Document:

exv10w24

Exhibit 10.24

METABANK

and

BLUESTEM BRANDS, INC.

AMENDED AND RESTATED PROGRAM AGREEMENT

Dated as of August 20, 2010

Confidential Treatment Requested

[*] Indicates confidential portions omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission

 

 

SCHEDULES AND EXHIBITS

	 	 	 

	SCHEDULE 1

	 	Definitions
	 
	 	 
	EXHIBIT A

	 	The Program
	 
	 	 
	EXHIBIT B

	 	Credit Policy
	 
	 	 
	EXHIBIT C

	 	Form of Application
	 
	 	 
	EXHIBIT D

	 	Form of Account Agreement
	 
	 	 
	EXHIBIT E

	 	Program Compliance Manual
	 
	 	 
	EXHIBIT F

	 	Debt Waiver Product
	 
	 	 
	EXHIBIT G

	 	Debt Waiver Product Terms and Conditions
	 
	 	 
	EXHIBIT H

	 	Sample Funding Statement
	 
	 	 
	EXHIBIT I

	 	Funding Account Information
	 
	 	 
	EXHIBIT J

	 	Interest Charges
	 
	 	 
	EXHIBIT K

	 	Insurance Coverage
	 
	 	 
	EXHIBIT L

	 	Subcontractors

i

 

          THIS AMENDED AND RESTATED PROGRAM AGREEMENT (this “Agreement”), dated as of August 20,
2010 (“Effective Date”), is made by and between METABANK (“Bank”), a federal
savings bank doing business as Meta Payment Systems and operating from a branch in Sioux Falls,
South Dakota, and BLUESTEM BRANDS, INC. (formerly known as FINGERHUT DIRECT MARKETING, INC.)
(“Bluestem”), a Delaware corporation, having its principal location in Eden Prairie,
Minnesota (each a “Party” and collectively the “Parties”).

          WHEREAS, Bluestem has historically been engaged in the business of marketing open-end consumer
financing accounts used to purchase general merchandise and services, and Bluestem is engaged in
the business of servicing such accounts; and

          WHEREAS, Bluestem, with the consent of Bank, desires to provide to qualifying customers who do
not qualify for open-end consumer financing an opportunity to finance purchases through closed-end
installment loans

          WHEREAS, Bank is in the business of originating various types of consumer and other financing;
and

          WHEREAS, upon the terms and conditions described herein, the Parties desire to operate a
nationwide program pursuant to which Bluestem will market, and Bank will establish, open-end
consumer financing accounts and closed-end installment loans used to purchase general merchandise
and services; and

          WHEREAS, the Parties desire that this AMENDED AND RESTATED PROGRAM AGREEMENT replace and
supersede the PROGRAM AGREEMENT between the Parties, dated as of January 14, 2010, as of the
Effective Date.

          NOW, THEREFORE, in consideration of the foregoing and the terms, conditions and mutual
covenants and agreements herein contained, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Bank and Bluestem mutually agree as follows:

	1.	 	Definitions. The terms used in this Agreement shall be defined as set forth in
Schedule 1 and as otherwise defined herein.

	2.	 	Marketing of Accounts. Bluestem shall promote and market the Program and the
Accounts using any form of Marketing Materials and Marketing Activities determined to be
appropriate by Bluestem, subject to Bank’s approval as set forth herein. Bank agrees that
Bluestem may refer to Bank and the Program in Marketing Materials upon the condition that the
form of any references to the Bank and/or the Program in any such Marketing Materials must
receive the prior written approval of Bank, in accordance with the procedures set forth in
this Section 2.

	 	(a)	 	Prior to the Effective Date, Bank shall have completed an initial review of
the forms of Marketing Materials and Marketing Activities proposed by Bluestem and
approve or reject any such forms of Marketing Materials and Marketing Activities that
have been provided to Bank. Marketing Materials and Marketing Activities

 

 

	 	 	 	will be considered approved and authorized by Bank once such approval and
authorization is clearly communicated by Bank in writing or electronically, provided
that Bank does not subsequently revoke its approval pursuant to the terms of Section
6(b).

	 	(b)	 	Thereafter, Bluestem shall make available for Bank’s prior review and
approval all new forms of Marketing Materials and Marketing Activities proposed by
Bluestem. Bank shall review and approve or reject any such forms of Marketing
Materials and Marketing Activities within five (5) Business Days after Bank’s receipt
of such Marketing Materials or Marketing Activities. Marketing Materials and Marketing
Activities will be considered approved and authorized by Bank once such approval and
authorization is clearly communicated by Bank in writing or electronically, provided
that Bank does not subsequently revoke its approval pursuant to the terms of Section
6(b).

	 	(c)	 	After approval of the form of Marketing Materials or Marketing Activities
pursuant to Section 2(a) or 2(b), and subject to Section 6(b), Bluestem may use such
forms of Marketing Materials and Marketing Activities, and need not seek further
approval for use of such forms unless there is (i) a Substantive Change in the
Marketing Materials or Marketing Activities, or (ii) a new offering to be included in
the Marketing Materials (each of the events in clauses (i) and (ii), a “Qualifying
Change”). In the event of a Qualifying Change, Bluestem shall submit such forms of
Marketing Materials and Marketing Activities to Bank for review and approval in
accordance with Section 2(b).

	 	(d)	 	Bank may request a periodic review of the Marketing Materials and Marketing
Activities then being used by Bluestem. Bank and Bluestem shall cooperate to determine
the form, format, frequency, and timing of such reviews in order to minimize expense
and disruption.

	 	(e)	 	Bluestem shall be liable for all claims arising from the use by Bluestem or
agents acting on Bluestem’s behalf of any Marketing Materials or Marketing Activities
without Bank’s prior approval and authorization. Bluestem shall ensure that all
Marketing Materials and Marketing Activities shall be accurate in all material respects
and not misleading and comply with Applicable Laws. Bluestem shall further use
commercially reasonable efforts to ensure that the Program will not be marketed in
connection with pornography, obscenities, gambling, hate speech, religion, politics,
known spammers, alcohol, drugs, illegal activities, or other activities Bank has in
good faith determined posed safety and soundness concerns.

	 	(f)	 	Bank agrees that it will not conduct any marketing of the Program, and will
not use any lists of Applicants or Borrowers it has obtained under the Program for any
purposes, including marketing other products or services to such Borrowers or
Applicants, other than fulfilling its obligations under the Program Documents.

	3.	 	Spanish Sub-Program. Bank agrees that Bluestem may develop a subprogram within
the Program targeted to Spanish-speaking customers. Any forms of Marketing Materials

 

 

	 	 	approved pursuant to Section 2 may be used in connection with such subprogram, provided that
such Marketing Materials are translated into Spanish by a translator or translation service
mutually approved by Bluestem and Bank.

	4.	 	Bank to Extend Credit.

	 	(a)	 	Bank agrees to make Accounts available to qualifying Applicants residing in
any state in the United States, its territories and the District of Columbia.

	 	(b)	 	Bank agrees to assume the obligations as issuer of Existing Accounts,
subject to Section 15(b).

	 	(c)	 	Bluestem acknowledges that the establishment of an Account hereunder
creates a creditor-borrower relationship between Bank and Borrower which involves,
among other things, the disbursement of financing proceeds and the collection of
financing payments by Bank. Nothing in this Agreement shall obligate Bank to establish
an Account for an Applicant or originate Account Advances if Bank determines that doing
so would constitute an unsafe or unsound banking practice or be contrary to Applicable
Law; provided, however, that in such an event, Bank shall notify Bluestem of its
determination. Bank may further elect to suspend the origination of new Accounts and
Account Advances under the circumstances set forth in Section 37 of the Receivables
Sale Agreement

	 	(d)	 	Bank shall use its best efforts to maintain a form of legal organization
that permits it to perform its obligations under this Agreement.

	5.	 	Consumer Documents and Credit Policy. The following documents, terms and
procedures (“Consumer Finance Materials”) have been approved by Bank and will be used
by Bank initially in connection with the Program: (i) Program description (i.e., general
description of Program processes) as Exhibit A; (ii) Credit Policy as Exhibit
B; (iii) form of Application as Exhibit C; (iv) form of Account Agreement as
Exhibit D; (vi) Program Compliance Manual as Exhibit E; (vii) description of
the Debt Waiver Product as Exhibit F; and (viii) Debt Waiver Product Terms and
Conditions as Exhibit G. Bluestem shall be responsible for the preparation of all
Consumer Finance Materials relating to the Program and ensuring that such Consumer Finance
Materials comply with Applicable Law. The Parties acknowledge that each Account Agreement and
all other documents referring to the creditor for the Program shall identify the Bank as the
creditor. The Account Agreement shall further provide, as appropriate, that it is governed by
South Dakota and federal law.

	6.	 	Changes to Marketing Materials or Consumer Finance Materials.

	 	(a)	 	Changes to Consumer Finance Materials, including a determination that any
Consumer Finance Materials are no longer authorized, may be made upon the request of
either Party subject to the prior written consent of the other Party, which consent
shall not be unreasonably withheld or delayed; provided, however, that Bank may change
the Consumer Finance Materials or determine that any Consumer Finance Materials are no
longer authorized upon written notice

 

 

	 	 	 	provided to Bluestem to the extent that such change is required by Applicable Law or
a Regulatory Authority or necessitated in Bank’s reasonable determination by safety
and soundness concerns. Bank shall take commercially reasonable steps to prevent
undue expense for Bluestem when changing any Consumer Finance Materials that are
already in production. Unless such changes are required sooner by Applicable Law or
a Regulatory Authority, upon Bluestem’s receipt of written notice from Bank of any
changes to the Consumer Finance Materials or a determination that any Consumer
Finance Materials are no longer authorized, Bluestem shall implement such change or
determination as soon as commercially practicable but in no event later than three
(3) months from Bluestem’s receipt of notice of such change or determination.

	 	(b)	 	Bank may change the Marketing Materials or Marketing Activities or
determine that any Marketing Materials or Marketing Activities are no longer authorized
upon written notice provided to Bluestem only to the extent that such change is
required by Applicable Law or a Regulatory Authority or necessitated in Bank’s
reasonable determination by safety and soundness concerns. Bank shall take
commercially reasonable steps to prevent undue expense for Bluestem when changing any
Marketing Materials that are already in production. Unless such changes are required
sooner by Applicable Law or a Regulatory Authority, upon Bluestem’s receipt of written
notice from Bank of any changes to the Marketing Materials or Marketing Activities or a
determination that any Marketing Materials or Marketing Activities are no longer
authorized, Bluestem shall implement such change or determination as soon as
commercially practicable but in no event later than six (6) months from Bluestem’s
receipt of notice of such change or determination.

	7.	 	Account Referral, Processing and Origination.

	 	(a)	 	As agent for Bank, Bluestem shall solicit Applications from Applicants and
shall process such Applications on behalf of Bank (including retrieving credit reports)
to determine whether the Applicant meets the eligibility criteria set forth in the
Credit Policy. As agent for Bank, Bluestem shall respond to all inquiries from
Applicants regarding the application process.

	 	(b)	 	Bluestem shall report aggregate information to Bank on Applications which
meet the eligibility criteria set forth in the Credit Policy, Applications which do not
meet such criteria and approved Applicants who accept Account offers. At Bank’s
request, Bluestem will provide more detailed reports, which shall include the name,
address and, if available, phone number of the Applicant. These reports may be
combined with any other reports required of Bluestem hereunder. Bluestem shall have no
discretion to override the Credit Policy with respect to any Applications. At
Bluestem’s reasonable request, Bank shall reconsider a rejected Applicant to determine
whether a discretionary override of a credit decision is appropriate.

	 	(c)	 	Subject to the terms of this Agreement and the Receivables Sale Agreement,
Bank

 

 

	 	 	 	shall establish Accounts with respect to Applicants who meet the eligibility
criteria set forth in the Credit Policy, or who Bank approves pursuant to a
discretionary Credit Policy override, and who accept the offer of financing.

	 	(d)	 	Pursuant to procedures mutually agreed by the Parties, Bluestem shall
deliver adverse action notices to Applicants who do not meet Credit Policy criteria or
are otherwise denied by Bank.

	 	(e)	 	Bluestem shall deliver to Borrowers the Account Agreements and any other
documents required to be delivered to Borrowers and shall obtain all Borrowers’
signatures and any third-party signatures required by Bank to extend credit on an
Account, if any, and take all other actions necessary for Bank to extend credit on an
Account, all in accordance with Applicable Law.

	 	(f)	 	Bluestem shall process each Borrower request for an extension of credit
under the Credit Policy and shall forward to Bank only the requests of Borrowers who
meet the eligibility criteria of the Credit Policy. Bank shall extend credit on
Accounts to Borrowers who have accepted an Account offer and who meet the eligibility
criteria set forth in the Credit Policy.

	 	(g)	 	Bluestem shall provide all Processing Services related to the Accounts for
as long as Bank owns the Accounts.

	 	(h)	 	Bluestem shall perform its obligations described in this Section 7 and
deliver any other customer communications to Applicants and Borrowers as necessary to
carry on the Program in accordance with Applicable Law, all at Bluestem’s own cost.
Bluestem shall pay all third-party costs associated with account referral services,
processing and origination, including but not limited to expenses related to payment
networks and credit bureaus.

	 	(i)	 	Each Party shall designate a relationship manager who will be dedicated to
the successful operation of the Program and the Parties’ relationship. A Party may
change its relationship manager by providing notice to the other Party. Bluestem shall
ensure that Bank’s relationship manager shall have reasonable access to Bluestem’s
facilities, personnel, files and records to review and examine Bluestem’s compliance
with the terms of the Program Documents. To the extent Bluestem retains any
subcontractor to provide Processing Services or other services in connection with
Accounts owned by the Bank, Bluestem shall use commercially reasonable efforts to
provide the Bank’s relationship manager with the same access as Bluestem to each such
subcontractor’s facilities, personnel, files and records to review and examine
Bluestem’s compliance with the terms of the Program Documents. Bank’s relationship
manager shall be permitted to utilize a reasonable system of routine monitoring,
sampling, and other review methods by which to evaluate Bluestem’s performance of its
obligations and shall be granted reasonable access to those personnel at Bluestem or
any subcontractor who can answer questions relating to the Accounts and the Program.
Bank’s relationship manager shall have access to audit reports and quality assurance

 

 

	 	 	 	reviews conducted by or on behalf of Bluestem related to the Accounts and the
Program. Bluestem’s relationship manager shall coordinate matters related to the
Accounts and the Program with Bank’s relationship manager and ensure that Bank’s
relationship manager is permitted to undertake the activities contemplated herein.
Without regard to any other provisions contained herein, Bluestem agrees to provide
Bank’s relationship and Bank’s internal audit staff with electronic access to all
Applicant, Borrower, and former Borrower records maintained by Bluestem or any
subcontractor. Such access shall be made available on-site at Bluestem, as well as
at agreed-upon Bank locations with any installation or ongoing connectivity costs
for the Bank to be reimbursed by Bluestem.

	 	(j)	 	Bluestem shall maintain accurate computer records regarding the Processing
Services to be provided in connection with the Accounts and shall allow Bank access to
the same, or provide reports produced therefrom, on such regular basis as Bank may
reasonably request. Bluestem shall provide Bank with all reports reasonably necessary
to demonstrate Bluestem’s adherence to the terms of the Program Documents, performance
of the services required by this Agreement, and compliance with all Applicable Laws
(collectively, “Management Reports”). Management Reports shall include only data
relating to the Program and shall be provided on such regular basis as the Bank may
reasonably request. Bluestem shall also provide Bank with data files, to be mutually
agreed by the Parties, on a daily basis by 12:00 p.m. Central Time on each Business
Day.

	 	(k)	 	As a means for Bank and Bluestem to assess compliance with the provisions
contained in this Agreement, as well as any requirements set forth by any Regulatory
Authority, Bank and Bluestem shall develop a performance matrix (“Performance Matrix”)
that sets forth the following information:

	 	(1)	 	Key performance indicators in each major functional area of
the Program,

	 	(2)	 	Mutually-agreed upon acceptable performance ranges for each
such indicator,

	 	(3)	 	Frequency with which such indicator shall be updated, and

	 	(4)	 	Supporting Management Reports from which the data can be
found.

	 	 	 	The Parties further agree that they shall cooperate to address and correct any areas
identified in the Performance Matrix to be outside of the performance ranges set
forth therein.

	8.	 	Settlement with Bluestem.

	 	 	 	Bluestem will provide a Funding Statement to Bank by e-mail or as otherwise mutually
agreed on each applicable Business Day no later than 12:00 P.M. Central Time, which
statement shall detail the Funding Amount for all Accounts that are ready for
Settlement by Bank. The Funding Statement shall be substantially in the form of
Exhibit H attached hereto. No later than 5:00 P.M.

 

 

	 	 	 	Central Time on the same Business Day as Bank receives the Funding Statement, but
subject to the provisions of the Program Documents, Bank shall transfer by wire
transfer in immediately available funds to the Funding Account (the specific account
information, which may be amended from time to time, as provided for in Exhibit
I attached hereto), the Funding Amount due to Bluestem for the purchase of
general merchandise and services reflected on the Funding Statement. Failure to
strictly adhere to the times referenced in this paragraph, provided that performance
occurs on the same Business Day, or the next Business Day for Bank in the event Bank
is unable to perform its obligation to fund on the same Business Day due to
Bluestem’s failure to timely provide the Funding Statement, shall not constitute a
technical breach of this Agreement.

	9.	 	Debt Waiver.

	 	(a)	 	At its own cost, Bluestem, on behalf of Bank, will offer and promote a debt
waiver product with terms and features approved by Bank, initially as described in
Exhibit F attached hereto (“Debt Waiver Product”), and, as amended,
modified, or otherwise changed from time to time pursuant to the terms of this
Agreement. Bluestem shall administer the Debt Waiver Product in accordance with the
Debt Waiver Product Terms and Conditions described in Exhibit G attached
hereto, and, as amended, modified, or otherwise changed from time to time pursuant to
the terms of this Agreement. Bluestem agrees that it will promptly cancel or suppress,
as applicable, any indebtedness of a Borrower under an Account in accordance with the
Debt Waiver Product purchased and invoked by such Borrower.

	 	(b)	 	Bluestem shall collect any amounts owed from Borrowers for the purchase of
the Debt Waiver Product (“Debt Waiver Collections”) on behalf of Bank. As
compensation for Bluestem’s promotion and administration of the Debt Waiver Product on
behalf of Bank, Bank shall pay Bluestem an amount equal to the Debt Waiver Collections
collected during the prior calendar month, less the fees retained by Bank in the
following amounts: (i) to the extent that the total Debt Waiver Collections in the
then-current Program Year are less than [ * ] of such Debt Waiver Collections; (ii) to the extent that the total Debt Waiver
Collections in the then-current Program Year are equal to or greater
than [ * ] and less than [ * ] of such Debt Waiver
Collections; and (iii) to the extent that the total Debt Waiver Collections in the
then-current Program Year are equal to or greater than [ * ] of such Debt Waiver Collections (“Debt Waiver
Product Fees”).

	 	(c)	 	The amounts to be paid pursuant to Section 9(b) shall be settled in
accordance with this Section 9(c). Not later than the fifth Business Day of each
calendar month, Bluestem shall pay to Bank the amount of the Debt Waiver Product Fees
with respect to the prior calendar month, and Bluestem may retain for its own account
the amount of the Debt Waiver Collections for such prior calendar month that exceed the
Debt Waiver Product Fees.

	[*]	 	Indicates confidential portions omitted pursuant to a request for
confidential treatment filed separately with the Securities and
Exchange Commission

 

 

	 	(d)	 	Bank will initially offer the Debt Waiver Product to Borrowers residing in
all states where the Existing Bank offers a debt waiver product with respect to
Existing Accounts, and will also research the permissibility of offering the Debt
Waiver Product to Borrowers residing in Alaska, Florida, Massachusetts and Montana.

	 	(e)	 	Borrowers enrolled in the debt waiver product offered by Existing Bank
immediately prior to the transfer of the Existing Accounts to Bank shall be
automatically enrolled in the Debt Waiver Product.

	10.	 	Customer Disputes and Refunds. Bluestem shall ensure that all adjustments and/or
credits agreed to in resolving disputes with Borrowers who pay for general merchandise and
services via an extension of credit on an Account shall promptly be communicated to the Party
owning and holding the related Receivable at the time of the adjustment and/or credit.
Procedures for applying such adjustments and/or credits to the Account involved shall be
mutually agreed upon by the Parties.

	11.	 	Consumer Complaints. Bluestem will maintain a log of all Standard Complaints and
Nonstandard Complaints received by Bluestem relating to the Program, which log shall include,
at a minimum, the following information: (a) name and address of the complaining party, (b) a
brief summary of the complaint, (c) in the case of a third party complaint, name and address
of the third party from whom the complaint was received, (d) the date the complaint was
received, and (e) a brief summary of the resolution. Such log shall be submitted monthly to
Bank or upon Bank’s request. To the extent such complaints are from Borrowers or Applicants
and can be responded to using template language, format, or procedures agreed upon by the
Parties (“Standard Complaints”), Bluestem shall respond to such complaint within twenty (20)
Business Days or such other time periods reasonably established by the Parties. All other
complaints relating to the Program, including any consumer complaints filed with a Regulatory
Authority or sent by any other party not an Account holder, including, but not limited to, any
attorney, state attorney general or the Better Business Bureau, (“Nonstandard Complaints”)
shall be reported by Bluestem to the Bank within five (5) Business Days of receipt of such
complaint, unless otherwise agreed upon by the Parties. Bank will determine within five
business days of receipt of such complaint from Bluestem if the Nonstandard Complaint warrants
a Bank response or whether Bluestem may respond to the complaint on both Parties’ behalf. In
the event Bank determines that Bluestem may respond on Bank’s behalf, Bluestem shall prepare
such response and submit to Bank for prior approval within ten (10) Business Days of Bank’s
request or such other time periods reasonably established by the Parties. In the event that
the Bank determines that it should respond to a Nonstandard Complaint, Bluestem agrees to
provide Bank with the information necessary to respond thoroughly, accurately, and in a timely
manner, and Bank agrees to respond within ten (10) days of Bank’s advising Bluestem that Bank
will respond. Bank further agrees to allow Bluestem the opportunity to comment on Bank’s
proposed response and to send Bluestem a copy of Bank’s response, and agrees that, unless such
response is being sent to the OTS (or successor or other Regulatory Authority with
jurisdiction over Bank) Bluestem may also provide a separate response, provided that Bluestem
allows the Bank the opportunity to comment on Bluestem’s proposed response and sends Bank a
copy of Bluestem’s response.

 

 

	12.	 	Notice of Actions; Government Communications.

	 	(a)	 	Actions. Each Party shall notify the other, promptly, but in no event
later than five (5) Business Days after becoming aware, of any actual or threatened
litigation, investigation, proceeding, or judicial, tax or administrative action by any
Regulatory Authority, state attorney general or any other Person which might materially
adversely affect such Party’s continuing operations, its indemnity obligations under
this Agreement, or its ability to perform its obligations under this Agreement, and
each Party shall provide the other Party with all related documentation thereof, unless
such Party is prohibited from sharing any such notice or documentation. Each Party
shall cooperate in good faith and provide such assistance, at the other Party’s
request, to permit the other Party to promptly resolve or address any such actions.

	 	(b)	 	Government Communications.

	 	(1)	 	Bluestem will not communicate with,
respond to inquiries from, or lobby the OTS (or successor or other
Regulatory Authority with jurisdiction over Bank) regarding the
Accounts or the Program.

	 	(2)	 	Except as provided in Section 12(b)(1), any inquiry from a
Regulatory Authority having jurisdiction over Bluestem, a member of
Congress, a state legislator, or an official of the executive branch
of the United States or a state government regarding the Accounts or
the Program shall be treated as a Nonstandard Complaint in accordance
with the procedures for response set forth in Section 11; provided,
however, that Bluestem may respond to such inquiry without following
the procedures set forth in Section 11 if the nature and timing of the
inquiry do not reasonably allow for such procedures, but Bluestem
shall promptly report such inquiry and response to Bank and provide
copies of any written materials related thereto, and Bluestem shall
state in its response that the response does not represent and is not
binding on Bank.

	 	(3)	 	Except as provided in Section 12(b)(1) and (2), and subject in
all cases to Section 18, Bluestem shall provide advance notice to Bank
that is reasonable under the circumstances regarding any
communications with a Regulatory Authority, a member of Congress, a
state legislator, or an official of the executive branch of the United
States or a state government regarding the Accounts or the Program;
Bluestem shall respond in good faith to any comments by Bank with
respect to such communications. Bluestem shall neither state, imply,
nor make any statements that

 

 

	 	 	 	would cause a person to reasonably
conclude that its communications represent the position of Bank.
Bluestem further agrees to notify Bank within a reasonable time after
commencement when any lobbying activities it undertakes would (if
successful) negatively impact the profitability or continued
operation of the Program.

	 	(4)	 	Representatives of Bluestem and Bank
shall meet on a quarterly basis to discuss and coordinate with respect
to any then contemplated communications with a Regulatory Authority, a
member of Congress, a state legislator, or an official of the
executive branch of the United States or a state government regarding
the Accounts or the Program.

	13.	 	Representations and Warranties.

	 	(a)	 	Bank hereby represents and warrants to Bluestem that:

	 	(1)	 	Bank is a federal savings bank, duly
organized, validly existing under the laws of the United States, and
Bank has full corporate power and authority to execute, deliver, and
perform its obligations under this Agreement and the Receivables Sale
Agreement; the execution, delivery and performance of this Agreement
and the Receivables Sale Agreement have been duly authorized, and are
not in conflict with and do not violate the terms of the charter or
bylaws of Bank and will not result in a breach of or constitute a
default under, or require any consent under, any indenture, loan or
agreement to which Bank is a party;

	 	(2)	 	All approvals, authorizations, licenses,
registrations, consents, and other actions, notices, and filings that
may be required in connection with the execution, delivery, and
performance of this Agreement and the Receivables Sale Agreement by
Bank, have been obtained (other than those required to be made to or
received from Borrowers and Applicants);

	 	(3)	 	Each of this Agreement and the Receivables
Sale Agreement constitutes a legal, valid, and binding obligation of
Bank, enforceable against Bank in accordance with its terms, except (i)
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, receivership, conservatorship
or other similar laws now or hereafter in effect, including the rights
and obligations of receivers and conservators under 12 U.S.C. §§ 1821
(d) and (e), which may affect the enforcement of creditors’ rights in
general, and (ii) as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in
equity);

 

 

	 	(4)	 	There are no proceedings or investigations
pending or, to the best knowledge of Bank, threatened against Bank (i)
asserting the
invalidity of this Agreement or the Receivables Sale Agreement, (ii)
seeking to prevent the consummation of any of the transactions
contemplated by Bank pursuant to this Agreement or the Receivables
Sale Agreement, (iii) seeking any determination or ruling that, in
the reasonable judgment of Bank, would materially and adversely
affect the performance by Bank of its obligations under this
Agreement or the Receivables Sale Agreement, (iv) seeking any
determination or ruling that would materially and adversely affect
the validity or enforceability of this Agreement or the Receivables
Sale Agreement, or (v) that would have a materially adverse financial
effect on Bank or its operations if resolved adversely to it;

	 	(5)	 	Bank is not Insolvent;

	 	(6)	 	The execution, delivery and performance of
this Agreement and the Receivables Sale Agreement by Bank comply with
all laws specifically applicable to Bank’s operations;

	 	(7)	 	Federal savings banks located in South
Dakota, such as Bank, may impose interest charges in connection with
extensions of credit to consumers as outlined in Exhibit J to
this Agreement;

	 	(8)	 	The Program is structured in a way such
that Bank is located in South Dakota for purposes of the Program, and
South Dakota law is the relevant law for purposes of determining
permissible interest rates and charges under 12 U.S.C. § 1463(g); and

	 	(9)	 	Bank shall comply with Title V of the
Gramm-Leach-Bliley Act and the implementing regulations of the OTS,
including but not limited to applicable limits on the use, disclosure,
storage, and safeguarding of Applicant and Borrower information, and
shall maintain reasonable disaster recover protections; provided,
however, that Bank’s representation in this Section 13(a)(9) shall not
apply to obligations of Bluestem, which are performed on behalf of
Bank.

