Exhibit 10.1
SECOND AMENDED AND RESTATED
HSBC REFUND ANTICIPATION LOAN
PARTICIPATION AGREEMENT
NOTE: CERTAIN MATERIAL HAS BEEN OMMITTED FROM THIS AGREEMENT PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2. THE LOCATIONS OF THESE
OMISSIONS ARE INDICATED THROUGHOUT THE AGREEMENT BY THE FOLLOWING MARKINGS:
[***].
Dated as of January 12, 2010

 

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Table of Contents

                      Page(s)  
ARTICLE I
  DEFINITIONS     2  
 
           
Section 1.1.
  Definitions     2  
Section 1.2.
  Rules of Construction     2  
Section 1.3.
  Corporate Reorganizations     2  
Section 1.4.
  Funding for Purchases of Participation Interests in HSBC RALs     3  
 
           
ARTICLE II
  REPRESENTATIONS AND WARRANTIES OF HSBC NA, HSBC TRUST, AND HSBC TFS     4  
 
           
Section 2.1.
  Representations Incorporated by Reference     4  
Section 2.2.
  [Intentionally Deleted]     4  
Section 2.3.
  Representations and Warranties of HSBC NA, HSBC TRUST, AND HSBC TFS Relating
to Participated HSBC RALs     4  
 
           
ARTICLE III
  REPRESENTATIONS AND WARRANTIES OF BFC     5  
 
           
Section 3.1.
  Representations Incorporated by Reference     5  
 
           
ARTICLE IV
  PURCHASE AND SALE OF PARTICIPATION INTERESTS     5  
 
           
Section 4.1.
  Purchase and Sale of Participation Interests in HSBC RALs     5  
Section 4.2.
  Purchase Price     6  
Section 4.3.
  Payment     6  
Section 4.4.
  Right to Exclude Certain RALs     6  
Section 4.5.
  Certain Rights of HSBC NA and HSBC Trust     7  
Section 4.6.
  Information to be Furnished by HSBC TFS to BFC     7  
Section 4.7.
  True Sale and Nonconsolidation Opinions     7  
Section 4.8.
  Right of BFC to Sell Participation Rights     8  
 
           
ARTICLE V
  SERVICING OF PARTICIPATED HSBC RALS     9  
 
           
Section 5.1.
  Servicing Agreement     9  
 
           
ARTICLE VI
  REPURCHASE OF PARTICIPATION INTERESTS     9  
 
           
Section 6.1.
  Repurchase Events     9  
Section 6.2.
  Repurchase Remedy     10  
Section 6.3.
  Procedures for Repurchase     10  
Section 6.4.
  Impairment     10  
 
           
ARTICLE VII
  TERM AND TERMINATION     10  

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Table of Contents (cont’d)

                      Page(s)  
Section 7.1.
  Term     10  
Section 7.2.
  Termination     11  
Section 7.3.
  Effect of Termination     11  
 
           
ARTICLE VIII
  DEFAULT OF HSBC BANK AND HSBC TFS AND REMEDIES OF BFC     11  
 
           
Section 8.1.
  HSBC NA, HSBC Trust, and HSBC TFS Events of Default     11  
Section 8.2.
  Remedies     12  
Section 8.3.
  Default Rate     12  
Section 8.4.
  Waiver     12  
 
           
ARTICLE IX
  DEFAULT OF BFC AND REMEDIES OF HSBC TFS     12  
 
           
Section 9.1.
  BFC Events of Default     12  
Section 9.2.
  Remedies     13  
Section 9.3.
  Default Rate     13  
Section 9.4.
  Waiver     13  
 
           
ARTICLE X
  MISCELLANEOUS     13  
 
           
Section 10.1.
  Independent Evaluation     13  
Section 10.2.
  Survival     13  
Section 10.3.
  No Waivers; Remedies Cumulative     14  
Section 10.4.
  Notices     14  
Section 10.5.
  Severability     14  
Section 10.6.
  Amendments and Waivers     14  
Section 10.7.
  Successors and Assigns     14  
Section 10.8.
  Headings     14  
Section 10.9.
  Alternative Dispute Resolution     14  
Section 10.10.
  Governing Law; Submission To Jurisdiction     15  
Section 10.11.
  Waiver of Jury Trial     15  
Section 10.12.
  Counterparts     15  
Section 10.13.
  Entire Agreement     15  
Section 10.14.
  Reinstatement     16  
Section 10.15.
  Advice of Counsel     16  
Section 10.16.
  No Strict Construction     16  
Section 10.17.
  Conflict of Terms     16  
Section 10.18.
  Further Execution     16  
Section 10.19.
  Expenses     16  
Section 10.20.
  No Implied Relationship     17  
Section 10.21.
  No Third Party Beneficiaries     17  
Section 10.22.
  Limitation of Scope of Representations and Warranties and Other Disclosures  
  17  

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SECOND AMENDED AND RESTATED
HSBC REFUND ANTICIPATION LOAN
PARTICIPATION AGREEMENT
     This Second Amended and Restated HSBC Refund Anticipation Loan
Participation Agreement (this “Second A&R Participation Agreement”), dated as of
January 12, 2010, is made by and among the following parties:
Block Financial LLC, a Delaware limited liability company (“BFC”);
HSBC Bank USA, National Association, a national banking association (“HSBC NA”);
HSBC Trust Company (Delaware), National Association (“HSBC Trust”); and
HSBC Taxpayer Financial Services Inc., a Delaware corporation (“HSBC TFS”).
RECITALS
     A. HSBC NA and HSBC Trust offer banking products and services, including
HSBC RALs offered through Block Offices.
     B. HSBC TFS is the servicer for HSBC NA and HSBC Trust with respect to HSBC
RALs..
     C. BFC offers financial products and services to individuals and business
entities, and purchases loans and participation interests in loans originated by
third party lenders.
     D. HSBC NA, HTMAC, HSBC TFS and certain of their Affiliates and certain
Affiliates of BFC entered into the HSBC Retail Settlement Products Distribution
Agreement, dated as of September 23, 2005 (the “Original Retail Distribution
Agreement”), which was subsequently amended by the Joinder and First Amendment
to Program Contracts, dated as of November 10, 2006 (the “First Amendment”),
pursuant to which, inter alia, HSBC Trust was added and HTMAC was removed to
reflect the replacement of HTMAC by HSBC TFS as a party to the Program
Contracts, and which was further amended by the Second Amendment to Program
Contracts, dated as of November 13, 2006 (the “Second Amendment”), pursuant to
which, inter alia, IMAs were added as a type of Settlement Product offered to
Clients, and which was further amended by the Third Amendment to Program
Contracts, dated December 5, 2008 (the “Third Amendment”) (the Original Retail
Distribution Agreement, as amended by the First Amendment, the Second Amendment,
and the Third Amendment, the “Retail Distribution Agreement”).
     E. HSBC NA, HTMAC, HSBC TFS and BFC entered into the HSBC Settlement
Products Servicing Agreement, dated as of September 23, 2005 (the “Original
Servicing Agreement”), to set forth the terms and conditions pursuant to which
HSBC TFS would service, administer and collect HSBC Settlement Products
originated by HSBC NA, which was subsequently amended by the First Amendment,
pursuant to which, inter alia, HSBC Trust was added as a party thereto, HTMAC
was removed as a party thereto, and HSBC TFS replaced HTMAC as a party thereto,
and which was further amended and restated pursuant to the First

