UPSTART INCOME SHARE AGREEMENT
This Upstart Income Share Agreement, as it may be updated from time to time ("Agreement") is a contract between you and Upstart Network, Inc. and our successors and assignees (“Upstart”, “we” or “us”). Under this Agreement, you agree to receive funding from us and mentoring from some of your investors and in return pay a portion of your income to us as repayment, as described below. This agreement is not a loan, the amount you must repay is not a fixed amount and will vary based on your income each year, as reported the Internal Revenue Service (IRS). Your obligations, including your income payment obligations (Section 2), are provided in this Agreement. This is an important document and you must read it carefully and agree with and accept all of the terms and conditions before choosing to proceed with us. You should save/print a copy of this agreement for your records. Some capitalized terms have specific definitions that are provided in this Agreement and are bolded where they are defined. Your agreement to this Agreement means you agree that if you receive the Funding Amount you will in good faith perform your obligations under this Agreement.
1. Your Final Terms and Cancellation Right.
a. Final Terms. The final terms of your Upstart funding (“Final Terms”) have been presented to you because: (1) you reached your maximum Funding Amount (defined below); (2) you opted to end your funding offer published on http://www.upstart.com including any subdomains (our “Website”) early; or (3) your funding offer period expired; and, in each case, you received funding offers from investors that equal or exceed the minimum funding requirement applicable to your funding offer (which was communicated to you when you published your funding offer). The Final Terms are included in this Agreement by reference.
Your Final Terms include:
- The final amount you will receive based on the amounts offered by investors that you accepted (your “Funding Amount”) less our Origination Fee (defined in Section 3) and any Accrued Income Payment (defined in Section 5.b);
- The corresponding percentage of your Total Income (defined in Section 2.a.ii below) you earn during the Income Share Term that you agree to pay as repayment for the funding you receive (your “Income Share”);
- The amount of our Origination Fee and any Accrued Income Payment;
- The Cap (defined in Section 2.b) on your Income Payments (defined in Section 2.a)
- The income threshold for deferrals (defined in Section 2.b.i below)
- Each of the investors you accepted; and
- The length of your initial Income Share Term, the date your Income Share Term (defined in Section 5) begins and your first monthly Income Payment is due, the date your payment obligations are estimated to end (assuming you have no extensions as provided in Section 2.b below) and the date your payment obligations cannot go beyond (if you defer for the maximum 5 years as provided in Section 2).
YOU MUST ACCEPT AND AGREE TO THIS AGREEMENT INCLUDING THE FINAL TERMS BEFORE WE WILL SEND THE FUNDING AMOUNT TO YOU. IF YOU HAVE INDICATED THAT YOU WILL USE YOUR FUND FOR EDUCATION-RELATED PURPOSES, YOU WILL HAVE UP TO 30 DAYS FROM THE DATE WE FIRST PRESENT THIS FUNDING AGREEMENT, INCLUDING THE FINAL TERMS, TO YOU TO ACCEPT IT. OTHERWISE, YOU WILL HAVE UP TO 7 DAYS FROM THE DATE WE FIRST PRESENT THIS FUNDING AGREEMENT, INCLUDING THE FINAL TERMS, TO YOU TO ACCEPT IT.
b. Cancellation Right. For 3 Business Days (defined in Section 18.b) following the date you agreed to this Agreement you will have the right to cancel your Agreement by logging into the Website and selecting the “cancel funding” option. If you do not cancel your Agreement, your funding will close after this 3-day period.
2. Your Income Payment Obligations.
a. Your Income Payments.
i. General. By agreeing to this Agreement and in return for receiving the Funding Amount, you agree to pay us your Income Share on the payment schedule outlined in Section 3 below (your “Income Payments”). Your Income Payments shall equal, for each calendar year, your Income Share of your “Total Income”, which is the amount of income you receive in each calendar year as stated on Line 22 of IRS Form 1040 (or Line 4 of Form 1040EZ).
ii. Income if you are Married. If you are married, or in the event you get married during the Income Share Term, and you file your tax return jointly with your spouse then your Total Income is the amount of income you receive in each calendar year as stated on Line 22 of IRS Form 1040 (or Line 4 of Form 1040EZ) minus any amounts you can demonstrate are from income earned by your spouse individually or from assets your spouse owns separately. In addition, you agree to pay your Income Share on half the income you earn from assets you own jointly with your spouse, provided you can demonstrate that this income comes from jointly owned assets. This means that you will not be required to share any income that your spouse earns from your spouse’s job or assets they own individually but you will be required to pay Income Share on half the income you earn from assets that you own or acquire jointly with your spouse. If you are married, or in the event you get married during the Income Share Term, and you file your tax return separately your Income Payments will continue to equal your Income Share of your Total Income as reported on your separately filed tax return. The foregoing applies even if you live in, or move to, a state that has community property laws (currently Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin).
b. Deferrals and Term Extensions.
