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Borrower Registration Agreement
Updated: May 30, 2008
This Borrower Registration Agreement (the "Agreement") is made and entered into between you, a potential borrower or cosigner, and Fynanz, Inc., ("Fynanz"). When executed by a cosigner, any reference in this Agreement to "you" or a "borrower" shall be deemed to include a like reference to a cosigner where applicable, including without limitation any reference to soliciting, obtaining or repaying any amount due under any loan, or obtaining, using or sharing personal information. PLEASE READ THIS AGREEMENT AND ALL OTHER INFORMATION ON FYNANZ.COM RELEVANT TO YOUR PARTICIPATION CAREFULLY AND PRINT AND RETAIN A COPY OF THIS AGREEMENT FOR YOUR RECORDS. 1. Registration as a Fynanz Borrower. You are registering as a borrower on Fynanz.com, so that you may become eligible to post loan requests or "listings" on Fynanz.com for people who may be interested in participating in an auction to purchase your loan after it is made and funded by Fynanz. Fynanz uses its own capital for the initial funding of loans made through Fynanz.com instead of relying on relationships with third parties. Fynanz then sells that portion of each loan not retained by Fynanz to one or more auction winners in respect of each winning auction bid. This Agreement refers to the people who bid on listings as "Lenders" although loans are originated by Fynanz and assigned to the winning bidder or bidders after an initial holding period. Fynanz may also participate as a Lender for your loan, and any reference to Lenders in this Agreement shall be deemed to include Fynanz as well as third-party Lenders. You agree to comply with the terms and provisions of this Agreement and the Terms of Use of Fynanz.com, as they may be amended by Fynanz from time to time in its sole discretion (collectively, the "Fynanz Terms and Conditions"). Fynanz reserves the right to restrict access to Fynanz.com to individuals who meet minimum credit guidelines and other criteria, as determined by Fynanz in its sole discretion. 2. Authorization to Obtain Credit Report. You authorize Fynanz to obtain a credit report from any consumer credit reporting agency, including Experian. Fynanz uses the credit report (i) for authentication purposes, to verify your identity, (ii) to obtain your credit score and (iii) to identify or determine certain financial information about you. Selected information from your credit report may be displayed on the Fynanz website with your listings. You authorize Fynanz to verify information in your credit report, and you agree that Fynanz may contact third parties to verify any such information; provided however that Fynanz will be under no obligation to verify such information. Fynanz may obtain your credit report each time you post a listing, except that Fynanz will not obtain a new credit report when you post listings within 30 days following the posting of an earlier listing. 3. Listings. You may request an OpenLoan from Fynanz (a "Loan") by posting a listing on Fynanz.com. You may request a Loan in the amount of $20,000 or less, in $50 increments, subject to a minimum Loan amount; the minimum Loan amount is either set at $2,500 or governed by the laws of the State where you reside ("Minimum Listing Amount"). The minimum Loan amounts are posted in the State Licenses section of Fynanz.com, and are subject to change at any time without notice. To post a listing, you must provide the amount of the Loan you are requesting, the maximum interest rate you are willing to pay, and the duration of your listing. NOTE THAT ALL LOANS MADE IN THE OPENLOAN PROGRAM ARE VARIABLE RATE LOANS. THAT MEANS YOUR INTEREST RATE WILL CHANGE EVERY THREE MONTHS, DEPENDING UPON MOVEMENTS IN INTEREST RATES GENERALLY IN THE FINANCIAL MARKETPLACE. See Rates & Fees in the Help section of Fynanz.com. At the time you post a listing, you must also provide your annual income, occupation and employment status, to the extent applicable. Based on your credit file or information you provide to Fynanz.com, the following information will be displayed with your listing: (1) Your Fynanz Academic Credit Score;(2) Your self-reported occupation, employment status and range of income. (3) Your debt-to-income ratio, reflecting the ratio of your monthly non-mortgage debt to monthly income; You may create a network of Fynanz friends and family, and when you post a listing, you may also obtain endorsements of your listing from your Fynanz friends and family. Endorsements from your Fynanz friends and family will be displayed with your listing. Fynanz friends and family are not required to co-sign or otherwise guarantee payments on your Loan. You may not include any personally identifying information, including, without limitation, names, addresses, phone numbers, email addresses, Social Security numbers or driver’s license numbers, or bank account or credit card numbers in your listing or on your Fynanz member web page, or elsewhere on the Fynanz.com. Listings that include this information are subject to cancellation by Fynanz, or deletion or redaction by Fynanz of the personally identifying information, although Fynanz is under no obligation to take such actions and you include such information solely at your own risk. Borrowers’ listings are displayed on Fynanz.com. This means that people who visit Fynanz.com will be able to view your listing, and see your Fynanz Academic Credit Score, your debt-to income ratio and other information; provided, however, that certain information concerning your credit history will only be viewable by registered Fynanz Lenders. By submitting a listing, you authorize Fynanz to display the listing on the Fynanz website. To facilitate bids for your listing, Fynanz may forward your listing by email to third parties, including but not limited to registered Fynanz Lenders, and may display your listing in promotional, advertising and marketing materials, and you authorize Fynanz to do so. You authorize Fynanz to verify your residence, income, occupation and any other information you provide in connection with a listing or your registration as a borrower, and you agree that Fynanz shall have the right but not the obligation to do so, and may contact third parties to verify information you provide. If such information changes after you post a listing but before the listing expires, you must either (i) promptly notify Fynanz of the change by logging onto Fynanz.com and updating your profile, or (ii) withdraw your listing. While you cannot edit or amend your listing once it is posted on the Fynanz website, you may withdraw your listing at any time prior to its expiration, and you may post another listing if you desire. Fynanz reserves the right, in its sole discretion, to limit the number of listings you post or attempt to post on Fynanz.com. Loan Request. Your listing is a request for a Loan in the amount you specify in the listing, at an interest rate equal to the Base Rate (the "Base Rate") plus the maximum margin over LIBOR you specify, plus a 1% Guarantee Fee (the "Lender Guarantee Fee"). The 1% Guarantee Fee is eliminated once you have repaid 10% of the original principal amount of the loan after your loan enters the Repayment Period. The Base Rate adjusts quarterly on the first day of