 

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Amended and Restated HSBC Settlement Products Servicing Agreement, dated
November 13, 2006 (the “First A&R Servicing Agreement”), to provide for, inter
alia, the servicing, administration and collection of IMAs, and which was futher
amended by the Second Amendment and the Third Amendment (the Original Servicing
Agreement, as amended by the First Amendment, Second Amendment, Third Amendment,
and the First A&R Servicing Agreement, the “Servicing Agreement”).
     F. HSBC NA, HTMAC, HSBC TFS and BFC entered into the HSBC Refund
Anticipation Loan Participation Agreement, dated September 23, 2005 (the
“Original Participation Agreement”), to set forth the terms and conditions of
HTMAC’s sales to BFC, and BFC’s purchases from HTMAC, of Participation Interests
in certain HSBC RALs originated by HSBC NA, which was amended by the First
Amendment, pursuant to which, inter alia, HSBC Trust was added, HTMAC was
removed and HSBC TFS replaced HTMAC as a party thereto, and which was further
amended and restated by the First Amended and Restated HSBC Refund Anticipation
Loan and IMA Participation Agreement, dated as of November 13, 2006 (the “First
A&R Participation Agreement”), and which was further amended by the Second
Amendment and the Third Amendment.
     G. HSBC NA, HSBC Trust, HSBC TFS and BFC now desire to enter into this
Second A&R Participation Agreement to amend and restate the Original
Participation Agreement, as amended by the First Amendment, Second Amendment,
Third Amendment, and the First A&R Participation Agreement, (the Original
Participation Agreement, as amended by the First Amendment, Second Amendment,
Third Amendment, the First A&R Participation Agreement, and this Second A&R
Participation Agreement, the “Participation Agreement”).
AGREEMENT
     ACCORDINGLY, the parties to this Second A&R Participation Agreement hereby
agree as follows:
ARTICLE I
DEFINITIONS
     Section 1.1. Definitions. For all purposes of this Second A&R Participation
Agreement, except as otherwise expressly provided herein or unless the context
otherwise requires, capitalized terms not otherwise defined herein shall have
the meanings assigned to such terms in the Appendix of Defined Terms and Rules
of Construction attached to the Original Retail Distribution Agreement as
Appendix A, as amended pursuant to the First Amendment, and as further amended
pursuant to the Second Amendment (as amended, the “Appendix of Defined Terms and
Rules of Construction”), which is hereby incorporated by reference herein. All
other capitalized terms used herein shall have the meanings specified herein. In
the event that any definition specified in this Second A&R Participation
Agreement for any capitalized term is inconsistent with the definition specified
for such term in the Appendix of Defined Terms and Rules of Construction, the
definition in the Appendix of Defined Terms and Rules of Construction shall
govern.

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     Section 1.2. Rules of Construction. For all purposes of this Second A&R
Participation Agreement, unless the context otherwise requires, the rules of
construction set forth in the Appendix of Defined Terms and Rules of
Construction shall be applicable to this Second A&R Participation Agreement.
     Section 1.3. Corporate Reorganizations.
          (a) The Block Companies may assign their rights and obligations under
this Participation Agreement to one or more Subsidiaries of H&R Block without
the consent of the HSBC Companies if (i) such assignment is desirable in
connection with a reorganization of the business operations of H&R Block’s
Subsidiaries, (ii) such contemplated assignment will not materially adversely
affect any right or obligation of any HSBC Company under this Participation
Agreement, and (iii) the contemplated assignee (A) is a wholly owned (direct or
indirect) Subsidiary of H&R Block and (B) has the operational and financial
capacity to meet all obligations of the assigning Block Company under this
Participation Agreement contemplated to be assigned to it (a “Permitted Block
Assignment”). The assigning Block Companies shall provide each of the HSBC
Companies at least sixty (60) days prior written notice of any contemplated
Permitted Block Assignment. The parties hereto agree to amend this Participation
Agreement to the extent necessary to reflect such Permitted Block Assignment.
          (b) The HSBC Companies may assign their rights and obligations under
this Participation Agreement to one or more Subsidiaries of HSBC North American
Holdings, Inc. without the consent of the Block Companies if (i) such assignment
is desirable in connection with a reorganization of the business operations of
HSBC North American Holdings, Inc.’s Subsidiaries, (ii) such contemplated
assignment will not materially adversely affect any right or obligation of any
Block Company under this Participation Agreement, and (iii) the contemplated
assignee (A) is a wholly owned (direct or indirect) Subsidiary of HSBC North
American Holdings, Inc., (B) only with respect to any assignment by HSBC NA or
HSBC Trust under this Section 1.3(b), is a national bank or federal savings
association and (C) has the operational and financial capacity to meet all
obligations of the assigning HSBC Company under this Participation Agreement
contemplated to be assigned to it (a “Permitted HSBC Assignment”). The assigning
HSBC Companies shall provide each of the Block Companies at least sixty
(60) days prior written notice of any contemplated Permitted HSBC Assignment.
The parties hereto agree to amend this Participation Agreement to the extent
necessary to reflect such Permitted HSBC Assignment.
     Section 1.4. Funding for Purchases of Participation Interests in HSBC RALs.
          (a) HSBC TFS shall use its best efforts to obtain board of directors’
and all other required approvals of one of its Affiliates, or of a third party
lender, on or before July 1, 2006, to furnish a commitment to BFC for funding of
the purchase of Participation Interests in HSBC RALs pursuant to this
Participation Agreement; provided, that BFC timely furnishes such information as
is reasonably requested by such lender, such funding to be provided to BFC at an
interest rate of [***]. BFC shall provide a preliminary written notice to HSBC
TFS no later than September 1st of the year preceding each Tax Period during the
Term requesting funding for the purchase of Participation Interests during the
next Tax Period, which preliminary request shall be confirmed

