How are payments applied by Cornwell Quality Tools to the Note?

If your Customer qualifies for Cornwell financing, Cornwell may finance merchandise up to $27,000. The Note provides for a repayment of principal and interest at an annual rate up to 24.99% depending on Customer's credit limit. Cornwell can adjust the interest rate periodically according to the respective state statutes. All payments are intended to be applied first toward unpaid accrued interest charges, then any/all fees and NSF fees and then as a reduction of the unpaid principal balance, but Cornwell reserves the right to apply these payments in any order it determines. In addition, Cornwell may impose a monthly late charge of $30.00 each month that the Customer is two or more payments in arrears. The Note may be voluntarily pre-paid in part or in full at any time, without penalty. The term of the Note will be determined by Cornwell, and will be no more than 60 months. There is a weekly payment minimum of $10 for your Customer.

Cornwell can recover its cost of collection, including court costs, repossession expenses, and reasonable attorney fees in the event of default. Cornwell reserves the right to decline Plan financing for any legally permitted reason, including, but not limited to sales to your Customers outside your assigned territory or if you do not use the "My Business" function of IBN as required.

Cornwell reserves the right to assign (sell) Tech-Credit accounts to third parties that will collect them for their own benefit, whether or not the accounts are then current.

NOTE 3 - Deferred Billing Program. Cornwell allows for deferred billing of a limited amount of purchases under the following conditions: Deferred purchases will be paid for over a 10 week term, without additional charge. The weekly-accumulated deferred payment will be one tenth (1/10) of initial balance of all partially paid deferred invoices. The weeklyaccumulated deferred payment will be due under the net terms of the open account statement upon which it initially appears. No deferred billing will be granted unless the open account is current. Cornwell reserves the right to reduce or eliminate any deferred billing limit on goods it deems inappropriate for the program or for any other legally permitted reason, including, but not limited to your not using the "My Business" function of IBN as required. Any action of this nature will be effective immediately upon notification to you.

Deferred billing account limits are based on a dealer's weekly purchase average and creditworthiness. New dealers are offered a $2,000 deferred limit on starting. New dealers will be reviewed after six (6) months in business and may be placed on a standard deferred billing program with up to a $12,000 maximum limit or an enhanced deferred billing program with up to a $30,000 maximum limit, at Cornwell's discretion, or on no deferred billing program. At no time can a dealer exceed the established maximum deferred billing limit of $12,000 or $30,000. As you pay your weekly accumulated deferred payment, you may then add new deferred invoices up to the maximum limit. A deferred billing balance may be paid in full at any time if you so desire; this must be done by contacting Cornwell's credit department.

NOTE 4 – Cornwell Extended Box (CBX) Financing. Cornwell allows for extended billing of tool box purchases under the following conditions: CBX purchases will be paid for over a 20-week term, without additional charge.

Source: Item 10 — FINANCING (FDD pages 33–43)