January, April, July and October and is equal to the average of the 1-Month LIBOR, as reported by the Wall Street Journal on the 1st business day of each month, for the last three months preceding the adjustment date. LIBOR is a floating interest rate offered by large banks to their best customers, and many student loans, including Fynanz OpenLoans, set their interest rates at LIBOR plus a specified margin. Please read the promissory note in the form of Exhibit A to this Agreement (the "Promissory Note") for more information about how Fynanz calculates interest rates. If your listing is matched, the interest rate on your Loan may be lower than the margin rate you specified, but it will never be higher (until we add the Lender Guarantee Fee). You may be offered a Loan in an amount less than the amount specified in your listing, provided that your listing attracts bid sufficient to fund at least half of your requested loan amount. No Commitment to Borrow. A listing you post on the Fynanz website is a request for a Loan, not a commitment to borrow through Fynanz.com. You have the right to withdraw your listing at any time prior to expiration of the listing. You may cancel a loan without owing any fees or service charges by returning or causing the principal of the loan to be retuned to Fynanz within 30 days of the Loan’s Disbursement Date as defined in the Promissory Note (see Exhibit A). After 30 days from the Disbursement Date, you may prepay your loan at any time without penalty, but you will owe all accrued interest and fees. Number of Listings. You may have only one listing outstanding at a time but you may post an unlimited number of listings and you may borrow up to four times per year; however, Fynanz reserves the right, in its sole discretion, to limit the number of listings you post or attempt to post on the Fynanz website. Duration of Listings. When you post a listing, you specify whether your listing will be displayed on the Fynanz website for 7, 10, 14 or 21 days. When you post a listing, it will be displayed on the Fynanz website along with other listings until you end the listing or the listing expires, or until the listing is withdrawn by you or by Fynanz as provided in Section 4 below. You may elect to end your listing early if your listing receives bids totaling to at least the Minimum Listing Amount. Additional Loans. Subject to eligibility requirements that Fynanz may in its sole discretion establish and amend from time to time, you may have up to 20 Loans outstanding at any one time, provided that the aggregate outstanding principal balance of your Loans does not exceed the maximum Loan amount for your state of residence. To be eligible to post a listing for a subsequent Loan, you must be current on your existing Loan, and you must not have been delinquent in making your last two monthly Loan payments. Prohibited Activities. You agree that you will not, in connection with any listings, bids, Loans or other transactions involving or potentially involving Fynanz, (i) make any false, misleading or deceptive statements or omissions of material fact in your listing; (ii) misrepresent your identity, or describe, present or portray yourself as a person other than yourself, whether in a narrative description or a photo in your listing; (iii) give to or receive from, or offer or agree to give to or receive from any Fynanz Lender or other person any fee, bonus, additional interest, kickback or thing of value of any kind in connection with a requested or existing Loan or in exchange for such person’s bid, or offer or agreement to bid, on your listing; or (iv) represent yourself to any person, as a representative, employee, or agent of Fynanz, or purport to speak to any person on behalf of Fynanz. 4. Fynanz’s Right to Verify Information and Cancel Funding. a. Fynanz reserves the right to verify the accuracy of all information provided by borrowers and Lenders in connection with profiles, listings, bids and Loans. Fynanz also reserves the right, at any time, to determine in its sole discretion whether a registered user is using, or has used, the Fynanz website illegally or in violation of any order, writ, injunction or decree of any court or governmental instrumentality, for purposes of fraud or deception, or otherwise in a manner inconsistent with the Fynanz Terms and Conditions or any agreement between Fynanz and such user; provided however that Fynanz shall be under no duty to investigate lenders or borrowers or their profiles, bids, listing or other activities conducted with Fynanz or between each other. You agree to respond promptly to Fynanz’s or its agent’s requests for information in connection with your profile, listing, accounts, Loan or your registration with Fynanz. b. In the event Fynanz, prior to funding a Loan, determines that a profile, listing, or a bid for the listing contains materially inaccurate information (including but not limited to unintended inaccuracies, inaccuracies resulting from errors by Fynanz, or inaccuracies resulting from changes in the borrower’s income, residence or Fynanz Academic Credit Score between the date a listing is posted and the date any resulting Loan is to be funded) or was posted illegally or in violation of any order, writ, injunction or decree of any court or governmental instrumentality, for purposes of fraud or deception, or otherwise in a manner inconsistent with the Fynanz Terms and Conditions or any other agreement on Fynanz.com, Fynanz may refuse to post the listing or, if the listing has already been posted, remove the listing from Fynanz.com and cancel all bids against the listing. c. When a listing ends or expires with a bid or bids totaling to at least the Minimum Listing Amount, Fynanz may conduct a "pre-funding" review prior to funding the Loan. Loan funding occurs when Fynanz disburses the Loan proceeds by check or electronically to or on account of the borrower. Fynanz may, at any time and in its sole discretion, delay funding of a Loan in order to enable Fynanz to verify the accuracy of information provided by borrowers and Lenders in connection with the listing or bids against the listing, and to determine whether there are any irregularities with respect to the listing or the bids against the listing. Fynanz may cancel or proceed with funding the Loan, depending on the results of Fynanz’s pre-funding review. If funding is cancelled, the listing will be removed from Fynanz.com and all bids against the listing will be cancelled, and each bidder’s funds will be returned to the Fynanz Funding Account, available for further bidding. In the event Fynanz cancels funding of a Loan, Fynanz will notify the borrower and all bidders for the listing of Fynanz’s determination to cancel funding of the Loan, which determination shall be final. 