Preview
FILED
11/1/2023 11:36 AM
FELICIA PITRE
DISTRICT CLERK
DALLAS CO., TEXAS
Christi Underwood DEPUTY
DC-23-18612
NO. _
IN RE IN THE DISTRICT COURT OF
DALLAS COUNTY, TEXAS
192nd
JUDICIAL DISTRICT
APPLICATION FOR APPROVAL OF
TRANSFER OF STRUCTURED ANNUITY BENEFITS
TO THE HONORABLE JUDGE OF THE COURT:
COMES NOW, Stone Street Originations, LLC “Applicant", by and through its attorney,
Julie Pi Evans, and presents the following:
1 A discovery control plan is not required for the adjudication of this application. This application
is filed in accordance with HB3356, effective date June 15, 2017. Per the newly enacted law,
Applicant has redacted all identifiable information about the Payee.
("Annuitant" or "Payee"), who resides in DALLAS County, currently is the
recipient of structured annuity benefits. is the
issuer of the annuity. is the owner of the annuity.
This Court has jurisdiction of this matter because the Payee resides in this county, or the
action from which the annuity arose was, or could have been, brought in this county. The
Court further has jurisdiction of this matter under the Texas Structured Settlement
Protection Act, Chapter 141, Texas Civil Practice and Remedies Code.
the Annuity Issuer, is an insurance company
domiciled in the State of lowa. The Annuity Issuer shall be given notice of this application
by Commercial Deliver Service, concurrently with notice of hearing,
the Annuity Owner, shall be given notice of this
application by Commercial Deliver Service, concurrently with notice of hearing,
The annuity provides for periodic payments including, but not limited to,
entered into a transfer agreement with Stone Street Originations, LLC,
pursuant to the terms of which she agreed to sell and assign
A true and correct copy of the Purchase
Agreement is attached hereto as Exhibit "1" and is incorporated herein by reference.
In exchange for the sale and assignment of the aforesaid payments, is to
receive a lump sum cash payment in the amount of less compliance and
administrative fees and filing and related expense fees, resulting in an actual payment of
10 Applicant is not aware of any statutory or case law in Texas restricting the sale or
assignment of structured annuity payments.
ll The transfer complies with the requirements of the Structured Settlement Protection Act,
Chapter 141, Texas Civil Practice and Remedies Code, as enacted on May 11, 2001 (the
"Act").
12 The Payee has the following dependents, as that term is defined in the Act:
12.1 residing with Payee:
12.2 Dependents not residing with Payee:
13 The Transfer is in the best interests of the Payee, taking into account the welfare and
support of the Payee's dependents, if any.
14 Stone Street Originations, LLC, has given written notice of the Applicant's name, address
and taxpayer identification number to Annuity Issuer and Annuity Owner. A true copy of
the notice is attached as Exhibit "2" and incorporated herein by reference.
15 All interest parties are hereby noticed that they are entitled to support, oppose, or otherwise
respond to this Application, either in person or by counsel, by submitting written comments
to the Court or by participating in the hearing.
16 Annuitant has received a disclosure statement that provides the amounts and due dates of
the structured settlement payments to be transferred; the aggregate amount of the
payments; the discounted present value of the payments, with the discount rate used in
determining the discounted present value; the gross amount payable to Annuitant in
exchange for the payments; and itemized listing of all commissions, fees, costs, expenses,
and charges payable by Annuitant or deductible form the gross amount otherwise payable
to Annuitant; the net amount payable to Annuitant after deduction of all commissions, fees,
costs, expenses, and charges; and the amount of any penalty and the aggregate amount of
any liquidated damages, inclusive of penalties, payable by Annuitant in the event of any
breach of the transfer agreement by Annuitant. A true and correct copy of the Disclosure
Statement is attached hereto as Exhibit "3" and incorporated herein by reference.
17 Attached as Exhibit 4 is the Payee’s request that all identifiable information be redacted
pursuant to HB3356. Applicant will serve the Court and all interested parties with a copy
of the application with non-redacted exhibits.
18 has been advised in writing by the Applicant to seek independent
professional advice regarding the transfer and has received such advice or has declined
such advice in writing. See Exhibit 5.
