NEW HORIZONS COMPUTER LEARNING CENTERS - FDD UFOC ITEM 10 Detail

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ITEM 10: FINANCING

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4/8/2008 11:51 AM

(1)                If you meet our credit standards, we may finance up to 100% of the initial franchise fee payable by a start up or conversion franchisee at an APR of 10% (or the highest rate permitted by law, whichever is lower), using our standard form initial franchise fee promissory note (Exhibit E to this Franchise Disclosure Document). The only security we require for repayment is a personal guarantee of the note by you and your spouse and by all equity owners of the franchisee. The note may be prepaid without penalty at any time during its term. If you do not pay on time, we can call the loan and demand immediate payment of the full outstanding balance and obtain court costs and attorney''s fees if a collection action becomes necessary. We may also terminate your franchise if you do not make your payments on time more than 2 times during the note''s term. You waive your rights to notice of a collection action and to assert any defenses to collection. Although we have no present plans to do so, we may sell these notes at a discount to a third party who may be immune under the law to any defenses to payment you may have against us. Except as we disclose in this Item 10, the note that you sign does not require you to waive your legal right to receive notices, waive defenses against us, or confess a judgment, although you may lose certain defenses against us and others in a collection action brought by a third party to whom we sell the note. We have no plans to sell notes or other commercial paper from franchisees. We do not receive direct or indirect payments for helping to arrange financing or leases from third parties.

(2)                We may help arrange equipment financing or leasing from third party finance companies at prevailing market rates and terms. We do not own any interest in these finance companies. Except as described in the preceding sentence, we do not arrange financing from other sources.