	 	(b)	 	Bluestem hereby represents and warrants to Bank that:

	 	(1)	 	Bluestem is a Delaware corporation duly organized and
validly existing in good standing under the laws of the State of Delaware, and
has full power and authority to execute, deliver, and perform its obligations
under this Agreement and the Receivables Sale Agreement; the execution,
delivery, and performance of this Agreement and the Receivables Sale Agreement
have been duly authorized, and are not in conflict with and do not violate

 

 

	 	 	 	the terms of the certificate of incorporation or bylaws of Bluestem, and will not
result in a breach of or constitute a default under or require any
consent under any indenture, loan, or agreement to which Bluestem is a party
except such consents as Bluestem shall have received on or prior to the date
hereof;

	 	(2)	 	All approvals, authorizations, consents, and other actions
by, notices to, and filings required to be obtained for the execution,
delivery, and performance of this Agreement by Bluestem have been obtained, and
all approvals, authorizations, consents, and other actions by, notices to, and
filings required to be obtained for the execution, delivery, and performance of
the Receivables Sale Agreement by Bluestem shall have been obtained;

	 	(3)	 	Each of this Agreement and the Receivables Sale Agreement
constitutes a legal, valid, and binding obligation of Bluestem, enforceable
against Bluestem in accordance with its terms, except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws now or hereafter in effect,
which may affect the enforcement of creditors’ rights in general, and (ii) as
such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);

	 	(4)	 	There are no proceedings or investigations pending or, to
the best knowledge of Bluestem, threatened against Bluestem (i) asserting the
invalidity of this Agreement or the Receivables Sale Agreement, (ii) seeking to
prevent the consummation of any of the transactions contemplated by Bluestem
pursuant to this Agreement or the Receivables Sale Agreement, (iii) seeking any
determination or ruling that, in the reasonable judgment of Bluestem, would
materially and adversely affect the performance by Bluestem of its obligations
under this Agreement or the Receivables Sale Agreement, (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Agreement or the Receivables Sale Agreement, or (v)
that would have a materially adverse financial effect on Bluestem or their
operations if resolved adversely to it;

	 	(5)	 	Bluestem is not Insolvent;

	 	(6)	 	The execution, delivery and performance of this Agreement
and the Receivables Sale Agreement comply with all laws specifically applicable
to the business of Bluestem;

	 	(7)	 	Bluestem shall comply with Title V of the
Gramm-Leach-Bliley Act and the implementing regulations of the OTS, including
but not limited to applicable limits on the use, disclosure, storage, and
safeguarding of Applicant and Borrower information, and shall maintain
reasonable disaster recovery protections;

 

 

	 	(8)	 	Except as otherwise disclosed to Bank, neither Bluestem
nor, to the actual knowledge of Bluestem’s executive officers, any Principal of
Bluestem, has been subject to the following as of the date of this Agreement:

	 	(a)	 	Any criminal conviction (except minor
traffic offenses and other petty offenses);

	 	(b)	 	Federal or state tax lien;

	 	(c)	 	Administrative or enforcement proceedings
commenced by the Securities and Exchange Commission, any state
securities authority, Federal Trade Commission, or any Regulatory
Authority; or

	 	(d)	 	Restraining order, decree, injunction, or
judgment entered in any proceeding or lawsuit alleging fraud or
deceptive practice on the part of Bluestem or any Principal thereof.

	 	(c)	 	The representations and warranties of the Parties contained in Sections
13(a) and 13(b), except those representations and warranties contained in subsections
13(a)(4), 13(b)(4), and 13(b)(8), are made continuously throughout the term of this
Agreement. In the event that any investigation or proceeding of the nature described
in subsections 13(a)(4) and 13(b)(4) is instituted or threatened against a Party, such
Party shall promptly notify the other Party of the pending or threatened investigation
or proceeding, unless otherwise prohibited by Applicable Law or a Regulatory Authority.

	 	(d)	 	Bluestem hereby represents and warrants to Bank as of the date of each
Funding Statement that:

	 	(1)	 	For each Account: (i) to the best of
Bluestem’s knowledge, all information in the related Application is
true and correct; (ii) all required disclosures have been timely and
accurately delivered to Applicants and Borrowers in compliance with
Applicable Law; (iii) the Account Agreement and all other Account
documents are genuine and legally binding and enforceable, conform to
the requirements of the Program and were prepared in conformity with
the Program Compliance Manual and Applicable Law; (iv) all necessary
approvals have been obtained; (v) nothing exists that would prohibit
the sale of the related Receivables by Bank to Bluestem; and (vi) no
act or omission of Bluestem has caused Bank not to be the sole owner of
the Receivable prior to the sale of the Receivable to Bluestem;

	 	(2)	 	Each Borrower listed on a Funding Statement
is eligible for an Account and the requested extension of credit under
the Credit

 

 

	 	 	 	Policy and has signed an Application in writing or
electronically or has telephonically applied for financing under the
Program; and

	 	(3)	 	The information in each Funding Statement
is true and correct in all material respects.

	14.	 	Other Relationships with Borrowers.

	 	(a)	 	Subject to Applicable Law, Bluestem shall have the right, at its own
expense, to solicit Applicants and/or Borrowers with optional offerings of general
merchandise and services from Bluestem and others, and to use Applicant and/or Borrower
information for purposes permitted by Applicable Law. Subject to Applicable Law, and
its obligations under this Agreement (including, without limitation, Section 2),
Bluestem, at its own cost also shall have the right to include inserts, on its own
behalf or on behalf of third parties, to billing statements on Accounts (whether in
paper or electronic form) and market through messages on such statements; provided,
however, that Bank shall have priority for space on the billing statements and in the
envelope for matters required by Applicable Laws.

	 	(b)	 	Bank shall not conduct any marketing of the Program, and shall not use the
lists of Applicants and/or Borrowers it may receive pursuant to its participation in
the Program for any purposes (or provide such lists to any Person) other than
fulfilling its obligations under the Program Documents and shall not market other
products or services to such Applicants and/or Borrowers based upon information it
receives pursuant to its participation in the Program, other than as mutually agreed
upon by the Parties.

	 	(c)	 	Notwithstanding subsection 14(b), (i) Bank may make solicitations for goods
and services to the public, which may include one or more Applicants or Borrowers;
provided that Bank does not (A) target such solicitations to specific Applicants and/or
Borrowers, or (B) use or permit a third party to use any list of Applicants and/or
Borrowers in connection with such solicitations; and (ii) Bank shall not be obligated
to redact the names of Applicants and/or Borrowers from marketing lists acquired from
third parties (e.g., magazine subscription lists) that Bank uses for solicitations.

	 	(d)	 	The terms of this Section 14 shall survive the expiration or earlier
termination of this Agreement.

	15.	 	Indemnification.

	 	(a)	 	Bank agrees to indemnify and hold harmless Bluestem and its Affiliates, and
the officers, directors, members, employees, representatives, shareholders, agents and
attorneys of such entities (the “Bluestem Indemnified Parties”) from and
against any and all claims, actions, liability, judgments, damages, costs and expenses,
including reasonable attorneys’ fees (“Losses”), that may arise from (i) the
gross negligence or willful misconduct of Bank or its agents or representatives (other
than Bluestem or its agents or assigns) in connection with Bank’s performance of

 

 

	 	 	 	its obligations under this Agreement, (ii) breach of any of Bank’s obligations
or undertakings or representations or warranties under the Program Documents (other
than any breach resulting from Bluestem’s performance of Bluestem’s obligations
under the Program Documents) by Bank or its agents or representatives (other than
Bluestem or its agents or assigns), or (iii) violation by Bank or its agents or
representatives (other than Bluestem or its agents or assigns) of any of the
Applicable Laws.

	 	(b)	 	Bluestem agrees to indemnify and hold harmless Bank and its Affiliates, and the
officers, directors, members, employees, representatives, shareholders, agents and
attorneys of such entities (the “Bank Indemnified Parties”) from and against
any and all Losses that may arise from (i) the gross negligence or willful misconduct
of Bluestem, or its agents or representatives, in connection with Bluestem’s
performance of its obligations under this Agreement, (ii) breach of any of Bluestem’s
obligations or undertakings or representations or warranties under the Program
Documents by Bluestem or its agents or representatives, or (iii) violation by Bluestem
or its agents or representatives of any Applicable Laws; (iv) any claim pertaining to
the Existing Accounts arising prior to or as a result of the transfer of the Existing
Accounts from Existing Bank to Bank, including, but not limited to, (A) the
administration, marketing, operation, processing or servicing of the Existing Accounts
prior to the transfer of the Existing Accounts from the Existing Bank to Bank, (B) the
failure of Existing Bank to perform its obligations under the account transfer
agreement between Existing Bank and Bank; or (C) any claim that Bank is a debt
collector under the Fair Debt Collection Practices Act or any similar state law with
respect to the Existing Accounts.
	 
	 	(c)	 	The Bluestem Indemnified Parties and the Bank Indemnified Parties are sometimes
referred to herein as the “Indemnified Parties”, and Bluestem or Bank, as an
indemnitor hereunder, is sometimes referred to herein as the “Indemnifying
Party”.
	 
	 	(d)	 	Any Indemnified Party seeking indemnification hereunder shall promptly notify
the Indemnifying Party, in writing, of any notice of the assertion by any third party
of any claim or of the commencement by any third party of any legal or regulatory
proceeding, arbitration or action, or if the Indemnified Party determines the existence
of any such claim or the commencement by any third party of any such legal or
regulatory proceeding, arbitration or action, whether or not the same shall have been
asserted or initiated, in any case with respect to which the Indemnifying Party is or
may be obligated to provide indemnification (an “Indemnifiable Claim”),
specifying in reasonable detail the nature of the Loss, and, if known, the amount, or
an estimate of the amount, of the Loss, provided that failure to promptly give such
notice shall only limit the liability of the Indemnifying Party to the extent of the
actual prejudice, if any, suffered by such Indemnifying Party as a result of such
failure. The Indemnified Party shall provide to the Indemnifying Party as promptly as
practicable thereafter information and documentation reasonably requested by such
Indemnifying Party to defend against the claim asserted.

 

 

	 	(e)	 	The Indemnifying Party shall have thirty (30) days after receipt of any
notification of an Indemnifiable Claim (a “Claim Notice”) to undertake, conduct
and control, through counsel of its own choosing, and at its own expense, the
settlement or defense thereof, and the Indemnified Party shall cooperate with the
Indemnifying Party in connection therewith if such cooperation is so requested and the
request is reasonable; provided that the Indemnifying Party shall hold the Indemnified
Party harmless from all of its out-of-pocket expenses, including reasonable attorneys’
fees, incurred in connection with the Indemnified Party’s cooperation. If the
Indemnifying Party assumes responsibility for the settlement or defense of any such
claim, (i) the Indemnifying Party shall permit the Indemnified Party to participate in
such settlement or defense through counsel chosen by the Indemnified Party (subject to
the consent of the Indemnifying Party, which consent shall not be unreasonably
withheld); provided that, other than in the event of a conflict of interest requiring
the retention of separate counsel, the fees and expenses of such counsel shall not be
borne by the Indemnifying Party; and (ii) the Indemnifying Party shall not settle any
Indemnifiable Claim without the Indemnified Party’s consent, which consent shall not be
unreasonably withheld or delayed for any reason if the settlement involves only the
payment of money, and which consent may be withheld for any reason if the settlement
involves more than the payment of money, including any admission by the Indemnified
Party. So long as the Indemnifying Party is vigorously contesting any such
Indemnifiable Claim in good faith, the Indemnified Party shall not pay or settle such
claim without the Indemnifying Party’s consent, which consent shall not be unreasonably
withheld.
	 
	 	(f)	 	If the Indemnifying Party does not notify the Indemnified Party within thirty
(30) days after receipt of the Claim Notice that it elects to undertake the defense of
the Indemnifiable Claim described therein, or if the Indemnifying Party fails to
contest vigorously any such Indemnifiable Claim, the Indemnified Party shall have the
right, upon notice to the Indemnifying Party, to contest, settle or compromise the
Indemnifiable Claim in the exercise of its reasonable discretion; provided that the
Indemnified Party shall notify the Indemnifying Party of any compromise or settlement
of any such Indemnifiable Claim. No action taken by the Indemnified Party pursuant to
this paragraph (f) shall deprive the Indemnified Party of its rights to indemnification
pursuant to this Section 15.
	 
	 	(g)	 	The terms of this Section 15 shall survive the expiration or earlier
termination of this Agreement.

 

 

	16.	 	Limitation of Liability.

	 	(a)	 	No Special Damages. No Party shall be liable to any other Party for any
special, indirect, incidental, consequential, punitive or exemplary damages, including,
but not limited to, lost profits, even if such Party has knowledge of the possibility
of such damages; provided, however, that the limitations set forth in this Section
shall not apply to or in any way limit the obligations of a Party to indemnify another
Party for third party claims which are otherwise covered by the indemnity obligations
under this Agreement.
	 
	 	(b)	 	Disclaimers of Warranties. The Parties specifically disclaim all warranties of
any kind, express or implied, arising out of or related to this Agreement, including
without limitation, any warranty of marketability, fitness for a particular purpose or
non-infringement, each of which is hereby excluded by agreement of the Parties.
	 
	 	(c)	 	The terms of this Section 16 shall survive the expiration or earlier
termination of this Agreement.

	17.	 	Term and Termination.

	 	(a)	 	This Agreement shall take effect on the Effective Date and continue through
January 13, 2015 (the “Initial Term”) and shall renew automatically for
successive additional terms of one (1) year each (each a “Renewal Term”),
unless Bluestem notifies Bank of non-renewal at least one hundred and twenty (120) days
prior to the end of the Initial Term or any Renewal Term or Bank notifies Bluestem of
non-renewal at least one hundred and eighty (180) days prior to the end of the Initial
Term or any Renewal Term (together, the “Term”). This Agreement shall terminate
immediately upon the effectiveness of any termination or expiration of the Receivables
Sale Agreement.
	 
	 	(b)	 	(1) Upon the expiration of eighteen (18) months after Bank’s origination of
the first Account, Bluestem shall have the right to terminate this Agreement upon one
hundred and eighty (180) days’ prior written notice to Bank if:

	 	(i)	 	Bank has exercised rights pursuant to Section 6(a) that: (A)
materially impact the ongoing profitability for Bluestem of its performance
under the Program Documents, and (B) after a consultation period of sixty (60)
days, the Parties are unable to negotiate a commercially reasonable alternative
approach to any modifications made by Bank that would mitigate the effect on
Bluestem’s profitability;
	 
	 	(ii)	 	Bluestem has determined that it is technologically or
operationally necessary to transfer all Accounts to another issuing bank for
the integrity of administering and servicing the Program; and
	 
	 	(iii)	 	Bluestem pays to Bank, upon the effectiveness of such
termination, an amount equal to the product of (A) the average monthly
compensation

 

 

	 	 	 	earned by Bank under the Program Documents for the twelve (12)
month period preceding the first day of the calendar month in which Bluestem
provides notification of termination pursuant to this Section 17(b)(1),
multiplied by (B) (x) nine (9), if Bluestem provides such notification no later
than twenty-four months after Bank’s origination of the first Account, or (y)
six (6), if Bluestem provides such notification more than twenty-four (24)
months but less than thirty-two (32) months after Bank’s origination of the
first Account, or (z) zero (0), if Bluestem provides such notification
thirty-two (32) months or more after Bank’s origination of the first Account.

	 	 	 	(2) Bluestem shall have the right to terminate this Agreement on thirty (30) days’
prior written notice to Bank if any Regulatory Authority determines that Bank is
prohibited from offering deferred interest/’no payment’ offers in connection with
the Program and such determination is likely to cause a negative financial impact to
the Program; provided that (i) Bank and Bluestem have first met and considered in
good faith for a period of thirty (30) days any modifications to the Program that
may eliminate such negative financial impact and Bluestem has determined in good
faith that such modifications are not feasible; and (ii) Bluestem has identified
another issuing bank that is permitted to offer deferred offers/’no payment’ offers
on terms Bank is unable to offer and such terms, including the compensation payable
to Bluestem, are more advantageous to Bluestem in totality than the terms Bank is
able to offer.

	 	(c)	 	A Party shall have a right to terminate this Agreement immediately upon written
notice to the other Party and upon written notice to the Administrative Agent in any of
the following circumstances:

	 	(1)	 	any financial statement, certificate,
representation or warranty furnished by the other Party in the Program
Documents shall be incorrect in any material respect and shall not have
been corrected within thirty (30) Business Days after written notice
thereof has been given to such other Party;
	 
	 	(2)	 	the other Party shall default in the
performance of any obligation or undertaking under the Program
Documents and such default shall continue for thirty (30) Business Days
after written notice thereof has been given to such other Party;
provided, however, that either Party, in its sole discretion, may
terminate this Agreement without such a cure period if the default
pertains to a material failure and substantially similar failures (for
which notices of default have been provided) have occurred two (2) or
more times in any rolling twelve (12) month period;
	 
	 	(3)	 	the other Party shall default on any obligation
to make a payment to the terminating Party as provided in Sections 8 or 9 hereof and
such default remains uncured for more than two (2) Business Days

 

 

	 	 	 	after the terminating Party provides the defaulting Party notice of
such default;
	 
	 	(4)	 	the other Party shall commence a voluntary case
or other proceeding seeking liquidation, reorganization, or other
relief with respect to itself or its debts under any bankruptcy,
insolvency, receivership, conservatorship or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, conservator, custodian, or other similar official of it or
any substantial part of its property, or shall consent to any such
relief or to the appointment of a trustee, receiver, liquidator,
conservator, custodian, or other similar official or to any involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any corporate action to
authorize any of the foregoing;
	 
	 	(5)	 	an involuntary case or other proceeding,
whether pursuant to banking regulations or otherwise, shall be
commenced against the other Party seeking liquidation, reorganization,
or other relief with respect to it or its debts under any bankruptcy,
insolvency, receivership, conservatorship or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, conservator, custodian, or other similar official of it or
any substantial part of its property; or an order for relief shall be
entered against either Party under the federal bankruptcy laws as now
or hereafter in effect;
	 
	 	(6)	 	there is a material adverse change in the financial condition of Bluestem (in the case of a termination by the
Bank);
	 
	 	(7)	 	there is a material adverse change in the
financial condition of the Bank (in the case of a termination by
Bluestem) in one of the following respects that remains uncured for a
period of ninety (90) days (or such shorter period during which a
Regulatory Authority requires Bank to cure such matter): (i) Bank’s
risk-based capital ratio falling below ten percent (10%); (ii) Bank’s
Tier 1 risk-based capital ratio falling below six percent (6%); (iii)
Bank’s leverage ratio falling below five percent (5%); or (iv) Bank
being subject to any written agreement, order, capital directive, or
prompt corrective action relating to capital issued by the OTS; Bank
shall provide written notice to Bluestem within five (5) Business Days
of the occurrence of any such material adverse change, and the terms
“total risk-based capital ratio,” “Tier 1 risk-based capital ratio,”
and “leverage ratio” shall have the meanings set forth in the OTS’s Capital Maintenance Regulations, 12 C.F.R. pt. 567; or

 

 

	 	(8)	 	as permitted by Section 34.

	 	(d)	 	Upon termination of the Agreement by Bluestem pursuant to Section 17(b) or (c),
and upon termination of the Agreement by Bank pursuant to Section 17(c)(8), at the
written request of Bluestem, Bank shall continue to operate the Program for up to one
hundred and eighty (180) days following receipt of Bluestem’s written notice of
termination, so long as both Parties continue to perform their respective obligations
under the Program Documents during the period contemplated in this Section 17(d) and
provided that such arrangement is not in violation of Applicable Law and does not cause
Bank to operate in an unsafe or unsound manner; provided, that Bank may
terminate its continuing operation of the Program if Bluestem does not demonstrate,
within one hundred and twenty (120) days after providing notice of termination, that it
is in active negotiations with another financial institution to offer a successor
program. After the passage of one hundred and eighty (180) days following receipt of
Bluestem’s written notice of termination, to the extent Bank is still operating the
Program, Bank may take any action it reasonably deems necessary with respect to the
Accounts, including but not limited to, canceling Accounts and terminating charging
privileges.
	 
	 	(e)	 	The termination of this Agreement either in part or in whole shall not
discharge any Party from any obligation incurred prior to such termination. To secure
the obligations of Bank to perform under the Program Documents, Bank hereby grants to
Bluestem a security interest in all Accounts and all Account Agreements. In the event
Bluestem validly terminates this Agreement, Bluestem may exercise all rights and
remedies under the Program Documents and under any applicable law; provided, however,
that the security interest granted in this Section may be enforced only in the event
that Bluestem validly terminates this Agreement for one or more of the events set forth
in Section 17(c). No termination nor rejection or failure to assume the executory
obligations of this Agreement in the bankruptcy or receivership of either Party shall
be deemed to impair or affect the obligations pertaining to any executed obligations,
including, without limitation, pre-termination breaches of representations and
warranties by either Party and pertaining to the obligations that expressly survive
termination of this Agreement.
	 
	 	(f)	 	Upon expiration or termination of this Agreement, and without limiting the
terms of Section 17(d), Bank shall cooperate reasonably and in good faith with Bluestem
with respect to transitioning Bank’s responsibilities under the Program to a successor
designated by Bluestem (the “Successor”). Such cooperation shall include (but
is not limited to) the following:

	 	(1)	 	Bank shall share with the Successor all
information sufficient to allow the Successor to establish quickly a
successor debt waiver program; and
	 
	 	(2)	 	Bank shall allow Bluestem to continue to
utilize servicing and collection stock that includes the Bank’s name or
marks for a

 

 

	 	 	 	period of time after the Successor is in place, and shall
allow materials (such as catalogs) in process to be used, provided that
(i) an appropriate disclosure is made concerning the existence of the
Successor, which disclosure shall be subject to review and approval by
Bank, and (ii) Bluestem indemnifies Bank against any and all
liabilities from the use of such materials.

	 	(g)	 	The terms of this Sections 17(d), (e), (f) and (g)shall survive the expiration
or earlier termination of this Agreement.

18. Confidentiality.

	 	(a)	 	Each Party agrees that Confidential Information of the other Party shall be
used by such Party solely in the performance of its obligations and exercise of its
rights pursuant to the Program Documents. Except as required by Applicable Laws, a
Regulatory Authority or legal process, neither Party (the “Restricted Party”)
shall disclose Confidential Information of the other Party to third parties; provided,
however, that the Restricted Party may disclose Confidential Information of the other
Party (i) to the Restricted Party’s Affiliates, agents, representatives or
subcontractors for the sole purpose of fulfilling the Restricted Party’s obligations
under this Agreement (as long as the Restricted Party exercises reasonable efforts to
prohibit any further disclosure by its Affiliates, agents, representatives or
subcontractors), (ii) to the Restricted Party’s auditors, accountants and other
professional advisors, (iii) to the Administrative Agent, Bluestem’s other financing
sources and Bluestem, and (iv) to any other third party as mutually agreed by the
Parties.
	 
	 	(b)	 	A Party’s Confidential Information shall not include information that:

	 	(1)	 	is generally available to the public;
	 
	 	(2)	 	has become publicly known, without fault on the part of the Party who now seeks to disclose such information (the
“Disclosing Party”), subsequent to the Disclosing Party acquiring the information;
	 
	 	(3)	 	was otherwise known by, or available to, the Disclosing Party prior to entering into this Agreement; or
	 
	 	(4)	 	becomes available to the Disclosing Party on a non-confidential basis from a Person, other than a Party to this
Agreement, who is not known by the Disclosing Party to be bound by a confidentiality agreement with the non-Disclosing Party or otherwise
prohibited from transmitting the information to the Disclosing Party.

	 	(c)	 	Upon written request or upon the termination of this Agreement, each Party
shall, within thirty (30) days, return to the other Party all Confidential Information
of

 

 

	 	 	 	the other Party in its possession that is in written form, including by way of
example, but not limited to, reports, plans, and manuals, and delete any digitally or
optically stored versions of Confidential Information of the other Party; provided,
however, that each Party may maintain in its possession all such Confidential
Information required to be maintained under Applicable Laws relating to the retention
of records for the period of time required thereunder.
	 
	 	(d)	 	Each Party shall require its subcontractors having access to Confidential
Information to agree in writing to be bound by the provisions of this Section 18 prior
to disclosure of any Confidential Information to such subcontractors. Such Party shall
keep and maintain such protective agreements and shall promptly provide the other Party
with copies thereof upon request. Such permissible disclosure shall not relieve the
Disclosing Party of liability for such disclosure.
	 
	 	(e)	 	In the event that a Restricted Party is requested or required, by oral
questions, interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process, to disclose any Confidential Information of
the other Party, the Restricted Party will provide the other Party with prompt notice
of such request(s) so that the other Party may seek an appropriate protective order or
other appropriate remedy. In the event that the other Party does not seek such a
protective order or other remedy, or such protective order or other remedy is not
obtained, the Restricted Party may furnish that portion (and only that portion) of the
Confidential Information of the other Party which the Restricted Party is legally
compelled to disclose and will exercise such efforts to obtain reasonable assurance
that confidential treatment will be accorded any Confidential Information of the other
Party so furnished as the Restricted Party would exercise in assuring the
confidentiality of any of its own confidential information.
	 
	 	(f)	 	Nothing in this Section 18 shall restrict or prohibit Bluestem from using
Customer Information in any manner permitted by Section 14.
	 
	 	(g)	 	The terms of this Section 18 shall survive the expiration or earlier
termination of this Agreement.

	19.	 	Proprietary Materials.

	 	(a)	 	Each Party (“Licensing Party”) hereby provides the other Party
(“Licensee”) with a non-exclusive, non-transferable, revocable limited license
to use and reproduce the Licensing Party’s name, logo, registered trademarks and
service marks (“Proprietary Material”) in the forms and formats approved by the
Licensing Party on the Applications, Account Agreements, marketing materials, and
otherwise in connection with the fulfillment of Licensee’s obligations under the
Program Documents; provided, however, that (i) Licensee shall at all times comply with
written instructions provided by Licensing Party regarding the use of its Proprietary Material, and (ii) Licensee acknowledges that, except as
specifically provided in this Agreement, it will require no interest in Licensing

 

 

	 	 	 	Party’s Proprietary Material, including without limitation, any and all goodwill
arising from the Licensee’s use of the Licensing Party’s Proprietary Material, which
shall inure solely to the Licensing Party. Upon termination of this Agreement,
Licensee will cease using Licensing Party’s Proprietary Material.
	 
	 	(b)	 	No Licensee shall use the Licensing Party’s Proprietary Material for any
purpose other than as set forth in Section 19(a) above whatsoever without the prior
written consent, in each instance, of the Licensing Party. Further, no Licensee shall
at any time adopt or use, without the Licensing Party’s prior written consent, any
variation of Licensing Party’s Proprietary Material, including translations, or any
mark likely to be similar to or confusing with any of the Licensing Party’s Proprietary
Material. In the event that Licensing Party consents to any variation of Licensing
Party’s Proprietary Material, the Licensee hereby agrees that Licensing Party shall own
such new mark and shall, at Licensee’s cost and expense, file and obtain in Licensing
Party’s name all United States and international trademark registrations.

	20.	 	Relationship of Parties. The Parties agree that in performing their responsibilities
pursuant to this Agreement, they are in the position of independent contractors. This
Agreement is not intended to create, nor does it create and shall not be construed to create,
a relationship of partner or joint venturer or any association for profit between Bank and
Bluestem.
	 
	21.	 	Expenses.

	 	(a)	 	Except as otherwise provided in this Agreement, the Parties shall pay their own
expenses (including, without limitation, the fees and expenses of their own agents,
representatives, counsel, and accountants) incidental to the preparation and
performance of this Agreement. Each Party shall further be responsible for payment of
any federal, state, or local taxes or assessments associated with the performance of
its obligations under this Agreement and for compliance with all filing, registration
and other requirements with regard thereto.
	 
	 	(b)	 	Allocation of Costs for Program. As between the Parties, any and all costs and
expenses (excluding the Bank’s internal administrative expenses and legal fees and
those expenses Bank has specifically agreed to pay under this Agreement) related to the
Program shall be paid by Bluestem as part of its obligation to administer, market and
service the Accounts; such costs and expenses include, without limitation, costs of
preparing, printing, storing any mailing any Consumer Finance Materials and Marketing
Materials, billing statements, adverse action notices, collection notices, and any
other materials relating to the Program; costs of any subcontractor retained by
Bluestem in connection with the Program; and costs of obtaining credit reports,
delivering adverse action notices, processing and completing Account documentation and
closing credit extensions (including all attorney costs and filings fees and any taxes,
except Bank’s income taxes).

 

 

	 	(c)	 	Costs and Expenses Paid by Bank. Except as otherwise provided in
this Agreement, Bank shall be solely responsible for all fines, penalties and other
amounts assessed by any Regulatory Authority due to any act, omission, or failure of
Bank or any agents retained by Bank (other than Bluestem and its agents) to perform
any of Bank’s obligations under this Agreement; provided, it is understood that
approval, acquiescence or failure by Bank or its agents to reject any proposal,
action, or activity by Bluestem shall not relieve Bluestem of any obligation under
this Agreement.
	 
