Operating Procedures

1. Obligations, Responsibilities, Limitations on Activities and Rights of the Parties.
2. Credit Criteria; Credit Approval; Rates, Fees and Other Terms. BANK shall be solely responsible forestablishing the credit criteria for evaluating and making approval or denial decisions on each application for a loan submitted by an Applicant (“Application”). BANK also shall be solely responsible for establishing the interest rate(s), feesand all other terms and conditions of the related loan agreement (“Loan Agreement”).  BANK also shall be solely responsible for establishing any terms and conditions governing payments to MERCHANTS in relation to funding under any Loan Agreement, including the Funding Percentages specified below.
3. Financed Price. MERCHANT shall assure BANK that the price being charged to a Customer for the purchase of Merchandise as evidenced by the Loan Agreement (the “Financed Price”) is the same price that would be charged to the Customer if the Customer paid cash for the Merchandise.

iii.            Applicant Identity and Residence Verification. MERCHANT shall authenticate the identity and residence ofApplicants by comparing the identity and residence information supplied by Applicant to the original copy of at least one of the forms of identification specified below under “Program Requirements” item 1.B. below.  MERCHANT shall assure BANK that the identity and residence information supplied by Applicant to MERCHANT in relation to MERCHANT’S sale or provision of goods and/or services to Applicant is the same identity and residence information that Applicant supplies to Bank in his or her Application and Loan Agreement.

1. No Assistance by MERCHANT; No Representations by MERCHANT regarding Application or Loan Agreement.MERCHANT shall not encourage Applicants to supply false, incomplete or misleading information during the Applicationprocess. MERCHANT shall not assist Applicants with completing their signature, whether electronic or actual, as part ofthe Application or Loan Agreement. MERCHANT shall assure Bank that the Applicant, and no other person, completed their signature of the Application and Loan Agreement. MERCHANT shall make no representations to Applicantsregarding loan approval or denial, interest rates, fees, or other terms and conditions associated with the LoanAgreement or Bank’s underwriting or approval process.
2. Delivery by BANK and Receipt by MERCHANT of Loan Proceeds. Before BANK receives or otherwiseprocesses an Application, each Applicant must have agreed in the Application that, if BANK approves the Application,BANK will deliver the Loan Agreement Proceeds (“Loan Proceeds”) directly to MERCHANT via the National AutomatedClearing House Association (“ACH Network”) to an account designated to Bank by MERCHANT. This account(“Settlement Account”) shall be used to credit and/or debit, as applicable, the settlement of proceeds of closed and funded Loan Agreements and/or any Chargebacks, as hereinafter defined. BANK shall disburse to the Settlement Account for the benefit of MERCHANT the Loan Proceeds through the ACH Network by the third Business Day after thedate of receipt of a signed and executed Loan Agreement and any other required documentation by Customer(“Customer”). MERCHANT hereby (a) agrees to be bound by the terms of the operating rules of the ACH Network, as ineffect from time to time, and (ii) authorizes BANK and its designated agents and representatives to initiate credit or debitentries and adjustments to the Settlement Account. BANK shall not be liable for any delays in receipts of funds or errorsin Settlement Account entries caused by third parties including, but not limited to, a clearinghouse, MERCHANT’Sfinancial institution, or any agent of MERCHANT. The following obligations of MERCHANT will survive the termination ofthe Agreement. MERCHANT shall not close the Settlement Account without providing BANK at least five (5) BusinessDays prior written notice of such closure and substitution of another account (including transfer to such other account of all funds in the original Settlement Account comprising proceeds of any Loan funded by Bank, with notification to Bank of such funds transfer). Upon termination of the Agreement, MERCHANT agrees to maintain the Settlement Accountwith sufficient funds until such time as BANK has processed all Chargebacks (as defined below) and other adjustments,and MERCHANT agrees to permit BANK to credit and debit such Settlement Account until all charges, Chargebacks andother adjustments are settled as provided for in this Agreement. MERCHANT shall be solely liable for all fees and costsassociated with the Settlement Account. This authority will remain in effect until five (5) Business Days after BANKreceives written notice from MERCHANT of its cancellation of such authorization, provided that in the event oftermination of this Agreement, MERCHANT agrees to maintain the Settlement Account with sufficient funds until suchtime as MERCHANT and BANK agree that all Chargebacks and other adjustments are processed and to permit BANK to credit and debit such Settlement Account until all charges, Chargebacks and other adjustments are settled as providedin this Agreement.
3. Loan Proceeds and Funding Percentages. MERCHANT understands and agrees that the amount of proceeds of any funding of any Loan made by Bank to Applicant that will be funded shall equal the product of: (a) the Financed Price and (b) the applicable Funding Percentage set forth on Schedule A hereto, and that such amount will be accepted by MERCHANT as payment in full of the entire amount payable to MERCHANT in respect of the goods and/or services MERCHANT will deliver to or perform for Applicant.  By way of example, the Loan Proceeds payable to MERCHANTfrom a Loan Agreement provided to a Customer for the purchase of Merchandise with a Financed Price of $1,000 and a Funding Percentage of 90% shall be $900.00.  The MERCHANT agrees not to charge, request, seek or otherwise attempt to collect from an Applicant or from Bank the difference between the Financed Price and the amount of the Loan Proceeds paid by Bank to the MERCHANT.  The MERCHANT further agrees not to disclose to any Applicant the applicable Funding Percentage, the amount of proceeds of any Loan funded to MERCHANT by Bank nor the difference between the amount of such proceeds and the Financed Price.