5. Matching of Bids and Listings. a. The Fynanz.com auction platform will automatically match your listing with bids that specify a minimum interest rate equal to or below the maximum interest rate margin over the Base Rate you would accept. Bids are determined to be winning bids based on the following priorities: (1) the interest rate offered, from lowest to highest; (2) if two or more bids are offered at the same interest rate, the type of Lender; and (3) the order in time in which bids were placed among Lenders of the same type, if the Lenders offered the same interest rate. Fynanz recognizes four types of Lenders when determining the priority of a bid. From highest to lowest priority, the types of Lenders are: (1) friends and family of the borrower; (2) alumni of the borrower’s school; (3) unaffiliated lenders; and (4) Fynanz itself. Note that in certain cases Fynanz may establish a minimum margin over the Base Rate which all Lenders and Fynanz will be required to meet. b. To safeguard your privacy rights, your name and address will be shielded from the view of bidders and prospective bidders, and your identity as the borrower on the Promissory Note will be shielded from the winning bidders who purchase your Loan; provided however that when Fynanz participates as a Lender it will have access to your personal information. Only your Fynanz user name will appear on listings and Promissory Notes shared with Lenders other than Fynanz, and only the user name of the bidders will appear with bids. 6. Loan fees and charges. a. Upfront Fee. If you receive a Loan, you must pay Fynanz a fee as compensation for originating your loan (the "upfront fee"). The current amount of the upfront fee is posted in the State, Rates & Fees section of Fynanz.com, and is subject to change by Fynanz at any time without notice. The upfront fee will be paid to Fynanz out of, or contemporaneously with disbursement of, the Loan proceeds at the time a Loan is funded. This fee will be added to the principal balance of the amount of the loan you receive so it will not reduce the amount of loan proceeds paid to you or to your school on your behalf. The amount of the Origination Fee added to your principal balance will not be considered part of the "original principal" of the loan for calculating other fees under this Agreement. The amount and method of charging the upfront fee is subject to adjustment to the extent required by applicable state law. For example, if applicable state law limits the fee to a lesser amount, you will be charged the lesser amount. b. Lender Guarantee Fee. In order to make Fynanz OpenLoans an attractive lending opportunity, Fynanz guarantees repayment of a portion of the principal of each Loan to Lenders depending on the Fynanz Academic Credit Score associated with the Loan from reserves held in a designated fund. Guarantee payments in respect of defaulted loans are made to lenders from the Default Prevention and Guarantee Fund (the "Guarantee Fund"). The Guarantee Fund is funded by a one percent fee, added to the interest rate of your Loan and reflected in your Note, that accrues from the Disbursement Date until such time as you have repaid 10% of the original principal amount of the Loan (the "Lender Guarantee Fee" or "Guarantee Fee"). The Guarantee Fund is for the benefit of Lenders and not you. The existence of the Guarantee Fund does not excuse your obligation to repay any loan amount. Lender Guarantee Fees accrue regardless of the repayment status of your Loan. Lender Guarantee Fees which are accrued but unpaid, for example because your Loan is in deferment or forbearance, are capitalized once your loan enters or re-enters repayment status. 7. Listings Matched with Multiple Bids. Your listing may be matched with more than one bid, including bids placed by Fynanz. A match of your listing with one or more bids in the full amount of your requested Loan will result in a Loan from Fynanz to you. A match of your listing with one or more bids for less than all, but at least half, of your requested Loan results in a commitment to lend to you should you desire to accept the offered loan amount. In each case, a Loan is subject to Fynanz’s right to verify information as provided in this Agreement. Prior to your Loan’s funding, you must sign a separate letter of authorization authorizing Fynanz to act as your agent to sign Promissory Notes on your behalf in favor of Fynanz. Fynanz will execute one Promissory Note in the amount of each bid that is funding your Loan, with the aggregate principal amount of the Notes equal to your requested Loan amount plus the upfront fee as defined in Section 6 (each, a "Promissory Note" and collectively, "Promissory Notes"). Each Promissory Note will be in the form of the Promissory Note included as Exhibit A to this Agreement, and will have identical interest rates and monthly payment due dates. Your monthly payment amount will be the aggregate monthly payment amount under the Promissory Notes, and the payments you make on your Loan are allocated pro rata to the respective Note owners based on the principal amount of each Lender’s Promissory Note with respect to the Loan. As used in this Agreement, the term "Loan" shall include your total indebtedness as evidenced by all Notes resulting from your listing being matched with multiple bids. 8. Making Your Loan Payments. At the time you register as a borrower, you must provide your deposit account information to facilitate transfers of funds to and from the Fynanz Funding Account and your deposit account. You agree to make your Loan payments by automated withdrawals from your designated account, or by the use of bank drafts drawn on your designated account. Fynanz will act as the servicer for all Loans you obtain through Fynanz.com, and all communications regarding your Loan must be made to Fynanz. To the extent authorized or permitted by applicable law, you agree to pay all any fees incurred as a result of failed automated Loan payments due to insufficient funds in your account or for other reasons, returned check fees, penalties or similar servicing costs incurred by Fynanz or the owner or owners of your Loan as further described in the Promissory Note. Interest on Notes and on Lender Guarantee Fees will accrue on all loans whether or not they are in repayment status. Accrued interest and fees are capitalized when the loan enters or re-enters repayment status.. Once you begin making loan payments, they will be applied in the manner described below. For payment categories that have the same priority, payments will be allocated proportionally. Priority 1 (highest)
9. Collection & Reporting of Delinquent Loans. In the event you do not make your Loan payments on time, Fynanz or any subsequent owner of the Loan will have all remedies authorized or permitted by the Promissory Note and applicable law. In addition, when a monthly payment becomes 30 days past due, your Loan will be referred to a collection agency for collection. Fynanz will report Loan payment delinquencies in excess of 30 days to one or more credit reporting agencies in accordance with applicable law. Subject to limitations of applicable law, you authorize and agree that Fynanz or a collection agency may employ customary collections practices to collect your Loan, including contacting you or your reference(s) at any or all of the telephone numbers you provide to Fynanz at or after registration. 10. No Guarantee. FYNANZ DOES NOT WARRANT OR GUARANTEE (1) THAT YOUR LISTING WILL BE MATCHED WITH ANY BIDS OR (2) THAT YOU WILL RECEIVE A LOAN AS A RESULT OF POSTING A LISTING. YOU SHOULD NOT RELY ON RECEIVING A LOAN FROM FYNANZ UNLESS THE LOAN AUCTION HAS ENDED WITH WINNING BIDS AS DESCRIBED IN THIS AGREEMENT AND FYNANZ HAS INFORMED YOU THAT IT HAS FAVORABLY COMPLETED IT PRE-FUNDING REVIEW. 