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by BFC pursuant to a final written notice to HSBC TFS to be delivered no later
than October 1st of such year preceding such Tax Period.
          (b) Each Affiliate of HSBC TFS or third party lender, as applicable,
and BFC shall pay their own legal fees and expenses to document the funding
arrangements described in this Section 1.4.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF HSBC NA, HSBC TRUST AND HSBC TFS
     Section 2.1. Representations Incorporated by Reference. HSBC NA, HSBC Trust
and HSBC TFS each represent and warrant, with respect to itself only, to BFC
that each representation and warranty made by it in Article IV of the Retail
Distribution Agreement is true and correct, each and all of which are made as of
the date hereof and (except the representations and warranties in Section 4.6 of
the Retail Distribution Agreement) as of each day during the term of this
Participation Agreement.
     Section 2.2. [Intentionally Deleted]
     Section 2.3. Representations and Warranties of HSBC NA and HSBC Trust
Relating to Participated HSBC RALs. HSBC NA and HSBC Trust hereby represent and
warrant to BFC, as of each Closing Date:
          (a) Eligible RALs. Each Participated HSBC RAL is an Eligible RAL.
          (b) Sale and Ownership; Title. Each conveyance of a Participation
Interest by HSBC NA and HSBC Trust to BFC on such Closing Date constitutes
either (i) a valid sale, transfer, assignment, set over and conveyance to BFC of
all right, title and interest of HSBC NA and HSBC Trust in and to such
Participation Interest, free and clear of any Lien of any Person claiming
through or under HSBC NA, HSBC Trust or any of their Affiliates, or (ii) if it
is ultimately determined by a court of competent jurisdiction that a sale of a
Participation Interest from HSBC NA or HSBC Trust to BFC did not occur, then
such conveyance constitutes a grant of a security interest (as defined in the
UCC as in effect in the applicable state) by HSBC NA and HSBC Trust to BFC in
each Participation Interest purportedly conveyed and this Participation
Agreement constitutes a security agreement with respect thereto. On each Closing
Date, immediately prior to any such sale of (or grant of a security interest in)
a Participation Interest, HSBC NA and HSBC Trust will be the sole legal and
beneficial owner of, and will have marketable title to, the Participation
Interest, free and clear of any Lien (other than the interests of BFC
contemplated by this Participation Agreement). Neither HSBC NA nor HSBC Trust
nor any Person claiming through or under HSBC NA or HSBC Trust or any of their
Affiliates shall have any claim to or interest in such Participation Interest,
except for any interest of HSBC NA or HSBC Trust therein as a “debtor”
(specifically, as seller of payment intangibles) for purposes of Article 9 of
the UCC.

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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BFC
     Section 3.1. Representations Incorporated by Reference. BFC hereby
represents and warrants to HSBC NA, HSBC Trust, and HSBC TFS that each
representation and warranty made by BFC in Article III of the Retail
Distribution Agreement is true and correct, each and all of which are made as of
the date hereof and (except the representations and warranties in Section 3.6 of
the Retail Distribution Agreement) as of each day during the term of this
Participation Agreement.
ARTICLE IV
PURCHASE AND SALE OF PARTICIPATION INTERESTS
     Section 4.1. Purchase and Sale of Participation Interests in HSBC RALs.
          (a) Purchase and Sale of Participation Interests. Except as otherwise
provided herein, HSBC NA and HSBC Trust shall sell to BFC, and BFC shall
purchase from HSBC NA and HSBC Trust, a Participation Interest in each HSBC RAL
originated pursuant to any Distribution Agreement. Each such Participation
Interest shall be purchased by BFC on the first Business Day following the
Business Day on which the Disbursement Check for such HSBC RAL has been
presented to HSBC NA or HSBC Trust, as the case may be, for payment or
Electronic Disbursement for such HSBC RAL, has been made by HSBC NA or HSBC
Trust, as the case may be. HSBC NA and HSBC Trust shall convey each
Participation Interest to BFC upon BFC’s payment to HSBC NA and HSBC Trust of
the Purchase Price with respect to each such Participation Interest as set forth
in Section 4.3. If and to the extent that any conveyance of a Participation
Interest is not deemed a sale of a Participation Interest, (i) HSBC NA and HSBC
Trust hereby grants to BFC a security interest in each Participation Interest
that was purportedly conveyed, (ii) this Participation Agreement shall
constitute a security agreement with respect to such Participation Interest
under applicable Law and (iii) HSBC NA and HSBC Trust authorize the filing of
such financing and continuation statements with respect to Participation
Interests hereafter created or arising. Except for the representations and
warranties expressly made by HSBC NA and HSBC Trust in this Participation
Agreement, Participation Interests (and the acquisition thereof by BFC) shall be
without recourse to HSBC NA and HSBC Trust.
          (b) Applicable Percentage. The Applicable Percentage for each
Calculation Period during the term of this Participation Agreement shall be
49.999999%; provided, however, that (i) BFC may elect to reduce the Applicable
Percentage to zero (0) for a particular Calculation Period, by giving notice of
BFC’s election to HSBC NA and HSBC Trust on or before September 1 immediately
prior to such Calculation Period; (ii) BFC may elect to reduce the Applicable
Percentage to zero (0) for any applicable Calculation Period (or any remaining
portion thereof) from and after January 30 of such Calculation Period, by giving
notice of BFC’s election to HSBC NA and HSBC Trust on or before January 20 of
such Calculation Period for which the election is applicable; and (iii) BFC may
elect to reduce the Applicable Percentage to zero (0) at any time if BFC has
exceeded its internal funding limit, by giving notice thereof as soon as
practicable, but no later than 8:30 a.m., New York time, on the date of the
reduction of the Applicable Percentage to zero (0), it being understood that the
reduction of the Applicable