vii.          Returned or Rejected Goods or Services Financed by Loans. If an Applicant who has obtained a LoanAgreement from BANK for the purchase of goods or services from MERCHANT, rejects or returns such goods or refuses or fails to avail himself or herself of such services in a manner consistent with MERCHANT’S return or rejection policy or applicable law, MERCHANT shall comply with the return of proceeds requirements and procedures described below.

vii.          Billing Inquires and Disputes. BANK will notify MERCHANT if it receives any notice or communication from or on behalf of an Applicant that has made a billing inquiry, filed a billing error notice, or filed a dispute related to MERCHANT’S goods or services or MERCHANT’S compliance with its warranty and/or return/exchange policy relating to goods or services paid for using proceeds of a Loan Agreement originated through MERCHANT. MERCHANT agrees to investigate and make a good faith effort to resolve each such billing inquiry or dispute referred to it by BANK. Withinfifteen (15) Business Days from the date BANK notifies MERCHANT of any such billing inquiry or dispute, MERCHANTshall notify BANK in writing of the resolution thereof or the action MERCHANT will take to resolve such billing inquiry or dispute. MERCHANT shall provide BANK with all such information as BANK may reasonably request in connectiontherewith.

1. ix.Chargeback Rights and Procedures.
2. a)Chargeback Rights. If MERCHANT has not complied with the terms of this Agreement or the OperatingProcedures, or if, at the end of the fifteen (15) Business Days billing inquiry/dispute resolution period specified above, thebilling inquiry or dispute is not resolved (or BANK has not been informed of the resolution or the action MERCHANT willtake to resolve the billing inquiry or dispute), BANK may refuse to fund related proceeds under the relevant LoanAgreement or require MERCHANT to reimburse BANK amounts funded under such Agreement, or the disputed portionthereof, as applicable, or Bank may withdraw such amounts (plus the amount of any related transfer or transaction fee and any Late Payment Fee) from the Settlement Account or set off such amounts against any future funding due MERCHANTunder other Loan Agreements an amount equal(any such action, a “Chargeback”). If BANK processes a Chargeback andthe disputed amount is subsequently aid by the Applicant, BANK will reimburse MERCHANT for the funded portion of such disputed amoun In the event of a customer rejection, refusal or return, MERCHANT has thirty (30) days from thedate of the return to refund BANK without penalty or additional charge. However, MERCHANT agrees that BANK is entitled to a two percent (2%) fee if refund occurs between 31-60 days, and a three percent (3%) fee beyond 60 days (a “Late Payment Fee”).
3. b)Method of Recourse. BANK is not required to pay MERCHANT for a Loan Agreement that is being chargedback. If BANK has already paid MERCHANT for such Loan Agreement, BANK, at its sole discretion, may deduct theamount to be charged back from the Settlement Account or offset such amount from a future payment to MERCHANT.Alternatively, BANK may demand that MERCHANT pay BANK the amount of the Chargeback (plus the amount of any related transfer or transaction fee and any Late Payment Fee) and MERCHANT shall make such payment within three (3) Business Daysof such demand. Any Chargebacks that are not paid as described above shall be due and payable by MERCHANTpromptly on deman
4. c)Contest of Compliance with Laws. In addition to the foregoing chargeback and refund provisions, in theevent an Applicant, in accordance with the provisions of applicable state law or the federal Truth in Lending Act andRegulation Z, as they may be amended from time to time, notifies BANK of any dispute of the terms and conditions of any Loan Agreement, or the compliance thereof with any applicable laws, rules or regulations, BANK has the right to deny funding thereof (to the extent not already funded) or to Chargeback from MERCHANT any proceeds thereof then on deposit in the Settlement Account with respect to the Loan Agreement that is the subject of such inquiry or dispu
5. B.No Other Compensatio