11. Restrictions on Use. You are not authorized or permitted to use Fynanz to obtain, or attempt to obtain, a Loan for someone other than yourself unless you are acting as cosigner for such an individual. You must be the owner of the deposit account you designate for electronic transfers of funds, with the sole authority to direct that Loan payments be made from the account. Your designated account will be the account from which Loan payments will be made. Although you are registering as a borrower, you may also register and participate on Fynanz.com as a Lender. If you obtain a Loan and have your Loan written off as a result of any default, your registration will immediately expire, and you will not be eligible to post any further listings or re-register with Fynanz as a borrower or Lender. Fynanz may in its sole discretion, with or without cause and with or without notice, restrict your access to Fynanz.com. 12. Authority. You warrant and represent that you have the legal competence and capacity to execute and perform this Agreement. 13. Termination of Registration. Fynanz may, in its sole discretion, with or without cause, terminate this Agreement at any time by giving you notice as provided below. In addition, upon Fynanz’s determination that you committed or attempted to commit fraud or made a material misrepresentation in connection with a listing, bid or Loan, performed any prohibited activity, or otherwise failed to abide by the terms of this Agreement or the Fynanz Terms and Conditions, Fynanz may, in its sole discretion, immediately and without notice, take one or more of the following actions: (i) suspend your right to post listings or otherwise participate in the Fynanz marketplace; (ii) terminate this Agreement and your registration with Fynanz. Upon termination of this Agreement and your registration with Fynanz, any listings you have placed on the Fynanz website shall terminate, and will be removed from Fynanz.com immediately. Any Loans you obtain prior to the effective date of any termination shall remain in full force and effect in accordance with their terms. 14. Fynanz’s Right to Modify Terms. Fynanz has the right to change any term or provision of this Agreement or the Fynanz Terms and Conditions, provided, however, that Fynanz does not have the right to change any term or provision of a Promissory Note evidencing a Loan to which you are a party except as authorized in the Promissory Note. Fynanz will give you notice of material changes to this Agreement, or the Fynanz Terms and Conditions, in the manner set forth in Section 16. You authorize Fynanz to correct obvious clerical errors appearing in information you provide to Fynanz, without notice to you, although Fynanz expressly undertakes no obligation to identify or correct such errors. This Agreement, along with the Fynanz Terms and Conditions, the Fynanz Privacy Policy, the Promissory Note, and the information contained on Fynanz.com as of the date hereof represents the entire agreement between you and Fynanz regarding your participation as a borrower in the Fynanz credit marketplace, and supersedes all prior or contemporaneous communications, promises and proposals, whether oral, written or electronic, between you and Fynanz with respect to your involvement as a borrower with Fynanz. 15. Member Web Page Display and Content. You may, but are not required to, maintain a "Fynanz member web page" on the Fynanz website, where you can post photos, content, logos or links to websites. If you elect to do so, you authorize Fynanz to display on the Fynanz website all such material you provide to Fynanz. Any material you display on your member page must conform to the Fynanz Terms and Conditions, as amended from time to time, and must not (i) infringe on any third party’s copyright, patent, trademark, trade secret or other proprietary rights or right of publicity or privacy; (ii) violate any applicable law, statute, ordinance or regulation; (iii) be defamatory or libelous; (iv) be lewd, hateful, violent, pornographic or obscene; (v) violate any laws regarding unfair competition, anti-discrimination or false advertising; (vi) promote violence or contain hate speech; or (vii) contain viruses, trojan horses, worms, time bombs, cancelbots or other similar harmful or deleterious programming routines. You may not include or display any personally identifying information, including, without limitation, names, addresses, phone numbers, email addresses, Social Security numbers or driver’s license numbers, or bank account or credit card numbers of anyone, on your Fynanz member web page, or elsewhere on the Fynanz website. 16. Notices. All notices and other communications hereunder shall be given by email to your registered email address, and shall be deemed to have been duly given and effective upon transmission. If your registered email address changes, you must notify by sending an email to support@fynanz.com or calling (800) 881-8985. You also agree to update promptly your registered residence address, mailing address and telephone number by logging on to Fynanz.com and updating your profile if such information changes. 17. No Warranties. EXCEPT FOR THE REPRESENTATIONS CONTAINED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES TO THE OTHER PARTY, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 18. Limitation on Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY LOST PROFITS OR SPECIAL, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, EVEN IF INFORMED OF THE POSSIBILITY OF SUCH DAMAGES. FURTHERMORE, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO THE OTHER REGARDING THE EFFECT THAT THE AGREEMENT MAY HAVE UPON THE FOREIGN, FEDERAL, STATE OR LOCAL TAX LIABILITY OF THE OTHER. 19. Miscellaneous. You may not assign, transfer, sublicense or otherwise delegate your rights under this Agreement to another person without Fynanz’s prior written consent. Any such assignment, transfer, sublicense or delegation in violation of this Section shall be null and void. This Agreement shall be governed by the laws of the State of New York, without regard to any conflicts of law principles other than New York General Obligations Law § 5-1401. Any waiver of a breach of any provision of this Agreement will not be a waiver of any other subsequent breach. Failure or delay by either party to enforce any term or condition of this Agreement will not constitute a waiver of such term or condition. If any part of this Agreement is determined to be invalid or unenforceable under applicable law, then the invalid or unenforceable provision will be deemed superseded by a valid enforceable provision that most closely matches the intent of the original provision, and the remainder of the Agreement shall continue in effect. EXHIBIT A
Fynanz
OpenLoan / Student Loan THIS IS A CONSUMER CREDIT TRANSACTION Borrower Information (the
“Borrower”): Optional Credit Worthy Cosigner Information (the