	 	(d)	 	Costs and Expenses Paid by Bluestem. In addition to any expenses specifically
set forth elsewhere in this Agreement, Bluestem shall be solely responsible for the
following:

	 	(i)	 	All expenses associated with Borrowers or third party fraud.
	 
	 	(ii)	 	All fines, penalties, reimbursements, and other amounts
assessed by any Regulatory Authority due to Bluestem’s actions, inactions, or
omissions or the actions, inactions or omissions of any third party retained by
Bluestem.
	 
	 	(iii)	 	A fee not to exceed $1,500 annually to Bank to offset the
expenses for conducting such inspections and audits as described in Section
23.
	 
	 	(iv)	 	All reasonable third-party expenses associated with completing
a due diligence review for any third party outsource vendor relationships
contemplated in this Agreement

	22.	 	Examination. Each Party agrees to submit to any examination that may be required by
a Regulatory Authority having jurisdiction over the other Party, during regular business hours
and upon reasonable prior notice, and to otherwise provide reasonable cooperation to the other
Party in responding to such Regulatory Authorities’ inquiries and requests relating to the
Program.
	 
	23.	 	Inspection. Each Party, upon reasonable prior notice from the other Party, agrees to
submit to an inspection of its books, records, accounts, personnel, and facilities relevant to
the Program, from time to time, during regular business hours subject, in the case of Bank, to
the duty of confidentiality it owes to its customers and banking secrecy and confidentiality
requirements otherwise applicable under Applicable Laws. Except as otherwise set forth in
this Agreement, all expenses of inspection shall be borne by the Party conducting the
inspection. Bluestem shall store all Records related to the Accounts, the Receivables and the
Program and shall make such Records available during any inspection by Bank or its designee
for such period as required by Applicable Law. Bluestem further agrees to provide timely and
thorough responses to any findings resulting from inspections, audits, reviews, assessments,
and the like conducted by Bank or a third party on behalf of Bank.

 

 

	24.	 	Cooperation. Each Party hereto agrees to cooperate fully with the other Party hereto
in furnishing any information or performing any action reasonably requested by such Party that
is needed by the requesting Party to perform its obligations under this Agreement or to comply
with Applicable or any request from a Regulatory Authority.
	 
	25.	 	Governing Law; Waiver of Jury Trial. The Parties acknowledge that Bank, as a federal
savings bank, is regulated by the OTS, and is therefore subject to federal law, and entitled
to preemption from state laws to the fullest extent permitted by law. In any matters not so
preempted (if any), this Agreement shall be interpreted and construed in accordance with the
laws of the State of Iowa, without giving effect to the rules, policies, or principles thereof
with respect to conflicts of laws. THE PARTIES HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING HEREUNDER. The terms of this
Section 25 shall survive the expiration or earlier termination of this Agreement.
	 
	26.	 	Severability. Any provision of this Agreement which is deemed invalid, illegal or
unenforceable in any jurisdiction, shall, as to that jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability, without affecting in any way the
remaining portions hereof in such jurisdiction or rendering such provision or any other
provision of this Agreement invalid, illegal, or unenforceable in any other jurisdiction.
	 
	27.	 	Assignment. This Agreement and the rights and obligations created under it shall be
binding upon and inure solely to the benefit of the Parties and their respective successors
and permitted assigns. Neither Party shall be entitled to assign or transfer any interest
under this Agreement without the prior written consent of the other Party, except that Bank
may assign this Agreement or any of its rights or obligations arising hereunder to the
surviving entity in a merger, sale, acquisition, or consolidation in which it participates. No
assignment under this Section 27 shall relieve a Party of its obligations under this
Agreement. Notwithstanding the foregoing, Bank hereby acknowledges and consents to (i) the
sale, transfer and assignment by Bluestem of all of its right, title and interest (but
excluding all obligations, including, without limitation, Bluestem’s obligations under Section
37 hereof) in, to and under the Receivables, the Account Agreements and the Program Documents,
whether now existing or hereafter acquired (the “Assigned Interests”), pursuant to the
Receivables Purchase Agreement (“RPA”), dated as of August 20, 2010 between Bluestem and
Fingerhut Receivables I, LLC (“Fingerhut Receivables”), as the same may be amended,
supplemented or otherwise modified, or refinanced, restated or replaced (with the same or
different financing sources), from time to time in accordance with the terms thereof, and (ii)
in connection with the Credit Agreement (“Credit Agreement”) dated as of August 20, 2010 by
and among Goldman Sachs Bank USA, as administrative agent (in such capacity, and including any
successor thereto, the “Administrative Agent”), collateral agent (in such capacity, and
including any successor thereto, the “Collateral Agent”), joint lead arranger, joint
bookrunner, syndication agent and documentation agent and J.P. Morgan Securities Inc., as
joint lead arranger and joint bookrunner, as the same may be amended, supplemented or
otherwise modified, or refinanced, restated or replaced (with the same or different financing
sources), from time to time in accordance with the terms thereof and the grant of a security
interest by Fingerhut Receivables in all of its right, title and interest in the

 

 

	 	 	Assigned
Interests to the Collateral Agent, and the enforcement of such security interest by the
Collateral Agent, in each case, pursuant to the Security Agreement (the “Security
Agreement”) dated as of August 20, 2010 between Collateral Agent and Fingerhut Receivables,
as the same may be amended, supplemented or otherwise modified, or refinanced, restated or
replaced (with the same or different financing sources), from time to time in accordance
with the terms thereof. Bank hereby further acknowledges and consents to the exercise of the
rights, title and interest in the
Assigned Interests directly by Fingerhut Receivables to
the extent permitted by the RPA, and by the Collateral Agent to the extent permitted by the
Security Agreement.
	 
	28.	 	Third Party Beneficiaries. Nothing contained herein shall be construed as creating a
third-party beneficiary relationship between either Party and any other Person; provided,
however, (i) Fingerhut Receivables, (ii) the Administrative Agent and (iii) Collateral Agent
(collectively, the “Third Party Beneficiaries”) shall each be a third party beneficiary of
this Agreement.
	 
	29.	 	Notices. All notices and other communications that are required or may be given in
connection with this Agreement shall be in writing and shall be deemed received (i) on the day
delivered, if delivered by hand; (ii) on the day transmitted, if transmitted by facsimile or
e-mail with receipt confirmed; or (iii) three (3) business days after the date of mailing to
the other Party, if mailed first-class postage prepaid, at the following address, or such
other address as either Party shall specify in a notice to the other:

	 	 	 	 	 

	 

	 	Two Copies to Bank:
	 	MetaBank d/b/a Meta Payment Systems
	 

	 	 	 	Attn: General Counsel and SVP of Credit
	 

	 	 	 	5501 S. Broadband Lane
	 

	 	 	 	Sioux Falls, SD 57108
	 

	 	 	 	Facsimile: 605-977-7501
	 
	 	 	 	 
	 

	 	To Bluestem:
	 	Bluestem Brands, Inc.
	 

	 	 	 	Attn: SVP and Chief Credit Officer
	 

	 	 	 	6509 Flying Cloud Drive
	 

	 	 	 	Eden Prairie, MN 55344
	 

	 	 	 	Telephone: (952) 656-3916
	 

	 	 	 	Facsimile: (952) 656-4117
	 
	 	 	 	 
	 

	 	With copies to:
	 	Bluestem Brands, Inc.
	 

	 	 	 	Attn: General Counsel
	 

	 	 	 	6509 Flying Cloud Drive
	 

	 	 	 	Eden Prairie, MN 55344
	 

	 	 	 	Telephone: (952) 656-3916
	 

	 	 	 	Facsimile: (952) 933-4117
	 
	 	 	 	 
	 

	 	 	 	Goldman Sachs Bank USA
	 

	 	 	 	Attn: Account Manager
	 

	 	 	 	6011 Connection Drive
	 

	 	 	 	Irving, Texas 75039
	 

	 	 	 	Telephone: (972) 368-5099
	 

	 	 	 	Facsimile: (972) 368-5090

 

 

	30.	 	Amendment and Waiver. This Agreement may be amended only by a written instrument
signed by each of the Parties and with the written consent of each of the Third Party
Beneficiaries. The failure of a Party to require the performance of any term of this
Agreement or the waiver by a Party of any default under this Agreement shall not prevent a
subsequent enforcement of such term and shall not be deemed a waiver of any subsequent breach.
All waivers must be in writing and signed by the Party against whom the waiver is to be
enforced.
	 
	31.	 	Entire Agreement. The Program Documents, including exhibits, constitute the entire
agreement between the Parties with respect to the subject matter thereof, and supersede any
prior or contemporaneous negotiations or oral or written agreements with regard to the same
subject matter.
	 
	32.	 	Counterparts. This Agreement may be executed and delivered by the Parties in any
number of counterparts, and by different Parties on separate counterparts, each of which
counterpart shall be deemed to be an original and all of which counterparts, taken together,
shall constitute but one and the same instrument.
	 
	33.	 	Interpretation. The Parties acknowledge that each Party and its counsel have
reviewed and revised this Agreement and that the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting Party shall not be employed in
the interpretation of this Agreement or any amendments thereto, and the same shall be
construed neither for nor against either Party, but shall be given a reasonable interpretation
in accordance with the plain meaning of its terms and the intent of the Parties.
	 
	34.	 	Agreement Subject to Applicable Laws. If (a) either Party has been advised by legal
counsel of a change in Applicable Laws or any judicial decision of a court having jurisdiction
over such Party or any interpretation of a Regulatory Authority that, in the view of such
legal counsel, would have a materially adverse effect on the Program, the rights or
obligations of such Party under this Agreement or the financial condition of such Party; (b)
either Party shall receive a lawful written request of any Regulatory Authority having
jurisdiction over such Party, including any letter or directive of any kind from any such
Regulatory Authority, that prohibits or restricts such Party from carrying out its obligations
under this Agreement; (c) either Party has been advised by legal counsel that there is a
material risk that such Party’s or the other Party’s continued performance under this
Agreement would violate Applicable Laws; (d) any Regulatory Authority shall have determined
and notified either Party that the arrangement between the Parties contemplated by the Program
Documents constitutes an unsafe or unsound banking practice or is in violation of Applicable
Law; or (e) a Regulatory Authority has commenced an investigation or action against a Party
which the other Party, in its reasonable judgment, determines threatens such Party’s ability
to perform its obligations
under the Program Documents, then, in each case, the Parties shall meet and consider in good
faith any modifications, changes or additions to the Program or the Program

 

 

	 	 	Documents that
may be necessary to eliminate such result. Notwithstanding any other provision of the
Program Documents, including Section 17 hereof, if the Parties are unable to reach agreement
regarding modifications, changes or additions to the Program or the Program Documents within
ten (10) Business Days after the Parties initially meet, either Party may terminate this
Agreement upon thirty (30) days prior written notice to the other Party and without payment
of a termination fee or other penalty. A Party shall be able to suspend performance of its
obligations under this Agreement, or require the other Party to suspend its performance of
its obligations under this Agreement, if (i) any event described in subsection 34(b) above
occurs and (ii) such Party reasonably determines that continued performance hereunder may
result in a fine, penalty or other sanction being imposed by the applicable Regulatory
Authority, or in material civil liability, unless with regards to civil liability, the other
Party agrees to indemnify the Party. For the avoidance of doubt, nothing in this Section 34
shall obligate a Party to disclose, share, or discuss any information to the extent
prohibited by Applicable Law or a Regulatory Authority.
	 
	35.	 	Force Majeure. If any Party shall be unable to carry out the whole or any part of
its obligations under this Agreement by reason of a Force Majeure Event, then the performance
of the obligations under this Agreement of such Party as they are affected by such cause shall
be excused during the continuance of the inability so caused, except that should such
inability not be remedied within thirty (30) days after the date of such cause, the Party not
so affected may at any time after the expiration of such thirty (30) day period, during the
continuance of such inability, terminate this Agreement on giving written notice to the other
Party. A “Force Majeure Event” as used in this Agreement shall mean an unanticipated event
that is not reasonably within the control of the affected Party or its subcontractors
(including, but not limited to, acts of God, acts of governmental authorities, strikes, war,
terrorist attacks, riot and any other causes of such nature), and which by exercise of
reasonable due diligence, such affected Party or its subcontractors could not reasonably have
been expected to avoid, overcome or obtain, or cause to be obtained, a commercially reasonable
substitute therefore. No Party shall be relieved of its obligations hereunder if its failure
of performance is due to removable or remediable causes which such Party fails to remove or
remedy using commercially reasonable efforts within a reasonable time period. Either Party
rendered unable to fulfill any of its obligations under this Agreement by reason of a Force
Majeure Event shall give prompt notice of such fact to the other Party, followed by written
confirmation of notice, and shall exercise due diligence to remove such inability with all
reasonable dispatch.
	 
	36.	 	Insurance. Bluestem agrees to maintain insurance coverages on the terms and
conditions specified in Exhibit K at all times during the Term.
	 
	37.	 	Compliance with Applicable Laws; Program Compliance Manual. Bluestem shall comply
with Applicable Laws and the Program Compliance Manual in its performance of this Agreement,
including Account solicitation, Application processing and the preparation of Account
Agreements and other Account-related documents. A copy of the
Program Compliance Manual is attached hereto as Exhibit E. Bank shall comply with
Applicable Laws specifically regarding its operations in its performance of this Agreement.

 

 

	38.	 	Headings. Captions and headings in this Agreement are for convenience only
and are not to be deemed part of this Agreement.
	 
	39.	 	Updates to Exhibit J. Bank shall promptly notify Bluestem of any changes in South
Dakota law pertaining to usury limitations or the exportation of interest rates or federal
laws pertaining to the exportation of interest rates that would cause Exhibit J to be
inaccurate.
	 
	40.	 	Privacy Law/Gramm-Leach Bliley Act Compliance. Subject to Applicable Laws, including
the GLBA, each of Bank and Bluestem shall comply with its respective privacy policy, which
have been agreed upon by both Parties with respect to Applicants and Borrowers. Bluestem shall
be responsible for providing Applicants and Borrowers with all required privacy disclosures on
behalf of Bank. Each Party agrees to implement and maintain appropriate measures to safeguard
Customer Information in compliance with Section 501(b) of the GLBA and the Interagency
Guidelines Establishing Information Security Standards.
	 
	41.	 	Data Security and Business Continuity.

	 	(a)	 	Data Security.

	 	(1)	 	Bluestem shall maintain, at its sole cost and expense, the
information systems necessary to perform its obligations under this Agreement
in a safe, sound, and compliant manner and reasonably secure all Confidential
Information. Specifically, Bluestem shall meet the following requirements with
respect to data security:

	 	(i)	 	Bluestem shall meet and maintain compliance
with the PCI Security Standards Council’s PCI Data Security Standard
(“PCI DSS”) no later than March 31, 2010, and shall promptly
provide to Bank a certification of compliance upon completion;
	 
	 	(ii)	 	By September 30, 2010, Bluestem shall retain a
reputable independent auditor (“Third Party Auditor”) to
perform an industry-standard audit of the information technology
controls maintained by Bluestem relating to the Program, and shall
promptly provide to Bank and copy of the Third Party Auditor’s
report(s) for such audits upon completion;
	 
	 	(iii)	 	By September 30, 2011, Bluestem shall retain a
Third Party Auditor to perform an industry-standard testing of the
information technology controls maintained by Bluestem relating to the
Program, and shall promptly provide to Bank a copy of the Third Party
Auditor’s report(s) for such audit(s) upon completion;

 

 

	 	(iv)	 	Prior to commencing the audit or testing
contemplated by Section 41(a)(1)(ii) or 41(a)(1)(iii), respectively,
Bluestem shall provide reasonable advance notice to Bank of the
intended scope of the audit or testing, and provide Bank an opportunity
to comment on such intended scope; and
	 
	 	(v)	 	Bluestem’s information technology controls
shall thereafter be reviewed and tested annually by an independent
third party, the audit results of which shall be reported promptly to
Bank.

	 	(2)	 	Each Party shall promptly disclose to the other any breaches in physical,
electronic or data security with respect to such Party’s operations or the
services it provides hereunder or databases or information maintained by such
Party, or a subcontractor, with respect to Accounts that result in unauthorized
intrusions that may have a material adverse effect on the Program or Borrowers.
A Party shall report to the other Party when any such material intrusion has
occurred, the estimated effect of the intrusion on the Program or Borrowers,
and the specific corrective actions taken or planned to be taken. In addition,
each Party agrees that it will not make material changes to its security
procedures and the requirements affecting the performance of its obligations
hereunder which would materially lessen the security of its operations or
materially reduce the confidentiality of databases and information maintained
with respect to the Program, Accounts and Borrowers without the prior written
consent of the other Party.

	(b)	 	Business Continuity. Bluestem shall, while this Agreement is in effect,
prepare and maintain disaster recovery, business resumption, and contingency plans
appropriate for the nature and scope of the activities of and the obligations to be
performed by Bluestem hereunder. Bluestem shall ensure that such plans are sufficient
to enable Bluestem to promptly resume the performance of its obligations hereunder in
the event of a natural disaster, destruction of Bluestem’s facilities or operations,
utility or communication failures, or similar interruption in the operations of
Bluestem or the operations of a third party which in turn materially affect the
operations of Bluestem. Bluestem shall make available to Bank copies of all such
disaster recovery, business resumption, and contingency plans and shall make available
to Bank copies of any changes thereto. Bluestem shall periodically test such disaster
recovery, business resumption, and contingency plans as may be appropriate and prudent
in light of the nature and scope of the activities and operations of Bluestem and its
obligations hereunder and shall promptly provide Bank with results of any such tests.
Bank acknowledges that Bluestem intends to revise its disaster recovery plans in 2010,
and that the requirement to provide and test such plans shall be implemented upon such
revisions.
	 
	 	 	Bluestem shall promptly provide written notice to Bank of the occurrence of any
changes or disruptions in the equipment, facilities, systems, staffing, or other
arrangements or contracts with third parties which may in any material respect

 

 

	 	 	 	have the effect of impairing, disrupting, or preventing the timely and full
performance by Bluestem of its obligations under this Agreement.
	 
	 	(c)	 	To the extent appropriate, Bluestem shall be responsible for ensuring that any
subcontractor retained by Bluestem to perform Processing Services in connection with
this Agreement complies with the requirements set forth in this Section.

	42.	 	Manner of Payments. Unless the manner of payment is expressly provided herein, all
payments under this Agreement shall be made by either ACH or wire transfer to the bank
accounts designated by the respective Parties. Notwithstanding anything to the contrary
contained herein, neither Party shall fail to make any payment required of it under this
Agreement as a result of a breach or alleged breach by the other Party of any of its
obligations under this Agreement or any other agreement, provided that the making of any
payment hereunder shall not constitute a waiver by the Party making the payment of any rights
it may have under the Program Documents or by law.
	 
	43.	 	Referrals. Neither Party has agreed to pay any fee or commission to any agent,
broker, finder, or other person for or on account of such person’s services rendered in
connection with this Agreement that would give rise to any valid claim against the other Party
for any commission, finder’s fee or like payment.
	 
	44.	 	Financial Information to be Provided. During the term of this Agreement, Bank will
make available to Bluestem via the internet (i) its Thrift Financial Report (www.fdic.gov);
and (ii) complete and correct copies of its balance sheets and related statements of income
and cash flow (www.metacash.com). During the term of this Agreement, Bluestem agrees to
provide Bank with unaudited quarterly financial statements within forty-five (45) days
following the end of each calendar quarter, which shall include, at a minimum, a balance
sheet, income statement and cash flow statement in such detail reasonably acceptable to Bank
and certified by Bluestem’s Treasurer or Chief Financial Officer, and audited annual financial
statements within one hundred twenty (120) days after the end of Bluestem’s fiscal year (or
such longer period during which Bluestem’s principal third-party creditors may permit it to
provide its audited annual financial statements; provided that Bluestem provided advance
notice of such delay to Bank that is reasonable under the circumstances), which shall include,
at a minimum, a balance sheet, income statement, and cash flow statement, in such detail
reasonably acceptable to Bank and prepared by an independent certified public accountant in
accordance with generally accepted accounting principles.
	 
	45.	 	Subcontractors.

	 	(a)	 	Bluestem may from time to time retain the services of one or more
subcontractors to perform some or all of the services Bluestem has agreed to perform
pursuant to this Agreement.
	 
	 	(b)	 	Bluestem shall be responsible for obtaining a written agreement with all
subcontractors for the rendering of such services and shall be responsible for all fees
and expenses of each subcontractor. Such written agreements shall be

 

 

	 	 	 	available to Bank for review upon its request. Bank may require Bluestem to
terminate or replace any subcontractor in the event Bank or a Regulatory Authority
determines that such subcontractor’s performance violates Applicable Law.

	 	(c)	 	Bluestem shall obtain Bank’s prior written consent, which consent shall not be
unreasonably withheld, prior to retaining any subcontractors to perform critical
services in connection with the Program (“Program Critical Subcontractors”).
Such critical services shall include application of Bank’s Credit Policy to incoming
applications, Office of Foreign Assets Control screening, set-up, activation and
maintenance of Accounts, transaction authorization, transaction processing, payment
processing, Account data entry, statement preparation and issuance, Borrower dispute
resolution, security and fraud control, customer service support, collection, credit
bureau reporting, and data warehousing, as well as any other services requiring a
subcontractor’s access to Customer Information. Bank acknowledges that Bluestem may be
or is contracting with those subcontractors identified on Exhibit L attached
hereto and incorporated herein by this reference. Bank and Bluestem agree that those
subcontractors listed on Exhibit L identified with an asterisk (“*”) are
considered Program Critical Subcontractors. Bluestem shall notify Bank in writing of
any changes to the list of Program Critical Subcontractors listed in Exhibit L
at least ten (10) days prior to entering into a contractual relationship with a new
Program Critical Subcontractor and at least twenty (20) days prior to providing notice
of termination of any contractual relationship with any Program Critical Subcontractor.
Bluestem shall not enter into any forbearance agreement with any Program Critical
Subcontractor, and shall notify Bank in writing of any proposed material change in
scope or terms of any written agreement with any Program Critical Subcontractor.
Bluestem shall update the list of all other subcontractors identified on Exhibit
L at least semi-annually.
	 
	 	(d)	 	Bluestem shall remain liable for any services performed by any subcontractors.
Bluestem shall make commercially reasonable efforts to include provisions in any new
agreement with a Program Critical Subcontractor requiring the Program Critical
Subcontractor to allow Bank and any Regulatory Authority having jurisdiction over Bank
to audit, inspect, and review their facilities, personnel, files and records insofar as
they relate to the Accounts or the Program. With respect to existing Program Critical
Subcontractors, Bluestem shall use its commercially reasonable efforts to procure such
audit and inspection rights in the event required by Bank or its Regulatory Authority,
and Bluestem shall take those measures reasonably required to honor the requirement of
any such audit, inspection or review. Any audit, inspection, or review as provided
hereunder shall be on terms reasonably acceptable to the applicable subcontractor,
including advance notice, respecting the operating hours and confidentiality, and such
other reasonable terms established of the subcontractor. Bluestem shall use
commercially reasonable efforts to include provisions in any agreement with any other
subcontractor requiring the subcontractor to allow Bank and any Regulatory Authority
having jurisdiction over Bank to audit, inspect, and review their

 

 

	 	 	 	facilities, personnel, files and records insofar as they relate to the Accounts or
the Program.

	46.	 	Additional Programs. Bank will provide resources to Bluestem and cooperate with
Bluestem to evaluate offering a Bluestem-branded prepaid card targeted to customers who were
ineligible for the Program. The Parties also agree to negotiate in good faith for Bank to
serve as a backup issuer for the Gettington credit offering marketed by Bluestem, on
commercially reasonable terms and subject to Bank’s risk evaluation.
	 
	47.	 	Closed-End Program.

	 	(a)	 	Upon request of Bluestem, and subject to review and approval by Bank of (i)
related Marketing Materials and Marketing Activities pursuant to Section 2(b) and (ii)
related Consumer Finance Materials pursuant to Section 6(a), Bank shall offer
Installment Loans.
	 
	 	(b)	 	The Debt Waiver Product shall not be available to borrowers of Installment
Loans.
	 
	 	(c)	 	In accordance with the terms of the Installment Loans, and subject to the
Credit Policy and this Agreement, Bank shall issue an Open-End Account to each Borrower
who has timely paid his or her Installment Loan with no late payments.
	 
	 	 	 	IN WITNESS WHEREOF, the Parties have entered into this Agreement on the date set forth above.

	 	 	 	 	 	 	 	 	 

	METABANK	 	BLUESTEM BRANDS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	By: 

Name:

	 	/s/ John Hagy
 

John Hagy
	 	By:

Name:
	 	/s/ Mark P. Wagener
 

Mark P. Wagener
	 	 
	Title:

	 	CLO
	 	Title:
	 	Executive Vice President	 	 

 

 

Schedule 1

Definitions

	(a)	 	“ACH” means the Automated Clearinghouse.

	(b)	 	“Account” means, collectively, the Open-End Accounts and Installment
Loans issued by Bank pursuant to the Program. “Account Advance” means an
advance by Bank to a Borrower from an Account pursuant to the Program.

	(c)	 	“Account Advance” means an advance by Bank to a Borrower from an
Account pursuant to the Program.

	(d)	 	“Account Agreement” means the agreement between a Borrower and the Bank
containing the terms and conditions of an Account, including all disclosures required
by Applicable Law.

	(e)	 	“Administrative Agent” shall have the meaning set forth in Section 27.

	(f)	 	“Affiliate” means, with respect to a Party, a Person who directly or
indirectly controls, is controlled by or is under common control with the Party. For
the purpose of this definition, the term “control” (including with correlative
meanings, the terms controlling, controlled by and under common control with) means the
power to direct the management or policies of such Person, directly or indirectly,
through the ownership of twenty-five percent (25%) or more of a class of voting
securities of such Person.

	(g)	 	“Applicable Laws” means all federal, state and local laws,
statutes, regulations and orders applicable to a Party or relating to or
affecting any aspect of the Program, and all publicly available rules, orders,
memoranda of understanding, formal and informal guidance, directives and decrees of all
governmental authorities (including without limitation federal, state and local
governments, governmental agencies and quasi-governmental agencies and Regulatory
Authorities) including, without limitation, Section 218 of the OTS Examination Manual
(including, but not limited to, those provisions of the Truth in Lending Act,
Regulation Z and the Credit CARD Act of 2009 pertaining to consumer credit cards), as
any of the foregoing may be amended, supplemented, replaced or otherwise modified from
time to time.

	(h)	 	“Applicant” means an individual who requests an Account from Bank.

	(i)	 	“Application” means any request from an Applicant for an Account in the
form required by Bank.

	(j)	 	“Assigned Interests” shall have the meaning set forth in Section 27.

 

	(k)	 	“Bank” shall have the meaning set forth in the introductory paragraph
of this Agreement.

	(l)	 	“Bank Indemnified Parties” shall have the meaning set forth in Section
15(b).

	(m)	 	“Bluestem Indemnified Parties” shall have the meaning set forth in
Section 15(a)

	(n)	 	“Borrower” means an Applicant for whom Bank has established an Account
and/or any Person who is liable, jointly or severally, for amounts owing with respect
to an Account.

	(o)	 	“Business Day” means any day, other than (i) a Saturday or Sunday, or
(ii) a day on which banking institutions in the State of South Dakota are authorized or
obligated by law or executive order to be closed.

	(p)	 	“Claim Notice” shall have the meaning set forth in Section 15(e).

	(q)	 	“Closed-End Program” means the closed-end installment loan program to
be offered by Bank to Borrowers pursuant to the terms of this Agreement, initially as
described in Exhibit A attached hereto.

	(r)	 	“Collateral Agent” shall have the meaning set forth in Section 27.

	(s)	 	“Confidential Information” means the Program Documents, Customer
Information, and any proprietary information or non-public information of a Party,
including a Party’s proprietary marketing plans and objectives, that the Disclosing
Party discloses to the Restricted Party or to which the Restricted Party obtains access
in connection with the negotiation and performance of this Agreement.

	(t)	 	“Consumer Finance Materials” shall have the meaning set forth in
Section 5.

	(u)	 	“Credit Agreement” shall have the meaning set forth in Section 27.

	(v)	 	“Credit Policy” means the minimum requirements of income, residency,
employment history, credit history, and/or other such considerations that Bank uses to
approve or deny an Application and to authorize the establishment of an Account or an
extension of credit thereunder.

	(w)	 	“Customer Information” means non-public personal information about
Borrowers and their Accounts as defined under the Gramm-Leach-Bliley Act.

	(x)	 	“Debt Waiver Collections” shall have the meaning set forth in Section
9(b).

	(y)	 	“Debt Waiver Product” shall have the meaning set forth in Section 9(a).