Bank and MERCHANT shall not be required to pay to or entitled to receive from the other any fee, charge or othercompensation of any kind in connection with any Application or Loan Agreement. MERCHANT shall not charge to orreceive from an Applicant or customer any fee, charge or other compensation of any kind in connection with anyApplication or Loan Agreement.

 

 

 

 

 

 

 

 

 

 

SCHEDULE A

 

Funding Percentages

 

 

The applicable Funding Percentage for determining the Loan Proceeds payable to any MERCHANT under a Loan Agreement in relation to any purchase of goods or services shall be determined by Bank based on the factors specified below, including credit grade, as determined in Bank’s sole and absolute discretion.

 

For Loan Agreements entered to fund, the Funding Percentages for each credit grade for each loan type are as follows:

 

 

Zero Interest Promotion Program- 8% Orig
Licensed Medical
36 Month Pricing
Credit Grade	A	B	C	D
Risk Band	0, 1, 2, 3	4, 5, 6, 7, 8	9,10	11
Interest Rate	10.98	18.92	24.13	24.13
APR	16.39	24.59	29.99	29.99
Max Amount	$35,000	$35,000	$25,000	$15,000
Payout %	100%	100%	93%	93%
60 Month Pricing
Bucket	A	B	C	D
Risk Band	0, 1, 2, 3	4, 5, 6, 7, 8	9,10	11
Interest Rate	15.74	23.55	26.02	26.02
APR	19.32	27.42	29.99	29.99
Max Amount	$35,000	$35,000	$20,000	$15,000
Payout %	100%	100%	93%	93%
Legal, Pet, Consumer Goods, Automotive, Jewelry, Travel,Medical Devices; Home Improvement; Bridal; Sporting Goods; Chiropractic
36 Month Pricing
Bucket	A	B	C	D
Risk Band	0, 1, 2, 3	4, 5, 6, 7, 8	9,10	11
Interest Rate	10.98	18.92	24.13	24.13
APR	16.39	24.59	29.99	29.99
Max Amount	$20,000	$15,000	$10,000	$10,000
Payout %	90.00%	90.00%	90.00%	90.00%
60 Month Pricing
Bucket	A	B	C	D
Risk Band	0, 1, 2, 3	4, 5, 6, 7, 8	9,10	11
Interest Rate	15.74	23.55	26.02	26.02
APR	19.32	27.42	29.99	29.99
Max Amount	$20,000	$15,000	$10,000	$10,000
Payout %	90.00%	90.00%	90.00%	90.00%

 

 

 

 

 

 

 

 

Program Requirements

 

 

1. Eligibility Requirements for Applicants:

 

1. A.Legal Age Requirement

Applicant must be at least 18 years of age to be considered eligible to make Application.

 

1. Identification

Applicant must have a non-expired U.S. driver’s license, U.S. Passport, or U.S. Military ID.

 

1. C.Minimum Financed Amount

Total sale amount that is to be financed must be at least $ 1,000 to apply for a loan with BANK.