“Cosigner”): A. DEFINITIONS 1. In this Note, the words “I”, “me”, “my”, and “mine” mean the person(s) who signed the Note as Borrower or Cosigner as applicable. The words “you”, “your”, “yours”, and “lender” mean Fynanz Inc., New York, NY, its successors and assigns, and any other holder of this Note. 2. “Application” means the written request that I make to you for a Loan. 3. “Capitalized Interest” means accrued and unpaid interest that you add to the principal balance of a Loan. 4. “Disbursement Date” means the date on which you lend money to me in consideration for this Note and will be the date of my loan check or electronic funds transfer. 5. “Disclosure Statement” means a closed-end disclosure statement as required by the federal Truth-in-Lending Act. 6. “In-School Period” means, if I have chosen to defer repayment while in school, the period beginning on the Disbursement Date and ending on the date which is the earliest of (i) six months after I graduate or six months after I cease to be enrolled at least half time at an eligible school (“Grace Period”); or (ii) 60 months after the Disbursement Date for an Undergraduate program or 27 months after the Disbursement Date for a Graduate program. 7. “Loan” means $______ of principal (the “Principal Balance”), plus interest, interest on any Capitalized Interest, and any other charges and fees (including any prepaid finance charge or loan fee) that may become due as provided in this Note. 8. “NSF Fees” means charges you will assess against me if a payment I tender is rejected or incomplete due to my having insufficient funds available to make such a payment. 9. “Repayment Period” means the period beginning on the day that the In-School Period, if any, ends and continuing for a maximum of 120 months. If there is no In-School Period, the Repayment Period begins on the initial Disbursement Date. 10.“Deferred Repayment” means that during the In-School period I chose not to make regular principal and interest payments. However, I may be required to make a monthly minumum payment between $25 and $50 until I enter Repayment Period. Any unpaid interest will accrue on the loan and capitalize once I enter Repayment Period. 11. “Interest Paid Repayment” means that during the In-School period I am obligated to make monthly interest payments on the loan. 12. “Initial Interest Only” means payment of interest due on my loan balance for the first 24 months of the Repayment Period. B. PROMISE TO PAY I promise to pay to you the amount of the Loan under the terms of this Note. C. PAYMENTS 1. In-School Period. During the In-School Period, if any, you will send me monthly statements (showing the total of my loan disbursements and the interest that accrues on my loan). Statements will be posted to my Fynanz account. I may, but am not required to, make payments during the In-School Period unless I select Interest Paid Repayment. You will add any interest that I do not pay during the In-School Period to the Principal Balance, as described in Paragraph D.3. 2. Repayment Period. During the Repayment Period I will make consecutive monthly payments, by the payment due dates shown on the statements you will send to me, in the amounts indicated, until I have paid all amounts outstanding under my Loan and this Note. 3. Repayment Terms. My monthly payment will be established when my Repayment Period begins based on the terms of this Note. The amounts shown on my monthly statements will be consecutive monthly installments of principal and interest calculated each Change Date to equal the amount necessary to amortize my Loan (as of the date of calculation) in equal monthly installments of principal and interest at the Variable Rate (as defined in Paragraph D) then in effect over the number of months remaining in the Repayment Period. If I have chosen the Initial Interest Only Option, my monthly payments for the first 24 months of the Repayment Period will equal only the interest due on my loan balance, as recalculated each Change Date. After the first 24 months of the Repayment Period, my monthly payments will include principal and interest and will be calculated as described above. For loan balances of $6,500 or less, the Term of the Note, or loan duration will be 84 months. For loan balances above $6,500, the loan duration will be 120 months. I may select a shorter loan duration while applying for the loan and you will compute my monthly payments using the loan duration specified by me. 4. Minimum Repayment. Notwithstanding Paragraph C.3., during the repayment period I agree to pay at least $25 each month (principal and interest) or the unpaid balance, whichever is less. I understand that this may result in my loan being paid off in less than the applicable Term of the Note. If the minimum balance due is less than $25, at your option you may choose to carry forward the balance to the next month until the accumulated amount reaches the $25 threshold. 5. Amounts Owing at the End of the Repayment Period. Since interest accrues daily upon the unpaid Principal Balance of my loan, if I make payments after my payment due dates, I may owe additional interest. If I have not paid my late charges, I will also owe additional amounts for those late charges. In such cases you will increase the amount of my last subsequent monthly payments to the amount necessary to repay my Loan. 6. Payments. Payments will be applied first to late charges, other fees and charges, accrued interest, capitalized interest and the remainder to principal. 7. Other Charges. If any part of a monthly payment remains unpaid for a period of more than 15 days after the payment due date, I will pay a late charge of __________. I will also pay an NSF Fee of ____________ for each payment on this Note returned for any reason, including but not limited to insufficient funds or a stop payment order. D. INTEREST 1. Accrual. Beginning on the Disbursement Date, interest on this Note will be calculated at the Variable Rate (as defined below) on the Principal Balance advanced, and on any unpaid interest added to the Principal Balance according to paragraph D.3., below, until the Loan is paid in full. Interest will be calculated on a daily simple interest basis, according to the outstanding Principal Balance each day of the term of the Note. The daily interest rate will be equal to the annual interest rate in effect on that day, divided 360. 2. “Variable Rate” means the Variable Rate equal to the sum of the Base Rate, a 1% Lender Guarantee Fee and a “Margin” that will be set by the online bidding in the Fynanz marketplace. The Variable Rate will change quarterly on the first day of each January, April, July and October (the “Change Date(s)”) if the Base Rate changes. The “Base Rate” for any calendar quarter beginning on a Change Date (or for any shorter period beginning on the Disbursement Date and ending on the first Change Date) is the average of the one-month London Interbank Offered Rate (“LIBOR”) published in the “Money Rates” section of The Wall Street Journal on the 1st day of each month for the three months preceding the applicable Change Date as applied according to the following rules. If the 1st day of the month is not a business day, you will use the next business day to determine the Base Rate. For purposes of this Paragraph D.2, “business day” means any day the banks in New York and London are open for the transaction of business. You may round the Base Rate higher to two decimal places. For example, 4.18751% will be rounded to 4.19%. (This is an example and may not reflect the actual LIBOR.) LIBOR is only a pricing index and is not necessarily the lowest interest rate index used by you or any other lender. If LIBOR is no longer available, you will choose a comparable index. The 1% Lender Guarantee fee will not be included in the calculation of the Variable Rate on my loan after the loan has entered the Repayment Period and I have repaid 10% of the requested Principal Balance of the loan at the time the loan was made to me, not including the upfront fee (specified in Paragraph A.7. of this Note). 