PRAYER
WHEREFORE, Stone Street Originations, LLC, prays that the Court enter an order
allowing the sale and assignment of the structured annuity payments for
Respectfully submitted,
JULIE PI EVANS LAW FIRM, PLLC
218 MAVERICK ST.
SAN ANTONIO, TEXAS 78212
(281) 846-6252 (TELEPHONE)
(888) 598-3598 (FACSIMILE)
JULIE@JPELAWFIRM.COM
pr pe war”
Julie Pi ans
State Bdt No. 24037280
ATTORNEY FOR APPLICANT
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PURCHASE CONTRACT
(LIFE CONTINGENT)
=
This is a Purchase Contract (“Contract”) for the sale of structured settlement payments between
(You, Your), and Stone Street Originations, LLC (We, Us, Our)
1200 Morris Drive, , Chesterbrook, PA 19087,
GENERAL INFORMATION
In connection with the resolution of a personal injury claim, You or someone acting for You, signed a Settlement
Agreement that entitles You to receive certain future payments (“Settlement Payments”), according to a set schedule.
Those Settlement Payments are being paid to You from an annuity policy (“Annuity Policy”) purchased by the Person
responsible for making the Settlement Payments to You (“Obligor”),
Rather than wait for the Settlement Payments to be made to You in the future, You want to sell all or some of those
Settlement Payments (“Purchased Payments”) to Us now for a lump sum.
THIS CONTRACT CONTAINS AN ARBITRATION PROVISION WHICH YOU SHOULD READ CAREFULLY, AS
IT WILL HAVE A SUBSTANTIAL IMPACT ON HOW DISPUTES BETWEEN YOU AND US ARE RESOLVED.
For additional definitions, see Section 3 of this Contract.
You and We agree as follows:
1 SALE OF THE PURCHASED PAYMENTS
A. Upon the signing of this Contract and subject to certain conditions including Court Approval, You sell, transfer and
assign to Us the right to receive the Purchased Payments specifically identified in the Disclosure Statement.
B. We will pay You the Net Purchase Price as agreed to in the Contract Documents, subject to certain conditions,
including meeting Our underwriting requirements, Court Approval and satisfactory completion of the Closing
Documents. We will do this in exchange for You:
. selling the Purchased Payments to Us;
changing the beneficiary of the Annuity Policy to Your estate and not changing it again until We have been
paid all of the Purchased Payments;
having any current beneficiaries waive their rights to the Purchased Payments; and
fulfilling Your promises under this Contract.
PURCHASE CONTRACT FORM 1
EX 1
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If We are buying only a portion of Your payments, this will have no effect upon Your rights in the unsold portion. You
will continue to receive the unsold portion unless You have already sold or encumbered that portion. However,
sometimes the Issuer, the Obligor or the court may require Us to receive the entire amount of Your payment. If so,
We will then forward the portion of the payment still due to You and You hereby agree to this payment servicing
arrangement.
2. PURCHASE PRICE
A. The Gross and Net Purchase Prices are shown on the Disclosure Statement and are fair and acceptable to You and Us.
B. We will pay You the Net Purchase Price in the manner You designate for Us.
C. Before we pay You, You agree that We will adjust for the following amounts, /f applicable:
Purchased Payments Owed to Us — The Issuer may have already paid You some of the
Purchased Payments before We have paid You for them. If that happens, We will deduct the
amount of those Purchased Payments.
Holdbacks — Due to possible delays in the Issuer beginning to make the Purchased Payments to
Us instead of You, We will hold back an amount equal to any Purchased Payments that the
Issuer owes Us post Court Approval, that are due within 90 days of the Funding Date. If We
subsequently receive those particular Purchased Payments directly, We will return the amount
of any related holdback to You.
Payment of Debts Owed — If You owe any past due child support, bankruptcy payoffs or taxes,
or have any judgments or liens against You or Your assets, We may pay those amounts and
deduct them from the amount We pay You, and You hereby provide Us with specific authority to
take such action. We will provide You with notice of the amounts that We are going to pay,
prior to actual payment.