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Percentage to zero (0) shall only be in effect during the periods of time BFC
has exceeded its internal funding limit.
     Section 4.2. Purchase Price. The Purchase Price for each Participation
Interest on each Closing Date shall be equal to the product of (a) the
Applicable Percentage on such Closing Date, multiplied by (b) the Principal
Amount minus the RAL Fees and the Refund Account Fees of the HSBC RAL in which a
Participation Interest is being purchased.
     Section 4.3. Payment. Each Business Day, not later than 8:30 a.m., New York
time, HSBC TFS shall provide to BFC a list of the number and amount of
Disbursement Checks presented to HSBC NA or HSBC Trust for payment and
Electronic Disbursements made by HSBC NA and HSBC Trust for HSBC RALs on the
previous Business Day (excluding those Disbursement Checks and Electronic
Disbursements related to any HSBC RALs excluded pursuant to Section 4.4),
together with the aggregate Purchase Price for the Participation Interests
corresponding to such HSBC RALs. BFC shall pay to HSBC NA and HSBC Trust the
full amount of such Purchase Price not later than 4:30 p.m., New York time, on
the Business Day on which such notice is received. Such payment shall be made
via wire transfer to such domestic accounts designated by HSBC NA and HSBC Trust
by notice to BFC from time to time, in United States dollars.
     Section 4.4. Right to Exclude Certain HSBC RALs.
          (a) BFC may in its reasonable discretion elect not to purchase
Participation Interests in any group or groups of HSBC RALs, for any remaining
portion of a Calculation Period and/or for any future Calculation Periods, for
any of the following reasons: (i) to comply with applicable Laws on advice of
BFC’s counsel; (ii) to comply with a court order or a cease and desist order;
(iii) to comply with an agreement with any federal or state regulatory
authority; or (iv) any combination of the foregoing reasons.
          (b) HSBC NA or HSBC Trust may in its reasonable discretion elect not
to sell Participation Interests in any group or groups of HSBC RALs, for any
remaining portion of a Calculation Period and/or for any future Calculation
Periods, for any of the following reasons: (i) to comply with applicable Laws;
(ii) to comply with a court order or a cease and desist order; (iii) to comply
with an agreement with any federal or state regulatory authority; or (iv) any
combination of the foregoing reasons. Upon any such election, the parties shall
negotiate in good faith to promptly amend this Participation Agreement to the
extent necessary to achieve economic results for BFC that are comparable to the
economic results that BFC would have achieved had such election not been made.
          (c) Either BFC, on the one hand, or HSBC NA and HSBC Trust, on the
other, shall make such elections to exclude certain RALs by giving notice of
such election to the other party, which notice shall specify the group or groups
of HSBC RALs that the notifying party elects to exclude, the reason for such
exclusion and the remaining portion of a Calculation Period or future
Calculation Periods with respect to which such RALs shall be excluded, which
election shall become effective ten (10) days after the giving of such notice.

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     Section 4.5. Certain Rights of HSBC NA and HSBC Trust. The following
obligations of BFC under this Section 4.5 shall survive any termination of the
obligations of HSBC NA and HSBC Trust to sell, and the obligations of BFC to
purchase, Participation Interests in HSBC RALs pursuant to Section 4.1 and all
other events and conditions whatever:
          (a) Reimbursement. If, at any time, HSBC NA or HSBC Trust is required
to return or pay over any payment received by, or application of funds made by,
HSBC NA or HSBC Trust on account of any Participated HSBC RAL, BFC, promptly
upon notice from HSBC NA or HSBC Trust, shall pay to HSBC NA or HSBC Trust an
amount equal to the Applicable Percentage of the amount (net of related
Defaulted RAL Collection Fees (as that term is defined in the Servicing
Agreement), as the case may be, retained by the Servicer pursuant to the
Servicing Agreement) so returned or paid over, together with the Applicable
Percentage of any interest or penalties payable with respect to such
Participated HSBC RAL, as the case may be.
          (b) Payover. If BFC receives any payment for any HSBC RAL, BFC shall
deliver such payment to the Servicer for deposit into the applicable Deposit
Account as provided in Section 3.2 of the Servicing Agreement.
     Section 4.6. Information to be Furnished by HSBC TFS to BFC. HSBC TFS shall
provide to BFC, as of January 31, April 30, July 31, and October 31 of each year
during the Term, a listing by Calculation Period of the Principal Amounts and
other amounts owing on all unpaid Participated HSBC RALs, unique customer
identifiers related thereto, type of Settlement Product including, if
applicable, type of HSBC RAL, EIC indicator and any other information related
thereto mutually agreeable to the parties, such information to be provided
within five (5) Business Days after such dates. BFC shall not use such
information for any purpose other than asset verification and trend analysis and
agrees to hold such information in confidence and not to disclose such
information to any party other than its accountants and its legal counsel,
subject to the terms and conditions of Section 16.1 of the Retail Distribution
Agreement.
     Section 4.7. True Sale and Nonconsolidation Opinions. Upon BFC’s request,
HSBC NA and HSBC Trust agree to use commercially reasonable efforts to obtain
for BFC (a) a “true sale” opinion of counsel to HSBC NA and HSBC Trust with
respect to the sale by HSBC NA and HSBC Trust and the purchase by BFC or its
Affiliates of the Participation Interests in the HSBC RALs, and (b) a
“nonconsolidation” opinion of counsel to HSBC NA and HSBC Trust with respect to
HSBC NA and HSBC Trust and any other Affiliate of HSBC NA and HSBC Trust that
owns the Participation Interests prior to such sale and purchase, in both cases
in form and substance typically employed in off-balance sheet financing or sale
transactions generally; provided, however, that in connection with such efforts
(A) HSBC NA and HSBC Trust shall not be obligated to restructure the terms of
any Program Contract in any way that will have a Material Adverse Effect upon
the economic interests of HSBC NA or HSBC Trust or their Affiliates, and (B) the
failure of HSBC NA and HSBC Trust to obtain such opinions (after making
commercially reasonable efforts to do so) shall not constitute a breach of any
of HSBC NA’s or HSBC Trust’s obligations under this Participation Agreement and
shall in no event give rise to any liability on the part of HSBC NA, HSBC Trust
or any of their Affiliates. With respect to such opinions for a particular
Calculation Period, (i) BFC shall request such opinions as soon as reasonably
possible during the immediately preceding calendar year, and in any event, no
later