	(z)	 	“Disclosing Party” shall have the meaning set forth in Section
18(b)(2).

 

	(aa)	 	“Effective Date” shall have the meaning set forth in the introductory
paragraph of this Agreement.

	(bb)	 	“Existing Accounts” means the open-end consumer financing accounts
transferred
to Bank from Existing Bank pursuant an account transfer agreement between such
parties.
	 
	(cc)	 	“Existing Bank” means CIT Bank, a Utah Bank.
	 
	(dd)	 	“Fingerhut Receivables” shall have the meaning set forth in Section 27.
	 
	(ee)	 	“Force Majeure Event” shall have the meaning set forth in Section 35.
	 
	(ff)	 	“Funding Account” means the demand deposit account of Bluestem into
which the Funding Amount is disbursed via federal wire transfer.
	 
	(gg)	 	“Funding Amount” means the aggregate amount of all proceeds of
extensions of credit on Accounts to be disbursed to Bluestem, as listed on a Funding
Statement.
	 
	(hh)	 	“Funding Statement” means the statement prepared by Bluestem each
Business Day that contains the computation of the Funding Amount to be forwarded by
Bank to Bluestem and such other information as set forth in Section 8 and as shall be
reasonably requested by Bank and mutually agreed by the Parties.
	 
	(ii)	 	“Indemnifiable Claim” shall have the meaning set forth in Section
15(d).
	 
	(jj)	 	“Insolvent” means the failure to pay debts in the ordinary course of
business, the inability to pay its debts as they come due or the condition whereby the
sum of an entity’s debts is greater than the sum of its assets.
	 
	(kk)	 	“Installment Loan” means a closed-end installment loan originated by
Bank pursuant to the Closed-End Program.
	 
	(ll)	 	“Licensee” shall have the meaning set forth in Section 19(a).
	 
	(mm)	 	“Licensing Party” shall have the meaning set forth in Section 19(a).
	 
	(nn)	 	“Losses” shall have the meaning set forth in Section 15(a).
	 
	(oo)	 	“Management Report” has the meaning set forth in Section 7(j).
	 
	(pp)	 	“Marketing Activities” means all advertising media of any kind or
nature, in whole or in part, including without limitation, catalogs, email solicitation
messages, published advertising (such as newspaper and magazine advertisements), SMS
text messaging, Internet media, blogs, tweet posts, banner ads, RSS feeds,
telemarketing scripts, television or radio advertisements, frequently asked questions,
promoting, advertising and/or marketing the Program.

 

	(qq)	 	“Marketing Materials” means categories of marketing messages intended
to generate originations of Accounts to and/or sales from a targeted population
delivered through various Marketing Activities. Marketing Materials include, but
are not limited to, pre-approved marketing, “up-to” marketing, deferred payment and
deferred interest marketing, and low monthly payments marketing.
	 
	(rr)	 	“Open-End Account” means an open-end consumer financing account
established by Bank pursuant to the Open-End Program, including Existing Accounts
transferred to Bank for inclusion in the Open-End Program. For purposes of compliance
with Applicable Law, all Open-End Accounts established by or transferred to Bank under
this Agreement shall be considered and treated as consumer credit card accounts.
	 
	(ss)	 	“Open-End Program” means the open-end consumer financing program to be
offered by Bank to Borrowers pursuant to the terms of this Agreement, initially as
described in Exhibit A attached hereto.
	 
	(tt)	 	“OTS” means the Office of Thrift Supervision or any successor entity.
	 
	(uu)	 	“PCI DSS” shall have the meaning set forth in Section 41(a)(i).
	 
	(vv)	 	“Performance Matrix” has the meaning set forth in Section 7(k).
	 
	(ww)	 	“Person” means any legal person, including any individual, corporation,
limited liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, governmental entity, or other entity of
similar nature.
	 
	(xx)	 	“Principal” means any Person directly or indirectly owning ten percent
(10%) or more of Bluestem, and any executive officer or director of Bluestem.
	 
	(yy)	 	“Processing Services” means those services which are necessary to
establish and maintain an Account and process Account transactions in accordance with
Applicable Law and the Program Compliance Manual. Such services shall include but not
be limited to: application of Bank’s Credit Policy to incoming applications, Office of
Foreign Assets Control screening, set-up, activation and maintenance of Accounts,
customer service, collections, transaction authorization, transaction processing,
payment processing, statement preparation and issuance, Borrower dispute resolution,
regulatory compliance, security and fraud control, and activity reporting.
	 
	(zz)	 	“Program” means, collectively, the Open-End Program and Closed-End
Program to be offered by Bank to Borrowers pursuant to the terms of this Agreement,
initially as described in Exhibit A attached hereto.
	 
	(aaa)	 	“Program Compliance Manual” means the policies and procedures for the
processing of Applications and the transmission of information and funds between
Bluestem, on the one hand, and Applicants or Borrowers, on the other hand as set

 

	 	 	forth
in the Bluestem documents including those entitled Credit Department Credit Policies,
Financial Operations Policies, Customer Service Policies, and Collection Policies, and
any modifications, amendments or supplements thereto.
	 
	(bbb)	 	“Program Critical Subcontractors” shall have the meaning set forth in
Section 45(c).
	 
	(ccc)	 	“Program Documents” means this Agreement and the Receivables Sale
Agreement, as may be amended from time to time.
	 
	(ddd)	 	“Program Year” means (a) the period from the Effective Date to the
first anniversary of such date, and (b) the period from one anniversary of the
Effective Date to the next successive anniversary of the Effective Date.
	 
	(eee)	 	“Proprietary Materials” shall have the meaning set forth in Section 19(a).
	 
	(fff)	 	“Qualifying Change” shall have the meaning set forth in Section 2(c).
	 
	(ggg)	 	“Receivable” means, with respect to any Borrower, any right to payment
from or on behalf of any Borrower in respect of any extension of credit on an Account,
and includes any existing, as well as the right to payment of any future, finance
charges, late fees, returned check fees and any and all other fees and charges and
other obligations of such Borrower with respect to such Account. Each Receivable
includes, without limitation, all rights of Bank to payment under the Account Agreement
with such Borrower. For avoidance of doubt, with respect to an Installment Loan, the
term “Receivable” shall include such Installment Loan and all right, title and interest
in and to such Installment Loan.
	 
	(hhh)	 	“Receivables Sale Agreement” means that Receivables Sale Agreement,
dated as of the Effective Date, between Bank and Bluestem, as the same may hereafter be
amended or otherwise modified from time to time, pursuant to which Bank agrees to sell
to Bluestem, and Bluestem agrees to purchase from Bank, the Receivables.
	 
	(iii)	 	“Records” means any Account Agreements, applications, change-of-terms
notices, credit files, credit bureau reports, copies of adverse action notices,
transaction data, records, or other documentation (including computer tapes, magnetic
or electronic files, and information in any other format) related to the Accounts, the
Receivables and the Program.
	 
	(jjj)	 	“Regulatory Authority” means any federal, state or local regulatory
agency or other governmental agency or authority having jurisdiction over a Party and,
in the case of Bank, shall include, but not be limited to, the OTS.
	 
	(kkk)	 	“Restricted Party” shall have the meaning set forth in Section 18(a).
	 
	(lll)	 	“RPA” shall have the meaning set forth in Section 27.

 

	(mmm)	 	“Security Agreement” shall have the meaning set forth in Section 27.
	 
	(nnn)	 	“Settlement” means Bank’s payment of the Funding Amount to Bluestem.
	 
	(ooo)	 	“Substantive Change” means a change to the Marketing Activities, the
categories
of the Marketing Materials, or any items required by (i) Applicable Law or (ii)
requirements previously identified by Bank in good faith as necessary due to safety
and soundness or reputational concerns.
	 
	(ppp)	 	“Successor” shall have the meaning set forth in Section 17(f).
	 
	(qqq)	 	“Third Party Auditor” shall have the meaning set forth in Section 41(a).
	 
	(rrr)	 	“Third Party Beneficiaries” has the meaning
set forth in Section 27.

 

EXHIBIT A

GENERAL DESCRIPTION OF PROGRAM

	1.	 	The following is an overview of the Program to be offered by Bank to Bluestem’s customers
pursuant to the terms of the Program Agreement to which this Exhibit A is attached (the
“Agreement”). Capitalized terms used in this Exhibit A without definition shall have the
meanings provided in the Agreement.

	2.	 	Bluestem is a direct marketing retailer of general merchandise and services offered to
consumers through catalog mailings, the internet and the telephone. Based on
creditworthiness, Applicants may be offered an Open-End Account or Installment Loan with Bank
which may be used by Applicant for personal purposes to purchase such products and services.
All Accounts established by Bank under this Agreement shall have a non-variable annual
percentage rate (“APR”) of 24.90%. Consumers who successfully pay off an Installment Loan
will be eligible for an Open-End Account. Open-End Accounts shall be considered and treated as
consumer credit card accounts for purposes of compliance with the Truth in Lending Act,
Regulation AA, Regulation Z, the Credit CARD Act of 2009, and other Applicable Law pertaining
to consumer credit card accounts. Bluestem may contemplate other credit programs from time to
time, subject to approval by Bank.

	3.	 	A copy of the form of Account Agreement currently used in the Open-End Program is attached as
Exhibit D to the Agreement. A copy of the form of Account Agreement currently used in the
Closed-End Program is attached as Exhibit D-1 to the Agreement. Customers wishing to apply
for an Account via the internet or mail will complete an Application, which is attached as
Exhibit C to the Agreement. The Application will be located on web pages at www.fingerhut.com.
Applicants applying for an Account via phone will provide Bluestem’s sales representatives
with oral answers to the application questions set forth on the Application. Once the
Applicant’s Application is completed, a FICO score, or other such credit score(s) utilized by
Bank at such time, will be obtained, and a credit determination will be made in accordance
with Bank’s then applicable Credit Policy, the current version of which is attached as Exhibit
B to the Agreement.

 

Exhibit B
[*]
Eight pages omitted

[*]
Indicates confidential portions omitted pursuant to a request for
confidential treatment filed separately with the Securities and
Exchange Commission

 

EXHIBIT C

Forms of Application

Fingerhut Credit Account

1) Mail Order Application

2) Phone Order Application

3) Website Application

See subsequent pages

 

	EXHIBIT C—MAIL ORDER APPLICATION

 

 

	EXHIBIT C—PHONE ORDER APPLICATION

 

 

	EXHIBIT C—WEB APPLICATION (1)

 

 

	EXHIBIT C—WEB APPLICATION (2) (FCRA Notification pop-up)

 

 

	EXHIBIT C—WEB APPLICATION (3) SafeLine Solicitation and T&Cs in scroll box

 

 

	EXHIBIT C—WEB APPLICATION (4)—Acceptance of T&Cs and Submission (application cannot be submitted
until terms are accepted)

 

 

	EXHIBIT C-l Forms of Application
Fingerhut FreshStart Credit Account
1) Mail Order Application 2) Phone Order Application
See subsequent pages

 

 

	EXHIBIT C-l(l) MAIL APPLICATION FINGERHUT FRESHSTART

 

 

	EXHIBIT C-l (2) FINGERHUT FRESHSTART PHONE ORDER APPLICATION
Order line intro script for customer that received FS catalog
FOP OL Scripting Tool
Locate Customer
Greeting:
“Thank you for calling Fingerhut, this is (name). Are you calling to place an order from a
Fingerhut FreshStart catalog today?”
Response 1:
“That’s great! I would be happy to help you with that.”
Response 2:
“May I have your customer number? It is located on the back of your catalog highlighted in yellow
above your name and address.”

 

 

	EXHIBIT C-l (2) F1NGERHUT FRESHSTART PHONE ORDER APPLICATION FOP OL Scripting Tool
Verification:
Refer to FOP scripting.
Verify the caller’s information — ensure name and address are spelled correctly.

 

 

	EXHIBIT C-l (2) FINGERHUT FRESHSTART PHONE ORDER APPLICATION FOP OL Scripting Tool
Response 3:
"/ see that you have received our Fingerhut FreshStart catalog offer! Do you have any questions
about the Fingerhut FreshStart Credit Account issued by MetaBank?”
YES — Proceed to Response 4 NO — Go to Response 5
Response 4:
“The Fingerhut FreshStart Credit Account issued by MetaBank is a new way of shopping that helps you
make the purchases you want today and may help build your credit over time. Shop, order, pay it
off- that’s how it works. Spend at least $50 up to your pre-approved credit limit. Place your order
and make a down payment of just $30. You’ll pay off the remaining balance in 6 on-time, low monthly
payments. Upon completion of the program with no late payments, you will be rewarded with a
revolving Fingerhut Credit Account issued by MetaBank with a credit limit of $200!”
Response 5:
"/ can complete an application right now. If you are approved, you can place an order immediately.
Would you like to apply?”
YES — continue with application. NO — Offer other MOP.

 

 

	EXHIBIT C-l (2) FINGERHUT FRESHSTART PHONE ORDER APPLICATION FOP OL Scripting Tool
MetaBank/Fingerhiif Fresh Start Credit Application
FreshStart Credit Application: Refer to FOP scripting.

 

 

	EXHIBIT C-l (2) F1NGERHUT FRESHSTART PHONE ORDER APPLICATION
Order line congratulations script for customers that are approved
FOP OL Scripting Tool
Response 1:
“Congratulations, your Fingerhut FreshStart Credit Account issued by MetaBank application has been
approved. Your
maximum purchase amount is $ . This is a one-time use
amount and your purchase must be at least $50. With this order, you will need to make a down
payment of $30 using your Visa or MasterCard debit card, checking/savings electronic draft or
payment by mail. We recommend making the down payment with your debit or credit card — this method
of payment will allow us to process your order more quickly. Do you have one of these methods
available today?”
YES — Continue with order and refer to FOP scripting NO — Go to Response 2
Response 2:
“OK, how would you like to make your down payment?”

 

 

	EXHIBIT C-l (2) F1NGERHUT FRESHSTART PHONE ORDER APPLICATION FOP OL Scripting Tool
If customer advises mailing in a check or money order:
Response 3:
“Please note that your payment must be received and applied within 10 days so we can process your
order. You can mail a check or money order for your $30 down payment using the postage-paid
envelope in your catalog. If you do not have the pre-paid envelope, send your payment to P.O. Box
270, St. Cloud, MN 56372-xxxx. Please keep in mind if you choose to mail your payment, we must
allow time for the payment to clear, which means your order could be delayed for up to three (3)
weeks.”

 

 

	EXHIBIT C-l (2) FINGERHUT FRESHSTART PHONE ORDER APPLICATION
Order line script for advising timeframe on Down Payment methods of payment on in stock item
FOP OL Scripting Tool
Debit:
“We allow 2-3 business days for your payment to be approved and applied to your order. Your order
will be processed once your payment has cleared the bank. “
Checking/Savings:
“We allow 12 business days for your payment to be approved and applied to your order. Your order
will be processed once your payment has cleared the bank.”
Mail Money Order:
“We allow 5 business days for your payment to be approved and applied to your order. Your order
will be processed once your payment has cleared the bank. Please mail your payment to PO Box 270,
St. Cloud, MN 56395 and include your 10 digit customer ID number on your payment/’
Paper Check:
“We allow 5 business days for your payment to be approved and applied to your order. Your order
will be processed once your payment has cleared the bank. Please mail your payment to PO Box 270,
St. Cloud, MN 56395 and include your 10 digit customer ID number on your payment.”

 

 

	EXHIBIT D
Fingerhut Credit Account
Terms and Conditions
Account Summary Disclosures
See Subsequent Pages

 

 

	Whie we investigate whether ornot there has been an error.
• We cannot try to collect the amount in question, or report you as delinquent.
• The’ charge in question may remain on your statement, and we may continue to charge you interest
on 1hat amount.
‘While you do not have to pay the amount in quest’on, you are responsible for the remainder of your
balance.
• We can apply any unpaid amount against your credit limit.
After we finish our investigation, one of two things will happen:
• If we made a mistake: You will not have to pay the amount in question or any interest or other
fees related to that amount
• If we do not believe there was a mistake: You will have to pay the amount in question, along with
applicable interest and fees. We will send you a statement of the amount you ewe and the date
payment is due. We may then report you as delinquent if you do not pay the amount we think you owe.
If you receive our explanation but still believe your bill is wrong, you must write to us within 10
days telling us that you still refuse to pay. If you do so, we cannot report you as delinquent
without also reporting that you are questioning your bill. We must tell you the name of anyone to
whom we reported you as delinquent, and we must let those organizations know when the matter has
been settled between us. If we do not follow all of the rules above, you do not have to pay the
first $50 of the amount you question even if your bill is correct
YOUR RIGHTS F YOU ARE DISSATISFIED WITH YOUR CREDIT PURCHASES If you use your card to make a
purchase and you are dissatisfied with the goods or services that you receive, you may have the
right not to pay the remaining amount due on the purchase. To use this right, all of the following
must be tue:
1. The purchase must have been made in your home state or within 100 miles of your current mailing
address, and the purchase price must have been more than $50. (Note: Neither of these are necessary
if your purchase was based on an advertisement we mailed to you, or if we own the company that sold
you the goods or services.)
2. You must have used your Card for the purchase.
3. You must have not yet fully paid for Hie purchase.
If all of the criteria above are met and youare still dissatisfied with the purchase, contact us in
writing at Rngerhut Credit Account Services, P.O. Box 1250, St. Cloud, MN 56395-1250. While we
investigate, the same rules apply to the disputed amount as discussed above. After we finish our
investigation, we will tell you our decision. At that point, if we think you owe an amount and you
do not pay we may report you as delinquent CREDIT BUREAU DISPUTES If you believe we inaccurately
reported credit history information about you or your Account to a credit reporting agency, call us
at 1 -866-734-0342 or write to us at Credit Bureau Reporting Services, 6250 Ridgewood Road, St.
Cloud, MN 56303. Please provide the Rngerhut Credit Account number along with a copy of your credit
bureau report reflecting Hie information that you believe is inaccurate.
Arbitration By requesting an Account from us and accepting this Agreement, you agree that if a
dispute of any kind arises out of this Agreement, either you or we, at our sole discretion, can
choose to have that dispute resolved by binding arbitration. If arbitration is chosen by any party,
neither you nor we will have the right to litigate that claim in court or to have a jury trial on
that claim, or to engage in pre-arbitrat’on discovery, except as provided for in the arbitration
rules. In addition, you will not have the right to participate as a representative or member of any
class of claimants pertaining to any claim subject to arbitration. The arbitrator’s decision will
generally be final and binding. Other rights that you would have if you went to court may also not
be available in arbitration. It is important that you read the entire Arbitration provision
carefully before accepting the t
erms of fcis Agreement Notwithstanding any language of this
Agreement to the contrary, should any portion of this Arbitration provision be held invalid or
unenforceable by a court or other body of competent jurisdiction, this entire Arbitration provision
shall be automatically terminated, but all other provisions of this Agreement shall remain in full
force and elect Any claim, dispute or controversy (whether in contract, regulatory, tort or
otherwise, whether preexisting, present or future and including constitutional, statutory, common
law, intentional tort and equitable claims) arising from or relating to the credit offered or
provided to you; the
actions of yourself, us, or third parties; or the validity of this Arbitration provision
(individually and collectively, a “Claim”), must, after an election by you or us, be resolved by
binding arbitration in accordance with the Arbitration provision and the Commercial Arbitration
Rules of the American Arbitration Association (“AAA”) in effect when the Claim is filed. There
shall be no authority for any Claims to be arbitrated on a class action basis. An arbitration can
only decide your or our Claim and may not consolidate or join the claims of other persons who may
have similar claims. You may obtain rules and forms by calling the AAA at 1-800-778-7579. Any
arbitration hearing that you attend will take place in the Federal judicial district where you
reside. At your request, we will advance the first $250.00 of the filing and hearing fees for any
Claim you may file against us; the arbitrator will decide whether you or we will ultimately pay
those fees. Unless inconsistent with applicable law, each party shall bear the expense of their
respective attorneys, experts, and witness fees, regardless of which party prevails in the
arbitration. The arbitrator shall apply applicable substantive law consistent with the Federal
Arbitration Act and applicable statutes of limitations, and shall honor claims of privilege
recognized at law. Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction. This Arbitration provision shall survive repayment of your extension of credit
and termination of your Account This Arbitration provision shall be governed by the Federal
Arbitration Act, 9 USC Sections 1 through 16. Ohio Residents: The Ohio laws against discrimination
require that all creditors make credit equally available to all creditworthy customers, and that
credit reporting agencies maintain separate credit histories on each individual upon request. The
Ohio Civil Rights Commission administers compliance with this law.
Married Wisconsin Residents: No provision of any marital property agreement, unilateral agreement,
or court decree under Wisconsin’s Marital Property Act will adversely affect a creditor’s interest
unless prior to the time credit is granted, the creditor is furnished a copy of fiat agreement or
decree or is given complete information about the agreement or decree.
All accounts, Including New York/Rhode Island/Vermont Residents: You ape to give MetaBank
permission to access your credit report in connection with any transaction, or extension of credit
and on an ongoing basis, for the purpose of reviewing your Account, adjusting the credit line on
your Account taking collection action on your Account, or for any other legitimate purposes
associated with your Account Upon your request, you will be informed of whether or not a consumer
credit report was ordered, and if it was, you will be given the name and address of the consumer
reporting agency that furnished the report. New York residents can contact the New York State
Banking Department: 1-800-518-8866.
California and Utah Residents: As required by law, you are hereby notified that a negative credit
report reflecting on your credit record may be submitted to a credit reporting agency if you fail
to fulfill the terms of your credit obligations. Texas Residents: To contact us about your account
call 1-800-2
08-2500. This contract is subject in whole or in part to Texas law which is enforced by
the Consumer Credit Commissioner, 2601 North Lamar Boulevard, Austin, Texas 78705-4207. Phone
1-800-538-1579: www.occc.slate.lx.us. Contact the Commissioner relative to any inquires or
complaints.
Effective 8/10
MetaBank Rngerhut Credit Account Agreement
‘AGREEMENT TO TERMS »USE OF YOUR ACCOUNT • DEFINITION OF PARTIES
Arbitration notice: This Agreement provides thai all disputes arising torn or related to your
Account may be resolved by arbitration, See “Arbitration’’ below.
This is the Agreement which covers your credit account (called your “Account”) with MetaBank
(“MetaBank”) for purchases you make with Rngerhut You can use your Account to purchase goods and
services torn any Rngerhut authorized merchant and to pay for goods and services offered in
connection with your Account You and MetaBank will be bound by this Agreement from the first time
you use the Account In this Agreement and in your monthly billing statements (“Statement"\ the
words “you” and “your” refer to all persons named on the credit account we issue to you or who have
signed application or acceptance forms, and Hie words “we”, “us” and “our” refer to MetaBank. If
your Account is a joint Account, you and your joint Account holder each promise to pay and are
jointly and individually responsible for all amounts due under this Agreement. Governing
law/Enterceabilify This Agreement will be governed by Federal law, and to the extent State law
applies, by the law of South Dakota, whether or not you live in South Dakota and whether or not
this Account is used outside of South Dakota. If any provision of this Agreement is determined to
be void or unenforceable under any applicable law, rule, or regulation, all other provisions of
this Agreement will remain valid and enforceable. Our failure to exercise any of our rights under
this Agreement will not be deemed to waive our rights to exercise such rights in the future. This
Agreement is a final expression of the agreement between you and us and this Agreement may not be
contradicted by evidence of any alleged oral agreement
Promise to Pay You promise to pay for (a) credit extended by MetaBank to you or to anyone you allow
to use your Account; (b) interest charges, late fees, and other charges (e.g. returned check
charges) provided in this Agreement; and (c) collection costs and attorneys’ fees as permitted by
applicable law if your Account should go into default. Available Credit We anticipate that we will
extend credit to you from time to time, but will be under no obligation to do so, and we may not
approve subsequent authorizations for purchases until we have received a payment on your first
order. We may also reduce your credit line or terminate your Account at any time with or without
cause subject to applicable law. Statements We will send you a Statement covering each billing
cycle in which you have a balance (induing a deferred balance) in excess of $1. The Stetementwill
reflect (a) the total amount you owed on the first day of the blng cycle (called the “previous
balance”), which will include any deferred balance (see Deferral Periods); (b) payments, credits,
purchases and interest charges, and all other charges made to your Account during the billing
cycle; (c) the total amount you owed at the end of the blng cycle (called the “new balance”); (d)
the minimum payment you must make (called the “minimum papenf); and (e) the date by which the
minimum papent must be paid in order to avoid late charges (called the “payment due date”).