If any Purchased Payments are mistakenly sent to You after We have paid You for them, You will immediately contact
Us. If We then determine that any deductions or holdbacks as set forth above are not enough to reimburse Us, We
will advise You of the amount You owe Us. You agree to immediately send that amount to Us by bank or certified
check.
3. DEFINED WORDS
Certain words used in this Contract have the specific meanings shown below.
Affiliate
An entity controlled by, controlling, or under common control with, another entity.
Annuity Policy
The policy purchased by the Obligor to ensure that the Settlement Payments are made to You as required by the
Settlement Agreement.
Closing Documents
Any documents necessary to carry out the purchase of the Purchased Payments, other than the “Contract or Contract
Documents” as defined below.
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Contract or Contract Documents
Collectively, only this Contract and the Disclosure Statement.
Contract Date
The date Your signature at the end of this Contract is notarized. However, if You happen to sign this Contract before the
number of days stated at the end of Your Disclosure Statement for waiting has passed, You will have no obligation under
Your Contract until that time has passed.
Court Order
A legally binding ruling issued by a judge or properly empowered administrative officer, approving the sale of the
Purchased Payments to Us (“Court Approval”).
Disclosure Statement
The document which identifies for You, the Purchased Payments, expenses, Purchase Price and various other disclosures.
Encumbrance
Any claim, right, lien, policy loan, or restriction. In addition, this includes any limits on rights of ownership (such as the
use, voting, transfer, receipt of income, etc.).
Funding Date
The date We pay You the Net Purchase Price.
Issuer
The insurance company that issued the Annuity Policy.
Life Insurance Policy
The Policy We (as defined in this section below, including successors, assigns and designees) may purchase to ensure that
We recover the value of any Life Contingent Purchased Payments should You die before We receive them.
Mortality Adjustment
The total cost of the Life Insurance Policy, if any.
Obligor
The Person who is obligated to make payments to You under the Settlement Agreement.
Party
One of You or Us. Parties means both You and Us.
Person
Any natural person or legal entity.
Purchased Payments
Only those certain payments that We are purchasing from You under this Contract. Some of the Purchased Payments may
be conditioned upon You still being alive at the time those Purchased Payments are made to Us. If so, those Purchased
Payments are referred to as “Life Contingent.”
Purchase Price:
Gross Purchase Price
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The amount shown as the “gross amount payable to the seller (You)” on the Disclosure Statement. This is the
sum We have agreed to pay You before any deductions as setforth in the Contract Documents.
Net Purchase Price
The amount shown as the “net amount payable to the seller (You)” on the Disclosure Statement. This is the sum
We have agreed to pay You after any deductions as set forth in the Contract Documents.
Settlement Agreement
The agreement that You and the Obligor signed to resolve Your personal injury claim.
Settlement Payments
All of the payments that the Obligor has agreed to make to You in the Settlement Agreement.
We, Our, or Us
Stone Street Originations, LLC, along with any of its successors, assigns, and designees. Some of the Contract Documents.
or Closing Documents may refer to Us as the purchaser.
You or Your
The Person named on this Contract’s first page. Some of the Contract Documents or Closing Documents may refer to You
as the seller.
4. YOUR REPRESENTATIONS AND WARRANTIES
You represent and warrant to Us the following:
A. You understand that THIS IS A SALE AND NOT A LOAN.
The Annuity Policy is in full force, You are the sole and undisputed recipient of the right to the Purchased Payments
have the right to sell them free and clear of any Encumbrances and have not previously sold any of the Purchased
Payments to any other Person.
You understand that Court Approval is required for this purchase; and You agree to fully cooperate with Us to obtain
that approval.
You gave Us all requested information and signed all documents necessary to complete the purchase. Every
statement made by You in the Contract Documents and Closing Documents is true and complete.
No law, divorce decree or other legal obstacle:
requires You to keep the Purchased Payments for the benefit of a current or former spouse, dependent
children, or other person; or
legally prevents You from contracting with Us, selling the Purchased Payments or changing the Annuity
Policy’s beneficiary.
F Either:
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You have never filed for bankruptcy, will not do so before the Funding Date and there are no lawsuits or
efforts by any of Your creditors to put You into bankruptcy or take any of the Purchased Payments; or
If You filed for bankruptcy, the Purchased Payments were not subject to the claims of Your creditors. You will
give Us a copy of any of Your bankruptcy documents that We request including evidence of a final
bankruptcy payoff or case closing, if any.