i. Deferrals and Term Extensions. Your Income Payments will be deferred in any calendar year during the Income Share Term that your Total Income is less than your income share deferral threshold for deferrals (this threshold is disclosed to you when you published your offer and in your final terms). Your Income Payments will be deferred a maximum of 5 times. For each year that your Income Payments are deferred, an additional year will be added to your Income Share Term. After your fifth deferral you will be required to pay your Income Share on your Total Income for the remainder of the extended Income Share Term.
ii. Process. If you believe you will be eligible for a deferral as described in clause i in any calendar year then please let us know by logging into our Website, or by contacting us as described in Section 18.b. We may request, and you agree to provide us with, any supporting documentation such as pay stubs. We will then suspend your monthly payments and we will confirm your deferral when we confirm your Total Income through your tax return. If it turns out that you did not meet the requirements for a deferral under this clause (b) then, then we will let you know how much you owe us as the Reconciliation Amount, via the process described in Section 5. If you make any Income Payments to us in a year when your Income Payments are deferred, you will have the option either to receive a refund of the excess amount, or to apply the excess amounts to future Income Payments.
c. Repayment Cap. Your Income Payments will be capped. You will not be required to repay an amount (the “Cap”) that exceeds three times your Funding Amount. You can find out what your Cap is at any time by logging into our Website or by contacting us as described in Section 18.b. If at any time your Income Payments to us equal or exceed your Cap, this Agreement will terminate. We will refund to you any amounts in excess of the Cap that you paid.
d. ACKNOWLEDGEMENT. YOU UNDERSTAND AND ACKNOWLEDGE THAT, UNLESS YOU RECEIVE A DEFERRAL YOU ARE AGREEING IN GOOD FAITH TO MAKE INCOME PAYMENTS IN ACCORDANCE WITH THE PAYMENT SCHEDULE PROVIDED IN THIS AGREEMENT. YOU UNDERSTAND THIS IS NOT A LOAN AND YOUR PAYMENT OBLIGATIONS ARE DIFFERENT FROM THOSE OF A TRADITIONAL CLOSED-END LOAN. YOU ARE NOT SPECIFICALLY OBLIGATED TO REPAY THE FUNDING AMOUNT BUT RATHER TO PAY A PORTION OF YOUR INCOME OVER TIME AS DESCRIBED IN THIS FUNDING AGREEMENT. NO INTEREST IS PAYABLE TO US ON YOUR FUNDING AMOUNT OR ANY OTHER AMOUNT. YOUR MONTHLY AND ANNUAL INCOME PAYMENTS WILL CHANGE EACH MONTH AND YEAR DEPENDING ON YOUR TOTAL INCOME IN THAT MONTH OR YEAR. YOU UNDERSTAND YOU ARE RESPONSIBLE FOR ENSURING THAT YOU ESTIMATE YOUR MONTHLY PAYMENTS ACCURATELY.
YOU ACKNOWLEDGE THAT IF YOU DEFAULT ON ANY OF YOUR PAYMENT OBLIGATIONS WE HAVE THE REMEDIES PROVIDED IN SECTION 16, INCLUDING THE RIGHT TO LIQUIDATED DAMAGES,
e. TAX TREATMENT. YOU AGREE YOU HAVE A FINANCIAL OBLIGATION UNDER THIS FUNDING AGREEMENT TO MAKE INCOME PAYMENTS IN RETURN FOR RECEIVING THE FUNDING AMOUNT. WE WILL NOT TREAT YOUR RECEIPT OF THE FUNDING AMOUNT AS INCOME FOR FEDERAL INCOME TAX PURPOSES. UNDER THIS AGREEMENT, YOU DO NOT HAVE A SPECIFIC OBLIGATION TO REPAY US THE FUNDING AMOUNT, HOWEVER, AT THE END OF THE INCOME SHARE TERM, ANY SHORTFALL BETWEEN THE FUNDING AMOUNT YOU RECEIVED AND YOUR TOTAL PAYMENTS WILL BE REPORTED BY US AS INCOME TO YOU. YOU AGREE NOT TO TAKE ANY POSITION INCONSISTENT WITH SUCH TREATMENT, UNLESS OTHERWISE REQUIRED BY (I) A CHANGE IN LAW OCCURRING AFTER THE DATE HEREOF, (II) A CLOSING AGREEMENT WITH THE APPLICABLE TAXING AUTHORITY OR (III) A FINAL NON-APPEALABLE JUDGMENT OF A COURT OF COMPETENT JURISDICTION. NOTWITHSTANDING THE FOREGOING, YOU ACKNOWLEDGE THAT WE MAKE NO REPRESENTATION OR WARRANTY TO YOU REGARDING THE EFFECT THAT THIS FUNDING AGREEMENT AND/OR YOUR RECEIPT OF THE FUNDING AMOUNT MAY HAVE UPON YOUR FOREIGN, FEDERAL, STATE OR LOCAL TAX LIABILITY AND THAT YOU HAVE CONSULTED WITH YOUR OWN TAX ADVISOR WITH RESPECT TO YOUR TAX CONSEQUENCES REGARDING THIS FUNDING AGREEMENT.