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than September 1st of such preceding calendar year absent major structural
changes to the terms of any Program Contract made or proposed by HSBC NA, HSBC
Trust or their Affiliates, (ii) BFC shall identify the entity, if any, with whom
it intends to effectuate any financing or sale transaction, and the proposed
structure of such financing or sale transaction, as soon as reasonably possible
during the immediately preceding calendar year, and in any event, no later than
September 1st of such preceding calendar year absent major structural changes to
the terms of any Program Contract made or proposed by HSBC NA, HSBC Trust or
their Affiliates, and (iii) HSBC NA and HSBC Trust and their Affiliates and BFC
shall cooperate and use commercially reasonable efforts to complete all changes
to the terms of all Program Contracts, if any, and the legal documents and
agreements reflecting such changes, if any, as soon as reasonably possible
during the immediately preceding calendar year, and in any event no later than
October 15th of such preceding calendar year absent major structural changes to
any such agreement made or proposed by BFC or HSBC NA, HSBC Trust or their
Affiliates. BFC shall be solely responsible for all legal fees of the parties
associated with any opinion undertaken pursuant to this Section 4.7. In
connection with any request by BFC for an opinion pursuant to this Section 4.7
for a particular Calculation Period, HSBC NA and HSBC Trust shall, upon
reasonable request by BFC, provide to BFC copies of all material operative
agreements executed by HSBC NA, HSBC Trust or thier Affiliates relating to the
origination of HSBC RALs by the Originator, or the sale and servicing of any of
HSBC NA’s or HSBC Trust’s retained interests in the HSBC RALs, for such
Calculation Period, as well as all material operative agreements executed by
HSBC NA or HSBC Trust relating to the financing or sale of such retained
interests for such Calculation Period, in each case only to the extent (y) such
agreements are reasonably necessary to be reviewed by BFC in connection with the
opinions contemplated by this Section 4.7, and (z) the terms of such agreements
permit disclosure to third parties; provided, however, that HSBC NA and HSBC
Trust shall not add any provision to any such agreement that unreasonably
prohibits disclosure to BFC, its accountants or counsel engaged in connection
with the issuance of any opinion pursuant to this Section 4.7, or the entity, if
any, engaged by BFC to effectuate any financing or sale transaction. BFC hereby
agrees to hold all such agreements in strict confidence and not to provide any
copies or disclose any terms therein to any party other than its accountants,
its counsel and the entity, if any, with whom BFC proposes to effectuate any
financing or sale transaction, subject to the terms and provisions of
Section 16.1 of the Retail Distribution Agreement (provided that references
therein to any Program Contract shall be deemed to be references to such
material operative agreements for purposes of this sentence); provided, however,
that, notwithstanding any other provision in this Participation Agreement, if
such entity or an Affiliate of such entity is deemed by HSBC NA or HSBC Trust to
be a competitor of HSBC NA, HSBC Trust or HSBC TFS in the making or servicing of
RALs, then the disclosure of such agreements to such entity may be restricted by
HSBC NA or HSBC Trust to the extent deemed necessary by HSBC NA or HSBC Trust,
in its sole discretion, to protect its business interests and trade secrets.
     Section 4.8. Right of BFC to Sell Participation Rights. If BFC has elected
not to purchase a Participation Interest as to any Calculation Period, BFC shall
have the right to sell, assign and transfer its rights to purchase Participation
Interests as to such Calculation Period without the consent of HSBC NA or HSBC
Trust if (a) such contemplated sale and assignment will not materially adversely
affect any right or obligation of HSBC NA or HSBC Trust under this Participation
Agreement, and (b) the contemplated purchasers and assignees (i) have the
operational and financial capacity to meet all obligations of BFC under this
Participation

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Agreement contemplated to be assigned to them and (ii) are not, and will not
become upon effectiveness of such contemplated purchase and assignment, subject
to any Law or consent that could reasonable be deemed to require any
Governmental Approval or third-party consent, that has not been obtained, to
carry out any of the obligations contemplated to be purchased and assigned to
them. BFC shall provide HSBC NA and HSBC Trust at least five (5) Business Days
prior notice of any contemplated sale and assignment, which notice shall specify
the portion of BFC’s rights to purchase Participation Interests which it
proposes to sell, the Person or Persons to whom it proposes to sell such rights,
the price and the terms and conditions of the proposed sale of such rights
contained in any bona fide offer to purchase such rights (the “Offer”). Within
five (5) Business Days after such notice, HSBC NA, HSBC Trust or their
Affiliates may elect, upon notice to BFC, to purchase from BFC the rights to
purchase Participation Interests proposed to be sold, at the price and on the
terms and conditions set forth in the Offer. If HSBC NA, HSBC Trust or their
Affiliates do not so elect to purchase BFC’s rights, BFC shall have the right to
sell such rights to the Person or Persons, at the price and on the terms and
conditions specified in the Offer, for a period of forty (40) days after BFC’s
notice of the Offer to HSBC NA and HSBC Trust.
ARTICLE V
SERVICING OF PARTICIPATED HSBC RALS
     Section 5.1. Servicing Agreement. HSBC NA, HSBC Trust, BFC and HSBC TFS (on
its own behalf and as Servicer) are parties to the Servicing Agreement .
Pursuant to the terms of the Servicing Agreement, the Servicer shall perform all
servicing acts with respect to Participated HSBC RALs including, but not limited
to, performing payment processing, record keeping, collecting and monitoring all
payments made with respect to Participated HSBC RALs, other routine customer
service functions and distribution of funds.
ARTICLE VI
REPURCHASE OF PARTICIPATION INTERESTS
     Section 6.1. Repurchase Events.
          (a) If HSBC NA and HSBC Trust shall breach any of their
representations and warranties made in Section 2.3 and the HSBC RAL underlying
such Participation Interest was not fully collected by December 31 immediately
following the Tax Period in which such HSBC RAL was originated, then BFC shall
have the repurchase rights set forth in Section 6.2.
          (b) If a Participated HSBC RAL is not an Eligible RAL as a result of
the failure to satisfy the conditions set forth in the definition of Eligible
RAL (contingent on that failure not being caused by any action or inaction by
BFC to perform its explicit obligations under this Participation Agreement), and
such Participated HSBC RAL was not fully collected by December 31 immediately
following the Tax Period in which such HSBC RAL was originated, then BFC shall
have the repurchase rights set forth in Section 6.2.
     Section 6.2. Repurchase Remedy. In the event of a breach as set forth in
Section 6.1, then, upon the earlier to occur of the discovery by BFC of such
breach or event, or receipt by BFC of notice from HSBC NA or HSBC Trust of such
breach or event, BFC may by notice then