We can rely on Your representations, warranties, and promises in this Contract. These representations, warranties,
and promises are for Our benefit and the benefit of any future owners of the Purchased Payments. You understand
that Our reliance on any intentional misrepresentation by You may result in Our enforcing Our rights against You in
court.
You had enough time to consider the sale of the Purchased Payments, understand the terms of the Contract
Documents and Closing Documents (including the arbitration provision), are of legal contracting age and sound mind,
not under the influence of drugs or alcohol, and freely and voluntarily, enter into this Contract and agree to all of its
terms.
You were advised by Us to obtain independent legal advice and professional tax advice about the sale of the
Purchased Payments and to have those advisors review the terms and legal, tax and other effects of this Contract with
You prior to Your execution of this Contract. You have also explored all appropriate financial options before entering
into this transaction.
We did not provide tax, financial, or legal advice to You about this Contract and have advised You that We may not
refer You to any specific attorney for such purpose.
If You are married, Your spouse understands all of the terms and conditions of this Contract including, but not limited
to the fact that, after the Funding Date, You (and Your spouse) will not receive the same amount of money on the
same payment schedule as You would have received under the Annuity Policy. Your spouse has been provided with all
information relating to the transaction and has had every opportunity to review the terms of the transaction and to
seek any advice relating thereto. Your Spouse also understands that he or she will be giving up any property or
contract rights that he or she may have in the Purchased Payments.
We may sell, transfer, or assign Our right to the Purchased Payments and Our right in the Life Insurance Policy
described in subsection N below in a sale, securitization, or other financing transaction (resale). Any resale would
involve disclosing certain information about You (including Your personal information) to the parties to a resale.
Any future owner of the right to the Purchased Payments will have all of the same rights We have, including the right
to the duties You owe Us under this Contract. This includes the right to make a claim against You for violating any of
the representations, warranties, or promises You made in this Contract.
You understand that as part of this Contract, We (as defined in the “Defined Words” section above, including
successors, assigns and designees) may purchase a Life Insurance Policy on Your life in the total amount of the
Life Contingent Purchased Payments sold to Us and that We will be the owner and beneficiary of the Life
Insurance Policy. You authorize Us, Our subsidiaries and affiliates to obtain certain medical information in order
to purchase the Life Insurance Policy. You agree to cooperate with Us in obtaining the Life Insurance Policy and
understand that this transaction may be contingent upon Us obtaining the Life Insurance Policy. If We attempt
to purchase a Life Insurance Policy on Your life to ensure that We recover Our Life Contingent Purchased
Payments, and We are unable to obtain that Life Insurance Policy at all, or We are unable to obtain it at an
amount substantially close to that shown on the Disclosure Statement as the Mortality Adjustment, We may
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cancel this transaction at any time. If We cancel this transaction after entry of a Court Order, You will cooperate
in the withdrawing or vacating of the Court Order. We may unilaterally waive this provision at any time.
5. YOUR PROMISES TO US
Before and after the Funding Date:
A. You will tell us right away if Your address or telephone number changes and do everything necessary, including
completing and signing all documents to:
. sell the right to the Purchased Payments to Us;
. change the beneficiary as required by this Contract;
. correct any documentation errors in the Contract Documents or Closing Documents.
. Assist Us in obtaining and maintaining the Life Insurance Policy.
You will also tell Us if any of the following occurs:
. a violation of this Contract; or
. anything that could negatively affect the Annuity Policy, the Purchased Payments, the Life Insurance Policy or
this Contract.
You will not:
. agree to sell the Purchased Payments to any Person other than Us;
. change the Annuity Policy’s beneficiary to any Person other than Your estate until We have collected all of
the Purchased Payments; or
. withdraw cash from, borrow against, or change the Annuity Policy.
You will give Us information necessary to update Your representations, warranties, and promises in this Contract. You
will also update any documents and information so they will be true and complete on the Funding Date.
We are now, and will continue in the future, to rely on the representations and warranties You have given Us. We will
confirm the accuracy of Your representations and warranties. You must cooperate with this confirmation and provide
complete access to any information We believe necessary.