 

2. Return/Exchange Policy:

 

1. A.Full or Partial Rejections or Returns.

(a) If a Customer rejects or returns all of the goods sold by MERCHANT, or rejects, refuses of fails to appear to receive all of the services, payment for which goods or services was funded under the Loan Agreement, in either case accordancewith MERCHANT’S customary acceptance, return and exchange policy or applicable law, or if a Loan Agreement isprocessed in error, or if for any reason the customer does not finalize its purchase of such goods or services with MERCHANT after executing his or her Loan Agreement with BANK, MERCHANT must return all of the Loan Proceedsreceived by MERCHANT directly to BANK. Upon receipt of such refunded Loan Proceeds, BANK shall waive any accruedfinance charges or other charges owed by the customer and shall cancel the Loan Agreement.

 

(b) If a Customer rejects, returns, refuses or fails to appear to receive only a portion of the goods or services payment for which was funded under a Loan Agreement, in either case in accordance with MERCHANT’S customaryacceptance, return and exchange policy or applicable law, MERCHANT must return the portion of the Loan Proceeds thatcorresponds to the rejected, returned, refused or undelivered or uncompleted goods or services directly to BANK. Upon receipt of such Loan Proceeds, BANK shall apply the funds to the outstanding balance of the loan and the customer will continue to be obligated to pay the remaining loan balance and interest in accordance with the terms of the LoanAgreement.

1. B.MERCHANT Actions in Relation to Rejections and Returns :
2. MERCHANT shall immediately notify BANK and provide the customer’s name, contract or purchasedate, Financed Price, amount of Loan Proceeds received by MERCHANT, and portion thereof corresponding to rejected or returned goods or services.

 

RETAIL PARTNER should contact: Erika Harber at Erika@loanclubusa.com

 

1. MERCHANT shall refund the relevant proceeds by wire transfer. Please contact Erika@loanclubusa.com for details within the time periods specified in the Operating Procedures.

 

 

 

3. CustomerDisputes:

MERCHANT will deliver the contracted or purchased goods or services to its customer in a timely manner and as agreed upon between MERCHANT and its customer. If a customer claims that he or she did not receive the contracted or purchased goods or services, disputes the nature, quality, merchantability or suitability thereof or otherwise disputes its payment obligations in relation thereto, MERCHANT will promptly provide proof of receipt, quality, merchantability and suitability or attempt to remedy the situation through exchange, additional performance or other commercially reasonable substitution or correction as applicable. If the dispute is not promptly resolved, MERCHANT agrees to return all or the relevant portion of the loan proceeds funded to MERCHANT by wire transfer to BANK as indicated above within the time periods specified in the Operating Procedures.

 

 

4. FundingDiscrepancies:

 

Amount Verification.

In the event MERCHANT fails to verify that the price charged for the relevant goods or services is the same as the Financed Price specified in the customer’s Loan Agreement, as disclosed by BANK on thefinal confirmation fax or other electronic notification of acceptance of the Loan Agreement prior to Bank’s funding of proceeds of the Loan Agreement, MERCHANT is responsible for the difference and shall either:

1. If BANK remits Loan Proceeds to MERCHANT in an amount that is greater than the actual cash purchase price offered by MERCHANT to its customer, then MERCHANT shall remit the differenceto BANK by wire transfer in accordance with the procedures specified above, so that BANK mayapply such amount to the Customer’s loan account.
2. If BANK remits Loan Proceeds in an amount that is less than the sale, then RETAIL PARTNER is solely responsible for the difference.

 

5. Dispute Resolution.

 

MERCHANT and Bank agree they will resolve all disputes concerning the Operating Procedures, customer complaints, returns, rejections and refusals of goods and services, and all refunds, Chargebacks and setoffs through arbitration conducted in accordance with the American Arbitration Association’s procedures for small commercial disputes, including those procedures concerning the selection and appointment of arbitrators and the selection of venue.  MERCHANT and Bank agree that the laws of the State of New Jersey and applicable federal laws shall govern the interpretation and enforcement of the Operating Procedures and the resolution of all such disputes but, without regard to any conflict of law principles of New Jersey.