3. Fees. You agree that the following fees (“Fees”) apply to you.
3% of the Funding Amount
This is a one-time, non-refundable fee that will be deducted from the Funding Amount before we deposit it into your bank account. We will specify the amount of the Origination Fee to you in your Final Terms.
Late Payment Fee
5% of past due amount or $15, whichever is greater
If you do not pay us the Reconciliation Amount or any Fees within 30 days of their due date, we may charge a late fee, subject to applicable law.
Late Tax Return Filing Fee
Per occurrence, and for each 30-day period that your tax returns remain undelivered
If you do not deliver your tax return to us in any year on April 30 (or the first Business Day after April 30 if April 30 is not a Business Day), and for each 30-day period following this date that your tax returns remain undelivered we may charge the late tax return fee, unless you have received a waiver from us as described in Section 6.
5% of the underpaid amount
Once per year, per occurrence
If the monthly payments we receive from you in any calendar year do not equal in the aggregate at least 70% of your Income Payment for that calendar year, as determined by us when we receive your tax return, we may charge an underpayment fee, subject to applicable law.
Check Processing Fee
Per check received
We may charge a check processing fee for each payment you make via a check, subject to applicable law.
ACH Return or Check Refund Fee
If automated clearing house ("ACH") transfers or checks are rejected or returned for any other reason, or fail due to insufficient funds in your account, then we may charge this fee, subject to applicable law. Each attempt to collect a payment is considered a separate transaction, so an unsuccessful payment fee will be assessed for each failed attempt. The bank that holds your Designated Account may assess its own fee in addition to the fee we assess.
Record Request Fee
If you request additional paper copies of any records, we may charge you with this fee for each record requested, subject to applicable law.
You authorize us to collect these fees using ACH transfers initiated by us from your Designated Account (defined in Section 4). Any fees we assess will be overdue if we do not receive payment within 30 days of the date we send you a notice they are due. You acknowledge that the Origination Fee is considered by us to be part of the Funding Amount.
4. Receipt of Funding; Designated Account. We will send you notice when your funding is closing. At closing, you authorize us to disburse the Funding Amount to you by ACH transfer to the bank account you designated on our Website (“Designated Account”). You confirm that you are the owner of the Designated Account. You agree that prior to funding we may verify your ownership of the Designated Account and, in connection with this verification, we may ask you to send us a voided check, or we may deposit trial amounts to this account that you must confirm. You acknowledge that if we are unable to verify the Designated Account, we may not be able to send the Funding Amount to you and we may cancel this Agreement.
5. Making Your Payments.
a. Your Income Share Term. Under this Agreement you agree to pay your Income Payment to us during your Income Share Term, unless your Income Payments are deferred in any year as provided in Section 2.b. Your initial income share term (the “Income Share Term”) is 5 years (60 months) and may be extended as provided in Section 2.b. Your Income Share Term will begin:
(i) on January 1 of the current calendar year if your funding offer period is set to expire on or between January 1 and June 30;
(ii) on January 1 of the immediately following calendar year if your funding offer period is set to expire on or between July 1 and December 31; or
(iii) on January 1 of the year immediately following your expected graduation date (as stated in your application) if you have not graduated at the time of your funding offer expires.
This means that if your funding offer period is set to expire on, or between, January 1 and June 30 you are agreeing to make Income Payment on amounts you earned before you entered into this Agreement. You agree to pay these amounts in your first Income Payment, unless your payments are deferred. Your final payment to us will be due on June 30 following the end of your Income Share Term, as set forth in Section 5.b below.
b. Your Payment Schedule.
(i) Payment Schedule. We will tell you in your Final Terms (1) the date your Income Share Term begins, and (2) the date your first Income Payment is due.
If your Income Share Term begins on January 1st of the year your funding offer period expires (as contemplated in 5.a.i) then your first Income Payment will be payable by the 20th day of the second full month following the date your funding offer expires. So if your funding offer period expires on March 15, your first Income Payment will be due on May 20, or if your funding offer expires on June 2 your first Income Payment will be due on August 20 of that year. In addition, unless your Income Payments are deferred in this year, you will owe an amount (your “Accrued Income Payment”) equal to your Income Share of the income you earned (as disclosed by you to us) from January 1 of this first year for each month until your scheduled monthly payments cover your Income Share. Your Accrued Income Payment will be disclosed to you when you provide your income information to us after accepting this Agreement. If you owe an Accrued Income Payment you agree that you will pay it to us in your first Income Payment.
If your Income Share Term begins on January 1st of the year following your funding offer period expiration or your graduation (as contemplated in 5.a.ii and iii), then your first Income Payment will be payable by February 20th of that year.