You agree that updating representations, warranties, promises, documents and other information will not cure a
breach of any representation or warranty made by You that was not true and complete.
You agree that Our obligation to You under this Contract is strictly limited to the requirement to pay You what We owe
You under the terms of this Contract, after receipt and approval of the Closing Documents, final underwriting approval
and Court Approval. Under no circumstances will We be liable for any consequential damages.
You agree to cooperate with Us at any time to establish the Life Insurance Policy. You will not be required to pay any
Life Insurance Policy costs other than those shown on the Disclosure Statement as the Mortality Adjustment. You also
agree that You will, at Your own expense, on a quarterly basis, during the period that the Life Contingent Purchased
Payments are outstanding, execute and notarize the forms We have provided to confirm You are still alive. You
understand that the Annuity Company Issuer requires this in order to pay Us the Life Contingent Purchased Payments
and that You will be in Default under this Contract if You fail to do so.
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L You hereby appoint Us and any of Our designees, with full power of substitution as your Attorney in Fact, to act in
Your name and place for the purpose of assigning and transferring ownership of any and all right, title and interest
that You have in the Purchased Payments and for Us to obtain all benefits contemplated by this transaction. You also
give Us full authority to act in any way proper and necessary to exercise this Attorney in Fact appointment including,
but not limited to: (1) negotiating, endorsing and executing checks, drafts and other instruments in Your name; and
(2) instituting, maintaining, compromising, settling and terminating any litigation or other proceedings related to the
Purchased Payments. This power of attorney is coupled with an interest and shall survive death or disability.
6. CANCELLATION BY US
We may cancel this Contract before the Funding Date if:
A. You breach any representation, warranty, or promise in any Contract Documents or Closing Documents.
B. The petition for the Court Order is contested, opposed, or not approved.
We are sued or threatened with a lawsuit or an arbitration about this Contract or the Annuity Policy, or the Life
Insurance Policy, if any.
There is any threatened, pending, or final action, or change in law or rule challenging the legality of, or negatively
affecting this transaction.
You file for, or are forced into bankruptcy.
You die.
Final approval has not been given by Our underwriting department.
The Purchase Contract is not signed by You and received back by Us by November 27, 2023.
A major rating agency downgrades the Issuer's credit rating.
The Issuer is, or becomes insolvent, or under regulatory supervision.
If applicable, We are unable to obtain the Life Insurance Policy at all, or are unable to obtain it at an amount
substantially close to the amount shown on the Disclosure Statement as the Mortality Adjustment.
With respect to A through K above, to the extent permitted by applicable law, the arbitration provision in Section 10 of
this Contract shall survive the termination, cancellation or rescission of this Contract.
a CANCELLATION BY YOU
A. (1) YOU MAY CANCEL THIS CONTRACT WITHOUT PENALTY OR FURTHER OBLIGATION AT ANY TIME
WITHIN FIVE (5) BUSINESS DAYS AFTER THE DATE YOU RECEIVE PAYMENT HEREUNDER FROM US. IN
ORDER FOR THE CANCELLATION TO BE EFFECTIVE, YOU MUST SEND A NOTICE POSTMARKED AT ANY
TIME WITHIN FIVE BUSINESS DAYS AFTER YOU RECEIVE PAYMENT HEREUNDER FROM US (This is the
rescission period).
(2) YOUR NOTICE IS TO BE SENT EITHER BY CERTIFIED OR REGISTERED MAIL (RETURN RECEIPT
REQUESTED) OR FEDEX OR ANOTHER MAJOR OVERNIGHT DELIVERY SERVICE. THE NOTICE MUST
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INCLUDE A BANK OR CERTIFIED CHECK MADE PAYABLE TO US, IN THE FULL AMOUNT RECEIVED BY
YOU. YOUR NOTICE MUST BE SENT TO:
Stone Street Originations, LLC
Attention: Manager of Operations
1200 Morris Drive,
Chesterbrook, PA 19087
GEORGIA RESIDENTS: YOU MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO 5:00 P.M.
