’s written demand that Seller cure such misstatement; provided, that (a) such misstatements with respect to Section 4.1 or 4.2 for which Seller remains subject to and/or shall have complied with Section 5.1 and/or (B) such misstatements with respect to Section 4.2 for which Seller shall have complied with Section 7.2 shall each not apply for purposes of this clause (iii);


(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,

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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;

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(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 9.16 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:

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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: Chief Capital Officer
E-mail Address: pdunne@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: relmer@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 .

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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 included in such assignment, pledge, hypothecation, or other disposition, subject to any applicable limitations thereon described in this Agreement, the Servicing Agreement and any Multi-Party Agreement.

9.5 Cooperation in Financing Efforts .

(a) 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.

(b) Purchaser agrees (i) that it shall, and that it shall require (A) each and any Person to which Purchaser transfers a Purchased Loan, (B) any Affiliate of such Person, (C) any special purpose vehicle established at the direction or for the benefit of such Person, or (D) an Affiliate of such Person to which such Person subsequently transfers a Purchased Loan to, in each case, obtain Bank’s written approval as to any publicly filed document or document made available to a third-party regarding securitization documentation that identifies Bank by name or provides a description of the Bank Program, (ii) that it shall require any Person covered by (i) above to include a provision similar to this Section 9.5(b) in any agreement by which such Person sells or transfers Purchased Loans requiring such Person to obtain Bank’s approval as contemplated hereby, and (iii) shall use commercially reasonable efforts to require any subsequent transferee not covered by (i) above to obtain Bank’s written approval as to any publicly filed document or document made available to a third party regarding securitization documentation that identifies Bank by name or provides a description of the Bank Program.


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.

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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

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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

MASTER LOAN PURCHASE AGREEMENT – Page AD

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.

9.1 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 ]

MASTER LOAN PURCHASE AGREEMENT – Page AE

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 PURCHASE AGREEMENT.

PURCHASER:

[______________]

By: __________________________

Name:

Title:

SELLER :

LENDINGCLUB CORPORATION

By: _____________________________

Name:

Title:

MASTER LOAN PURCHASE AGREEMENT – Page AF

PRIME 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.	Borrower Agreement


5.	Loan Agreement and Non-Negotiable Promissory Note ( Note: form is included as Exhibit A to Borrower Agreement)


6.	Applicable Privacy Notice ( Note: form is included as Exhibit B to Borrower Agreement)


7.	Terms of Use

MASTER LOAN PURCHASE AGREEMENT – Addendum No. 1 (Prime)

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, 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 (Prime) and Addendum No. 2 (Super Prime) 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:

i. 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.

ii. 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.

MASTER LOAN PURCHASE AGREEMENT – Addendum No. 1 (Prime)

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.

iii. 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.

iv. 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.

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 (Prime)

SUPER PRIME 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.	Borrower Agreement


5.	Loan Agreement and Non-Negotiable Promissory Note ( Note: form is included as Exhibit A to Borrower Agreement)


6.	Applicable Privacy Notice ( Note: form is included as Exhibit B to Borrower Agreement)

MASTER LOAN PURCHASE AGREEMENT – Addendum No. 2 (Super Prime)


7.	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, 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.

IV. Representations, Warranties and Covenants

(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

MASTER LOAN PURCHASE AGREEMENT – Addendum No. 2 (Super Prime)

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.

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:

NEAR PRIME LOAN PROGRAM

ADDENDUM 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 near prime 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.	Borrower Agreement


5.	Loan Agreement and Non-Negotiable Promissory Note ( Note: form is included as Exhibit A to Borrower Agreement)


6.	Applicable Privacy Notice ( Note: form is included as Exhibit B to Borrower Agreement)


7.	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.

(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.

(c) Seller may strive to allocate Eligible Loans among purchasers participating in the Loan Program covered by this Addendum No. 3 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. 3. However, Purchaser acknowledges that Seller may, in its sole and absolute discretion, allocate Eligible Loans to participants in the Near Prime 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

(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.

(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.

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. 2 (Super Prime)

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.

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

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

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 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

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

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.

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

(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.

(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.

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:

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.

“ 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


6.	Security Agreement (if applicable)


7.	UCC Financing Statements(s) (if applicable)

III. Purchase Requirement and Loan Program Mechanics

(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.

IV. Representations, Warranties and Covenants

(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.

(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

(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.

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:

EXHIBIT A

PURCHASE 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:

¨ Prime 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: ACCEPTED BY SELLER:

[_____________________] LENDINGCLUB CORPORATION

By: ____________________________ By: ____________________________

Name: Name:

Title: Title:

Date:

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

Exhibit 10.2

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 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.

“ Ancillary Fees ” means all ancillary servicing type fees or monies derived from or paid with respect to the Purchased Loans after the Purchase Date to the extent not otherwise prohibited by this LSA, the related Loan Documents or Applicable Law, including, but not limited to, (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), certain Bank and other administrative fees, reporting fees and other such fees and expenses. Servicer shall be entitled to retain amounts sufficient to cover all Ancillary Fees with respect to the Purchased 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 Purchased 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.

“ 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.

“ 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) .

“ 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 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.

“ Multi-Party Agreement ” has the meaning assigned to such term in the Purchase Agreement.

“ 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.

“ 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.

“ Purchase Price ” has the meaning assigned to such term in 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 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.

“ Securitization Transaction ” has the meaning assigned to such term in the Purchase Agreement.

“ 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.

“ Whole Loan Transfer ” has the meaning assigned to such term in the Purchase Agreement.

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 (or an Affiliate or other designee of 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;

(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 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 Addendum No. 5 (Multi-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 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 six (6) Business Days (or four (4) Business Days for purposes of Loans purchased pursuant to the terms of Addendum No. 5 (Multi-Draw Line of Credit 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 .