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given in writing to HSBC NA and HSBC Trust direct HSBC NA or HSBC Trust to
repurchase the Participation Interest in each such Participated HSBC RAL within
thirty (30) days of such notice (or within such longer period as may be
specified in such notice but in no event later than one hundred twenty
(120) days) on a date specified by BFC occurring within such applicable period,
on the terms and conditions set forth in Section 6.3.
     Section 6.3. Procedures for Repurchase. When the provisions of Section 6.2
require repurchase of a Participation Interest, HSBC NA or HSBC Trust shall
purchase such Participation Interest by remitting to BFC an amount equal to the
Repurchase Value of the Participation Interest as of the date of such
repurchase. Such remittance shall be made to BFC at such account designated by
BFC by notice to HSBC NA or HSBC Trust, in United States dollars and in
immediately available funds, without setoff, withholding, counterclaim or other
deduction of any nature whatsoever. Upon such remittance, BFC shall
automatically and without further action be deemed to transfer, assign, set over
and otherwise convey to HSBC NA or HSBC Trust, without recourse, representation
or warranty (except for the warranty that since the date of conveyance by HSBC
NA or HSBC Trust to BFC, BFC has not sold, transferred or encumbered any such
Participation Interest), all right, title and interest of BFC in and to such
Participation Interest. BFC shall execute such documents and instruments of
transfer and assignment and take other actions as shall reasonably be requested
by HSBC NA or HSBC Trust to evidence the conveyance of such Participation
Interest, all monies due or to become due with respect thereto and all proceeds
thereof pursuant to this Section 6.3. The obligation of HSBC NA or HSBC Trust to
repurchase Participation Interests in HSBC RALs in accordance with this
Section 6.3 shall constitute the sole remedy respecting the occurrence of the
events specified in Section 6.1.
     Section 6.4. Impairment. For the purposes of this Article VI, no proceeds
of a HSBC RAL shall be deemed to be impaired hereunder solely because such
proceeds are held by HSBC NA or HSBC Trust for more than the applicable period
under Section 9-315(d) of the UCC as in effect in the State of Delaware.
ARTICLE VII
TERM AND TERMINATION
     Section 7.1. Term. The “Initial Term” of this Second A&R Participation
Agreement shall commence as of January 12, 2010 and shall expire on June 30,
2011. In the event the Block Companies elect to renew the Retail Distribution
Agreement for not more than two (2) successive one year periods (each such one
year period is referred to as a “Renewal Term”), this Participation Agreement
shall be automatically renewed for each Renewal Term so elected by the Block
Companies, unless BFC elects not to renew this Participation Agreement for a
Renewal Term by providing written notice to HSBC NA, HSBC Trust and HSBC TFS not
later than ninety (90) days prior to the expiration of the Initial Term or, if
the Participation Agreement was renewed, the Renewal Term. The Initial Term and
any Renewal Term(s) are collectively referred to as the “Term”. Notwithstanding
the provisions of this Section 7.1, this Participation Agreement may be
terminated prior to the expiration of the Initial Term or any Renewal Term in
accordance with the provisions of Section 7.2.

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     Section 7.2. Termination.
          (a) This Participation Agreement may be terminated as follows:
               (1) upon the mutual written agreement of all of the parties
hereto;
               (2) upon the expiration or termination of the Retail Distribution
Agreement;
               (3) by BFC in accordance with Section 18.2(b) of the Retail
Distribution Agreement; or
               (4) by HSBC NA, HSBC Trust or HSBC TFS in accordance with
Section 19.2(b) of the Retail Distribution Agreement.
          (b) BFC may terminate this Participation Agreement pursuant to
Section 8.2(b).
          (c) HSBC NA, HSBC Trust, or HSBC TFS may terminate this Participation
Agreement pursuant to Section 9.2(b).
     Section 7.3. Effect of Termination. Termination pursuant to Section 7.2
shall not affect the rights or obligations of the parties to this Participation
Agreement or any other Program Contract arising prior to the termination of this
Participation Agreement, including the obligations of the Servicer under the
Servicing Agreement.
ARTICLE VIII
DEFAULT OF HSBC NA, HSBC TRUST AND HSBC TFS AND REMEDIES OF BFC
     Section 8.1. HSBC NA, HSBC Trust, and HSBC TFS Events of Default. The
occurrence of any one or more of the following events for any reason whatsoever
(whether voluntary or involuntary, by operation of Law or otherwise) shall
constitute an event of default with respect to HSBC TFS. The occurrence of any
one or more of the following events with respect to HSBC NA or HSBC Trust, as
applicable, for any reason whatsoever (whether voluntary or involuntary, by
operation of Law or otherwise) shall constitute an event of default with respect
to HSBC NA or HSBC Trust, as applicable.
          (a) HSBC NA, HSBC Trust or HSBC TFS, as applicable, fails to observe
or perform any covenant applicable to it contained in this Participation
Agreement (or, in the event such covenant does not contain a Material Adverse
Effect qualification, so long as such failure could reasonably be expected to
have a Material Adverse Effect), following receipt of notice of such failure and
the same shall remain unremedied for five (5) days or more following receipt of
such notice;
          (b) any representation, warranty, certification or statement made by
HSBC NA, HSBC Trust or HSBC TFS, as applicable, in this Participation Agreement
is incorrect in any respect (or, in the event such representation, warranty,
certification or statement made in this Participation Agreement does not contain
a Material Adverse Effect qualification, so long as

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such incorrect representation, warranty, certification or statement could
reasonably be expected to have a Material Adverse Effect); or
          (c) a HSBC Event of Default occurs under the Retail Distribution
Agreement.
     Section 8.2. Remedies. If any event of default by HSBC NA, HSBC Trust or
HSBC TFS under Section 8.1 has occurred and is continuing and adversely affects
BFC, the following actions may be taken:
          (a) Termination. BFC may terminate this Participation Agreement. If
BFC terminates, this Participation Agreement under this Section 8.2(a), BFC
shall promptly provide written notice to HSBC NA and HSBC Trust and HSBC TFS.
The effective date of termination shall be the date such corresponding notice
was received by HSBC NA, HSBC Trust and HSBC TFS.
          (b) Other Rights and Remedies. BFC may exercise any rights and
remedies provided to it under this Participation Agreement or at law or equity.
     Section 8.3. Default Rate. If any event of default of HSBC NA, HSBC Trust
or HSBC TFS has occurred and is continuing, and all or any portion of the
Obligations hereunder of HSBC NA, HSBC Trust or HSBC TFS are outstanding, such
Obligations or any portion thereof shall bear interest at the Default Rate until
such Obligations or such portion thereof plus all interest thereon are paid in
full.
     Section 8.4. Waiver. BFC may waive, in writing, any event of default of
HSBC NA, HSBC Trust or HSBC TFS, as applicable. Upon any such waiver of a past
event of default of HSBC NA, HSBC Trust or HSBC TFS, as applicable, such event
of default shall cease to exist; provided, however, that such waiver shall not
excuse or discharge any Obligations relating to or liabilities arising from such
event of default. No such waiver shall extend to any subsequent or other event
of default of HSBC NA, HSBC Trust or HSBC TFS, as applicable, or impair any
right consequent thereon except to the extent expressly so waived.
ARTICLE IX
DEFAULT OF BFC AND REMEDIES OF HSBC NA, HSBC TRUST, AND HSBC TFS
     Section 9.1. BFC Events of Default. The occurrence of any one or more of
the following events for any reason whatsoever (whether voluntary or
involuntary, by operation of Law or otherwise) shall constitute an event of
default with respect to BFC:
          (a) BFC fails to observe or perform any covenant applicable to it
contained in this Participation Agreement (or, in the event such covenant does
not contain a Material Adverse Effect qualification, so long as such failure
could reasonably be expected to have a Material Adverse Effect), and the same
shall remain unremedied for five (5) days or more following receipt of written
notice of such failure;
          (b) any representation, warranty, certification or statement made by
BFC in or pursuant to this Participation Agreement is incorrect in any respect
(or, in the event such representation, warranty, certificate or statement made
in this Participation Agreement does not