OF THE TWENTY-FIRST DAY FOLLOWING RECEIPT OF THE ENCLOSED “NOTICE OF CANCELLATION
RIGHTS” FORM, OR AT THE HEARING ON THE APPLICATION FORAUTHORIZATION OF A TRANSFER OF
STRUCTURED SETTLEMENT PAYMENT RIGHTS, OR AT ANYTIME WITHIN FIVE (5) BUSINESS DAYS
AFTER YOU RECEIVE PAYMENT HERE UNDER FROM US, WHICHEVER EVENT OCCURS LAST (This is the
Georgia rescission period). IN ORDER FOR THE CANCELLATION TO BE EFFECTIVE, YOU MUST SIGN THE
ENCLOSED “NOTICE OF CANCELLATION RIGHTS” FORM AND MAIL OR DELIVER IT TO US AS SPECIFIED
IN THAT NOTICE AND YOU MUST RETURN ALL AMOUNTS (PURCHASE PRICE OR OTHERWISE) RECEIVED
BY YOU ACCORDING TO THE REQUIREMENTS OF 7 (A) (2) ABOVE.
WEST VIRGINIA RESIDENTS: IN ORDER FOR YOUR CANCELLATION TO BE EFFECTIVE, YOUR NOTICE
CAN BE SUBMITTED VIA PHONE, MAIL, OR FACSIMILE. ANY AMOUNTS ADVANCED BY US IN
CONTEMPLATION OF THE TRANSFER SHALL BE IMMEDIATELY REFUNDED TO US. IF YOU DISMISS
YOUR ACTION AFTER APPOINTMENT OF A GUARDIAN AD LITEM, OR RESCIND YOUR TRANSFER
AGREEMENT (PURCHASE CONTRACT) WITHIN THE RESCISSION PERIOD IN 7(A) (1) ABOVE, YOU SHALL
BE RESPONSIBLE FOR THE FILING FEE AND ANY GUARDIAN AD LITEM FEES.
With respect to A through C above, to the extent permitted by applicable law, the arbitration provision
in Section 10 of this Contract shall survive the termination, cancellation or rescission of this Contract.
8 NOTICES
A. All notices about this Contract must be in writing.
All notices must be sent either by: (1) certified or registered mail (return receipt requested); or (2) FedEx or another
major overnight delivery service with a delivery tracking system and are considered given when delivered as follows:
If to You: to the most recent address for You listed in Our files. If to Us: to the address listed in Section 7(A) (2) of
this Contract.
9 EVENTS OF DEFAULT
You will be in default if You:
A. fail to comply with any terms or conditions of this Contract; or
B. breach any of Your representations, warranties and promises in this Contract.
If You are in default, even if You have not rejected the arbitration provision (see Section 10 of this Contract), We have the right
to enforce Our rights against You in court to make You perform Your promises or to get money from You. If We sue You in
court in connection with a Claim that is subject to arbitration under the arbitration provision in Section 10 of this Contract, and
You have not rejected the arbitration provision, You will have the option of remaining in court or seeking to compel arbitration
of that Claim under the terms of the arbitration provision.
10. ARBITRATION PROVISION
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To the extent permitted by applicable law, You and We agree to the following arbitration provision.
YOU HAVE THE RIGHT TO REJECT THIS ARBITRATION PROVISION AS SET FORTH BELOW. If You do not reject
this arbitration provision and a Cl: is arbitrated, You will not have the right to: (1) have a court or a jury
decide the Cl; im; (2) engage in information gathering (discovery) to the same extent as in court; (3) participate
in a class action in court or in arbitration; or (4) join or consolidate a im with claims of any other person. The
right to appeal is more Ii ited in arbitration than in court and other rights in court may be unavailable or
limited in arbitration.
Claims Subject to Arbitration. “Claim” subject to arbitration is any claim, dispute or controversy between You and Us
(other than an Excluded Claim or Proceeding as set forth below), whether preexisting, present or future, which arises out of, or
relates to the Contract, the negotiations related thereto, the breach thereof or any other transaction conducted with us in
connection with the Contract. “Claim” has the broadest possible meaning and includes initial claims, counterclaims, cross-
claims, third-party claims and federal, state, local and administrative claims. It includes disputes based upon contract, tort,
consumer rights, fraud and other intentional torts, constitution, statute, regulation, ordinance, common law and equity and
includes claims for money damages and injunctive or declaratory relief. Upon the demand of You or Us, Claim(s) will be
resolved by individual (not class or class-wide) binding arbitration in accordance with the terms specified in this arbitration
provision.