 

 

	Payment The minimum papent is based on your account balance as outlined in the Payment Chart below.
The minimum papent is due when you receive your Statement each month. We will not impose any late
charges if you pay at least the minimum payment reflected in your Statement by the payment due date
specified, which will always be at least 24 days from the Statement date. If you wish, you may pay
more than the minimum payment and at any time you may pay the entire new balance, without penalty.
All payments by mail must be made by check or money order. You agree that any payment you make may
be returned to you without applying it to your Account and without presentment or protest, for
reasons including, but not limited to, that the check or money order: (1) is not drawn on the U.S.
Post Office or a financial institution located in the United States; (2) is missing a signature;
(3) is drawn with different numeric and written amounts; (4) contains a restrictive endorsement;
(5) is post-dated; (6) is not payable as directed on your statement; (7) is not payable in US.
dollars; or (8) is not paid upon presentment. You agree to pay any bank collection fees we incur
for any check payments made in U.S. dollars drawn on a financial institution not located in the
United States. We can accept late ar partial payments, or checks or money orders marked “Payment in
Full” or otherwise restrict’vely endorsed, without losing any of our rights under this Agreement.
All payments under the Agreement must be received at the address specified on your billing
Statement
PAYMENT CHART
Account Balance            Minimum PMT $
From            To 100%
$5.98
$5.99 $44.99 $5.99
$45.00 $69.99 $6.99
$70.00 $99.99 $7.99
$100.00 $124.99 $9.99
$125.00 $199.99 $13.99
$200.00 $249.99 $16.99
$250.00 $299.99 $19.99
$300.00 $349.99 $22.99
$350.00 $449.99 $28.99
$450.00 $549.99 $33.99
$550.00 $799.99 $46.99
$800.00 $1,099.99 $59.99
$1,100.00 $1,399.99 $69.99
$1,400.00 5%
How We Figure Interest Charges To calculate the interest charge payable each month, we multiply the
average daily balance times the monthly periodic rate and, if applicable, add any deferred interest
charge (see Deferral Periods). Your Account is subject to a minimum interest charge of $1.00.
Average Daily Balance We figure the interest charge on your Account by applying the monthly
periodic rate to the “average daily balance” of your Account, including current transactions. To
get the “average daily balance” we take the beginning balance of your Account each day, add any new
purchases, charges and other fees, and subtract any payments or credits. Purchases subject to
Deferral Periods described below are excluded from our calculation of the “average daily balance”
until the day following the expiration of the Deferral Period. This gives us the daily balance.
Then, we add up all the daily balances for that billing cycle and divide the total by the number of
days in the billing cycle. This gives us the “average daily balance.”
Son-Variable APR Your Annual Percentage Rate is 24.90%, which corresponds to a monthly periodic
rate of 2.075%. This is a non-variable rate. When Merest Charges Begin to Accrue Interest charges
begin to accrue on each purchase on the date of the purchase. However, if you paid the new balance
on your previous Statement by the papent due date shown on your previous Statement, then: (1) If
you pay
the new balance on your current Statement by the papent due date shown, we impose no interest
charges on purchases during the current billing cycle, and (2) if you make a payment by the papent
due date shown on your current Statement that is less than the new balance reflected on your
current Statement, we will credit that papent as of the f
irst day in your current billing cycle. In
addition, if your previous Statement reflected a new balance and you did not pay that new balance
in full by the payment date on that previous Statement, then we will not impose interest charges on
any purchases during the current billing cycle if you pay the balance shown on your current
Statement by the papent due date reflected on your current Statement
Deferral Periods See the deferral terms In the specific offer you are orderingfrom for special
rules which apply during the deferral periods. If you are unable to locate the terms of your
deferred offer, please contact Customer Service at 1-800-20B-2500.
Late Fees late fees will be equal to your minimum payment due with a maximum amount of up to $25.00
for the first lime offense and will increase to a maximum amount of $30.00 if you have not made
your payment by the due date in each of your next 6 billing cycles The late fee will never be pater
than your minimum payment due to which the late fee relates. Returned Payment Fee Returned payment
fees will be equal to your minimum papent with a maximum amount of up to 525.00 for the first time
offense and will increase to a maximum amount of $30.00 if you have any returned payments in your
next 6 billing cycles. The returned papentfee will never be geater than your most recent minimum
papent due.
Application of Payments Each papent you send to us will be applied to your Account in a manner
consistent with the applicable law. Generally, we will apply your payment first to satisfy your
mlnbium papent due. Any remaining payment in excess of the minimum papent due will be applied to
the highest APR balances first. Exception to this will be deferred balances with expiration dates
within the next two billing cycle periods.
Change of TBrms (Including Interest Charges) SUBJECT TO APPLICABLE LAW, WE MAY CHANGE OR TERMINATE
ANY TERM OF THIS AGREEMENT OR ADD NEW TERMS AT ANY TIME, INCLUDING, WITHOUT LIMITATION, ADDING OR
INCREASING FEES, INCREASING YOUR MINIMUM PAYMENT AND INCREASING THE RATE OR AMOUNT OF INTEREST
CHARGES OR CHANGING THE METHOD OF COMPUTING THE BALANCE UPON WHICH INTEREST CHARGES ARE ASSESSED.
PRIOR WRITTEN NOTICE WILL BE PROVIDED TO YOU WHEN REQUIRED BY APPLICABLE LAW. CHANGES MAY APPLY TO
BOTH NEW AND OUTSTANDING BALANCES.
Default You will be in default under this Agreement upon: (a) your failure to make at least the
minimum papent by the papent due date specified in your Statement; (b) your violation of any other
provision of this Agreement; (c) your death; (d) your becoming the subject of bankruptcy or
insolvency proceedings; (e) your becoming the objectof attachment, foreclosure, repossession, lien,
judgment, or garnishment proceedings; (f) your failure to supply us with any information we
reasonably deem necessary; (g) your supplying us with misleading, false, incomplete or incorrect
information; (h) our receipt of information that you are unable to perform the terms and conditions
of this Agreement; or (i) your moving out of the U.S. Upon default, we have the right to require
you to pay your entire Account balance (including all deferred purchases and all accrued but unpaid
charges) immediately, and to sue you for what you owe. You will pay our court costs, reasonable
attorneys’ fees and other collection costs related to the default to the extent permitted by
applicable law. Following any default, any balances outstanding under the Agreement will continue
to accrue interest charges until paid in full and will be subject to all the terms and conditions
of this Agreement, except that we will apply your payments first to attorneys’ fees and other court
costs, and then in the order set forth in the Application of Payments section.
Closing Your Account You can cancel or close your Account by writing to us at Rngerhut Credit
Account Services, P.O. Box 1250, St Cloud, H 56395-1250. If you do not pay us in full when you
cancel, your outstanding balances will continue to accrue in
terest and other charges and be subject
to the terms and conditions of this Agreement
Cancellation or Termination of Agreement If you cancel or dose your Account or if we choose to
terminate your charging privilegesfor any reason, whether or notyour Account is in default, you may
not try to make any purchases with your Account card(s) (“Card”) and upon request you must return
to us your Cardjs) cut in half. Following any cancellation, closing or termination, any balances
outstanding under this Agreement will continue to accrue Merest charges until paid in full and will
be subject to all the terms and conditions of this Agreement.
Liability for Unauthorized Use When you receive your Statement, you should verify that the charges
are tue and the amounts unaltered. You may be liable for the unauthorized use of your Card. You
will not be liable for unauthorized use that occurs after you notify us of the loss, theft, or
possible unauthorized use. Notification must be given by you immediately upon learning of the loss,
theft or possible unauthorized use by calling us at 1-800-208-2500 or writing us at Rngerhut Credit
Account Services, P.O. Box 1250, St Cloud, MN 56395-1250. In any case, your liability for
unauthorized use of your Card will not exceed $50. However, unauthorized use does not include use
by a person whom you have given the Card or authority to use the Account, and you will be liable
for all use by such a user. To terminate this authority, you must retrieve the Card from the
previously authorized user and return it to us at the above address alongwith a letter explaining
why you are doing so. We have found that most of our customers prefer to allow their spouses to
place orders on their Account. To better serve you, if your spouse places an order on your Account
we will process that request, unless you instruct us otherwise.
Lost or Stolen Credit Cardjs] You agree to notify us immediately if your Card(s) are lost
or stolen. You may notify us by calling 1-800-208-2500 or writing us at Rngerhut Credit
Account Services, P.O. Box 1250, St Cloud, MN 56395-1250.
Change of Name, Address, Telephone Number or Emplopent You agree to give us
prompt notice of any change in your name, mailing address, telephone number or place
of emplopent Send changes to: Rngerhut Credit Account Services, P.O. Box 1250,
St Cloud, MN 56395-1250.
Consent to Use of Telephone timbers You expressly consent to receiving calls and
messages, Including autodialed and prerecorded message calls, from MetaBank/fingerhut,
their affiliates, marketing partners, agents and others calling at their request or on their
behalf, at any telephone numbers that you have provided or may provide in the future
(including any cellular telephone numbers).
Assignment of Account We may sell, assign or tansfar your Account or any portion thereof
without notice to you. You may not sell, assign or transfer your Account
Reporting and Monitoring If you fail to fulfill the terms of your credit obligation, a negative
report reflecting on your credit record can be submitted to one or more credit reporting
agencies You agree that any government agency may release your residence address to
us, should it become necessary to locate you. You ape that our supervisory personnel
may listen to telephone calls between you and our representatives in order to evaluate the
quality of our service to you and to other cardholders.
Updated Financial and other information Upon request, you agree to promptly give us
accurate financial and other information aboutyourself.
Severabilhy If any provision of this Agreement is finally determined to be void or
unenforceable under any law, rule, or regulation, all other provisions of this Agreement will
remain valid and enforceable.
YOUR BILLING RIGHTS: KEEP THIS DOCUMENT FOR FUTURE USE This notice tells you about
your rights and our responsibilities under the Fair Credit Billing Act.
WHAT TO «i F YOU THINK YOU FDD A MISTAKE ON YOUR STATEMENT If you think
there is an error on your statement wri
te us at Rngerhut Credit Account Services,
P.O. Box 1250, St Cloud, MN 56395-1250. In your letter, pjve us the following information:
• Account Mnrrata Your name and Rngerhut Credit Account number
• DoHarAmwifc The dollar amount of the suspected error
• Odscripibn of Mem; If you think there is an error on your bill, describe what you believe is
wrong and why you believe it is a mistake.
You must contact us within 60 days after the error appeared on your statement You must
noti^usofariypoteiitialeirDrsinOTiling.Yournaycalius.lwtityourJovsearenotreqnireii to investigate
any potential errors and you may have to pay the amount in question. WHAT WILL HAPPBI AFTER WE
RECBVE YOUR LETTER When we receive your letter, we must do two things:
1. Within 30 days of receiving your letter, we must tall you that we received your letter. We will
also tell you if we have already corrected the error.
2. Within 90 days of receiving your letter, we must either correct the error or explain why we
believe the statement was correct

 

 

	PHESCREEN AND OPT-OUT NOTICE: The “prescreened” offer of credit Is based on Intaiattai in your
credit report indicating tat you meet certain criteria. Credit may not be extended if, after you
respond, it is determined that you do not meet tie criteria used for screening or an) other
applicable criteria bearing on cretfcorthiness. If you do not want to receive prescreened offers of
credit from this or other companies, call the consumer reporting agencies at 1-3S3-5-OPT-0UT,’
1-866-213-7260,1-866-S91-MS4 and 1-86WS0-1920 or write: Equifax Options, P.O. Box 740123, Atlanta,
GA 30374-0123; Transllnion Opt Out Bequest, P.O. Box 505, Woodlyn, PA 1SD94-0505; Alliant
Cooperative Data Solutions, Attn: CRhod, 301 Fields Lane, Brewster, UY10509.
METABArlK/FlHGEHHUT REVOLVING CREDIT ACCOUNT SUMMARY DISCLOSURES
Annual Percentage Rate 24.90% (APR) for Purchases
How to Avoid Paying            Your due date is at least 24 days after the close Interest of each billing
cycle. We will not charge you
any interest on purchases if you pay your entire balance-by the due date each month.
Minimum Interest If you are charged interest, the charge will be no
Charge less than $1.00.
For Credit Card Tips            To learn more about factors to consider when 1 from the
Federal applying for or using a credit card, visit the
Reserve Board website of the Federal Reserve Board at
http://www.iederalreserve.tiov/creditcard.
Penalty Fees
• Late Payment • Up to $30,00
• Returned Payment • Up to $30.00
How We Will Calculate Your Balance: We use a melhod called “average daily balance (including new
purchases).” See below for more details. Billing Rights: Information on your rights to dispute
transactions and how to exercise those rights is provided below.
Summary Disclosures Only: This document contains important disclosures about the MetaBank/Rngerhut
Credit Account, but it is not your complete Credit Account Agreement Your Credit Account Agreement
will be sent to you. Please read these Disclosures and that Agreement carefuly, and keep them for
your records. The Credit Account Agreement will
¦ explain bow the Agreement may he changed, and that MelaBank may sell, assign or transfer your
account or any portion thereof.
Advertised Price per Month: The advertised price per month is the estimated initial monthly minimum
payment required for a single item order. Your actual minimum payment will be calculated using tie
payment chart on the Blue Page, based on your Account balance. flow We figure Interest Charges: To
calculate the interest charge payable each month, we multiply the average daily balance times trie
monthly periodic rate and, if applicable, add any deferred interest charges (see Deferral Periods).
Average Daily Balance: We figure the interest charge on your Account by applying the monthly
periodic rate to the “average daily balance” of your Account, including current transactions. To
get the “average daily balance,” we take the beginning balance of your Account each day. add
        . any new purchases, charges and other fees, and subtract any payments or credits. Purchases
subject to Deferral Periods described below are excluded from our calculation of the “average
: daily balance* until the day following the expiration of the Deferral Period. This gives us the
daily
: balance. Then we add up all the daily balances for that billing cycle and divide the
total by the number of days in the billing cycle. This gives us the “average dairy balance.”
Non-Variable APR: Your Annual Percentage Bate is 24.90%, which corresponds to a
monthly periodic rate of 2.075%. This is a non-variable rate.
When Interest Charges Begin to Accrue: Interest charges begin to accrue on each
purchase on the date of the
purchase. However, if you paid the new balance on your previous
Slaiement by the payment due date shown on Ihe Statement, then: (1) if you pay the new
balance on your current Statement by the payment due date shown, we impose no interest
charges on purchases during the current bring cycle, and (2) if you make a payment by
the papent due date shown on your cunent Statement that is less than ihe new balance,
we will credit that papent as of the first day in your cunent Ming cycle. In addition, if
your Statement reflected a new balance and you did not pay that new balance in full by
the payment date on that previous Statement, then we will not Impose interest charges on
any purchases during the cunent billing cycle if you pay the balance shown on your current
Statement by the payment due date reflected on that current Statement
Deferral Periods: MetaBank or Merchants affiliated with Rngerhut may specify a period
during which no payments are required for your purchase. We call these “Deferral Periods.”
See Ihe Blue Page in the catalog from which you placed your order lor Ihe specific rules
that apply to your Deferral Period. Alternatively, you may call 1-800-208-2500 to obtain
the information.
YOUR BILLING RIGHTS: KEEP THIS DOCUMENT FOR FUTURE USE
This notice tells you about your rights and our responsibilities under the Fair Credit Billing Act
WHAT TO DO IF YOU THINK YOU FIND A MISTAKE ON YOUR STATEMENT
If you think there is an error on your statement, write us at Rngerhut Credit Account Services,
P.O. Box 1250, St Cloud, MN 56395-1250.
In your letter, give us ihe following information
• Account Information: Your name and Rngerhut Credit Account number.
• Dollar Amount: The dollar amount of the suspected emr.
• Description of Problem: If you think there is an error on your bill, describe what you believe is
wrong and why you believe it is a mistake.
You must contact us within 60 days after Ihe error appeared on your statement You must notify us of
any potential errors in writing. You may call us, but if you do we are not required to investigate
any potential errors and you may have to pay the amount in question. WHAT WILL HAPPEN AFTER WE
RECBVE YOUR LETTER When we receive your letter, we must do two things:
1. Within 30 days of receiving your letter, we must tell you that we received your letter. We will
also tell you if we have already corrected the error.
2. Within 90 days of receiving your letter, we must either correct the error or explain why we
believe the statement was correct
While we investigate whether or not there has been an error:
• We cannot try to collect Ihe amount in question, or report you as delinquent
• The charge in question may remain on your statement, and we may continue to charge you interest
on that amount.
¦ While you do not have to pay the amount in question, you are responsible lor the remainder of
your balance.
• We can apply any unpaid amount against your credit imit After we finish our investigation, one ol
two things mil happen:
• If we made a mistake: You will not have to pay the amount in question or any interest or other
fees related to that amount
• If we do not believe there was a mistake: You will have to pay Ihe amount in question, along with
applicable interest and fees. We will send you a statement of the amount you owe and the date
payment is due. We may then report you as delinquent if you do not pay the amount we think you owe.
If you receive our explanation but still believe your bill is wrong, you must write to us within 10
days teling us that you still refuse to pay. If you do so, we cannot report you as delinquent
without also reporting lhatyou are questioning your bilL We must tell you Ihe name of anyone to
whom we reported you as delinquent, and we must let those organizations know when Ihe matter has
been settled between us.
If we do not follow all of the rules above, you do not have to pay the first $50 of the amount you
queslion even il your bill is correct.
YOUR RIGHTS IF YOU ARE DIS
SATISFIED WITH YOUR CREDIT CARD PURCHASES
If you use your card to make a purchase and you are dfesan’sfied with the goods or setvices
that you receive, you may have Ihe right not to pay the remaining amount due on the
purchase.
To use this right al of the following must be true:
1. The purchase must have been made in your home Slate or wilhin 100 miles of your current mailing
address, and the purchase price must have been more than $50. (Mote: Neither of these are necessary
if your purchase was based on an advertisement we mailed to you, or if ‘jve own the company that
sold you the goods or services.)
2. You must have used your credit card for the purchase.
3. You must have not yet fully paid for the purchase.
If all of the criteria above are met and you are stil dissatisfied wilh Ihe purchase, contact us in
wribng at Rngerhut Credit Account Services. P.O. Box 1250, St Cloud, MN 56395-1250. While we
investigate, the same rules apply to the disputed amount as discussed above. After we finish our
invesb’gation, we will tell you our decision. At that point, it we think you owe an amount and you
do not pay we may report you as delinquent Ohio Residents: The Ohio laws against discrimination
require that all creditors make credit equally available to all creditworthy customers, and that
credit reporting agencies maintain separate credit histories on each individual upon request The
Ohio Civil Rights Commission administers compliance with this law.
Married Wisconsin Residents: No provision of any marital property agreement, unilateral agreement,
or court decree under Wisconsin’s Marital Property Act will adversely affect a creditor’s interest
unless prior to the (me credit is granted, the creditor is furnished a copy of that agreement or
decree or is given complete information about the agreement or decree. All accounts, Including New
York/Rhode Island/Vermont Residents: You agree to give MetaBank permission In access your credit
report in connection with any transaction, or extension of credit and on an ongoing basis, for the
purpose of reviewing your Account. adjusting the credit line on your Account, taking collection
action on your Account, or for any other legitimate purposes associated wilh your Account Upon your
request, you will be informed of whether or not a consumer credit report was ordered, and if it
was, you will be given the name and address of the consumer reporting agency that furnished the
report New York residents can contact the New York State Banking Department 1 -800-518-8866.
California and Utah Residents: As required by law, you are hereby notified that a negative credit
report reflecting on your credit record may be submitted to a credit reporting agency if you fail
to fulfill the terms ot your credit obligations.
Texas Residents: To contact us about this account call 1-800-208-2500. This contract is subject in
whole or in part to Texas law which is enforced by the Consumer Credit Commissioner, 2601 North
Lamar Boulevard. Austin, Texas 78705-4207. Phone: (800) 538-1579; www.occcjt3te.tx.us. Contact the
Commissioner relative to any inquiries or complaints.
Consent to Use ot Telephone Numbers: You expressly consent to receiving calls and messages,
including autodialed and prerecorded message calls, from MelaBank/Rngertiut, their affiliates,
marketing partners, agents and others calling at their request or on their behalf, at any telephone
numbers that you have provided or may provide in the future (including any cellular telephone
numbers).
NOTE To help Ihe government light the funding ol terrorism and money laundering activities, Federal
law requires all financial institutions to obtain, verify and record information that identifies
each person who opens an Account When you open an Account, we win ask for your name, address, date
of birth, and other information that will allow us to identify you. We may also ask for your
driver’s license number or other identifying information. This prescreened offer of credit
supersedes an
d revokes all previous offers of credit from MetaBank. This offer expires on
11/26/2010. Requests lor credit through this mailing received after the expiration date will be
considered but will be subject to our general underwriting criteria. Please see bottom of pages 1-2
for location of Plan terms tor additkirialnpirtarrt terms,

 

 

	EXHIBIT D-l
Fin^erhut FreshStart Credit Account
Terms and Conditions
Account Summary Disclosures
See Subsequent Pages

 

 

	EXHIBIT D-l (1) F1NGERHUT FRESHSTART INSTALLMENT LOAN TERMS
Creditor: MetaBank, Sioux Falls, South Dakota Borrower Name and Address: <Firstname Lastname>
<AddressLine1> <Address Line 2> <Address Line 3>
ANNUAL FINANCE Amount Financed Total of Payments
PERCENTAGE RATE CHARGE
The cost of your credit as            The dollar amount the            The amount of credit The amount you will
have
a yearly rate credit will cost you provided to you or on paid after you have made
your behalf all scheduled payments
24.90% <$XXX.XX> (e) <$XXX.XXX> <$XXX.XXX> (e)
Your payment schedule will be:
Number of Payments            Amount of Payments            When Payments Are Due
<X> (e) <$XXX.XX> (e) Monthly, starting <firstpaymentduedate>
Late Charge: If a payment is late, you will be charged:
$4.90 if your balance is greater than $15 but less than or equal to $50 $14.90 if your balance is
greater than $50
Prepayment If you pay off early, you will not have to pay a penalty.
See your contract document for any additional information about nonpayment, default, any required
repayment in full before the scheduled date, and prepayment refunds and penalties.
(e) means an estimate
Itemization of Amount Financed:
<$XXX.XX> Amount Financed — paid by MetaBank to Fingerhut (Principal Amount of your Loan)
In some cases, goods and services you order may be shipped at different times, and will be added to
your Loan when shipped. As a result, your Payment Schedule, your Finance Charge, and your Total of
Payments are estimated.

 

 

	but all other provisions of this Agreement shall remain in full force and effect Any claim, dispute
or controversy (whetJier in contract, regulatory, tort or otherwise, whether preexisting, present
or future and including constitutional, statutory, common law, intentional tort and equitable
claims) arising from or relating to the credit offered or provided to you; the actions of yourself,
us, or third parties; or the validity of this Arbitration provision (individually and collectively,
a “Claim”), must, after an election by you or us, be resolved by binding arbitration in accordance
with the Arbitration provision and the Commercial Arbitration Rules of the American Aifcitrab’on
Association (“AAA”) in effect when the Claim is filed. There shall be no authority for any Claims
to be arbitrated on a class action basis. An arbitration can only decide your or our Claim and may
not consolidate or join the claims of other persons who may have similar claims, You may obtain
rules and forms by calling the AAA at 1-800-77B-7879. Any arbitration hearing that you attend will
take place in the Federal judicial district where you reside, At your request, we will advance the
first $250,00 of the filing and hearing fees for any Claim you may file against us; the arbitrator
will decide whether you or we will ultimately pay those fees. Unless inconsistent with applicable
law, each party shall bear the expense of their respective attorneys, experts, and witness fees,
regardless of which party prevails in the arbitration. The arbitrator shall apply applicable
substantive law consistent with the Federal Arbitration Act and applicable statutes of limitations,
and shall honor claims of privilege recognized at law. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction, This Arbitration provision shall
survive repayment of your Loan and termination of this Agreement. This Arbitration provision shall
be governed by the Federal Arbitration Act, 9 USC Sections 1 through 16.
All borrowers, including New YorWRhode Island/Vermont Residents You give MetaBank (as well as its
agents, successors, and assigns) permission to access your credit report in connection with any
transaction, or extension of credit, and on an ongoing basis, for the purpose of reviewing your
Loan, taking collection action on your Loan, or for any other legitimate purposes associated with
your Loan, Upon your request, you will be informed of whether or not a consumer credit report was
ordered, and if ‘it was, you will be given the name and address of the consumer reporting agency
that furnished the report. New York residents may contact the New York state banking department to
obtain a comparative listing of credit card rates, fees and grace periods, at1-800-518-«.
Ohio Residents The Ohio laws against discrimination require that all creditors make credit equally
available to all creditworthy customers, and that credit reporting agencies maintain separate
credit histories on each individual upon request The Ohio Civil Rights Commission administers
compliance with this law.
Married Wisconsin Residents No provision of any marital property agreement, unilateral agreement,
or court decree under Wisconsin’s Marital Property Act will adversely affect a creditor’s interest
unless prior to the time credit is granted, the creditor is furnished a copy of that agreement or
decree or Is given complete information about the agreement or decree.
California and Utah Residents As required by law, you are hereby notified that a negative credit
report reflecting on your credit record may be submitted to a credit reporting agency if you fail
to fulfill the terms of your credit obligations.
NOTICE: ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE
DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED WITH THE PROCEEDS HEREOF.
RECOVERY HEREUNDER BY THE
 DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.
Effective 7/1/2010
FINGERHUT FRESHSTARTSM CREDIT ACCOUNT ISSUED BY METABANK INSTALLMENT LOAN AGREEMENT
Arbitration notice: This Agreement provides that all disputes arising from or related to your Loan
may be resolved by arbitration. See “Arbitration” below.
This is the Agreement which covers your installment loan (called your “Loan”) from MetaBank
(“MetaBank”) to pay for your purchase of goods and services from Flngeihut In this Agreement, the
words “you” and “your” refer to the borrower who requested the Loan, and the words “we,” “us” and’W
refer to MetaBank.
Governing Law/Errforceability This Agreement will be governed by Federal law, and to the extent
State law applies, by the law of South Dakota, whether or not you live in South Dakota, If any
provision of this Agreement Is determined to be void or unenforceable under any applicable law,
rule, or regulation, all other provisions of this Agreement will remain valid and enforceable, Our
failure to exercise any of our rights under this Agreement will not be deemed to waive our rights
to exercise such rights in the future, This Agreement Is a final expression of the agreement
between you and us and this Agreement may not be contradicted by evidence of any alleged oral
agreement
Promise to Pay You promise to pay the Principal Amount, which Is the purchase price of the goods
and services you purchase from Fmgerhut less your down payment to Flngeihut, together with interest
at an Annual Percentage Rate of 24,90% (monthly periodic rate of 2.075%), in 6 monthly
installments. Your initial estimated payment schedule, including the amount and due date of each
payment, is set forth In the Trath-in-Lending Disclosure that will be provided to you,
How We Rguw Interest Charges: To calculate the interest charge payable each monthly billing cycle,
we multiply the average daily balance times the monihiy periodic rate.
Average Daily Balanced get the “average daily balance” we take the beginning balance of your Loan
each day, add any charges and other fees, and subtract any payments or credits. We also add any new
merchandise that shipped on that day. This gives us the daily balance, Then, we add up all the
daily balances for that billing cycle and divide the total by the number of days in the billing
cycle. This gives us the “average dally balance,”
The actual finance charge you pay may exceed the Finance Charge disclosed in the Trath-in-Lending
Disclosure that will be provided to you, if you make pr payments later than the scheduled dates or
in less than the scheduled amounts. You may prepay all or any part of the amount due under this
Agreement at any time without penalty. A partial prepayment will not change or defer your next
scheduled payment Amounts outstanding following the last scheduled monthly installment payment date
(and any Interest on such amounts) will be due In full one month alter the last scheduled monthly
installment payment date, We can apply your payments to outstanding Finance Charges, your unpaid
Principal Amount, or any additional charges in our discretion, but subject to applicable legal
requirements,
Delayed Shipment In some cases, shipment of some or all of the good and services you order may be
delayed. When shipment is delayed, goods and services are not added to your Loan balance until they
are shipped. Your payment schedule will be adjusted to allow you to pay for each subsequent
shipment in 6 monthry installments following the shipment The amount of your payments will be set
forth In your monthly billing statements. Delayed shipment may increase the total Finance Charge
that you pay,
Approval Your Loan is subject to final approval by us. We may not approve your Loan if we are not
able to validate your contact information. We also will not approve your Loan until your down
payment is received.