You agree to pay us monthly on or before the 20th day of each month (or if the 20th day if its not a Business Day, as defined in Section 18.b, the next Business Day) an amount that you estimate in good faith equals your Income Share of the income you earned in the previous month. If you have completed a bank transfer authorization, then we will automatically transfer your first payment in the amount specified in this authorization from your Designated Account, unless you cancel or modify this payment at least 3 business days before its scheduled date by contacting us as described in Section 18.b.
(ii) Reconciliation Payments. No later than June 30 following each year of the Income Share Term, after submitting your tax return as required by Section 6, you may be required to pay an additional amount if we determine that your aggregate monthly payments in any calendar year do not equal your Income Payment based on your tax return for that year (the “Reconciliation Amount”). You understand that you may be subject to an underpayment fee as described in Section 3 if your estimated monthly payments in any year do not equal in total at least 70% of your total Income Payment amount, as determined by us based on your tax return. In the event that you owe a Reconciliation Amount and any related fees we will notify you in writing no later than May 31 of such year, provided you have submitted your tax returns to us as required by Section 6. You must pay any Reconciliation Amount and any related fees to us no later than June 30 of that year (or the next Business Day after June 30 if its not a Business Day). If you do not pay us on time, you may be subject to a late payment fee as described in Section 3. If in any year we determine that you have overpaid, we will provide you with the option either to receive a refund of the excess amount, or to apply the excess amounts to your Income Payments in the current calendar year.
c. Payment Methods; Bank Account Payment Authorization. You may pay the amounts you owe us, including your monthly Income Payment amounts, any Fees, and Reconciliation Amounts (if any), from your Designated Account by authorizing us to debit your Designated Account automatically by ACH transfer for (1) the amount you specify via our Website for each estimated monthly payment due on the 20th day of each month (or if the 20th day is not a Business Day, the next Business Day) and (2) the Reconciliation Amount to be debited on June 30 of each year (or the next Business Day after June 30 if its not a Business Day) provided that no such debit will exceed $5,000 without your express permission. You agree to specify the monthly Income Payment amount to be debited from your Designated Account no later than last day of first month of your Income Share Term. You agree to promptly report any changes to your income, including salary increases and any one-time payments such as a bonus, by logging into our Website and editing your income sources or by contacting us as described in Section 18.b. You also have the right to stop any specific automatic withdrawal or revoke your authorization for automatic withdrawals generally by notifying your bank or us at least 3 Business Days before the scheduled date of transfer. If you tell your bank, you must notify us that you have stopped a payment or revoked your authorization. Please remember that this authorization does not affect your obligation to pay all amounts required under this Agreement when they are due. If ACH transfers or checks are rejected or returned for any reason, you acknowledge and agree that we may apply the ACH/check return fee described in Section 3, subject to applicable law. You acknowledge that the bank that holds your Designated Account may also charge a fee in addition to our fee.
You may elect to make payments by personal check by contacting us as described in Section 18.b. You acknowledge and agree that we may charge a check processing fee per payment as described in Section 5, subject to applicable law. If you elect to make payments by check, you must send the check by regular mail to the address provided in Section 18.b..
6. Tax Returns; Income Verification.
a. Filing Your Tax Return. Each year, you agree to file your federal tax return no later than the applicable tax filing deadline date for such year. In addition, no later than April 30 each year, you agree to provide us with a true and accurate copy of your federal tax return for the previous year as submitted to the IRS. If you do not submit your tax return to us on or before April 30 in any year in the manner we ask you to, then you may be subject to the late filing fee as provided in Section 3. In addition to this fee, you may also be subject to late payment fees to the extent we determine that you owe a Reconciliation Amount and it is not paid by June 30 of that year as described in Section 5. If you file for an extension for filing your federal tax returns, please notify us immediately. You may be eligible for a waiver from your late tax return filing fee and your late payment fees. We will take into account a number of factors when we consider your eligibility for a waiver, including whether you have been making reasonable estimated monthly Income Payments throughout the year. If you no longer file a US tax return for whatever reason, you will not be relieved of your obligation to share income; we will determine in good faith your total income for the purposes of your payment obligations.
b. Limited Power of Attorney. We require that you give us permission to request a transcript of your previous federal tax return so we can verify your income. You hereby grant us a limited power of attorney and appoint us and/or our designees as your true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for you and in your name, place and stead, in any and all capacities, to complete and execute a 4506-T 'Request for Transcript of Tax Return' form (or any successor form) from the IRS for each calendar year during the Income Share Term and you grant us the full power and authority to do and perform every act and thing required and necessary in connection with such power as you might or could do in person. This power of attorney is limited solely to the completion and execution of the 4506-T form and will expire automatically upon the termination or expiration of this Agreement. In addition you agree if requested by us to execute, and cause your spouse to execute if you file your tax return jointly, a 4506-T 'Request for Transcript of Tax Return' form (or any successor form) for any calendar year during the Income Share Term.