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contain a Material Adverse Effect qualification, so long as such incorrect
representation, warranty, certification or statement could reasonably be
expected to have a Material Adverse Effect); or
          (c) a Block Event of Default occurs under the Retail Distribution
Agreement.
     Section 9.2. Remedies. If any event of default by BFC under Section 9.1 has
occurred and is continuing and adversely affects HSBC NA, HSBC Trust or HSBC
TFS, as applicable, the following actions may be taken:
          (a) Termination. HSBC NA, HSBC Trust or HSBC TFS, as applicable, may
terminate this Participation Agreement. If any of HSBC NA, HSBC Trust or HSBC
TFS, as applicable, terminates this Participation Agreement under this
Section 9.2(a), such party shall promptly provide written notice to BFC. The
effective date of termination shall be the date such corresponding notice was
received by BFC.
          (b) Other Rights and Remedies. HSBC NA, HSBC Trust or HSBC TFS, as
applicable, may exercise any rights and remedies provided to it under this
Participation Agreement or at law or equity.
     Section 9.3. Default Rate. If any event of default of BFC has occurred and
is continuing, and all or any portion of the Obligations hereunder of BFC are
outstanding, such Obligations or any portion thereof shall bear interest at the
Default Rate until such Obligations or such portion thereof plus all interest
thereon are paid in full.
     Section 9.4. Waiver. HSBC NA, HSBC Trust or HSBC TFS, as applicable, may
waive, in writing, any event of default of BFC. Upon any such waiver of a past
event of default of BFC, such event of default of BFC shall cease to exist;
provided, however, that such waiver shall not excuse or discharge any
Obligations relating to or liabilities arising from such event of default of
BFC. No such waiver shall extend to any subsequent or other event of default of
BFC or impair any right consequent thereon except to the extent expressly so
waived.
ARTICLE X
MISCELLANEOUS
     Section 10.1. Independent Evaluation. BFC expressly acknowledges that
except as provided in Article II and the other Program Contracts, HSBC NA, HSBC
Trust and HSBC TFS have not made any representation or warranty, express or
implied, to BFC and no act by HSBC NA, HSBC Trust or HSBC TFS heretofore or
hereafter taken shall be deemed to constitute any representation or warranty by
HSBC NA, HSBC Trust or HSBC TFS to BFC; and (b) in connection with its entry
into and its performance of its obligations under this Participation Agreement,
BFC has made and shall continue to make its own independent investigation of the
economic and credit risks associated with the purchase of Participation
Interests.
     Section 10.2. Survival.
          (a) The rights and obligations of the parties hereto under
Sections 1.1, 1.2, 1.3, 1.4(b), 4.5 and 4.6, Article V and Article VI of this
Participation Agreement, shall survive

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the expiration or termination of this Participation Agreement until such time as
no obligations of such parties thereunder are due and owing.
          (b) The (i) representations and warranties of the parties hereto and
(ii) the rights and obligations of the parties hereto under Sections 8.2, 8.3,
9.2 and 9.3 and Article X of this Participation Agreement shall survive the
expiration or termination of this Participation Agreement indefinitely.
     Section 10.3. No Waivers; Remedies Cumulative. No failure or delay by any
party hereto in exercising any right, power or privilege under this
Participation Agreement shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law, by other agreement or otherwise.
     Section 10.4. Notices. All notices, requests and other communications to
any party hereunder shall be provided in the manner set forth in Section 22.3 of
the Retail Distribution Agreement.
     Section 10.5. Severability. In case any provision of, or obligation under,
this Participation Agreement shall be invalid, illegal or unenforceable in any
applicable jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired thereby.
     Section 10.6. Amendments and Waivers. Any provision of this Participation
Agreement may be amended or waived only if such amendment or waiver is in
writing and is signed by all of the parties hereto.
     Section 10.7. Successors and Assigns. The provisions of this Participation
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided, however, no such party
may assign or otherwise transfer any of its rights under this Participation
Agreement without the prior written consent of all parties signatory hereto
except as provided in Sections 1.3, 4.8 or Article VI hereof; provided further,
BFC may assign, pledge and/or provide a security interest in its rights under
this Agreement to HSBC NA in order to secure financing for the purchase of
Participation Interests hereunder.
     Section 10.8. Headings. Headings and captions used in this Participation
Agreement (including all exhibits and schedules thereto) are included herein for
convenience of reference only and shall not constitute a part of this
Participation Agreement for any other purpose or be given any substantive
effect.
     Section 10.9. Alternative Dispute Resolution. ANY DISPUTE BETWEEN OR AMONG
THE PARTIES HERETO ARISING OUT OF OR RELATING TO THIS PARTICIPATION AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREIN (EXCEPT JUDICIAL ACTION FOR SPECIFIC
PERFORMANCE OR INJUNCTIVE RELIEF) SHALL BE RESOLVED AMONG THE PARTIES TO SUCH
DISPUTE BY NEGOTIATION, MEDIATION AND ARBITRATION IN ACCORDANCE WITH THE
PROVISIONS OF