 

 

	Payments All payments by mail must be made by check or money order. You agree that any payment you
make may be returned to you without applying it to your Loan and without presentment or protest,
for reasons including, but not limited to, mat the check or money order, (1) is not drawn on the
U.S. Post Office or a financial institution located in the United States; (2) is missing a
signature; (3) is drawn witti different numeric and written amounts; (4) contains a restrictive
endorsement; (5) is post-dated; (6) is not payable as directed on your statement; (7) is not
payable in U.S. dollars; or (8) is not paid upon presentment You agree to pay any bank collection
fees we incur for any check payments made in U.S. dollars drawn on a financial institution not
located in the United States, We can accept late or partial payments, or checks or money orders
marked “Payment in Full” or otherwise restrictivery endorsed, without losing any of our rights
under this Agreement All payments under the Agreement must be received at the address specified on
your billing Statement
Late Fees If you do not pay at least the payment amount due by a payment due date, you agree to pay
a Late Fee of $4,90 if your balance is greater than $15 but less than or equal to $60 at the time
the Late Fee is assessed, or $14.90 if your balance is greater than $50 at the time the Late Fee is
assessed.
Returned Payment Fee You agree to pay a Returned Payment Fee of $25 if a payment on your Loan is
not honored by a depository institution.
Ore* Card Account You request that we consider you for a revolving Fingerhut Credit Account issued
by MetaBank that you can use for future purposes, and that we send you a credit card or account
number if you are approved, if you pay off your initial purchase within 6 payments or earlier with
no instance of late payments, we will issue a MetaBank/Fingerhut Credit Account to you. However, if
you elect to pay your entire balance due at the same time as your down payment, then this will
cancel your Loan and you may not be eligible to be considered for a MetaBank/Fingerhut Credit
Account. You may not be eligible to be considered for a MetaBank/ Fmgerhut Credit Account if you
die, file for bankruptcy, enter a consumer credit counseling service program, make any past due
payments, or have any payments returned unpaid, or if you enter any other negative credit status.
We will send you your account agreement and important disclosures about the MetaBank/ Hngerhut
Credit Account when approved. Below is a summary of the key credit terms of the Fingerhut Credit
Account
METABAfK/FlfffiERHUT REVOLVING CREDIT ACCOUNT SIMMY DISCLOSURES
Annual Percentage Rate e%a ofio/ (APR) for Purchases            Z^.SfO/o
How to Avoid Paying            Your due date is at least 24 days after the close Interest of each billing
cycle. We will not charge you
any interest on purchases if you pay your entire balance by the due date each month.
Minimum Interest If you are charged interest, the charge will be no
Charge less than $1.00.
For Credit Card Tips            To learn more about factors to consider when from the Federal applying
for or using a credit card, visit the
Reserve Board weDSlte 0f the Federal Reserve
Board at
http://www.federalreserve.gov/creditcard.
Penalty Fees
o Late Payment: • Up to $30.00
• Returned Payment: • Up to $30.00
Returned Merchandise Your ability to return any merchandise purchased is governed by Frngerhuf s
return policy. When you return merchandise, we subtract the return amountfrom your initial purchase
amount; your payment amount will then remain the same, but you will pay off your Loan earlier.
However, If a return
(or returns) results in a purchase amount of less than $50, p will no longer
be eligible for consideration for a Fingerhut Credit Account issued by MetaBank, If a return (or
returns) results in a credit balance, we will also refund your credit balance,
Default You will be in default under this Agreement upon: (a) your failure to pay at least the
payment amount due by a payment due date; (b) your violation of any other provision of this
Agreement, (c) your death; (d) your becoming the subject of bankruptcy or insolvency proceedings;
(e) your becoming the object of attachment foreclosure, repossession, lien, judgment, or
garnishment proceedings; (f) your failure to supply us with any Information we reasonably deem
necessary; (g) your supplying us with misleading, false, incomplete or Incorrect information; (h)
our receipt of information that you are unable to perform the terms and conditions of this
Agreement; or (j) your moving out of the U.S, Upon default we have the right to require you to pay
your entire Loan balance (including the unpaid Principal Amount, Finance Charges, and other
charges) immediately, and to sue you for what you owe, You will pay our court costs, reasonable
attorneys’ fees and other collection costs related to the default to the extent permitted by
applicable law. Following any default, any unpaid Principal Amount outstanding under this Agreement
will continue to accrue Finance Charges until paid in full and will be subject to all the terms and
conditions of this Agreement
Change of Name, Address, Telephone Number or Employment You agree to give us prompt notice of any
change in your name, mailing address, telephone number or place of employment Send changes to:
Fingerhut Credit Account Services, P.O. Box 1250, St Cloud, MN 56395-1250. You may also contact us
at 1-800-208-2500. Representatives are available Monday through Friday, 8AM — 8PM CT, Or, you may
log in to fingerhutcorn/MyAccount.
Consent to use of Telephone Numbers You expressly consent to receiving calls and messages,
including autodialed and prerecorded message calls, from MetaBank/Fingerhut, ttielr affiliates,
marketing partners, agents and others calling at their request or on their behalf, at any telephone
numbers that you have provided or may provide in the future (including any cellular telephone
numbers).
Assignment of Loan We may sell, assign or transfer your Loan or any portion thereof without notice
to you. You may not sell, assign or transfer your Loan.
Reporting and Monitoring We may report the status of your account to credit reporting agencies, if
you fail to fulfill the terms of your credit obligation, a negative report reflecting on your
credit record can be submitted to one or more credit reporting agencies. You agree that any
government agency may release your residence address to us, should it become necessary to locate
you. You agree that our supervisory personnel may listen to telephone calls between you and our
representatives in order to evaluate the quality of our service to you and to other borrowers.
Updated Financial and other Information Upon request, you agree to promptly give us accurate
financial and other information about yourself.
CREDIT BUREAU DISPUTES If you believe we Inaccurately reported credit history information aboutyou
or your Loan to a credit reporting agency, call us at 1-866-734-0342 or write to us at Credit
Bureau Reporting Services, 6250 Rldgewood Road, St. Cloud, MN 56303. Please provide the Loan number
along with a copy of your credit bureau report reflecting the information that you believe is
inaccurate.
Arbitration By requesting a Loan from us and accepting this Agreement, you agree that if a dispute
of any kind arises out of this Agreement, either you or we, at our sole discretion, can choose to
have that dispute resolved by binding arbitration. If arbitration Is chosen by any party, neither
you nor we will have the right to litigate that claim In court or to have a jury trial on that
claim,
 or to engage in pre-arbftratkm discovery, except as provided for in the arbitration rules,
In addition, you will not have the right to participate as a representative or member of any class
of claimants pertaining to any claim subject to arbitration. The arbitrator’s decision will
generally be final and binding, Other rights that you would have if you went to court may also not
be available In arbitration, ft is important that you read the entire Arbitration provision
carefully before accepting the terms of this Agreement Notwithstanding any language of this
Agreement to Hie contrary, should any portion of this Arbitration provision be held invalid or
unenforceable by a court or other body of competent jurisdiction, this entire Arbitration provision
shall be automatically terminated,

 

 

	PBESCREH AND OPT-OUT NOTICE: The “presented” after of credit Is based an information In your credit
report indicating that you meet certain criteria. Credit may not be extended if, after you respond,
It is determined that you do not meet the criteria used for screening or any other applicable
criteria bearing on crefltworthiness. H you do not want to receive prescreened offers of credit
from this or other companies, call the consumer reporting agencies at 1-SSS-5-SFT-0UT,
1-8S6-213-7260,1-866-5S1-3464 and 1-8SWSO-1s20 or write: Equrfax Options, P.O. Box 740123, Atlanta,
GA 30374-0123; TransUnion Opt Out Request, P.O. Box 505, Woodyn, PA 1SWW505; Affiant Cooperative
Data Solutions, Aitn: CRhod, 301 Fields Lane, Bnster, NY 10509.
Your initial purchase of more than $50 may be financed by an Installment Loan Agreement between you
and MetaBank. This is not your complete Installment Loan Agreement It is only a summary of certain
important disclosures. Your Installment Loan Agreement will be sent to you. Please read it
carefully and keep it for your records. MetaBank may sell, assign or transfer your Installment Loan
Agreement or any portion thereof.
Obtaining a Loan: To help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens an account When you obtain an Installment Loan,
we will ask for your name, address, date of birth, and other information that will allow us to
identify you. We may also ask for your driver’s license number or olher identifying information.
Representative Terms of Credit The Installment Loan Agreement lets you make your initial purchase
by making a $30 down payment to Fingerhut and 6 low monthly payments on your Loan. The Annual
Percentage Rate is 24.9%. For purchases of $50 and $100, the following credit terms apply:
Cash price $50 $100
Down payment $30 $30
Terms of repayment 6 monthly payments            S monthly payments of $3.33 of $11.66
Late payment fee: $4.90 if your balance is greater than $15 but less than or equal to $50; $14.90
if your balance is greater than $50. Returned payment fee: $25.

	Advertised Price per Month: The advertised price per month is the estimated initial monthly minimum
payment required for a single item order. Your actual minimum payment will be calculated at the
time of your purchase and will be disclosed to you with your Installment Loan Agreement

	Credit Card Account You request that we consider you for a revolving Fingerhut Credit Account
issued by MetaBank that you can use for future purposes, and that we send you a credit card or
account number if you are approved. If you pay off your initial purchase within 6 payments or
earlier with no instance of rate payments, we may issue a MetaBank/ Fingerhut Credit Account to
you. However, if you elect to pay your entire balance due at the same time as your down payment,
then this will cancel your Loan and you may not be eligible to be considered for a
MetaBank/Fingerhut Credit Account You may not be eligible to be considered for a MetaBank/Fingerhut
Credit Account if you die, file for bankruptcy, enter a consumer credit counseling service program,
make any past due payments, or have any payments returned unpaid, or if you enter any other
negative credit status. We will send you your account agreement and important disclosures about the
MetaBank/Fingerhut Credit Account when approved. Below is a summary of the key credit terms of the
Fingerhut Credit Account.
metabank/fihgerhut revolving credit account summary disclosures
Annual Percentage Rate 24 90% (APR) for Purchases &-*-*«"u
How to Avoid Paying            Your due date is at least 24 days after the close Interest of each billing
cycle. We will not charge you
any interest on purchases if you pay your entire balance by the due date each month.
Minimum Interest If you are charged interest, the charge will be no
Charge less than $1.00.
For Credit Card Tips            To learn more about factors to consider when from the Federal applying
for or using a credit card, visit the
Reserve Board website of the Federal Reserve Board at
httD://wvvw,federalreserve.qov/creditcard.
Penalty Fees
• Late Payment • Up to $30.00
• Returned Payment • Up to $30.00
Returned Merchandise: Your ability to return any merchandise purchased is governed by Fingerhut’s
return policy. When you return merchandise, we subtract the return amount from your initial
purchase amount; your payment amount will then remain the same, but you will pay off your Loan
earlier. However, if a return (or returns) results in a purchase amount of less than $50, you will
no longer be eligible for consideration for a Fingerhut Credit Account issued by MetaBank. If a
return (or returns) results in a credit balance, we will also refund your credit balance.
Arbitration: Your Installment Loan Agreement will contain a binding arbitration provision. In the
event of any dispute relating to your Agreement the dispute will be resolved by binding arbitration
pursuant to the rules of the American Arbitration Association. Both you and we agree to waive the
right to go to court or to have the dispute heard by a jury. You and we will be waiving any right
to a jury trial and you will not have the right to participate as part of a class of claimants
relating to any dispute with us. Other rights available to you in court may also be unavailable in
arbitration. When you receive your Installment Loan Agreement you should read the arbitration
provision in the Agreement carefully.
Updated Financial and other Information: Upon request, you agree to promptly give us
accurate financial and other information about yourself.
CREDIT BUREAU DISPUTES: If you believe we inaccurately reported credit history information about
you or your Loan to a credit reporting agency, call us at 1-866-734-0342 or write to us at Credit
Bureau Reporting Services, 6250 Ridgewood Road, St. Cloud, MN 56303. Please provide the Loan number
along with a copy of your credit bureau report reflecting the information that you believe is
inaccurate.
Consent to Use of Teiephone Numbers: You expressly consent to receiving calls and messages,
including autodialed and prerecorded message calls, from
MetaBank/Fingerhut, their affiliates,
marketing partners, agents and others calling at their request or on their behalf, at any telephone
numbers that you have provided or may provide In the future (including any cellular telephone
numbers). Ail borrowers, including New York/Rhode Island/Vermont Residents: You give MetaBank (as
well as its agents, successors, and assigns) permission to access your credit report in connection
with any transaction, or extension of credit, and on an ongoing basis, for the purpose of reviewing
your Loan, taking collection action on your Loan, or for any other legitimate purposes associated
with your Loan. Upon your request, you will be informed of whether or not a consumer credit report
was ordered, and if it was, you will be given the name and address of the consumer reporting agency
that furnished the report New York residents may contact the New York state banking department to
obtain a comparative listing of credit card rates, fees and grace periods, at 1-800-518-8866. Ohio
Residents: The Ohio laws against discrimination require that all creditors make credit equally
available to all creditworthy customers, and that credit reporting agencies maintain separate
credit histories on each individual upon request The Ohio Civil Rights Commission administers
compliance with this law. Married Wisconsin Residents: No provision of any marital property
agreement, unilateral agreement or court decree under Wisconsin’s Marital Property Act will
adversely affect a creditor’s interest unless prior to the time credit is granted, the creditor is
furnished a copy of that agreement or decree or is given complete information about the agreement
or decree.
California and Utah Residents: As required by law, you are hereby notified that a negative credit
report reflecting on your credit record may be submitted to a credit reporting agency if you fail
to fulfill the terms of your credit obligations.

 

 

EXHIBIT E

MetaBank/Bluestem Brands, Inc.

Program Compliance Manual

Compliance Program Overview

Bluestem Brands, Inc. (“Bluestem”), its subsidiaries and affiliates (for purposes of this Exhibit
E, “Fingerhut”) will act as an agent for MetaBank during underwriting, origination, and servicing
phases of the MetaBank/Fingerhut credit program (“Credit Program”).

The Consumer Credit Compliance Program (“Compliance Program”) was developed and implemented by
Fingerhut to further compliance with laws applicable to the Credit Program.

The Compliance Program is designed to further compliance with the law or regulations named in the
applicable policy, specifically:

	 	•	 	Regulation Z/Truth in Lending (12 CFR 226)

	 	•	 	Regulation B/Equal Credit Opportunity Act (12 CFR 202)

	 	•	 	Fair Credit Reporting Act/FACTA (12 CFR 222 and 15 USC 1681 seq.)

	 	•	 	Bank Secrecy Act/USA PATRIOT Act (31 CFR 103 and HR 3162)

	 	•	 	Right to Financial Privacy (12 USC 3501)

	 	•	 	Office of Foreign Assets Control (OFAC)

	 	•	 	Servicemembers’ Civil Relief Act

	 	•	 	Fair Debt Collection Practices Act

	 	•	 	Regulation P/Gramm-Leach-Bliley Privacy Act (12 CFR 332)

	 	•	 	Regulation AA/FTC Unfair and Deceptive Practices Act (16 CFR 444)

	 	•	 	Identity Theft/Red Flags

	 	•	 	CAN SPAM/Telephone Consumer Protection Act (TCPA)/Do Not Call (DNC)

The Compliance Program encompasses the lending activities of MetaBank for which Fingerhut acts as
agent. Monitors are in place across all functional areas of Fingerhut that include a credit
component, be it prescreening, underwriting, servicing or collections.

Bluestem’s Legal Services Department monitors changes in applicable laws and regulations, engaging
nationally recognized financial services counsel as partners in this effort, and ensures that such
changes are reflected in the applicable policies and procedures.

 

Consumer Credit Compliance Program

Bluestem’s Consumer Credit Compliance Program Steering Committee has been authorized by Bluestem’s
Executive Team to provide oversight of the development and administration of the Compliance
Program. Operating teams from the four main functional areas that include credit components
(Customer Service, Credit Operations, Credit Risk and Collections) have day-to-day responsibility
for maintaining compliance with internal procedures and monitoring of same.

Bluestem’s Compliance Program is maintained in a written format and is housed on Bluestem’s
internal SharePoint system. Access to policies and procedures is available to all employees who
require it in order to fulfill their responsibilities under the program.

Monitoring of compliance procedures is incorporated in the normal business activities of each
affected area and reported upon monthly. Goals for the monitoring process include the detection
of procedural or training deficiencies and the application of corrective action plans where
appropriate.

Training

Understanding of the laws which guide the various procedures across Bluestem is an integral part of
Bluestem’s “new hire” training. In addition, specialized training is provided to staff who perform
functions that are guided by consumer compliance laws, such as Billing Disputes or Collections.

Compliance Procedure Overview

Bluestem Brands, Inc has adopted policies and procedures as an integral part of its Consumer Credit
Compliance Program. This section is intended to be illustrative in a summary fashion of certain
procedures also constituting part of the Consumer Credit Compliance Program. It is only
representative of certain of Bluestem’s procedures and therefore is not a comprehensive index of
procedures nor the procedures themselves.

Collections

Collections Support Settlement Procedure

A customer may be offered a settlement if his or her account is two cycles or more past due
(66 days or greater excluding charged-off accounts) and the account falls into certain
pre-determined behavior score ranges. The first payment must be received within 10 business
days of the original offer. The last payment must be received within 60 days of the first
payment. The offer is null and void if payments are not received or are returned by a
financial institution as unpaid. The account will not be moved to a “Settlement Status”
until 30 days after the last payment is received.

 

Cease and Desist Requests

When a written request is received via mail from the customer, an attorney representing the
customer, or any third party who provides a Power of Attorney signed by the customer,
communications from Fingerhut regarding the collection of an account will cease within 48
hours.

Reduced Payment Plans

Fingerhut offers reduced payment plans to customers who experience financial hardships. A
qualifying payment amount is a minimum of 2.5% of the account balance. Late fees are not
applied while the customer is on the program and the finance charges are reduced.

Reage of Accounts

Customers who have had an account open for a minimum of nine months, are at least 66 days
past due and have no open to buy are eligible for Fingerhut’s Re-age Program. Customers are
offered a re-age program when they are unable to bring their accounts current through any
other means. When on a reage program, the customer must make three qualifying payments, or
one single payment equal to the amount of three qualifying payments, in order for the
account to reage. An account may be reaged only once in a 12-month period and no more than
twice in a five-year period.

Bankruptcy and Deceased Early Charge-Off

Accounts marked as Bankruptcy or Deceased will be charged off 60 days after notification,
provided there is a balance and the account is six or more days delinquent.

Consumer Credit Counseling Services (CCCS)

From time to time, customers who are facing financial difficulties will contract with a
Consumer Credit Counseling Service (“CCCS”) in an effort to pay their debt. CCCS companies
contact Fingerhut with a written proposal for repayment. The payment amount proposed must be
at least 3% of the outstanding balance or $15.00, whichever is greater, in order to be
accepted. If the account is less than 90 days delinquent, the APR is set at 14.90% and the
account is set to “CCCS Retention”. If the account is greater than 90 days delinquent, the
APR is set at 9.90% and the account is set to “CCCS Closed”.

Credit Operations

FinCEN Reporting

The Financial Crimes Enforcement Network (“FinCEN”) provides biweekly files containing names
and addresses (when available) of individuals and business appearing on Specially Designated
Terrorist Lists. Bluestem matches the names of individuals against the lists of current
credit customers; in the event a name is a match or a potential
match, further investigation is completed and the results of the investigation is forwarded

 

to the appropriate banking partner. When a match occurs, the results are grouped based on
three main matching criteria: a one-to-one match on SSN, a one-to-one match by alias first
name/last name, city and ZIP code or a calculated match by address and city. MetaBank
performs this task on behalf of Bluestem for the Fingerhut Credit Account portfolio.

Manual Review Override Authorization

From time to time, requests are made for credit line increases that are outside the normal
parameters for the Manual Review Area. In such cases, the request is forwarded to a
Supervisor or Manager. Manual Review Supervisors have authority up to $200.00 to approve an
account or increase of a credit limit. Manual Review Managers have authority up to $500.00
to approve an account or increase of a credit limit. The Director/Vice President of NCA has
authority up t $2000.00 to approve an account or increase of a credit limit. Requests for
amounts greater than $2000.00 are referred to the head of Risk Management.

Credit Risk

Modeling Variable Restrictions

The following attributes are not to be included in the development or usage of any credit
statistical models: age, gender, religion, language preference, nationality, state of
residence, the fact that all or part of the applicant’s income derives from a public
assistance program, the fact that the applicant has in good faith exercised any right under
the Consumer Credit Protection Act (or any other fields that could directly or indirectly
cause redlining), marital status or medical condition. All credit statistical models will be
reviewed by the Model Review Committee.

GLB Annual Notifications

On an annual basis (defined as within a 12-month period), Privacy Notices are provided to
all account holders required to receive such notices. Account holders exempt from
notification include all zero balance closed accounts, charged off/closed, bankrupt and
deceased accounts. Account holders are provided the right and the ability to opt out of
information sharing as per the Fingerhut Privacy Policy, and are provided a form and mailing
address on the privacy notification.

Credit Bureau Reporting

On behalf of MetaBank, Fingerhut reports information on credit accounts on a monthly basis
to both Equifax and TransUnion. The extract file developed for reporting purposes conforms
to the standard Metro 2 credit reporting format. Customer Service and Collections Support
have separate operational procedures in order to comply with reporting requirements and any
subsequent customer inquiries. Collections Support is responsible for handling all credit
bureau disputes.

 

Portfolio Reviews

On a quarterly basis, Fingerhut, on behalf of MetaBank, obtains an updated read on the
credit bureau attributes of selected accounts. A representative of the Credit Risk team runs
a SAS program to determine which customers satisfy the criteria in place to generate a
review. This group of customers is then compared to a file constructed by IT using the same
criteria, and if the comparison is acceptable, the file is sent to the credit bureau. Upon
receipt of the updated information for the reviewed customers, Credit Risk verifies that the
customers returned are the same as those sent out and that the attributes returned are
reasonable.

Real Time Authorizations (Applicable to Open-End Program only)

This fully automated process provides guidelines and logic for making purchase authorization
decisions at the point of sale. It includes decisioning for Overlimit Authorizations and
High Risk declines. At each purchase attempt, accounts satisfying all other criteria to
approve the purchase except sufficient available credit are subject to “OTB logic”, which
uses preset parameters to make an authorization decision. If the purchase passes the OTB
Logic, the authorization is approved. No overlimit fees are assessed. If the purchase does
not pass the OTB Logic, the authorization is declined. In addition, at each purchase
attempt, accounts satisfying all other criteria that would approve the purchase are analyzed
in real time to assess the risk of the purchase. If the purchase meets the high-end
threshold in terms of defining the risk the account will become seriously delinquent within
the next 12 months, the purchase authorization is declined and the credit limit is reduced
to balance. The customer is sent an adverse action letter which provides the reasons for the
declination.

Credit Line Increase Program (Applicable to Open-End Program only)

On a monthly basis, Fingerhut, on behalf of MetaBank, executes an automated credit limit
increase program for accounts with demonstrated payment capacity and low risk. The credit
limit increase is not run in January or July so as not to interfere with the Portfolio
Review process. The credit limit increase process utilizes three unique sets of logic to
determine which accounts qualify. Two types of increases are given to customers: permanent
and temporary. Temporary line increases generally have an expiration date of 90 days.
However, if a customer utilizes all or part of the temporary line increase, their limit will
remain increased by the amount of utilization even after the expiration date.

Credit Line Decrease Due to Delinquency (Applicable to Open-End Program only)

At the end of each billing cycle, accounts meeting pre-set conditions are systematically
reviewed for a decrease in the credit limit. With the conditions met, actions are taken
based upon the number of days delinquent. Limits on accounts with a 60-89 day delinquency
status are reduced to balance and rounded up to the nearest whole dollar. The credit limit
will not be reduced below $100.00. Limits on accounts with a 90+ day
delinquency status are reduced to zero. No action is taken for purposes of this procedure

 

on accounts that are less than 60 days delinquent.

Customer Service

Billing Disputes (Applicable to Open-End Program only)

In the event a customer has a dispute as defined in the Truth-in-Lending Act and notifies
Fingerhut no later than 60 days after the first billing statement on which the disputed
information appears, Fingerhut will investigate and resolve the dispute within the
timeframes as specified in the Truth-in-Lending Act. During the period in which the dispute
is being investigated, the amount in dispute will be suspended from the accrual of finance
charges, billing and, in some cases, collection. All notification to the customer regarding
the receipt, investigation and resolution of the dispute will be sent within the timeframes
as specified in the Truth-in-Lending Act.

Servicemembers’ Civil Relief Act

Upon the request of a customer who is enlisted in the Armed Services (as defined by the
SCRA), and when accompanied by copies of the customer’s active duty orders, FDM will reduce
the interest rate to 6% on that portion of the account balance incurred prior to the
customer’s call to active duty. Within 30-60 days prior to the release of the customer from
active duty, Fingerhut will send notification to the customer that their protection under
SCRA is due to expire and request further documentation in the event the customer’s active
duty has been extended. Protection under the SCRA will terminate within 30 to 90 days after
the customer’s discharge from active duty. As a courtesy to customers on active duty, and
upon appropriate verification, Fingerhut will accept requests for protection and information
regarding deployment from a servicemembers’ spouse.

 

EXHIBIT F

Debt Suppression

Benefits Description:

Fingerhut suppresses Credit Account for up to six months in the event of the Borrower’s
unemployment or disability provided conditions below are met.

	 	a)	 	Credit Account will be suppressed for the shortest of: 1) number of months
enrolled in SafeLine, 2) the length of unemployment, 3) the length of disability
occurrence or 4) six months.

	 	b)	 	Suppressed is defined as not imposing minimum payment due, late fees, or
SafeLine fees for the period in which benefits are provided. Negative reports will not
be sent to any reporting agency during a billing period in which the Credit Account is
suppressed.

	 	c)	 	Credit Account will be suppressed and unable to be used while benefits are
active. Interest will continue to accrue at contract rate.

Conditions for Unemployment Benefit Activation under Debt Suppression

	 	1.	 	Borrower must be out of work for 30 or more consecutive days prior to making
a request.

	 	2.	 	Borrower’s previously held job must have required 30 or more hours per week.

	 	3.	 	Borrower is not eligible if self-employed, retired or permanently disabled.

	 	4.	 	Borrower’s unemployment must be involuntary.

	 	5.	 	Borrower must be enrolled in SafeLine for 3 months prior to making unemployment
claim.

	 	6.	 	Borrower must not be seriously delinquent more than 60 days at time of Benefits
Activation Application.

Conditions for Disability Benefits Activation under Debt Suppression

	 	1.	 	Borrower must be enrolled for one month prior to requesting benefit activation
due to disability.

	 	2.	 	Borrower must be unable to work.

	 	3.	 	Borrower must be out of work for 30 or more consecutive days prior to making a
request.

	 	4.	 	Borrower’s previously held job must have required 30 or more hours per week.

	 	5.	 	Borrower is not eligible if self-employed, retired or permanently disabled.

	 	6.	 	Pre-existing conditions not covered until Borrower is enrolled in SafeLine six
or more months.

	 	7.	 	Disability does not include: 1) childbirth, 2) normal pregnancy, or 3)
intentionally self inflicted injuries.

Debt Waiver

Benefits Description:

 

In the event of Borrower’s death, SafeLine will waive the entire outstanding balance as of the date
of death.

Conditions for Death Benefit

	 	1.	 	Borrower must be enrolled in SafeLine for three or more months prior to date of
death to be eligible for the death benefit.

	 	2.	 	Death certificate must be provided to Fingerhut by Borrower’s estate or a third
party.

	 	3.	 	Borrower must not be seriously delinquent more than 60 days at time of Benefits
Activation Application.

Pricing — Price listed below is as of date of signing of contract.

	 	1.	 	$0.94 per $100 of total balance of Credit Account.

Marketing Channels — Marketing Channels listed below are as of date of signing of contract:

	 	1.	 	Print including billing statement message, insert, bangtail and solo direct
mail

	 	2.	 	Inbound and outbound telemarketing

	 	3.	 	Internet and email marketing

	 	4.	 	Customer Service cross-sell and order add-on

SAFE LINE ACCOUNT PROTECTION PLUS

(includes both Debt Suppression and Debt Waiver)

General Requirements for Benefit Activation

	 	•	 	Customer will not qualify for benefits if account is seriously delinquent (more than
sixty (60) days past due) when we review Benefit Activation Application.

	 	•	 	Customer must complete a Benefit Activation Application and submit it, along with
the supporting documentation, to Fingerhut Account Services at the address shown on the
application.

	 	•	 	Fingerhut Account Services will verify the information given and evaluate request
for benefit activation n.

	 	•	 	If benefit activation is approved, benefits will be activated immediately. If
benefits are not approved, customer will be notified of such action and the reason
benefits were not activated.

	 	•	 	For Payment Suspension Benefits, except when activated for Life Events, customer
will be required to provide proof of continued qualification for benefit activation, as
described below.

Death Benefit: Balance Cancellation Benefit Description

For the first ninety (90) days after enrollment in the Plan, customer may be eligible for
the Balance Cancellation Benefit, but only in the event of Accidental Death. “Accidental Death”
means death that (a) is directly due to an accidental injury that occurs after the enrollment date;
(b) is independent of all other causes, except accidental injury; and ( c) is unintended,
unexpected, and unforeseen.

 

If death occurs more than ninety (90) days after enrollment in the Plan, customer may be eligible
for the Balance Cancellation Benefit regardless of the cause of death; however, death from war, act
of war (declared or not), or act of terrorism invalidates eligibility for the Balance Cancellation
Benefit, unless such invalidation is prohibited by applicable law.

Conditions for Death Benefit Activation

	 	•	 	Death celiificate must be provided.

Involuntary Unemployment Benefit: Payment Suspension Benefit and Balance Cancellation Benefit

Customer may be eligible for a Payment Suspension Benefit if customer becomes Involuntarily
Unemployed.

“Involuntary Unemployment” or “Involuntarily Unemployed” means customer has suffered an entire loss
of employment income due to one of the following reasons: (a) layoff, (b) general strike, or (c)
involuntary termination by the employer.

Benefits will not be activated for termination due to willful or criminal misconduct, unionized
labor dispute, or lockout. The following are examples of occurrences that do not qualify as
Involuntary Unemployment: (a) voluntary forfeiture of employment salary, wages or employment
income; (b) resignation; ( c) retirement; (d) scheduled termination of an employment contract; (e)
termination of employment (except for involuntary termination by the employer); or (f) loss of
income caused by illness, disease, accident, injury or pregnancy (although these occurrences may
qualify for a Disability Payment Suspension Benefit, as described below).

A customer is not eligible for Involuntary Unemployment benefit activation if customer is self
employed or retired.

The Maximum Benefit Period for Involuntary Unemployment is twelve (12) months.

If a customer is continuously involuntarily unemployed for twelve (12) consecutive months,
customer may be eligible for a Balance Cancellation Benefit at that time.

Conditions for Involuntary Unemployment Benefit Activation

	 	•	 	Customer must be out of work for thirty (30) or more consecutive days to qualify for
benefit activation due to Involuntary Unemployment.
	 
	 	•	 	Customer must be enrolled in the Plan for three (3) months prior to requesting benefit
activation.
	 
	 	•	 	Customer must have been working in a job for thirty (30) or more hours per week for the
three (3) months immediately preceding date of Involuntary Unemployment in order to qualify
for benefit activation.
	 
	 	•	 	Customer will be required to submit a copy of state unemployment registration form
provided by the state in which customer collects Involuntary Unemployment benefits.
	 
	 	•	 	Upon approval of Benefit Activation Application, benefits will be activated retroactive
to the later of (a) customer’s first day of Involuntary Unemployment, in which case any
delinquency relating to the Involuntary Unemployment condition will be cleared (if

 

	 	 	 	present); or (b) three (3) months after enrollment date in the program, in which case any
negative status or reporting will be cleared only if it arose at least three (3) months
after enrollment date in the program and was a result of the Involuntary Unemployment
condition for which customer received Payment Suspension Benefits.
	 
	 	•	 	Each month customer may be required to give proof of continued receipt of state
unemployment benefits.

Disability Benefit: Payment Suspension Benefit and Balance Cancellation Benefit

Customer may be eligible for a Payment Suspension Benefit if a customer becomes Disabled.

If customer is a working person, “Disability” or “Disabled” means that, as a result of an injury or
illness, the customer is unable to perform the material and substantial duties of customer’s
occupation and is under the continuous treatment of a physician.

If customer is a non-working person, “Disability” or “Disabled” means that, as a result of an
injury or illness, the customer is unable to perform all the normal activities of daily living of a
person of like age or sex as celiified by a physician and is under the continuous treatment of a
physician.