7. Marriage. If, at any time from the date you agree to this Agreement until the end of the Income Share Term, you get married then you agree to provide us with additional information to ensure any income earned by your spouse individually or from assets your spouse owns separately are excluded from our calculation of the amounts that you owe us. You may demonstrate this through the submission of your spouse’s W-2 form, 1099 forms or other tax reporting forms or such other documentation that is reasonably acceptable to us. Further, if you live in or move to a state that has community property laws (currently Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), you agree that you will enter into any spousal agreements as necessary to ensure that your obligation to pay the Income Payment on your portion of your Total Income continues in effect for the Income Share Term.
8. Term; Early Termination By You. This Agreement shall continue in effect until all of your obligations have been satisfied hereunder. You may at any time elect to terminate this Agreement upon written notice to us specifying the date of termination, which must be at least 30 days from the date of the notice (“Early Termination Date”). This termination is subject to your payment to us of the remaining Cap amount prior to the Termination Date. You can find out what your Cap amount is at any time by logging into our Website, or by contacting us as described in Section 18.b.
9. Investors.. An investor may be an individual that has successfully registered on the Website as an accredited investor, a private fund or such other third party.. Each investor that commits funds to you through the Upstart platform is agreeing to purchase a security that in the amount they have committed ("Investor Security"). The payments under each Investor Security are dependent on your payment of your Income Payment, as described in this Agreement. You acknowledge that an investor's commitment to purchase a Investor Security that is for a portion of your Funding Amount from us does not confer any rights to you. You understand that investors make their own decisions whether to commit funds. You agree not to contact any investor directly to negotiate any of the terms, including your payment obligations, provided in this Agreement.
11. Representations, Warranties and Covenants. You represent and warrant that you are 18 years old (and 19 if you are in Alabama and Nebraska) and a citizen of the United States. You represent and warrant that you are entering into this Agreement in good faith and with the intention to repay us by making Income Payments when due. You represent and warrant that all the information you provided in connection with your application and in your profile is true and accurate and you have not provided any false, misleading or deceptive statements or omissions of fact in your application or profile. During the Income Share Term, you agree not to conceal, defer, divert or transfer any of your income or assets for the purpose of avoiding or reducing your Income Payment obligation or otherwise. You confirm that the Funding Amount is for your own use and you have not obtained this funding for any third party. You agree we may rely on this information without any independent verification. You agree you will not represent yourself to any person, as a representative, employee, or agent of ours, or purport to speak to any person on our behalf. You certify that the Funding Amount will not be used for the purpose of purchasing or carrying any securities or to fund any illegal activity. If you live in California, you represent and warrant that no broker assisted you in obtaining the Funding Amount from us.
12. Recordkeeping; Right to Information. You agree to keep accurate records relating to your Total Income for each year of your Income Share Term. You agree to retain such records for a period of 1 year following the date you fulfill all your payment obligations under this Agreement. This includes retaining copies of your tax returns and any supporting documentation relating to your income, which may include W-2 forms, 1099 forms, stock option grant and exercise agreements, stock purchase agreements, bank statements and brokerage statements for at least 7 years from the date you received the Funding Amount (or longer if your Income Share Term is extended as contemplated in Section 2.b). For each month of each Income Share Term year, you also agree to keep accurate records relating to monthly income, including pay stubs, or invoices relating to services you provide. You agree to retain such records for 2 years. This is information you are probably already retaining as part of your tax return record, however, you must retain them for longer than the IRS requires. In addition, if you get married during the Income Share Term, you agree to keep accurate records relating to your spouse’s income information. You agree that from time to time we may request certain information from you in order to confirm your compliance with this Agreement, including your monthly and annual Income Payment obligations. If we require additional information we will send you a written notice that will request the specific information we are requesting. Within 10 days of your receipt of this request, you agree to provide us with such information. We may make this request to confirm either your estimated monthly payments or your annual reconciliation payments are accurate or otherwise. You agree to provide us with all reasonable assistance in connection with any information request.
14. Payment Servicing. You acknowledge that Upstart will service your payment obligations under this Agreement, and that we may delegate this servicing to a third party.
15. Events of Default and Remedies.
a. Events of Default. We will determine that you are in default of this Agreement if you:
i. fail to pay the Reconciliation Amount, or any fees, when due;
ii. fail to deliver your tax return to us by April 30 each year without receiving a waiver from us;
iii. file or have instituted against you any bankruptcy or insolvency proceedings or similar proceedings;
iv. commit fraud or make any material misrepresentation in this Agreement, your application for Upstart Funding, your funding offer and profile published on our Website, or any other documents, applications or related materials delivered to us in connection with your funding;
v. are convicted of a felony; or
vi. fail to abide by any other terms and conditions in this Agreement;
and, in the case of (i), (ii) and (vi), you fail to cure your failure within 30 days of our sending you written notice of your failure and how you may cure it (each of (i) – (vi), an "Event of Default").