3. Capitalization. You may, at your option, add all accrued and unpaid interest to the Principal Balance of my loan on the last day of the In-School Period and at the end of any Forbearance Period (as defined below). The sum is thereafter considered the principal, and interest will accrue on the new principal balance. E. UPFRONT FEE I will pay a upfront fee to you at the time the loan proceeds are disbursed. The amount of the upfront fee is calculated as a percentage of the total loan (including the upfront fee) and will range from 2.9% to 6.9%, as determined by you in accordance with the rules of the Fynanz OpenLoan Program. The upfront fee applicable to any of my Loans will be as disclosed to me on my Disclosure Statement. The amount of the upfront fee will be added to the Principal Balance and deducted from my loan proceeds when they are disbursed. You may increase the Principal Balance I requested on my application and/or the amount certified by my school by the amount necessary to pay the upfront fee. In the event the Principal Balance is not a multiple of $25, you may increase the Principal Balance to the next $25 multiple, however, the amount you increase the Principal Balance by will be disbursed to me. If I prepay this loan in full or in part, I will not be entitled to any refund of any part of the upfront fee, unless otherwise required by applicable law or stated otherwise in Paragraph F. F. RIGHT TO PREPAY I have the right to prepay all or any part of my loan at any time without penalty. Any partial prepayment will be credited to the principal of my Loan. If I prepay the amount that was disbursed or return the check you sent me within 30 days from the date you approved my application, I will not be charged any interest or fees on the loan. G. FORBEARANCE If I am unable to repay my loan in accordance with the terms established under this Note, I may request that you modify these terms. I understand that such modification would be at your option. I understand that I will remain responsible for all interest accruing during any period of forbearance (a “Forbearance Period”) and that you will add any interest that I do not pay during any forbearance period to the principal balance as described in paragraph D.3. I may, at your discretion, receive up to 18 months of forbearance, consisting of two forbearance periods of nine months duration, of which only one period may be taken per calendar year. H. WHOLE LOAN DUE To the extent permitted by applicable law, I will be in default and you have the right to give me notice that the whole outstanding principal balance, accrued interest, and all other amounts payable to you under the terms of this Note, are due and payable at once (subject to any applicable law which may give me a right to cure my default) if: (1) I fail to make any monthly payment to you when due, (2) I die, (3) I break any of my other promises in this Note, (4) Any bankruptcy proceeding is begun by or against me, or I assign any of my assets for the benefits of my creditors, (5) I make any false written statement in applying for this loan or at any time during the In School or Repayment Periods. If I default, I will be required to pay interest on this loan accruing after default. The interest rate after default will be subject to adjustment in the same manner as before default. I. NOTICES 1. I will send written notice to you, or any subsequent holder of this Note, within ten calendar days after any change in any information provided to you in my Application. 2. Any notice required to be given to me by you will be effective when such information is emailed to the email address I have given you or, at your discretion, mailed by first class mail to the latest address you have for me. Unless required by applicable law, you need not give a separate notice to the cosigner, if any. J. PRIVACY 1. You may report information about my account to credit bureaus. Late payments, missed payments or other defaults on my account may be reflected in my credit report. 2. I authorize you from time to time to request and receive from others credit related information about me (and about my spouse if I live in a community property state). K. ADDITIONAL AGREEMENTS 1. I understand that you are located in New York and that this Note will be entered into in the same state. CONSEQUENTLY, THE PROVISIONS OF THIS NOTE WILL BE GOVERNED BY FEDERAL LAW AND NEW YORK LAW, WITHOUT REGARD TO CONFLICT OF LAW RULES. I agree that any action brought pursuant to this agreement may be brought in the Federal or State Courts of the State of New York and expressly consent to personal jurisdiction within New York. 2. The proceeds of this loan will be used only for my educational expenses at the school listed on the Application. The Cosigner, if any, will not receive any of the loan proceeds. 3. I understand that I must repay this Note though I may be less than 18 years of age when the Application is signed. 4. My responsibility for paying this Note is unaffected by the liability of any other person to me or by your failure to notify me that a required payment has not been made. You may delay, fail to exercise, or waive any of your rights on any occasion without losing your entitlement to exercise the right at any future time, or on any future occasion. You will not be obligated to make any demand upon me, send me any notice, present this Note to me for payment or make protest of non-payment to me before suing to collect on this Note if I am in default, and to the extent permitted by applicable law, I hereby waive any right I might otherwise have to require such actions. Without losing any of your rights under this Note, you may accept late payments or partial payments. I WILL NOT SEND YOU PARTIAL PAYMENTS MARKED “PAID IN FULL”, “WITHOUT RECOURSE” OR WITH OTHER SIMILAR LANGUAGE UNLESS THOSE PAYMENTS ARE MARKED FOR SPECIAL HANDLING AND SENT TO THE ADDRESS SPECIFIED ON THE FYNANZ WEBSITE OR TO SUCH OTHER ADDRESS AS I MAY BE GIVEN IN THE FUTURE. 5. I may not assign this Note or any of its benefits or obligations. You may assign this Note at any time and will inform me 30 days prior to any changes in my terms 6. The terms and conditions set forth in this Note constitute the entire agreement between you and me. 7. If any provision of this Note is held invalid or unenforceable, that provision shall be considered omitted from this Note without affecting the validity or enforceability of the remainder of this Note. 8. A provision of this Note may only be modified if jointly agreed upon in writing by you and me. Any modification will not affect the validity or enforceability of the remainder of this Note. 9. I authorize any school that I may attend to release to other persons designated by you, any requested information pertinent to this loan (e.g. enrollment status, prior loan history, and current address). 