A customer does not qualify for benefit activation if Disability is due to (a) childbirth, (b)
normal pregnancy, or (c) intentionally self-inflicted injuries. Disability must begin more than
thirty (30) days after customer enrolls in the Plan. If Disability is caused by a pre-existing
condition, customer does not qualify for benefit activation until customer has been enrolled in the
Plan for six months. A pre-existing condition is an illness or an injury arising from an accident
that caused customer to consult with a physician or seek medical treatment within six (6) months
prior to enrollment date.

The Maximum Benefit Period for Disability is twelve (12) months.

If customer is continuously disabled for twelve (12) consecutive months, customer may be
eligible for a Balance Cancellation Benefit at that time.

Conditions for Disability Benefit Activation for Working Persons

	 	•	 	Customer must be out of work for thirty (30) or more consecutive days to qualify for
benefit activation.
	 
	 	•	 	Customer must have been working in a job for thirty (30) or more hours per week for the
three (3) months immediately preceding date of Disability to qualify for benefit
activation.
	 
	 	•	 	Customer may be asked to provide a statement from physician stating the cause of the
Disability, the initial onset of the Disability, the expected duration of the Disability,
and a statement that customer is unable to perform the customer’s regular job. Each month
the customer may be required to give proof that Disability has continued.

Conditions for Disability Benefit Activation for Non-Working Persons

 

	 	•	 	Customer must have been unable to perform at least one (1) of the activities of daily
living for thirty (30) or more consecutive days to qualify for benefit activation.
	 
	 	•	 	Customer may be asked to provide a statement from physician stating the cause of the
Disability, the initial onset of the Disability, the expected duration of the Disability,
and a statement that customer is unable to perform at least one (1) of the activities of
daily living. Each month customer may be required to give proof that Disability has
continued.

Hospitalization Benefit: Payment Suspension Benefit and Balance Cancellation Benefit

Customer may be eligible for a Payment Suspension Benefit if customer becomes Hospitalized. “

“Hospitalization” or “Hospitalized” means that customer is admitted to a Hospital and remains in
the Hospital for more than forty-eight (48) hours. The term “Hospital” means a (a) licensed medical
facility; (b) chiropractic hospital; (c) acute care facility; (d) nursing home; (e) residential
drug facility; (f) psychiatric facility; (g) hospice facility; or (h) rehabilitation facility.

Customer does not qualify for benefit activation if Hospitalization is due to (a) childbirth, (b)
normal pregnancy, or (c) intentionally self-inflicted injuries.

The Maximum Benefit Period for Hospitalization is three (3) months.

If customer is continuously hospitalized for three (3) consecutive months, customer may be eligible
for a Balance Cancellation Benefit at that time.

Conditions for Hospitalization Benefit Activation

	 	•	 	Hospitalization must begin more than thirty (30) days after em-ollment in the Plan.
	 
	 	•	 	Customer may be asked to provide proof of Hospital stay and the duration of the stay.

Unpaid Leave of Absence Benefit: Payment Suspension Benefit

Customer may be eligible for a Payment Suspension Benefit if customer takes an Unpaid Leave of
Absence (“Leave”).

“Leave” means an employer-approved temporary absence without pay from permanent, nonseasonal,
full-time employment.

The following are examples of occurrences that do not qualify as a Leave: (a) resignation; (b)
retirement; (c) scheduled termination of employment contract; (d) termination of employment; and
(e) absence from work due to illness, disease, accident, or injury (although these occurrences may
qualify for a Disability Payment Suspension Benefit as described above).

Customer is not eligible for Leave benefit activation if customer is self-employed or is an
independent contractor.

The Maximum Benefit Period for Leave is three (3) months.

 

Conditions for Leave Benefit Activation

	 	•	 	Leave must begin more than thirty (30) days after enrollment in the Plan.
	 
	 	•	 	Customer must have been working in ajob for thirty (30) or more hours per week for the
three (3) months immediately preceding date of Leave.
	 
	 	•	 	Customer may be asked to provide proof from employer, stating that customer has been
granted a Leave from work, the reason for the Leave, and the duration of the Leave.

Life Event: Payment Suspension Benefit

Customer
may be eligible for a Payment Suspension Benefit if customer
experiences a Life Event.

“Life Event” means (a) marriage or entrance into a domestic partnership; (b) the bilih of a child
or adoption of a child; (c) divorce; (d) retirement; (e) change of primary residence; (f) the death
of Spouse or Domestic Patiner; or (g) experiencing of a natural disaster.

The Maximum Benefit Period for a Life Event is three (3) months, except for “(e) change of primary
residence,” in which case the benefit period is one (1) month.

Conditions for Life Event Benefit Activation

	 	•	 	Customer must be enrolled in the Plan for thirty (30) days prior to requesting benefit
activation due to a Life Event.
	 
	 	•	 	Customer must notify Fingerhut Account Services within one (1) year of the date the
Life Event initially occurred.
	 
	 	•	 	Customer will be required to provide satisfactory evidence, such as a copy of (a) a
marriage certificate; (b) a bilih certificate or adoption papers; (c) the divorce decree or
court order of divorce; (d) a letter from the employer indicating retirement; ( e) an
address change documentation, such as a signed lease, real estate purchase agreement, or
deed of trust; (f) a death certificate; or (g) documentation indicating that as a result of
a natural disaster customer experienced at least five hundred dollars ($500) in damages to
residence or proof that residence is uninhabitable, or other proof that customer has been
directly impacted by a federally declared natural disaster.

Pricing — Price listed below is as of date of signing of contract.

1. $1.19 per $100 of total balance of Fingerhut credit account.

Marketing Channels — Marketing Channels listed below are as of date of signing of contract.

1. Print including Statement message, catalog, insert, bangtail and solo direct mail

2. Inbound and outbound telemarketing

3. Internet and email marketing

4. Customer Service cross-sell and order add-on

 

EXHIBIT G

Debt Waiver Product Terms and Conditions

See Subsequent Pages

 

	I acknowledge my
enrollment in the SafeLine Account
Protection program offered by
MetaBank to protect my Rngerhut
Credit Account and I have received
the SafeLine Plan Summary.
Account Holder Name (please print)
Address
City Stale Zip
Account Holder Signature
Fingerhut
Account Services 6250
Ridgewood Road St.
Cloud, MN
56303
Congratulations on
choosing
Account Protection
Your enrollment
ensures worry-free protection of
your Fingerhut Credit Account
for just pennies a day and you
pay nothing ifl’oU have no
balance!
” In case of job loss or
disability, SafeLine freezes
your account for up to
6 months:
110 monthly
pa)lments or late fees will
be due and no SafeLine
monthly fees will be
assessed. Interest charges
will continue to accrue .
        .. Or, in the event of
your death, the
outst(lnding account
balance up to the
assigned credit limit
wil! be waived.
See inside for importallt iufonnatioll abollt your benefits, including
eligibility conditions, and retain the cndoscll Plan Summary.
Claim Information
To make an eligible
claim, please contact
Fingerhut Account Services:
By Mail
Fingerhut
Account Services
6250 Ridgewood Road
SI. Cloud, MN 56303
BV Phone
Toll-free
1-800-208-2500
OFingelnvtS..Q&J<lSU-(1{X)
Welcome to
@
Account Protection
for Fingerhut customers
You’ve (I smart choice.
Your SaftLine enrollment provides wony-frce protection of your Fingerhut Credit Accolillt
(issued by MetaBank).
l’LEASE REVlh“W THE ENCLOSED l’LAN SUMMARY~ It contains important
information abOUt” your coverage and contacts for making a claim.
RETA1N FOR YOUR RECORDS.

 

 

	SafeUne® Account Protection
Plan Summary
This is a summalY of benefits and
conditions of the optional Safcline
Account Protection Program in which you
have elected La be enrolled in
connection with your MetaBanklRngerhut
Credit Account.
In this benefits and condiLions
guide, the words “you” and “your” refer
to the person enrolled in the Safeline
Account Protection Program, and the
words “we”, “us” and “our” refer to
MetaBank.
Enrollment
Your piJrchase of Safeline Account
Protection is an optional benefil for
Fingerhut Credit customers. Whether or
not you purchase this product will noL
atlecL your applicaLion for credit or
Lhe oLher Lerms of any exisLing crediL
agreement you have with MeLaBank.
The monthly fee for Safeline
Account Protection is 94 cents
per $100 of your total balance
of your MetaBank/Fingerhut Gredit
Account at the end of each montilly
billing cycle. For example, if
your balance is $195 you
will be assessed a fee of $1.83
($1951100 x .94). II
your balance is less than $100,
this lee will be prorated. For
example, if your balance is $65, you
will be assessed a fee 01 61 cents

	( $6511 00 x .94).
You have the right to cancel
Safeline Account Protection aL any time.
II you cancel within 30 days of your
enrollment date, we will relund your
Saleline Account Protection fee. We may
cancel Saleline Account Protection at
any time. We will not reduce any claimed
benefits you are already receiving at
Lhe time of our cancellation notice.
Fingerhut reserves the right to adjust
benefils and pricing Witll 30 days prior
written notification to you of the
change.
Benefils Description
Sale line Account ProLection
freezes your MetaBankiFingerhut Credit
Account for up to six monills in the
event III at you become unemployed or
disabled, provided all conditions are
met. (See “Conditions for Unemployment
Benen! Activation” and “Gonditions for
Disability Benefit Activation” below.)
In the event of your death, Saleline
Account Protection will waive your
entire balance as of the date of your
death (up to your assigned credit limit)
provided all conditions are met, and
your MetaBank/Fingerhut Credit Account
will be closed. (See ·’Conditions for
Death Benelit” below.)
The term “freeze” means that we
will not impose a minimum payment due,
late fees, or Saleline Account
Protection fees in any billing period in
which benefits are provided. Your
account status with MetaBank will be
frozen upon benefit activation during
those billing periods, and no reports
reflecting a deteriorating credit status
with MetaBank will be sent to any credit
reporting agency during those billing
periods. For example, il your account is
30 days delinquent when you
activate benefits, the status will
remain unchanged while your account is
frozen. Please note that you will be
unable to use your MetaBank/Rngerhut
Credit Account and interest will
continue to accrue on your outstanding
balance while Saleline Account
Protection is activated and your account
is lrozen.
if ali conditions are met. your
MetaBankiFlngerllUt Credit Account
will be frozen forthe shortest
of: 1) 1I1e number of months
you have been enrolied in Safeline, 2)
the length of your unemployment, 3) tile
length of your disability occurrence, or
4) six months. Once benelits have
expired, your account will be
reactivated and you will be responsible
lor making monthly payments again, as
outlined In your MetaBank/Fingerhut
Credit Account agreement. In the event
01 your death, the account balance as of
the date 01 your death (up to your
assigned credit limit) will be waived
(provided all conditions are met)
and your MetaBankiFlngerhut Credit
Account will be closed.
Conditions lor Unemployment Benefit Activation
• You must be out 01 work lor 30 or more consecutive days prior to making a request lor benefits.
• You must have been working In a job which entailed 30 or more hours per week in order to
submit an unemployment benefit activation request
• You are not eligible for the unemployment benefit If you are sell-employed. Retired and
permanently disabled account holders cannol request benefit activation due to unemployment.
• Your unemployment must be involuntary.
• You must be enrolled in Saleline
Account Protection for three months .
prior to requesting benefit activalion
due to unemployment.
• You cannot submit a benefit activation
request due La an unemployment condition
tllat we have already honored lor the
lull six-month benefit period.
• You will be required to submit a completed Benelil Activation Application lorm and a copy 01 your
State unemployment registration form provided to you by tile State In which you collect
unemployment benefits.
• Fingerhut Account Services will verify the inlormation given and evaluate your request lor
benefit activation.
• Upon approval 01 your Benefit
Activation Application, your benefits
will be retroactive to the later of your
first day of unemploymenl, in which case
any delinquency relating to the
unemployment condition will
 be cteared
(if present), or three months after your
enrollment date in the program. Also,
any negative status or reporting will be
cleared if it was a result of the
unemployment condition that arose three
months after your enrollment date In the
program.
• Each month you will be required to
give proal that you will continue to
receive unemployment beneftts.
Acceptable verification includes a copy
of electronic documentation of receipt
of unemployment payment or other similar
verification.
• You wiii not qualify for benefits il
your account is seriously delinquent
(more than 60 days past due) when we
review your application lor benefits.
Conditions for Disability Benelil Activation
• You must be enrolled in SafeUne
Account Protection for 30 days prior to
requesting benefit activation due to
disability.
• You must be unable 10 work due to the disability.
• You must be out of work for 30 or more
consecutive days prior to making a
benefit activation request.
• No disability or illness benefl[
activation request can be submitted for
pre-existing conditions until you have
been enrolled in SaleUne Account
Protection lor six months.
• You must have been working in a job
whicil entailed 30 or more hours per
week in order to submit a benefit
activation request for a disability. You
are not eligible lor tile disability
benefit if you are retired, permanently
disabled. or self-employed.
• You cannot qualily lor disability benefits due to a) cilildblrth, b) normal pregnancy, or c)
intentionally sell-inflicted injuries.
• You cannot re-submlt a benefit activation request due to a disability condition that we have
already honored for the full six-month benefit period.
• Fingerhut Account Services will
verify the information given and
evaluate your request for benelit
activation.
• You will not qualify for benelits
il your account is seriously
delinquent (more than 60 days past
due) when we review your application
for benefits.
Conditions lor Death Benefit
• You must be enrolled in SaleLine Account Protection for three months prior to date of death to be
eligible lor the death benefit.
• A death certificate must be provided. Upon receipt of death certificate, your account
balance will be waived up to your credit limit and your account will be closed.
• You will not qualify lor benelits
il your account is seriously
delinquent (more than 60 days past
due) wilen we review your application
for benefits.

 

 

	Suspension Benefil and
Benefit Description
You may be eligible for a Payment
Suspension Benefit if you become
Hospitalized.
“Hospitalization” or “Hospitalized”
means that you are admitted to a
Hospital and remain in the Hospital
for more than forty-eight (46)
hours. The term “Hospital” means a
(a) licensed medical facility; (b)
chiropractic hospital; (c) acute
care facility; (d) nursing home;
(e) residential drug facility;
(D psychiatric facility;
(g) hospice facility; or (h)
rehabilitation facility.
You do not qualify for benefit
activation il your Hospitalization
is due to (a) childbirth, (b)
normal pregnancy, or (c)
intentionally self-inflicted
injuries.
TIle MiJximum Benefit Period for Hospitulization is three (3) months.
If you are continuously
hospitalized for three (3)
consecutive months, you may be
eligible lor a Balance Cancellation
Benefit at that time with proof of
your ongoing hospitalization.
Conditions for Hospitalization Benefit Activation
• Your Hospitalization must begin
more than thirty (30)
days after you enroll in the
Plan.
• You may be asked to provide proof
of your Hospital stay and the
duration of the stay.
leave 01 Absence ilenelil: Payment Suspension
Benefit Description
You may be eligible for a Payment
Suspension Benefit if you take an
Unpaid Leave of Absence (“Leave”).
“Leave” means an
employer-approved temporary absence
without pay from permanent,
non-seasonal, full-time employment
The following are examples of
occurrences that do not qualify as a
Leave: (a) resignation; (b)
retirement; (c) scheduled
termination of your employment
contract; (d) termination of
employment, and (e) absence from
work due to illness, disease,
accident, or iniury (although these
occurrences may qualify for a
Disability Payment Suspension
Benefit as described above).
You are not eligible for Leave
benefit activation if you are
self-employed or are an independent
contractor.
TIle Maximum Genefit Period for Leave is three (3) months.
Conditions for Leave Benefit Activation
• Your Leave must begin more than thirty (30) days atter you enroll in the Plan.
• You must have been working in a iob for thirty (3~) or more hours per week for the three
(3) months immediately preceding your date of Leave.
• You may be asked to provide proof
from your employer, stating that
you have been granted a Leave from
work, the reason for the Leave, and
the duration of the Leave.
Llle Even!: Payment Suspension Ilmmlil
Benefit Description
You may be eligible for a
Payment Suspension Benefit if you
experience a Life Event
“Life Event” means (a) your
marriage or entrance into a
domestic partnership; (b) the birth
of your child or your adoption of a
child; (c) your divorce; (d) your
retirement; (e) your change of
primary residence;
(f) the death of your spouse or
domestic partner, or (g) your
experiencing of a natural disaster.
The Maximum Benefit Period for
a Life Event is (hree (3) mOllllls,
except for “(e) your chnnge of
primary residence,” in which case
the bendit period is one
(1) month.
Conditions for Life Event Benefit Activation
• You must be enrolled in the Plan
for thirty (3~) days prior
to requesting benefit activation due
to a Life Event.
• You must notify Fingerhut Credit Account Services within one (1) year of the date the Life Event
initially occurred.
• You will be required to provide satisfactory evidence, such as a copy of (a) a marriage
certificate; (b) a birth certificate or adoption papers; (c) the divorce decree or court
order of divorce; (d) a letter from the employer indicating retirement; (e) an address change
documentation, such as a signed lease
, real estate purchase agreement, or deed of trust; (f) a
death certificate; or (g) documentation indicating that as a result of a natural disaster you
experienced at least five hundred dollars ($500) in damages to your residence or proof that your
residence is uninhabitable, or other proof that you have been directly impacted by a federally
declared natural disaster.
Your enrollment ensures worry-free protection of your
MetaBank/Fingerhut Credit
Account for just pennies a day
and you pay nothing if you
have no balance!
In case of unforeseen
events, SafeLine freezes your
account for up to the
specified amount of time
below; no monthly payments
or late fees will be
due and no SafeLine monthly
fees will be assessed.
fnterest charges will
continue to accrue.
        , Job loss: up
to 12 months
Disability: up to
12 months
Unpaid leave of absence: up to 3 months
Hospitalization: up to 3 months
        , Life event (as described inside): up to 3 months
Dr, in the event of your
death, the outstanding account
balance up to the assigned
credit limit will be waived.
You may be eligible for
other account balance
cancellation benefits.
Infotmation:To make an eligible claim, please contact Fingerhut Credit Account Services:
Fingerhut Credit Account Services Ridgewood Road, SI. Cloud, MN 56303 Phune: Toll-free
1-800-208-2500
<ClFlngerhurS-0605G3-000
for Fingerhut customers
smart
Your SafeLine enrollment provides worry-free protection of your Fingerhut Credit Account
(issued by MetaBank).

 

 

	SaleLiner
Accollnt Protection Plus Plan Summary
These are the terms and
conditions of the optional SafeLine”
Account Protection Plus Plan
(“Plan”) in which you have elected
to be enrolled in connection with
your MetaBankiFingerhut Credit
Account (“Credit Account”).
In this Plan Summary. the
words “you” and “your” refer to the
person enrolled in the Plan. and
the words “we”, “us” and “our”
refer to MetaBank.
Emollment
Your purchase of the Plan is
optional. Whether or not you
purchase the Plan will not affect
your application for credit or the
terms of any existing credit
agreement you have with MetaBank.
The monthly fee for the Plan is
$1.19 per $100 of your total
balance of your Credit Account at
the end of each monthly billing
cycle. For example, if your balance
is $195 you will be assessed a fee
of $2.32
($195/$100 x $1.19). If your
balance is $65, you will be
assessed a fee of $0.77 ($65/$100 x
$1.19). You have the right to
cancel the Plan at any time. If you
cancel within thirty (30) days of
your enrollment date, we will
refund your Plan fee. We reserve
the right to adjust any of the
terms and conditions, or cancel the
Plan entirely, with thirty (30)
days prior written notification to
you of the change. Any change or
cancellation will not affect any
benefit activation that exists on
or prior to the effective date of
such change or cancellation.
Balance Cancellation Benelit lIescrilllion
Provided all conditions are
met, we may activate your benefits
and cancel your entire balance up
to your assigned credit limit as of
the date of your death; or we · may
cancel your entire balance at the
end of your Maximum Benefit Period
under Disability, Hospitalization,
or Involuntary Unemployment
protection. Upon balance
cancellation, your Credit Account
will be closed.
Payment Suslmnslon Beneiilllescriplion
Provided all conditions
are met, we may activate your
benefits and suspend your Credit
Account during the benefit
activation period. The term
“suspend” means that we will waive
your requirement to make the
minimum monthly payment and will
waive all late fees or Plan fees
applicable to any billing period In
which benefits are activated. Upon
benefit activation, your Credit
Account is suspended. During those
billing periods, no reports
reflecting a deteriorating credit
status with us will be sent to any
credit reporting agency. Please
note that you will be unable to use
your Credit Account while benefits
are activated, and interest will
continue to accrue on your
outstanding balance.
Upon benefit activation, your
Credit Account will be suspended
for the shorter of (a) the number
of months you have been enrolled in
the Plan or (b) the length of time
that the condition causing your
benefits to be activated continues
up to the maximum benefit period;
provided, however, that suspension
will never be less than one (1)
monlh. Once your benefits have
expired, your account will be
reactivated in the same stalus as
it was on the date of benefit
activation, and you will be
responsible for making monthly
payments again as outlined in your
Credit Account agreemenl
Gennrailleqlliremcnts lnr ilenefit Jictivalinn
• You will not quatify for
benefits if your account is
seriously delinquent (more than
sixty (60) days past due) when we
review your Benefit Activation
Application.
• Contact us to obtain a Benefil Aclivation Applicalion by visiting us al fingerhulcom; or by
writing to us al Fingerhut Credit Account Services, 6250 Ridgewood Rd .. St. Cloud, MN 56303; or by
calling us al 1-800-208-2500. The applicalion will list Ihe supporting documenlation that you must
provide
        . • You must complete a Benefit Activation Application and submit it, along with the
supporting documentation, to Fingerhut Cre
dit Account Services at the address shown on the
application.
• Fingerhut Credit Account Services will verify the information given and evaluate your
request for benefit activalion.
• If your benefit activation is
approved, your benefits will be
activated immediately. If your
benefits are not approved, you will
be notified of such action and the
reason benefits were not activated.
Disability
Should you become disabled due to an            i II
accident or iIIne55 thaI leaves you unable to            I months
perform normal activities of daily living or
your job for at least 30 consecutive days
After 3
When you are hospitalized due to an months            cons
acddent or illness for more than two ffii
12 Afterll
months            consecutive
months
months
3
months
month
Account
balance
cancellation
• If you meet
eligibility
requirements as
stated in this Plan
Summary.
• For Payment Suspension Benefils,
except when activated for Life
Events, you will be required to
provide proof of continued
qualification for benefit
activation, as described below.
ileath Ilenell!: Ii.lance Cancellation
Benefit Oescription
For the first ninety (90) days
after your enroliment in the Plan,
you may be eligibte for the Balance
Cancellation Benefit, but only in
the event of your Accidental Death.
“Accidental Death” means death that
(a) is directly due to an accidental
injury that occurs after the
enrollment date; (b) is independent
of all other causes, except
accidental injury; and (c) is
unintended, unexpected, and
unforeseen.
If your death occurs more
than ninety (90) days after your
enrollment in the Plan, you may be
eligible for the Balance
Cancellation Benefit regardless of
the cause of death; however, death
from war, act of war (declared or
not), or act of terrorism
invalidates eligibility for the
Balance Cancellation Benefit, unless
such invalidation is prohibited by
applicable law.
Conditions for Oeath Benefit Activation
• Your death certificate must be provided.
Benefit Oescription
You may be eligible for a Payment
Suspension Benefit if you become
Involuntarily Unemployed.
“Involuntary Unemployment” or
“Invotuntarlly Unemployed” means you
have suffered an entire loss of
employment income due to one of the
following reasons: (a) layoff, (b)
general strike. or (c) involuntary
termination by the employer.
Benefits will not be activated
for termination due to your willful
or criminal misconduct, unionized
labor dispute, or lockout. The
following are examples of
occurrences that do not qualify as
Involuntary Unemployment: (a)
voluntary forfeiture of employment
salary, wages or employment income;
(b) resignation; (c) retirement; (d)
scheduled termination of an
employment contract; (e) termination
of employment, except for
involuntary termination by your
employer; or (f) loss of income
caused by illness, disease,
accident, injury or pregnancy
(although these occurrences may
qualify for a Disability Payment
Suspension Benefit, as described
below).
You are not eligible for
Involuntary Unemployment benefit
activation if you are seif-employed
or retired.
The Maximum Benefit Period for
Involuntary Unemployment is tweh’c
(Il) months.
If you are continuously
involuntarily unemployed for twelve
(12) consecutive months, you may be
eligible for a Balance Cancellation
Benefit at that time, as long as you
continue to meet the requirements
for unemployment eligibility.
Conditions for fnvoluntary Unemployment Benefit Activation
• You must be out of work for thirty
(30) or more consecutive days to
qualify for bene
fit activation.
• You musl be enrolled in the Plan for Ihree (3) months prior to requesting benefit activation due
to Involuntary Unemployment
• You must have been working in a job for thirty (30) or more hours per week for lhe three (3)
months immedialely preceding your date of Involuntary Unemployment in order to qualify for benefit
activation. • You will be required to submit a copy of your state unemployment registration form
provided to you by lhe state in which you collect Involuntary Unemployment benefits.
• Upon approval of your Benefit Activation Application. your benefits will be activated
retroactive to the later of (a) your first day of Involuntary Unemployment, in which case any
delinquency relating to the Involuntary Unemployment condition will be cleared (if present); or (b)
three (3) months after your enrollment date in the program, in which case any negative slatus or
reporting will be cleared only if it arose at least three (3) months after your
enrollment date in the program and was a result of the Involuntary Unemployment condition for which
you received Payment Suspension Benefits.
• Each month you may be required to give proof that you continue to receive state unemployment
benefits.
Suspension 8enefil and Balance
Benefit Oescription
You may be eligible for a Payment
Suspension Benefit if you become
Disabled
If you are a working person,
“Disability” or “Disabled” means
that, as a result of an injury or
illness, you are unable to perform
the material and substantial duties
of your occupation and are under
the continuous treatment of a
physician.
If you are a non-working
person, “Disability” or “Disabled”
means Ihat, as a result of an injury
or illness, you are unable to
perform all the normal activities of
daily living of a person of like age
or sex as certified by a physician
and are under the conlinuous
treatment of a physician. You do not
qualify for benefit activation if
your Disability is due to (a)
childbirth, (b) normal pregnancy, or
(c) intentionally self-inflicted
injuries. Your Disability must begin
more than thirty (30) days after you
enroll in the Plan. If your
Disability is caused by a
pre-existing condilion, you do not
qualify for benefit activation until
you have been enrolled in the Plan
for six (6) months. A pre-existing
condition is an illness or an injury
arising from an accident, that
caused you to consult with a
physician or seek medical trealmenl
within six (6) months prior 10 your
enrollment date.
The Maximum Benefit Period for Disabili(y is hvelvc (12) monlhs.
If you are continuously
disabled for twelve (12)
consecutive months, you may be
eligible for a Balance Cancellation
Benefit at that time, as long as
you continue to meet the conditions
for disability eligibility.
Conditions for Oisabllity Benefit Activation for Working Persons
• You must be out of work for
thirty (30) or more consecutive
days 10 qualify for benefit
activation.
• You must have been working in a job for thirty (30) or more hours per week for the three (3)
months immediately preceding your date of Disability to qualify for benefit activation.
• You may be asked 10 provide a statement from your physiCian stating the cause of the
Disability, the initial onset of the Disability, the expected duration of the Disability, and a
statement that you are unable to perform your regular job. Each month you may be required to give
proof that your Disability has continued.
Conditions for Oisability Benefit Activation for Non-Working Persons
• You must have been unable to
perform at least one (1) of the
activities of daily living for
thirty (30) or more consecutive
days to qualify for benefit
activation.
• You may be asked to provide a
statement from your physician
stating the cause of the
Disabilily, the initial onset of
the Disability, the expected
duration of the Disability, and a
statement t
hat you are unable to
perform at least one (1) of Ihe
aclivilies of daily living. Each
month you may be required to give
proof that your Disability has
continued .

 

 

	MetaBank Exhibit H—Sample Funding Statement Date Transaction Date Meta Origination Date Sales
Originations Sales Origination Fee % Sales I Origination Fee Amt SafeLine Originations SafeLine
Originations Fee% SafeLine Originations Fee Amt SafeLine OW Fee % SafeLine OW Fee I Fingerhut Amt
Purchase Date # Days Interest Rate Total I (24.90%) Interest Paid Total-Purchase Amount

 

 

EXHIBIT I — Funding Account Information

[*]

[*] Indicates confidential portions omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission

 

EXHIBIT J

Interest Charges

Interest Rate:

All Open-End Accounts and Installment Loans issued by Bank under this Agreement shall have a
non-variable annual percentage rate (“APR”) of 24.90%.

Late Fees for Open-End Program Only:

Late fees may be imposed on an Open-End Account if the minimum payment due is not received by the
payment due date on the customer’s periodic statement.