16. Remedies. If an Event of Default occurs, we may exercise all the remedies available to us under applicable law or this Agreement.
a. Liquidated Damages Upon an Event of Default we may elect to recover liquidated damages from you for the remaining term of this Agreement in the following amounts:
1 + (0.1 x number of years since receiving your Funding Amount, rounded up) multiplied by the Funding Amount
By way of example the liquidated damages for an upstart who receives a Funding Amount of $10,000 on August 17, 2013, will equal $11,000 (1.1 x 10,000) if an Event of Default is declared by us on or before August 16, 2014, $12,000 (1.2 x 10,000) if an Event of Default is declared by us between August 17, 2014 and August 16, 2015, etc.
You agree that quantifying losses arising from a default by you is inherently difficult because your future income is not known and you agree that the above amounts are not a penalty, but rather a reasonable measure of our damages based upon our prediction of your income and our expected returns.
b. Other remedies Upon an Event of Default you agree that we are also entitled to calculable damages and to exercise all of the remedies available to us under law, including enforcing the performance of this contract in court or through binding arbitration.
c. Attorneys Fees and Other Expenses. Upon an Event of Default, you agree to pay all costs of collecting all amounts due under this Agreement, including any liquidated damages, reasonable collection agency fees, and/or attorneys' fees, to the extent not prohibited by applicable law.
17. Delinquency Reporting. We reserve the right to report payment delinquencies in excess of 30 days in accordance with applicable law.
18. Consent to Electronic Communications; Contacting Us; Notices.
a. Consent to Electronic Communications. You confirm you have agreed to our Electronic Communications Policy and you have agreed to receive electronically all communications, agreements, documents, notices and disclosures (collectively, "Communications") that we provide in connection with this Agreement and our servicing of your payment obligations under this Agreement. You agree that we, or a collection agency we engage, may contact you at any of the telephone numbers you provide to us, subject to applicable law.
b. Contacting Us. You may contact us by emailing us at firstname.lastname@example.org, by calling us at (650) 204-1000 during our operating hours 9:00 AM PT to 5:00 PM PT, each Monday through Friday that are Business Days, or by writing to us via regular mail at Upstart Network, Inc., P.O. Box 61203, Palo Alto, CA 94306. A “Business Day” means a calendar day other than a Saturday or a Sunday, January 1, the third Monday in January (Martin Luther King Day), the third Monday in February (Presidents Day), the last Monday in May (Memorial Day), July 4 (Independence Day), the first Monday in September (Labor Day), the second Monday in October (Columbus Day), November 11 (Veterans Day), the fourth Thursday in November (Thanksgiving), and December 25 (Christmas Day). If January 1, July 4, November 11, or December 25 fall on (1) a Saturday, the preceding Friday is not a business day and (2) a Sunday, the next Monday is not a business day.
c. Notices. All Communications given to you by email to your registered email address, or posted on our Website shall be deemed to have been duly given and effective upon transmission or when they were posted. You acknowledge that communications from us may contain sensitive, confidential, and collections-related communications. If your information changes, such as your email address, your mailing address or your telephone number, you agree to notify Upstart promptly of the change by logging into our Website and updating this information in your account profile, or by contacting us as described in clause 18.b above.
19. NO WARRANTIES FROM US. THE UPSTART SERVICES ARE PROVIDED "AS IS" AND WITHOUT ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS, IMPLIED OR STATUTORY. UPSTART, OUR OFFICERS, DIRECTORS, AGENTS, EMPLOYEES AND SUPPLIERS SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. Upstart does not guarantee continuous, uninterrupted or secure access to our Website or any of our services, and the operation of our Website may be interfered with by numerous factors outside of our control. We will make reasonable efforts to ensure that requests for electronic debits and credits involving bank accounts and check issuances are processed in a timely manner but we make no representation or warranty regarding the amount of time needed because these services are dependent upon many factors outside of our control, such as delays in the banking system or the U.S. mail service. We reserve the right to make changes to our products and services for future customers, including changes to the terms and conditions associated with these products and services.
20. LIMITATION ON LIABILITY. IN NO EVENT SHALL WE, OUR OFFICERS, DIRECTORS, AGENTS, EMPLOYEES OR SUPPLIERS BE LIABLE FOR LOST PROFITS OR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH OUR WEBSITE, THE SERVICES, OR THIS FUNDING AGREEMENT (HOWEVER ARISING, INCLUDING NEGLIGENCE). Some states do not allow the exclusion or limitation of incidental or consequential damages so the above limitation or exclusion may not apply to you. OUR LIABILITY, AND THE LIABILITY OF OUR OFFICERS, DIRECTORS, AGENTS, EMPLOYEES AND SUPPLIERS, TO YOU OR ANY THIRD PARTIES IN ANY CIRCUMSTANCE IS LIMITED TO THE ACTUAL AMOUNT OF DIRECT DAMAGES.