10. I authorize my lender, subsequent holder, or their agents to: (1) advise my school of the status of my Application, (2) respond to inquiries from prior or subsequent lenders or holders with respect to my Note and related documents, (3) release information and make inquiries to the persons I have listed in my loan Application as references, for the purposes of learning my current address and telephone number, (4) check my credit and employment history and to answer questions about their credit experience with me. 11. Waiver by Lender: You waive (give up) any right to claim a security interest in any property to secure this Note. This does not affect any right to offset as a matter of law. 12. Dischargeability: I acknowledge that my loan is made pursuant to an education loan program. I understand that my loan may be subject to the limitations on dischargeability in bankruptcy established by Section 523(a)(8) of the U.S. Bankruptcy Code as amended. L. BORROWER/COSIGNER CERTIFICATION I declare under penalty of perjury under the laws of the United States of America that the following is true and correct. I certify that the information contained in the Application and Note is true, complete and correct to the best of my knowledge and belief and is made in good faith. I certify that the proceeds of this loan will be used for educational purposes for the academic period stated in the loan Application at the school named on such Application. I understand that I am responsible for repaying immediately any funds that I receive which are not to be used or are not used for educational expenses related to attendance at the school for the academic period stated. M. DISCHARGES Under this Paragraph M, "I", "me" and "my" refers to the borrower only and not the cosigner. "You" and "your" refers to "Fynanz". My obligation to repay this loan may be partially or totally discharged for the reasons specified in paragraphs A, B, and C below. In the event of discharge, the cosigner will not be responsible for the discharged amount.A. Death - In the event of my death, you will discharge the total remaining amount owed on this loan upon receipt of evidence of death satisfactory to you. B. Total and Permanent Disability - If I become totally and permanently disabled after I receive this loan, I or my caretaker may request you to discharge a portion or the total amount of the loan. You may or may not approve my request in whole or in part at your sole discretion. I will continue to make regular payments under the terms of this agreement until such time as you may advise me that my obligations have been reduced or discharged. C. School Closure - If I was unable to complete the program in which I was enrolled because my school closed prior to my completing the term for which I took the loan, I may request you to discharge a portion or the total amount of the loan. You may or may not approve my request and will determine at your sole discretion whether I am eligible for a partial or total discharge. I will continue to make regular payments under the terms of this agreement until such time as you may advise me that my obligations have been reduced or discharged. N. STATE DISCLOSURE NOTICES ARIZONA RESIDENTS: Notice: I understand that I may request that the initial disclosures prescribed in the Truth in Lending Act (15 United States Code sections 1601 through 1666j) be provided in Spanish before signing any loan documents. AVISO PARA PRESTATARIOS EN ARIZONA: Puedo solicitar que las divulgaciones iniciales prescritas en la Ley Truth in Lending Act (15 Código de los Estados Unidos secciones 1601 hasta 1666j) sean proporcionadas en español antes de firmar cualesquiera documentos de préstamos. CALIFORNIA RESIDENTS: I have the right to prohibit the use of information contained in my credit file in connection with transactions not initiated by me. I may exercise this right by notifying the consumer credit reporting agency. A married applicant may apply for a separate account. If you take any adverse action as defined by Section 1785.3 of the California Civil Code and the adverse action is based, in whole or in part, on any information contained in a consumer credit report, I have the right to obtain within 60 days a free copy of my consumer credit report from the consumer reporting agency who furnished you my consumer credit report and from any other consumer credit reporting agency which compiles and maintains files on consumers on a nationwide basis. I have the right as described by Section 1785.16 of the California Civil Code to dispute the accuracy or completeness of any information in a consumer credit report furnished by the consumer credit reporting agency. IOWA AND KANSAS RESIDENTS (For purposes of the following notice, the word “you” refers to the Borrower and the Cosigner, not the lender): NOTICE TO CONSUMER. This is a consumer credit transaction. 1. DO NOT SIGN THIS NOTE BEFORE YOU READ THIS NOTE. 2. YOU ARE ENTITLED TO A COPY OF THIS PAPER APPLICATION AND PROMISSORY NOTE. 3. YOU MAY PREPAY THE UNPAID BALANCE AT ANY TIME WITHOUT PENALTY AND MAY BE ENTITLED TO A REFUND OF UNEARNED CHARGES IN ACCORDANCE WITH LAW. MISSOURI RESIDENTS: Oral agreements or commitments to loan money, extend credit or to forbear from enforcing repayment of a debt including promises to extend or renew such debt are not enforceable. To protect me (borrower(s)) and you (creditor(s)) from misunderstanding or disappointment, any agreements we reach covering such matters are contained in this writing, which is the complete and exclusive statement of the agreement between us, except as we may later agree in writing to modify it. NEVADA RESIDENTS: This is a loan for study. NEW JERSEY RESIDENTS: The section headings of this Note are a table of contents and not contract terms. Portions of this Note with references to actions taken to the extent of applicable law apply to acts or practices that New Jersey law permits or requires. In this Note, acts or practices (i) by you which are or may be permitted by “applicable law” are permitted by New Jersey law, and (ii) that may or will be taken by you unless prohibited by “applicable law” are permitted by New Jersey law. NEW YORK, RHODE ISLAND AND VERMONT RESIDENTS: A consumer report (credit report) may be obtained from a consumer-reporting agency (credit bureau) in connection with this loan. If I request (i) I will be informed whether or not consumer reports were obtained, and (ii) if reports were obtained, I will be informed of the names and addresses of the credit bureaus that furnished the reports. If you agree to make this loan to me, a consumer credit report may be requested or used in connection with renewals or extensions of any credit for which I have applied, reviewing my loan, taking collection action on my loan, or legitimate purposes associated with my loan. OHIO RESIDENTS: The Ohio laws against discrimination require that all creditors make credit equally available to all credit worthy customers, and that credit reporting agencies maintain separate credit histories on each individual upon request. The Ohio civil rights commission administers compliance with this law. WISCONSIN RESIDENTS: For married Wisconsin residents, my signature on this Note confirms that this loan obligation is being incurred in the interest of my marriage or family. No provision of any martial property agreement (pre-martial agreement), unilateral statement under Section 766.59 or court decree under Section 766.70 adversely