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.


(iii)	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 non-public personally identifiable information as defined by Title V of the Gramm-Leach-Bliley Act of 1999 and implementing regulations (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, a fidelity bond and “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 ”). Any such fidelity bond and Errors and Omissions Insurance policy shall protect and insure Servicer against losses, including forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of such 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 Five Million Dollars ($5,000,000.00) (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, and at all times that Servicer continues to service Loans hereunder, 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 or the Purchased Loans.

(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 or the Purchased Loans.

(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 any Borrower except as contemplated by Section 4.2(u) of the Purchase Agreement.

(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, materially impair or interfere with the ability of Servicer to service the Loans, or materially impair the aggregate value, collectability or performance 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 or a material impairment of the ability of Servicer to service the Loans or the enforceability or collectability of the Loans; 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, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect on Purchaser or the Purchased Loans.

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; or (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.

(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 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 Purchaser has or receives notice of or otherwise has actual knowledge of the applicable breach to the extent such breach is 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 thirty (30) days of receipt of such Purchaser Claims Notice. If Servicer does not elect to dispute the claim, Servicer shall within sixty (60) days of its receipt of the Purchaser Claims Notice either pay the applicable indemnification amount to Purchaser and/or other applicable Indemnified Purchaser Party.

(v) 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 the transfer was made in a Securitization Transaction or Whole Loan Transfer or otherwise consented to in writing by Servicer, be permitted to claim indemnification hereunder and, if the transfer was made in a Securitization Transaction or Whole Loan Transfer or 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.

(vi) Repurchase Obligation . Nothing in this Section 5.3 is intended to or shall limit the rights of Purchaser under Sections 7.1 and 7.2 of the Purchase Agreement.

(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 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 Purchaser of Sections 3.3 , 3.4 , 4.2 or 5.2 of this Agreement or (b) Purchaser’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 thirty (30) days of receipt of the related Servicer Claims Notice, Purchaser shall make payment of the applicable indemnification amount to Servicer within sixty (60) 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 and participate in the defense of any such claim or matter; provided that any related attorneys’ fees shall not be indemnifiable Losses unless the Indemnifying Party and the Indemnified Party are both defendants in the matter for which the indemnity is sought and the Indemnified Party shall have been advised by counsel representing the Parties an actual conflict of interest would arise in such counsel’s continued representation of both Parties. 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 unless such Indemnified Party shall have failed to notify the applicable Indemnifying Party of such breach or non-compliance in a timely manner in accordance with the terms of this Article V . 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.

6.7. Notice of Transfer. In the event that Purchaser plans, intends or agrees to sell, assign, transfer, pledge, hypothecate or otherwise dispose of its interests in Loan(s), Purchaser will only use Servicer’s publicly available information to describe Servicer and its products (including the Loans) in any such solicitation. Purchaser shall obtain Servicer’s prior written consent with respect to any different or additional descriptions, information or materials concerning or relating to Servicer and its products (including the Loans) in any such solicitation. Furthermore, Purchaser agrees that it shall provide written notice to Servicer of such transaction at least sixty (60) days prior to contacting any potential purchaser, assignee or transferee with respect to a proposed transaction. Unless otherwise agreed in writing by Servicer, Purchaser also agrees that it shall cause such purchaser, assignee or transferee to agree to be bound by the standard and customary terms of Servicer’s then-current form of loan servicing agreement .

ARTICLE VII
TERMINATION

7.1 Termination for Event of Default.

i. 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;

Notwithstanding the foregoing, if a Servicer Event of Default only applies to Loans sold to Purchaser pursuant to the terms of a particular Addendum or Addenda, (A) this Agreement shall be terminable at the sole option of Purchaser with respect to such Loans only and (B) this Agreement shall remain in full force and effect with respect to any other Loans sold to Purchaser pursuant to the terms of any other Addendum or Addenda.

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 with respect to the applicable Loans and in and to the servicing contract established hereby and the proceeds thereof, except as incurred prior to the effective date of such termination.

i. 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 ”):


(viii)	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;


(ix)	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;


(x)	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;

(xi)

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


(xii)	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 applicable 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 applicable documents and other instruments, place in such successor’s possession all applicable 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 applicable 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 applicable Loans. Servicer shall be entitled only to any applicable 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. 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 with respect to the applicable Loans 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 with respect to the applicable Loans. 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 applicable 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 applicable 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 applicable 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: Chief Capital Officer

Email: pdunne@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: relmer@lendingclub.com


8.2.	Severability.


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.


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.


8.5.	LIMITATION 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.


8.15.	Force Majeure.

[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: __________________________

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. [__]

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.

EXHIBIT B

CHARGE OFF POLICY

EXHIBIT C

POWER OF ATTORNEY

From [____________], as Purchaser, to

LendingClub Corporation, as Servicer

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the Master 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 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.

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.

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:

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*


(d)	¨ Daily 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.

PURCHASER:

[_____________________]

By: ____________________________

Name:

Title:

Date:

Exhibit 31.1

CERTIFICATION

I, Scott Sanborn, 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: November 9, 2016

/s/ SCOTT SANBORN

Scott Sanborn

Chief Executive Officer and President

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION

I, Thomas W. Casey, 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 consolidated 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: November 9, 2016

/s/ THOMAS W. CASEY

Thomas W. Casey

Chief Financial 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 September 30, 2016 , 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.



	/s/ SCOTT SANBORN
	Scott Sanborn
	Chief Executive Officer and President
	(Principal Executive Officer)

	/s/ THOMAS W. CASEY
	Thomas W. Casey
	Chief Financial Officer


	Dated:	November 9, 2016