a. Contact Us First. If you have an issue with our services, or a dispute arises between you and Upstart, please contact us first. Our goal is to learn about and address your concerns and, if we are unable to do so to your satisfaction, to provide you with a neutral and cost effective means of resolving the dispute quickly. Disputes between you and Upstart regarding our services may be reported by contacting us as described in Section 18.b.
b. Arbitration Agreement.
i. General. Except as expressly provided below, you agree that any Claim (defined below) shall be, at either your or our election, submitted to and resolved on an individual basis by binding arbitration. Any such arbitration shall be under the Federal Arbitration Act, 9 U.S.C. §§1 et seq. (the “FAA”) before the American Arbitration Association (the “AAA”) under its Commercial Arbitration Rules including the Supplementary Procedures for Consumer Related Disputes, in effect at the time the arbitration is brought (the “AAA Rules”), or before any other party that you and we agree to in writing, provided that such party must not have in place a formal or informal policy that is inconsistent with and purports to override the terms of this arbitration agreement. The AAA Rules are available online www.adr.org. The arbitration agreement in this Section 21.b terms applies to any party named as a co-defendant with Upstart in a Claim asserted by you, such as servicers or debt collectors.
For purposes of this Section 21.b: (x) any “Claim” means any claim, dispute or controversy relating to (1) this Agreement (including a dispute over the validity, enforceability, arbitrability or scope of this arbitration clause) or any other agreement related to this Agreement or any our services; (2) any relationship resulting from, or activities connected to, this Agreement; (3) any underwriting, servicing or collection activities under this Agreement; or (4) breach of this Agreement or any other such agreement, whether based on statute, contract, tort or any other legal theory, provided a Claim does not include any individual action brought by you in small claims court or your state’s equivalent court, unless such action is transferred, removed or appealed to a different court; and (y) the terms “Upstart”, “we”, or “ours” include Upstart, any other subsequent holder of your Agreement, and the officers, directors, and employees, and their affiliates, subsidiaries, and parents, and any officers, directors, and employees of such entities.
ii. Right To Reject. You may reject the arbitration agreement provided in this Section 21.b by mailing a signed rejection notice to the address provided in Section 18.b within 30 calendar days of your agreement to this Agreement. Any rejection notice must include your name, address, the e-mail address you registered with Upstart, and your telephone number.
iii. Effect Of Arbitration Award. Any state or federal court with jurisdiction and venue may enter an order enforcing the arbitration agreement provided in this Section 21.b, enter judgment upon the arbitrator’s award and/or take any action authorized under the FAA. For any arbitration-related proceedings in which courts are authorized to take action under the FAA, each party expressly consents to the non-exclusive jurisdiction of any state court of general jurisdiction or any state court of equity that is reasonably convenient to that party, provided that the parties to any such judicial proceeding shall have the right to initiate such proceeding in a federal court or remove the proceeding to federal court if authorized to do so under applicable federal law.
iv. Important Waivers. IF EITHER YOU OR UPSTART CHOOSES ARBITRATION, NEITHER PARTY WILL HAVE THE RIGHT TO A JURY TRIAL, TO ENGAGE IN DISCOVERY, EXCEPT AS PROVIDED IN THE APPLICABLE ARBITRATION RULES, OR OTHERWISE TO LITIGATE THE DISPUTE OR CLAIM IN ANY COURT (OTHER THAN IN AN ACTION TO ENFORCE THE ARBITRATOR’S AWARD). FURTHER, YOU WILL NOT HAVE THE RIGHT TO PARTICIPATE AS A REPRESENTATIVE OR MEMBER OF ANY CLASS OF CLAIMANTS PERTAINING TO ANY CLAIM SUBJECT TO ARBITRATION. THE ARBITRATOR’S DECISION WILL BE FINAL AND BINDING. OTHER RIGHTS THAT YOU OR UPSTART WOULD HAVE IN COURT ALSO MAY NOT BE AVAILABLE IN ARBITRATION. THE ARBITRATOR SHALL HAVE NO AUTHORITY TO ARBITRATE CLAIMS ON A CLASS BASIS, AND CLAIMS BROUGHT BY OR AGAINST YOU MAY NOT BE JOINED OR CONSOLIDATED WITH CLAIMS BROUGHT BY OR AGAINST ANY OTHER PERSON. If you reside in the U.S., any arbitration hearing shall take place within the federal judicial district in which you reside. Each party will bear the expense of its own attorneys, experts and witnesses, regardless of which party prevails, unless applicable law or this Agreement gives a right to recover any of those fees from the other party. If your claim is for $10,000 or less, you may choose whether the arbitration will be conducted solely on the basis of documents submitted to the arbitrator, through a telephonic hearing or by an in-person hearing as established by the AAA Rules. If your claim exceeds $10,000, the AAA Rules will determine the right to a hearing. All fees and expenses of the arbitrator and administrative fees and expenses of the arbitration shall be paid by the parties as provided by the AAA Rules, to the extent applicable, or by specific ruling by the arbitrator, or by agreement of the parties. The arbitrator shall have the authority to award in favor of the individual party seeking relief all remedies permitted by applicable substantive law, including compensatory, statutory and punitive damages (subject to constitutional limits that would apply in court), and attorneys’ fees and costs. In addition, the arbitrator may award declaratory or injunctive relief only in favor of the individual party seeking relief and only to the extent necessary to provide relief warranted in that party’s individual claim. Upon the timely request of either party, the arbitrator shall write a brief explanation of the basis of his or her award. If the arbitrator determines that any claim or defense is frivolous or wrongfully intended to oppress the other party, the arbitrator may award sanctions in the form of fees and expenses reasonably incurred by the other party (including arbitration administration fees, arbitrator’s fees, and attorney, expert and witness fees), to the extent such fees and expenses could be imposed under Rule 11 of the Federal Rules of Civil Procedure.