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ARTICLE XXI OF THE RETAIL DISTRIBUTION AGREEMENT, WHICH ARE INCORPORATED HEREIN
BY REFERENCE.
     Section 10.10. Governing Law; Submission To Jurisdiction. THIS
PARTICIPATION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF MISSOURI. WITHOUT LIMITING THE EFFECT OF
SECTION 10.9 HEREOF AND ARTICLE XXI OF THE RETAIL DISTRIBUTION AGREEMENT, EACH
OF THE PARTIES HERETO HEREBY (A) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
FEDERAL AND/OR STATE COURTS SITTING IN ST. LOUIS, MISSOURI FOR PURPOSES OF ALL
LEGAL PROCEEDINGS FOR SPECIFIC PERFORMANCE OR INJUNCTIVE RELIEF PERMITTED BY
SECTION 21.12 OF THE RETAIL DISTRIBUTION AGREEMENT, (B) IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM, (C) IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN SUCH
PROCEEDING THE MANNER PROVIDED FOR NOTICES IN SECTION 10.4 AND (D) AGREES THAT
NOTHING IN THIS PARTICIPATION AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO
THIS PARTICIPATION AGREEMENT TO SERVE PROCESS IN ANY SUCH PROCEEDING IN ANY
OTHER MANNER PERMITTED BY LAW.
     Section 10.11. Waiver of Jury Trial. WITHOUT LIMITING THE EFFECT OF SECTION
10.9, EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO THIS PARTICIPATION AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
     Section 10.12. Counterparts. This Participation Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Participation Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.
     Section 10.13. Entire Agreement. This Participation Agreement and the other
Program Contracts, as amended through the date hereof, constitute the entire
agreement and understanding among the parties hereto, and supersede and
extinguish any and all prior agreements and understandings, oral or written
relating to the operation of the Settlement Products Program on and after the
date hereof. For the avoidance of doubt, (i) this Participation Agreement and
the other Program Contracts, as amended through the date hereof, shall govern
the operation of the Settlement Products Program on and after the date hereof,
(ii) the Original Participation Agreement, as amended by the First Amendment, as
further amended and restated by the First A&R Participation Agreement, and
further amended by the Second Amendment and the Third Amendment shall continue
to govern the participation interests sold between the date of the Original
Participation Agreement and the date of this Second A&R Participation Agreement,
and (iii) nothing in this Participation Agreement or the other Program Contracts
shall affect the rights

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and obligations of the parties to the Prior Program Agreements, whenever
arising, under such Prior Program Agreements, which remain valid and enforceable
in accordance with their terms.
     Section 10.14. Reinstatement. This Participation Agreement shall remain in
full force and effect and continue to be effective should any petition be filed
by or against any party hereto for liquidation or reorganization, should any
party hereto become insolvent or make an assignment for the benefit of any
creditor or creditors or should a receiver or trustee be appointed for all or
any significant part of any party’s assets or properties, and shall continue to
be effective or to be reinstated, as the case may be, if at any time payment and
performance of the obligations hereunder, or any part thereof, is, pursuant to
applicable Law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of such obligations, whether as a “voidable preference,”
“fraudulent conveyance,” or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the obligations hereunder shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
     Section 10.15. Advice of Counsel. Each of the parties represents to each
other party hereto that it has discussed this Participation Agreement with its
counsel.
     Section 10.16. No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Participation Agreement. In the
event any ambiguity or question of intent or interpretation arises, this
Participation Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this Participation
Agreement.
     Section 10.17. Conflict of Terms. Except as otherwise provided in this
Participation Agreement or any of the other Program Contracts by specific
reference to the applicable provisions of this Participation Agreement, if any
provision contained in this Participation Agreement conflicts with any provision
in any of the other Program Contracts, other than the Indemnification Agreement
or the Retail Distribution Agreement, the provisions contained in this
Participation Agreement shall govern and control. If there is a conflict between
this Participation Agreement and the Retail Distribution Agreement (but not the
Indemnification Agreement), then the Retail Distribution Agreement shall
control. If there is a conflict between this Participation Agreement and the
Indemnification Agreement, the Indemnification Agreement shall control.
     Section 10.18. Further Execution. Each party hereto shall execute any and
all documents as are necessary or desirable to consummate the transactions
contemplated hereby.
     Section 10.19. Expenses. Except as otherwise provided herein or in any
Program Contract, each party hereto shall pay its own expenses, including the
expenses of its own counsel and its own accountants, in connection with the
consummation of the transactions contemplated by this Participation Agreement.

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     Section 10.20. No Implied Relationship. Notwithstanding any provision
herein to the contrary:
          (a) This Participation Agreement shall not be construed to establish a
partnership or joint venture between the parties hereto.
          (b) All personnel employed or otherwise engaged by any party hereto to
perform the obligations and duties of such party hereunder shall not be deemed
to be employees of any other party hereto. In addition, the party employing or
otherwise engaging such employees, shall at all times be responsible for the
compensation of, and payment of applicable state and federal income taxes with
respect to, any personnel employed by such party to perform any services
hereunder.
     Section 10.21. No Third Party Beneficiaries. This Participation Agreement
is for the sole benefit of the parties hereto and their permitted successors and
assigns and nothing in this Participation Agreement, express or implied, is
intended to or shall confer upon any other person any legal or equitable right,
benefit or remedy, of any nature whatsoever under or by reason of this
Participation Agreement.
     Section 10.22. Limitation of Scope of Representations and Warranties and
Other Disclosures. The representations, warranties and other disclosures set
forth by each party hereto are only made for the benefit of the parties hereto
and the purpose of the transactions contemplated hereby and are not intended for
use by any person with respect to any acquisition or disposition of any security
of any party hereto.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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THIS PARTICIPATION AGREEMENT CONTAINS A BINDING
ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.
     IN WITNESS WHEREOF, the parties hereto have caused this Second A&R
Participation Agreement to be executed by their respective duly authorized
officers as of the date set forth above.

            HSBC BANK USA, NATIONAL ASSOCIATION,
a national banking association
      By:   /s/ Eesh K. Bansal         Name:           Title:           HSBC
TRUST COMPANY (DELAWARE), N.A.,
a national banking association
      By:   /s/ Richard D. Leigh         Name:   Richard D. Leigh       
Title:   President        HSBC TAXPAYER FINANCIAL SERVICES INC.,
a Delaware corporation
      By:   /s/ John R. Butler         Name:   John R. Butler        Title:  
Senior Vice President        BLOCK FINANCIAL LLC,
a Delaware limited liability company
      By:   /s/ Becky S. Shulman         Name:   Becky S. Shulman       
Title:   President and Chief Financial Officer   

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