affects the interest of the lender unless the lender, prior to the time that the loan is approved, is furnished with a copy of the agreement, statement, or decree or has actual knowledge of the adverse provision when the obligation to the lender is incurred. If the loan for which I am applying is granted, my spouse will also receive notification that credit has been extended to me. O. STATE-SPECIFIC COSIGNER NOTICES: For the purposes of the following notices only, the words “you” and “your” refer to the Cosigner, where applicable, not to the lender. FOR OBLIGORS COSIGNING IN CALIFORNIA: NOTICE TO COSIGNER (Traduccion en Ingles Se Requiere Por La Ley): You are being asked to guarantee this debt. Think carefully before you do. If the borrower doesn't pay the debt, you will have to. Be sure you can afford to pay if you have to, and that you want to accept this responsibility. You may have to pay up to the full amount of the debt if the borrower does not pay. You may also have to pay late fees or collection costs, which increase this amount. The holder of the loan can collect this debt from you without first trying to collect from the borrower. The holder of the loan can use the same collection methods against you that can be used against the borrower, such as suing you, garnishing your wages, etc. If this debt is ever in default, that fact may become part of your credit record. This notice is not the contract that makes you liable for the debt. AVISO PARA EL FIADOR (Spanish Translation Required by Law): Se le está pidiendo que garantice esta deuda. Piénselo con cuidado antes de ponerse de acuerdo. Si la persona que ha pedido este préstamo no paga la deuda, usted tendrá que pagarla. Esté seguro de que usted podrá pagar si sea obligado a pagarla y de que usted desea aceptar la responsabilidad. Si la persona que ha pedido el préstamo no paga la deuda, es posible que usted tenga que pagar la suma total de la deuda, mas los cargos por tardarse en el pago o el costo de cobranza, lo cual aumenta el total de esta suma. El acreedor (financiero) puede cobrarle a usted sin, primeramente, tratar de cobrarle al deudor. Los mismos metodos de cobranza que pueden usarse contra el deudor, podran usarse contra usted, tales como presentar una demanda en corte, quitar parte de su sueldo, etc. Si alguna vez no se cumpla con la obligación de pagar esta deuda, se puede incluir esa información en la historia de credito de usted. Este aviso no es el contrato mismo en que se le echa a usted la responsibilidad de la deuda. FOR OBLIGORS COSIGNING IN IOWA, NEW YORK AND SOUTH CAROLINA: NOTICE TO COSIGNER: You agree to pay the debt identified below although you may not personally receive any property, goods, services or money. You may be sued for payment although the person who receives the property, goods, services, or money is able to pay. You should know that the Total of Payments listed below does not include finance charges resulting from delinquency, late charges, repossession or foreclosure costs, court costs or attorney's fees, or other charges that may be stated in the Note or contract. You will also have to pay some or all of these costs and charges if the Note or contract, the payment of which you are guaranteeing requires the borrower to pay such costs and charges. This notice is not the Note or contract that obligates you to pay the debt. Read the Note or contract for the exact terms of your obligation. IDENTIFICATION OF DEBT(S) YOU MAY HAVE TO PAY Name of Debtor: The Borrower and Cosigner identified on the first page of this Note. Name of Creditor: Fynanz Inc, and its successors and assigns. Date: If the loan is disbursed by check, the date of the check. If the loan is disbursed electronically, the date the creditor transmits the funds to the School. Kind of Debt: Education loan. Total of Payments: The principal set forth on the first page of this Note (to the extent advanced), plus interest and the upfront fee set forth in this Note. FOR OBLIGORS COSIGNING IN VERMONT: NOTICE TO COSIGNER: YOUR SIGNATURE ON THIS PROMISSORY NOTE MEANS THAT YOU ARE EQUALLY LIABLE FOR REPAYMENT OF THIS LOAN. IF THE BORROWER DOES NOT PAY, THE LENDER HAS A LEGAL RIGHT TO COLLECT FROM YOU. FOR OBLIGORS COSIGNING IN WEST VIRGINIA: NOTICE TO COSIGNER: You are being asked to guarantee this debt. Think carefully before you do. If the Borrower doesn't pay the debt, you will have to. Be sure you can afford to pay it if you have to, and that you want to accept this responsibility. You may have to pay up to the full amount of the debt if the Borrower does not pay. You may also have to pay late fees or collection costs, which increase this amount. The creditor can collect this debt from you without first trying to collect from the borrower. The creditor can use the same collection methods against you that can be used against the borrower, such as suing you, garnishing your wages, etc. If this debt is ever in default, that fact may become a part of your credit record. This notice is not the contract that makes you liable for the debt. By my signature, I acknowledge that I have read and understand the information contained in this Note and certify that the information supplied by me is true and accurate to the best of my knowledge and belief. I authorize the lender, any assignee of the lender and any guarantor of this loan to investigate my creditworthiness, to obtain consumer reports from consumer reporting agencies, and to furnish information concerning my loan to consumer reporting agencies and other persons who may legally receive such information. I authorize the lender and/or its agents to obtain consumer reports from consumer reporting agencies, for any purpose permitted by law when any amounts are owed under this Note. I authorize the lender to report on the status and performance of this loan to any guarantor of this loan. I have read, understand and agree to the terms of and undertake the obligations set forth in this Note, including without limitation Paragraph L, “Borrower's Certification,” and if applicable, any “Notice to Cosigner” printed or referenced in the Application or this Note. I agree that this Note provides for the compounding of interest. The originating lender for this Note is Fynanz Inc, New York, NY, or its successors and assigns. I authorize the lender to consider the Application and this Note as an application for the lowest cost loan for which I am qualified. FOR ALABAMA RESIDENTS: CAUTION - IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE YOU SIGN IT. FOR WISCONSIN RESIDENTS - NOTICE TO CUSTOMER: (a) DO NOT SIGN THE APPLICATION OR THIS PROMISSORY NOTE BEFORE YOU READ THE WRITING ON THE APPLICATION AND THIS PROMISSORY NOTE, EVEN IF OTHERWISE ADVISED. (b) DO NOT SIGN THE APPLICATION OR THIS PROMISSORY NOTE IF IT CONTAINS ANY BLANK SPACES. (c) YOU ARE ENTITLED TO AN EXACT COPY OF ANY AGREEMENT YOU SIGN. IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT: To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. What this means for you: When you open an account, we will ask you for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents. Warning: Any person who knowingly makes a false statement or misrepresentation on this form is subject to penalties, which may include fines or imprisonment.
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