v. Governing Law. The arbitration agreement in this Section 21.b is made pursuant to a transaction involving interstate commerce and shall be governed solely by the FAA, and not by any state law concerning arbitration or otherwise. If you have a question about the American Arbitration Association, you can contact them as follows: American Arbitration Association, 1633 Broadway 10th Floor, New York, N.Y. 10019, 212-716-5800, www.adr.org.
vi. Survival, Severability. The arbitration agreement in this Section 21.b shall survive your full payment under this Agreement, Upstart’s assignment, sale or transfer of this Agreement, any bankruptcy or insolvency, any forbearance or modification granted pursuant to this Agreement, any cancellation or request for cancellation of this Agreement or any disbursements under this Agreement. If any part of this arbitration agreement (other than the class waiver in Section 21.b.iv) is found to be invalid or unenforceable by a decision of a tribunal of competent jurisdiction, then such specific part or parts shall be of no force and effect and shall be severed, but the remainder of this arbitration agreement shall continue in full force and effect. If the class waiver in Section 21.b.iv is determined to be invalid or unenforceable, then this entire arbitration agreement shall be void and of no force or effect to any class actions.
c. Governing Law. Except as set forth in clause (b) above this Agreement shall be governed in all respects by the laws of the State of California, without regard to conflict of law provisions.
d. Insolvency Proceedings. If any proceeding by or against you is commenced under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, Upstart will be entitled to recover all reasonable costs or expenses (including reasonable attorneys' fees and expenses) incurred in connection with the enforcement of this Agreement.
e. No Waiver. Our failure to act with respect to a breach by you or by others does not waive our right to act with respect to subsequent or similar breaches.
f. Indemnification. You agree to defend, indemnify and hold Upstart, our officers, directors, agents, employees and suppliers, harmless from any claim or demand (including attorneys’ fees) made or incurred by any third party due to or arising out of your breach of this Agreement and/or your use of our Website or our services.
22. Amendments. Except with respect to Sections 2 (Income Payment Obligations), 3 (Fees), 5.a (Income Share Term), 8 (Early Termination), 15 (Event of Default and Remedies), and 16 (Payment Conversion), we may amend this Agreement and will provide you with at least 30 days written notice of any material changes in accordance with Section 18.c.
24. Assignment. You hereby agree that we may, without notice to you, assign all of our rights, title and interest in this Agreement to a third party. To the extent provided therein, any such assignment shall release us from all of our obligations and duties under this Agreement and the assignee shall be solely responsible for the performance of such obligations and duties. You may not assign, transfer, sublicense or otherwise delegate your rights or obligations under this Agreement to another person without our prior written consent. Any such assignment, transfer, sublicense or delegation in violation of this Section 24 shall be null and void.
25. Processing Errors. We will correct any transaction processing error that we discover. If the error results in your receipt of less than the correct amount to which you are entitled, we will credit you for the difference. If the error results in your receipt of more than the correct amount to which you are entitled, we will debit the extra funds. You agree to provide any consents necessary in order for us to correct any errors that occur.
26. Miscellaneous. The parties acknowledge that there are no third party beneficiaries to this Agreement. Any waiver of a breach of any provision of this Agreement will not be a waiver of any other subsequent breach. Failure or delay by either party to enforce any term or condition of this Agreement will not constitute a waiver of such term or condition. Except as otherwise provided in Section 21.b.vi, if at any time after the date of this Agreement, any of the provisions of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality and unenforceability of such provision shall have no effect upon and shall not impair the enforceability of any other provisions of this Agreement to effect to the greatest extent possible the intention of the parties as provided in this Agreement. No part of this Agreement, nor any charge or acceptance of payment tendered to us, is intended to permit us to impose any amount of interest or other charges in excess of lawful amounts. If an unlawful excess occurs, we will apply it as a credit or otherwise refund it, and the rate or amount involved will automatically be reduced to the maximum lawful rate or amount. The headings in this Agreement are for reference purposes only and shall not affect the interpretation of this Agreement in any way.