Common use of Penalties for Misrepresentations Clause in Contracts

Penalties for Misrepresentations. In the event a Participant makes any material misrepresentations or provides any erroneous information in any communication with FAME, the Program or any service provider to the Program, including, without limitation, on the Account Application or any Account maintenance and servicing form, FAME may terminate a Participant’s Account and charge fees or expenses in addition to a 15% penalty on the investment earnings of the Account. Contributions made to an Account on behalf of a Designated Beneficiary are invested in one or more Portfolios based on an election on the Account Application (or any change to such election) made by a Participant. Assets of Portfolios are then invested in one or more Portfolio Investments recommended by the Investment Manager or a Sub-Advisor that reflect the investment strategies of the respective Portfolios, which FAME reviews and approves. There is no assurance that the strategy of any Portfolio will be successful. Participation in the Program is not considered to be part of an investment advisory service. Accordingly, the Participant will be responsible for monitoring and making investment decisions concerning his or her Account.‌ A Participant should consider which investment options are most appropriate given the other resources expected to be available to fund the Designated Beneficiary’s Qualified Higher Education Expenses, the age of the Designated Beneficiary, and the anticipated date of first use of funds in the Account for the Designated Beneficiary. A Participant should also consider the limited ability to change investment options for Contributions (and any earnings thereon) that have already been invested in an Account. Portfolios generally invest in one or more mutual funds, exchange traded funds or separate accounts managed by BlackRock or its affiliates. The Client Direct Series may also offer Portfolios managed by one or more Sub-Advisors, although currently there are no Sub-Advisors in the Client Direct Series. The Principal Plus Portfolio currently invests in a Funding Agreement issued by an insurance company, and may invest in corporate fixed-income investments and/or similar instruments. Under normal market conditions, the NextGen Savings Portfolio will only make deposits in the Bank Deposit Account.

Penalties for Misrepresentations. In the event a Participant makes any material misrepresentations or provides any erroneous information in any communication with FAME, the Program or any service provider to the Program, including, without limitation, on the Account Application or any Account maintenance and servicing form, FAME may terminate a Participant’s Account and charge fees or expenses in addition to a 15% penalty on the investment earnings of the Account. Contributions made to an Account on behalf of a Designated Beneficiary are invested in one or more Portfolios based on an election on the Account Application (or any change to such election) made by a Participant. Assets of Portfolios are then invested in one or more Portfolio Investments recommended by the Investment Manager or a Sub-Advisor that reflect the investment strategies of the respective Portfolios, which FAME reviews and approves. There is no assurance that the strategy of any Portfolio will be successful. Participation in the Program is not considered to be part of an investment advisory service. Accordingly, the Participant will be responsible for monitoring and making investment decisions concerning his or her Account.‌ A Participant should consider which investment options are most appropriate given the other resources expected to be available to fund the Designated Beneficiary’s Qualified Higher Education Expenses, the age of the Designated Beneficiary, Expenses and the anticipated date of first use of funds in the Account for the Designated Beneficiary. A Participant should also consider the limited ability to change investment options for Contributions (and any earnings thereon) that have already been invested in an Account. Portfolios generally invest in one or more mutual funds, exchange traded funds or separate accounts managed by BlackRock or its affiliates. The Client Direct Series may also offer Portfolios managed by one or more Sub-Advisors, although currently there are no Sub-Advisors in the Client Direct Series. The Principal Plus Portfolio currently invests in a Funding Agreement issued by an insurance company, and may invest in corporate fixed-income investments and/or similar instruments. Under normal market conditions, the NextGen Savings Portfolio will only make deposits in the Bank Deposit Account.