Special Defi: ions. Solely for purposes of this arbitration provision, in addition to the meanings set forth in this Contract:
(1) “We,” “Us” and “Our” also (a) refer to Our employees, officers, directors, parents, controlling persons, subsidiaries and
affiliates and (b) apply to third parties if You assert a Claim against such third parties in connection with a Claim you assert
against Us; and (2) “You” or “Your” also refer to Your current or former spouse(s), children. heirs, estate, executors,
successors, assigns, representatives and beneficiaries.
Excluded Claim or Proceeding. Notwithstanding the foregoing, “Claim” does not include any dispute or controversy about
the validity, enforceability, coverage or scope of this arbitration provision or any part thereof (including, without limitation, the
“Class Action Waiver” set forth below and/or this sentence); all such disputes or controversies are for a court and not an
arbitrator to decide. However, any dispute or controversy that concerns the validity or enforceability of the Contract as a whole
is for the arbitrator, not a court, to decide. In addition, We will not require You to arbitrate 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.
Federal Arbitration Act. Notwithstanding any other provision in this Contract, You and We agree that this Contract
evidences a transaction involving interstate commerce and that the Federal Arbitration Act (Title 9 of the United States Code)
(“FAA”) shall govern its interpretation and enforcement and proceedings pursuant thereto. To the extent state law is applicable
under the FAA, the law of the state of Your domicile (where You regularly reside on the Contract Date) shall apply.
Class Action Waiver. Notwithstanding any other provision of this Contract, if a Claim is arbitrated, neither You
nor We will have the right: (a) to participate in a class action, private attorney general action or other
representative acti court or in arbitration, either as a class representative or class member; or (b) to join or
consolidate Claims with claims of any other Persons. No arbitrator shall have authority to conduct any
7
arbitré n invi lation of this pro ion (provided, however, that the Class Action Waiver does not apply to any
laws or ad istrative proceeding filed against us by a state or federal government agency even when such
agency is seeking relief on behalf of a class of borrowers including You. This means that We will not have the
right to compel arbitration of any claim brought by such an agency). The Class Action Waiver is nonseverable
from tl arbitration provision. If the Class Action Waiver is limited, voided or found unenforceable, then this
arbitration provision (except for this sentence) shall be null and void with respect to such proceeding, subject to
the right to appeal the limitation or invalidation of the Class Action Waiver.
Arbitration Procedures. If You or We seek to arbitrate a Claim, the Party seeking arbitration must notify the other Party in
writing. This notice can be given after the beginning of a lawsuit and can be given in papers filed in the lawsuit, such as a
motion to compel arbitration. Otherwise, Your notice must be sent to Us at the address specified in Section 7 (A) (2) of this
Contract and Our notice must be sent to the most recent address for You in our files. Any arbitration hearing that You attend
will take place in a venue of Your domicile. If a Party files a lawsuit in court asserting Claim(s) that are subject to arbitration,
and the other Party files a motion to compel arbitration with the court, which is granted, it will be the responsibility of the Party
prosecuting the Claim(s) to select an arbitration administrator in accordance with the paragraph below and commence the
arbitration proceeding in accordance with the administrator’s rules and procedures.
PURCHASE CONTRACT FORM 1
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Account ID: 1612959
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The arbitration will be administered by the American Arbitration Association (“AAA”), 1633 Broadway, 10th Floor, New York, NY
10019, www.adr.org, 1-800-778-7879 or JAMS, 1920 Main Street, Suite 300, Irvine, CA 92614, www.jamsadr.com, 1-800-352-
5267. The rules and forms of the AAA and JAMS may be obtained by writing to these organizations at the addresses listed
above. If the AAA and JAMS are unable or unwilling to serve as administrator, the Parties may agree upon another
administrator or, if they are unable to agree, a court shall determine the administrator. No company may serve as
administrator, without the consent of all Parties, if it adopts or has in place any formal or informal policy that is inconsistent
with and purports to override the terms of this arbitration provision. In the event of a conflict between the provisions of this
arbitration provision, on the one hand, and other provisions of this Contract or any applicable rules of the AAA or JAMS or other
administrator used, on the other hand, the provisions of this arbitration provision shall control.
A single arbitrator will be appointed by the administrator and must be a practicing attorney with ten or more years of
experience or a retired judge. The arbitrator will not be bound by judicial rules of procedure and evidence that would apply in
a court, or by state or local laws that relate to arbitration proceedings. The arbitrator will honor statutes of limitation and
claims of privilege recognized under applicable law. In determining liability or awarding damages or other relief, the arbitrator
will follow this Contract and the applicable substantive law, consistent with the FAA and this Contract, that would apply if the
matter had been brought in court. At Your written request, we will pay all filing, hearing and/or other fees charged by the
administrator and arbitrator to You for Claim(s) asserted by You in arbitration after You have paid an amount equivalent to the
fee, if any, for filing such Claim(s) in state or federal court (whichever is less) in the judicial district in which You reside. (If
You have already paid a filing fee for asserting the Claim(s) in court, You will not be required to pay that amount again). In
addition, the administrator may have a procedure whereby You can seek a waiver of fees charged to You by the administrator
and arbitrator. We will always pay any fees or expenses that We are required to pay by law or the administrator's rules or that
We are required to pay for this arbitration provision to be enforced. The arbitrator will have the authority to award attorneys’
and expert witness fees and costs to the extent permitted by this Contract, the administrator's rules or applicable law. The
arbitrator will always award You reasonable attorneys’ and expert witness fees and costs (a) if and to the extent You prevail on
Claims you assert against Us in an arbitration commenced by You and (b) to the extent required under applicable law for this
arbitration provision to be enforced. The arbitrator shall write a brief explanation of the grounds for the decision. A judgment
on the award may be entered by any court having jurisdiction.
Severability and Survival. If any part of this arbitration provision, other than the Class Action Waiver, is deemed or found to
be unenforceable for any reason, the remainder shall be enforceable. To the extent permitted by applicable law, this
arbitration provision shall survive the termination, cancellation or rescission of this Contract.
Effect of Arbitration Award. The arbitrator’s award shall be final and binding on all Parties, except for any right of appeal
provided by the FAA. However, if the amount of the Claim exceeds $50,000 or involves a request for injunctive or declaratory
relief that could foreseeably involve a cost or benefit to either Party exceeding $50,000, any Party can, within 30 days after the
entry of the award by the arbitrator, appeal the award to a three-arbitrator panel administered by the administrator. The panel
shall reconsider anew any aspect of the initial award requested by the appealing Party. The decision of the panel shall be by
majority vote. Reference in this arbitration provision to “the arbitrator” shall mean the panel if an appeal of the arbitrator's
decision has been taken. The costs of such an appeal will be borne in accordance with the above paragraph titled “Arbitration
Procedures.” Any final decision of the appeal panel is subject to judicial review only as provided under the FAA.
Right to Reject Arbitration Provision. You may reject this arbitration provision by sending Us written notice of Your
decision so that We receive it at the address listed below within forty-five (45) days of the Contract Date. Such notice must be
sent by certified or registered mail (return receipt requested) or by FedEx or another major overnight delivery service with a
delivery tracking system; must include a statement that You wish to reject the arbitration provision along with Your name,
address, Account I.D. number and Your signature; and must be delivered to Us at the address specified in Section 7 (A) (2) of
this Contract. This is the sole and only method by which You can reject this arbitration provision. Upon receipt of a rejection
notice, We will reimburse You for the standard cost of a certified or registered letter or overnight delivery. Rejection of this
arbitration provision will not affect any other terms of this Contract and will not result in any adverse consequence to You. You
agree that Our business records will be final and conclusive with respect to whether You rejected this arbitration provision in a
timely and proper fashion. This arbitration provision will apply to You and Us unless you reject it by providing
proper and timely notice as stated herein.
11. MISCELLANEOUS
A. You give Us permission to conduct background checks on You, including obtaining information from the credit
bureaus, in order to verify Your legal residence, contact information, and any other information We deem necessary
for this transa