Through August 21,2010, late fees shall be assessed in accordance with the following table:

	 	 	 	 	 

	Balances from zero to $15.00:
	 	exempt from late fees	 
	Balances from $15.00 to $50.00
	 	$	4.90	 
	Balances from 50.01 to $200.00
	 	$	14.90	 
	Balances from $200.01 to $300.00
	 	$	19.90	 
	Balances greater than $300.00
	 	$	24.90	 

Effective August 22,2010, late fees will be assessed at up to the lesser amount of the minimum
payment due or $24.90.

Effective September 30,2010, late fees will be assessed at up to the minimum payment due up to a
maximum amount of $25.00 for the first time offense in 6 months and will increase up to a maximum
amount of $30.00 if a customer has not made payment by the due date during any of the customer’s
next 6 billing cycles.

The late fees for the Open-End Program may only be increased with consent of MetaBank.

Late Fees for Closed-End Program Only:

Late fees for Installment Loans shall be assessed in accordance with the following table:

	 	 	 	 	 

	Balances from zero to $15.00:
	 	exempt from late fees	 
	Balances from $15.01 to $50.00:
	 	$	4.90	 
	Balances greater than $50.00:
	 	$	14.90	 

The late fees for the Closed-End Program may only be increased with consent of MetaBank.

Return Payment Fees for Open-End Program Only:

 

A returned payment fee may be assessed to an account each time a payment on an Open-End Account is
not honored by a depository institution.

Through August 21, 2010, returned payment fees shall be assessed in the amount of $25.00.

Effective August 22, 2010, returned payment fees will be assessed at up to the lesser amount of the
minimum payment due or $24.90.

Effective September 30, 2010, returned payment fees will be assessed at up to the minimum payment
due up to a maximum amount of $25.00 for the first time offense in 6 months and will increase up to
a maximum amount of $30.00 if a customer has any returned payments during any of the customer’s
next 6 billing cycles.

The returned check fee for the Open-End Program may only be increased with consent of MetaBank.

Returned Check Fee for Closed-End Program Only:

A charge of up to $25.00 may be assessed to an account each time a payment on an Installment Loan
is not honored by a depository institution. The returned check fee for the Closed-End Program may
only be increased with consent of MetaBank.

Minimum Finance Charge for Open-End Program Only:

As of the date of this contract, the minimum finance charge on an Open-End Account is $1.00. The
minimum finance charge may only be increased with the consent of MetaBank.

 

EXHIBIT K

Insurance Requirements

Fingerhut shall maintain, at its sole expense and with a insurers rated II A-” or better by AM
Best, (a) a general comprehensive liability policy insuring Fingerhut for not less than One Million
Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) in the aggregate; (b) a
comprehensive crime policy, including employee dishonesty/fidelity, insuring Fingerhut for not less
than One Million Dollars ($1,000,000) per occurrence; and (c) a cyber liability policy insuring
Fingerhut for not less than Five Million Dollars ($5,000,000) in the aggregate. Fingerhut shall
provide to Bank, on the date hereof and from time to time thereafter upon any change in or renewal
of such policies, copies of the certificates of insurance evidencing such policies. Fingerhut shall
not take any action to cancel or terminate any of such policies unless a substantially similar
policy is in effect providing the same coverage. Fingerhut shall instruct its insurance carrier to
notify Bank concurrently with the delivery of any notice regarding the renewal, termination, or
cancellation by the issuer of any of such policies.

 

EXHIBIT L

	 	•	 	2417 Customer, Inc. *
	 
	 	•	 	EXHIBITL
	 
	 	•	 	SUBCONTRACTORS
	 
	 	•	 	Adobe (formerly Omniture)*
	 
	 	•	 	AllianceOne, Inc. *
	 
	 	•	 	Alliant*
	 
	 	•	 	Argus Information and Advisory Services*
	 
	 	•	 	Aspect Software, Inc. *
	 
	 	•	 	CCB Credit Services, Inc. *
	 
	 	•	 	CheckFree Pay Corporation*
	 
	 	•	 	Clear Commerce Corporation (eFunds)*
	 
	 	•	 	CoreCard Software, Inc. *
	 
	 	•	 	Coremetrics, Inc. *
	 
	 	•	 	DataLogix
	 
	 	•	 	Digital Data Voice Corporation*
	 
	 	•	 	Direct Media (an infoUSA company)
	 
	 	•	 	eBureau LLC*
	 
	 	•	 	Elavon, Inc. *
	 
	 	•	 	Epsilon Data Management, LLC*
	 
	 	•	 	Equifax Information Services LLC*
	 
	 	•	 	Equifax Technology Solutions LLC*
	 
	 	•	 	Experian Marketing Solutions, Inc. *
	 
	 	•	 	Fair Isaac Corporation*
	 
	 	•	 	FreshAddresses, Inc. *
	 
	 	•	 	Fry, Inc.*
	 
	 	•	 	Genpact*
	 
	 	•	 	Haggin Marketing, Inc.
	 
	 	•	 	Huntington National Bank*
	 
	 	•	 	e I-Behavior, Inc.*
	 
	 	•	 	e ID Insight
	 
	 	•	 	Impact Mailing of Minnesota*

 

	 	•	 	InfoCentricity, Inc. *
	 
	 	•	 	It IXI Corporation *
	 
	 	•	 	JC Christiansen and Associates*
	 
	 	•	 	L2C, Inc.*
	 
	 	•	 	LexisNexis Public Records Data Services, Inc.*
	 
	 	•	 	Merkle Inc. *
	 
	 	•	 	MicroBilt Corporation*
	 
	 	•	 	MotionPoint Corporation
	 
	 	•	 	National Asset Recovery Services*
	 
	 	•	 	NCO Financial Systems, Inc.
	 
	 	•	 	NetMargin LLC (Datran)
	 
	 	•	 	Online Resources Corporation*
	 
	 	•	 	Phillips & Cohen Associates, Ltd. *
	 
	 	•	 	Quad/Graphics, Inc.
	 
	 	•	 	R.R. Donnelley & Sons Company
	 
	 	•	 	Remitco LLC*
	 
	 	•	 	Responsys, LLC
	 
	 	•	 	Scorelogix, LLC*
	 
	 	•	 	SoundBite Communications, Inc. *
	 
	 	•	 	Systems and Services Technologies, Inc. *
	 
	 	•	 	TARGUSInfo*
	 
	 	•	 	Teletrack
	 
	 	•	 	Touchpoint Data Solutions, Inc.
	 
	 	•	 	Trans Union LLC*
	 
	 	•	 	vCustomer Corporation *
	 
	 	•	 	Walter Karl
	 
	 	•	 	x+lexv10w25

Exhibit 10.25

METABANK

And

BLUESTEM BRANDS, INC.

AMENDED AND RESTATED

RECEIVABLES SALE AGREEMENT

Dated as of August 20, 2010

Confidential Treatment Requested

[*] Indicates confidential portions omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission

 

 

          THIS AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT (this “Agreement”), dated as of
August 20, 2010 (“Effective Date”), is made by and between METABANK (“Bank”), a federal
savings bank doing business as Meta Payment Systems and operating from a branch in Sioux Falls,
South Dakota, and BLUESTEM BRANDS, INC. (formerly known as FINGERHUT DIRECT MARKETING, INC.)
(“Bluestem”), a Delaware corporation having its principal location in Eden Prairie,
Minnesota (each a “Party” and collectively the “Parties”).

          WHEREAS, Bank and Bluestem are entering into an Amended and Restated Program Agreement
(“Program Agreement”) as of the date hereof pursuant to which Bank, upon request from Bluestem,
shall establish open-end consumer financing accounts and closed-end installment loans for consumers
who use the resulting proceeds to finance purchases of general merchandise and services from
Bluestem via direct marketing; and

          WHEREAS, Bluestem desires to purchase from Bank all Receivables hereafter originated by Bank
pursuant to the Program Agreement; and

          WHEREAS, Bank wishes to sell to Bluestem all Receivables hereafter originated pursuant to the
Program Agreement.

          WHEREAS, the Parties desire that this AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT replace
and supersede the RECEIVABLES SALE AGREEMENT between the Parties dated as of January 14, 2010, as
of the Effective Date.

          NOW, THEREFORE, in consideration of the foregoing and the terms, conditions and mutual
covenants and agreements herein contained, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Bank and Bluestem agree as follows:

1. Definitions. The terms used in this Agreement shall be defined as set forth in
Schedule 1 and as otherwise defined herein.

2. Purchase of Receivables; Payments to Bank.

	 	(a)	 	With respect to each Account during the term of this Agreement, Bank hereby
agrees to sell, transfer, assign, set-over, and otherwise convey to Bluestem, without
recourse and with servicing released, the Receivables now existing and hereafter
created arising under the Accounts during the Term of this Agreement, on the first
Business Day after the date of Settlement in accordance with Section 2(b) below. All of
the foregoing shall be in accordance with the procedures set forth in this Section 2.
Bluestem will provide all Processing Services in connection with such Receivables and
their related Accounts, or arrange for such servicing through a subcontractor, if
applicable, in accordance with the Program Agreement, at no cost to Bank. In connection
with the foregoing, Bluestem or its designee shall provide the connectivity to enable
Bank to have access on demand to the online system of Bluestem or its data processor,
as applicable, for the purpose of reviewing the Accounts and Receivables being
serviced. In

 

 

	 	 	 	consideration for Bank’s agreement to sell, transfer, assign, set-over and convey to
Bluestem all Receivables generated by Bank during the term of this Agreement,
Bluestem agrees to purchase such Receivables from Bank, and Bluestem shall pay to
Bank the Purchase Price on each Closing Date in accordance with Section 2(b) below
and the additional amount, if any, in accordance with Section 2(d) below.

	 	(b)	 	Bluestem shall prepare and deliver to Bank a Daily Receivables Sale Statement,
in a form to be agreed to by the Parties, by e-mail or as otherwise mutually agreed no
later than 12:00 p.m. Central Time on each Business Day that qualifies as a Closing
Date, which statement shall relate to the Receivables that Bank is selling to Bluestem
on such Business Day pursuant to Section 2(a) above. No later than 5:00 p.m. on the
same Business Day that Bluestem provides each Daily Receivables Sale Statement to Bank,
Bluestem shall pay to Bank the aggregate Purchase Price for all of the Receivables
identified on each such Daily Receivables Sale Statement. Bluestem shall make the
payment required by this Section 2(b) by a method mutually agreed by the Parties, to
Bank’s account number 17-15613, or such other account as may be hereafter designated by
Bank. Failure to strictly adhere to the times referenced in this paragraph, provided
that performance occurs on the same Business Day, shall not constitute a technical
breach of this Agreement.

	 	(c)	 	As part of the Purchase Price payable to Bank by Bluestem pursuant to Section
2(b) above, Bluestem shall pay to Bank an origination fee (“Origination Fee”)
for each Account Advance as follows:

	 	(1)	 	To the extent that the total Account Advances in the
then-current Program Year are less than [*], [*] of each Account Advance;

	 	(2)	 	To the extent that the total Account Advances in the
then-current Program Year are equal to or greater than [*] and less than
[*], [*] of each Account Advance;

	 	(3)	 	To the extent that the total Account Advances in the
then-current Program Year are equal to or greater than [*] and less than
[*], [*] of each Account Advance; and

	 	(4)	 	To the extent that the total Account Advances in the
then-current Program Year are equal to or greater than [*], [*] of each Account Advance.

	 	(d)	 	As further consideration for Bank’s agreement to sell Receivables to Bluestem
hereunder, if the Total Bank Revenue for any calendar month during the Term is less
than the Monthly Minimum for such calendar month, within ten (10) Business Days after
the end of each such calendar month, Bluestem shall pay to

	 	[*]	 	Indicates confidential portions omitted pursuant to a request
for confidential treatment filed separately with the Securities and
Exchange Commission

 

 

	 	 	 	Bank the difference between the Monthly Minimum and Total Bank Revenue for the
calendar month then ended.

	 	(e)	 	To the extent that such materials are in Bank’s possession, upon Bluestem’s
request, Bank agrees to cause to be delivered to Bluestem, at Bluestem’s cost, copies
of Records on all Receivables purchased by Bluestem pursuant to this Agreement through
the preceding Business Day.

	 	(f)	 	During such time as Bank owns the Receivables, Bluestem shall ensure that all
refunds, adjustments and credits on Accounts shall be disbursed to Bank within three
(3) Business Days after the refund, adjustment or credit is processed by Bluestem. All
claims by Borrowers for refunds, adjustments, or credits made with respect to
Receivables purchased hereunder by Bluestem shall be the responsibility of Bluestem.
Bank hereby assigns to Bluestem, with respect to each Receivable purchased pursuant to
this Agreement, all of Bank’s rights to any such refunds, credits or adjustments and
the interest accruing on each Receivable.

	 	(g)	 	Bank and Bluestem each intend the transfer of the Receivables under this
Agreement to be a true sale by Bank to Bluestem that is absolute and irrevocable. At
any time and from time to time, Bank will promptly and duly execute and deliver or will
promptly cause to be executed and delivered, such further instruments and documents and
take such further actions as are reasonably requested by Bluestem to confirm the sale
of the Receivables and/or for the purpose of obtaining or preserving the full benefits
of this Agreement, including, without limitation, the filing of any financing or
continuation statements under the UCC or other applicable state law in effect in any
jurisdiction with respect to the transfer or ownership of the Receivables. However,
notwithstanding the intent of the Parties, if a court of competent jurisdiction holds
that the conveyance of the Receivables is not a true sale of the Receivables from Bank
to Bluestem, then (i) this Agreement also shall be deemed to be and hereby is a
security agreement within the meaning of the UCC, and (ii) the conveyance by Bank
provided for in this Agreement shall be deemed to be, and Bank hereby grants to
Bluestem, a first priority security interest in and to all of Bank’s right, title and
interest in the Receivables to secure all obligations now or hereafter arising from
Bank to Bluestem. Bank also hereby authorizes Bluestem to file any such financing or
continuation statement with respect to such grant. Further, Bank will promptly and duly
execute and deliver or will promptly cause to be executed or delivered, such further
instruments and documents and take such further actions as are reasonably requested by
Bluestem to effect the servicing of the Accounts and Receivables. At any time and from
time to time, Bluestem will promptly and duly execute and deliver or will promptly
cause to be executed or delivered, such further instruments and documents and take such
further actions as are reasonably requested by Bank for the purpose of obtaining or
preserving the full benefits of this Agreement.

 

 

3. Ownership of Receivables; Servicing.

	 	(a)	 	On and after each Closing Date, Bluestem shall be the owner of the Receivables
purchased from Bank on such date and shall be entitled to all of the rights,
privileges, and remedies applicable to said ownership interest. Bank agrees to make
entries on its books and records to clearly indicate the sale of the Receivables to
Bluestem as of each Closing Date. Bluestem agrees to make entries on its books and
records to clearly indicate the purchase of the Receivables as of each Closing Date.
Bank does not assume and shall not have any liability to Bluestem for the repayment of
any Receivables; provided that the Bank shall promptly forward any repayments of
Receivables sold to Bluestem in accordance with Section 4(c) below.

	 	(b)	 	Bank shall retain ownership of the Accounts after each Closing Date except as
otherwise set forth herein. Bluestem agrees to make entries on its books and records to
clearly indicate Bank’s ownership of the Accounts as of each Closing Date.

4. Covenants of Bank. Bank hereby covenants that:

	 	(a)	 	Bank will take no action to cause any Account or Receivable to be evidenced by
any “instrument” or “chattel paper” (as defined in the UCC as in effect in the Relevant
UCC State). Bank will take all actions reasonably requested by Bluestem for the purpose
of ensuring that any Account not be anything other than an “account” or a “general
intangible” or a “payment intangible” and/or any Receivable not be anything other than
a “general intangible” or an “account” (as defined in the UCC as in effect in the
Relevant UCC State) or under any revision to the law under the Relevant UCC State;

	 	(b)	 	Except for the rights expressly granted to Bluestem and Bank under the Program
Documents, Bank will not sell, pledge, assign or transfer to any other Person, any
Account or any Receivable, or any interest therein.

	 	(c)	 	If Bank receives or collects any funds in repayment of a Receivable sold to
Bluestem after the applicable Closing Date for such Receivable, Bank shall promptly
send an e-mail notice of such receipts to Bluestem, and shall forward any Receivables
payments, any materials that are enclosed with such payments (e.g., payment stubs) and
any other correspondence that it receives from Borrowers as directed by and in the
manner requested by Bluestem (e.g., overnight delivery) at Bluestem’s cost. Bank hereby
agrees and acknowledges that any Receivables payments so collected by Bank shall be
held in trust for Bluestem and shall be delivered promptly to Bluestem.

5. General Representations and Warranties of Bank.

	 	(a)	 	Bank hereby represents and warrants to Bluestem that:

 

 

	 	(1)	 	Bank is, and throughout the term of this Agreement and the
Program Agreement intends to remain, subject to a change in Applicable Law, a
federal savings bank, duly organized, validly existing under the laws of the
United States, and Bank has full corporate power and authority to execute,
deliver, and perform its obligations under this Agreement and the Program
Agreement; the execution, delivery and performance of this Agreement and the
Program Agreement have been duly authorized, and are not in conflict with and
do not violate the terms of the charter or bylaws of Bank and will not result
in a breach of or constitute a default under, or require any consent under, any
indenture, loan or agreement to which Bank is a party;

	 	(2)	 	All approvals, authorizations, licenses, registrations,
consents, and other actions, notices, and filings that may be required in
connection with the execution, delivery, and performance of this Agreement and
the Program Agreement by Bank, have been obtained (other than those required to
be made to or received from “Borrowers” and “Applicants”, as such terms are
defined in Schedule 1 of the Program Agreement);

	 	(3)	 	Each of this Agreement and the Program Agreement constitutes a
legal, valid, and binding obligation of Bank, enforceable against Bank in
accordance with its terms, except (i) as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship or other similar laws now or hereafter in effect, including the
rights and obligations of receivers and conservators under 12 U.S.C. §§ 1821
(d) and (e), which may affect the enforcement of creditors’ rights in general,
and (ii) as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity);

	 	(4)	 	There are no proceedings or investigations pending or, to the
best knowledge of Bank, threatened against Bank (i) asserting the invalidity of
this Agreement or the Program Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by Bank pursuant to this
Agreement or the Program Agreement, (iii) seeking any determination or ruling
that, in the reasonable judgment of Bank, would materially and adversely affect
the performance by Bank of its obligations under this Agreement or the Program
Agreement, (iv) seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement or the
Program Agreement, or (v) would have a materially adverse financial effect on
Bank or its operations if resolved adversely to it;

	 	(5)	 	Bank is not Insolvent; and

 

 

	 	(6)	 	The execution, delivery and performance of this Agreement and
the Program Agreement by Bank comply with all laws specifically applicable to
Bank’s operations.

	 	(b)	 	The representations and warranties set forth in this Section 5 shall survive
the sale, transfer and assignment of the Receivables pursuant to this Agreement and,
with the exception of those representations and warranties contained in Section
5(a)(4), shall be made continuously throughout the term of this Agreement. In the event
that any investigation or proceeding of the nature described in Section 5(a)(4) is
instituted or threatened against Bank, Bank shall promptly notify Bluestem of such
pending or threatened investigation or proceeding, unless otherwise prohibited by
Applicable Law or a Regulatory Authority.

6. Additional Representations and Warranties of Bank.

	 	(a)	 	Bank hereby represents and warrants that, as of the Effective Date or such
other date as specified below in a specific representation:

	 	(1)	 	As of each Closing Date, the transfer of each Receivable to
Bluestem on such date constitutes a valid sale, transfer, assignment, set-over
and conveyance of all of Bank’s right, title, and interest in and to such
Receivable, free of any adverse interest;

	 	(2)	 	As of each Closing Date, Bank was the legal and beneficial
owner of all right, title and interest in and to each Receivable, and no
Receivable was subject to an encumbrance immediately prior to the transfer of
the Receivable pursuant hereto;

	 	(3)	 	Bank shall maintain its records in a manner to clearly and
unambiguously reflect the ownership of Bluestem in each of the Receivables
transferred hereunder;

	 	(4)	 	As of the Closing Date, with respect to each Receivable: (i)
Bank has done nothing that would alter the terms and conditions or the amount
of the Receivable; and (ii) there is no limit on Bank’s authority to assign the
Receivable;

	 	(5)	 	As of the Closing Date, with respect to each Receivable
transferred on such Closing Date, to the best of Bank’s knowledge:

	 	(i)	 	Bank has not received any payments with respect
to such Receivable; and

	 	(ii)	 	The maximum annual percentage rate to be
provided in each Account Agreement, as set forth pursuant to the Credit
Policy as defined in the Program Agreement, and the maximum late fee
and returned check fee provided for in the Account Agreement are
permissible under South Dakota law and federal laws pertaining to

 

 

	 	 	 	the exportation of interest rates for Bank to charge as of the date
of each such Account Agreement.

	 	(6)	 	As of each Closing Date hereunder, the Bank has good and
marketable title to the Receivables free and clear of any Lien, claim or
encumbrance of any Person;

	 	(7)	 	The Bank has received all consents and approvals to the
transfers of the Receivables under this Agreement; and

	 	(8)	 	Except as contemplated under this Agreement, the Bank has not
(i) pledged, assigned, sold, granted a security interest in, or otherwise
conveyed any of the Receivables nor (ii) authorized the filing of, nor is it
aware of, any financing statements against the Bank that include the
Receivables in the collateral description.

	 	(b)	 	The representations and warranties set forth in this Section 6 shall survive
the sale, transfer and assignment of the Receivables pursuant to this Agreement.

7. Representations and Warranties of Bluestem.

	 	(a)	 	Bluestem hereby represents and warrants to Bank that:

	 	(1)	 	Bluestem is a Delaware corporation duly organized and validly
existing in good standing under the laws of the State of Delaware, and has full
power and authority to execute, deliver, and perform its obligations under this
Agreement and the Program Agreement; the execution, delivery, and performance
of this Agreement and the Program Agreement have been duly authorized, and are
not in conflict with and do not violate the terms of the certificate of
incorporation or bylaws of Bluestem, and will not result in a breach of or
constitute a default under or require any consent under any indenture, loan, or
agreement to which Bluestem is a party except such consents as Bluestem shall
have received on or prior to the date hereof;

	 	(2)	 	All approvals, authorizations, consents, and other actions by,
notices to, and filings required to be obtained for the execution, delivery,
and performance of this Agreement by Bluestem have been obtained, and as of the
Effective Date, all approvals, authorizations, consents, and other actions by,
notices to, and filings required to be obtained for the execution, delivery,
and performance of this Agreement and the Program Agreement by Bluestem shall
have been obtained;

	 	(3)	 	This Agreement and the Program Agreement constitute a legal,
valid, and binding obligation of Bluestem, enforceable against Bluestem, in
accordance with its terms, except (i) as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other similar
laws now or hereafter in effect, which may affect the

 

 

	 	 	 	enforcement of creditors’ rights in general, and (ii) as such enforceability
may be limited by general principles of equity (whether considered in a suit
at law or in equity);

	 	(4)	 	There are no proceedings or investigations pending or, to the
best knowledge of Bluestem, threatened against Bluestem (i) asserting the
invalidity of this Agreement or the Program Agreement, (ii) seeking to prevent
the consummation of any of the transactions contemplated by Bluestem pursuant
to this Agreement or the Program Agreement, (iii) seeking any determination or
ruling that, in the reasonable judgment of Bluestem, would materially and
adversely affect the performance by Bluestem of its obligations under this
Agreement or the Program Agreement, (iv) seeking any determination or ruling
that would materially and adversely affect the validity or enforceability of
this Agreement or the Program Agreement, or (v) would have a materially adverse
financial effect on Bluestem or their operations if resolved adversely to it;

	 	(5)	 	Bluestem is not Insolvent;

	 	(6)	 	The execution, delivery and performance of this Agreement by
Bluestem complies with all laws specifically applicable to the business of
Bluestem;

	 	(7)	 	Bluestem will at all times remain in material compliance with
all of its covenants and obligations under any credit facility or
securitization established for the purpose of funding its acquisition of
Receivables (“Funding Facility”), and Bluestem will provide to Bank a copy of
any Funding Facility agreements and amendments thereto; Bluestem shall provide
notice to Bank of its sending any notice of non-renewal of the Funding
Facility, and shall provide prompt notice to Bank of any event of default of
Bluestem under the Funding Facility; Bluestem shall maintain the Funding
Facility to the extent necessary to perform its obligation to purchase
Receivables under this Agreement; a loss by Bluestem of the Funding Facility
shall not relieve Bluestem of its obligation to purchase Receivables pursuant
to this Agreement, nor shall such a loss serve as a basis for Bluestem’s
terminating this Agreement; and

	 	(8)	 	Except as otherwise disclosed to Bank, neither Bluestem nor, to
the actual knowledge of Bluestem’s executive officers, any Principal of
Bluestem, has been subject to the following as of the date of this Agreement:

	 	(a)	 	Any criminal conviction (except minor traffic
offenses and other petty offenses);

	 	(b)	 	Federal or state tax lien;
	 
	 	(c)	 	Administrative or enforcement proceedings
commenced by the Securities and Exchange Commission, any state
securities

 

 

	 	 	 	authority, Federal Trade Commission, or any Regulatory
Authority; or

	 	(d)	 	Restraining order, decree, injunction, or
judgment entered in any proceeding or lawsuit alleging fraud or
deceptive practice on the part of Bluestem or any Principal thereof.

	 	(b)	 	The representations and warranties set forth in this Section 7 shall survive
the sale, transfer and assignment of the Receivables pursuant to this Agreement and,
with the exception of those representations and warranties contained in Section 7(a)(4)
and 7(a)(8), shall be made continuously throughout the term of this Agreement. In the
event that any investigation or proceeding of the nature described in Section 7(a)(4)
is instituted or threatened against Bluestem, Bluestem shall promptly notify Bank of
such pending or threatened investigation or proceeding, unless otherwise prohibited by
Applicable Law or a Regulatory Authority.

8. Conditions Precedent to the Obligations of Bluestem.

	 	(a)	 	The obligations of Bluestem to purchase any Receivables under this Agreement
are subject to the satisfaction of the following conditions precedent on or prior to
each Closing Date:

	 	(1)	 	As of each Closing Date, no action or proceeding shall have
been instituted or threatened against any Party to prevent or restrain the
consummation of the transactions contemplated hereby, and, on each Closing
Date, there shall be no injunction, decree, or similar restraint preventing or
restraining such consummation;

	 	(2)	 	The representations and warranties of Bank set forth in
Sections 5 and 6 shall be true and correct in all material respects on each
Closing Date as though made on and as of such date;

	 	(3)	 	The obligations of Bank set forth in this Agreement to be
performed on or before each Closing Date shall have been performed in all
material respects as of such date by Bank; and

	 	(4)	 	No Regulatory Authority shall have determined and notified any
of the Parties that the arrangement between the Parties contemplated by this
Agreement constitutes an unsafe or unsound banking practice or is in violation
of Applicable Law, nor shall there have been imposed or obtained an injunction
prohibiting the continuation of such arrangement.

	 	(b)	 	The Parties agree that, upon payment by Bluestem to Bank of the Purchase Price
on any Closing Date, title to the Receivables acquired by Bluestem on such day shall
vest in Bluestem, whether or not the foregoing conditions precedent to such
purchase were in fact satisfied and any Party’s sole remedy for damages on

 

 

	 	 	 	account
of failure to satisfy such conditions precedent shall be limited to indemnification
as provided in Section 12.

9. Conditions Precedent to the Obligations of Bank.

	 	(a)	 	The obligations of Bank in this Agreement are subject to the satisfaction of
the following conditions precedent on or prior to each Closing Date:

	 	(1)	 	As of each Closing Date, no action or proceeding shall have
been instituted or threatened against any Party to prevent or restrain the
consummation of the purchase or other transactions contemplated hereby, and, on
each Closing Date, there shall be no injunction, decree, or similar restraint
preventing or restraining such consummation;

	 	(2)	 	The representations and warranties of Bluestem set forth in the
Program Documents shall be true and correct in all material respects on each
Closing Date as though made on and as of such date;

	 	(3)	 	The obligations of Bluestem set forth in the Program Documents
to be performed on or before each Closing Date shall have been performed in all
material respects as of such date by Bluestem; and

	 	(4)	 	No Regulatory Authority shall have determined and notified any
of the Parties that the arrangement between the Parties contemplated by this
Agreement constitutes an unsafe or unsound banking practice or is in violation
of Applicable Law, nor shall there have been imposed or obtained an injunction
prohibiting the continuation of such arrangement.

	 	(b)	 	The Parties agree that, upon payment by Bluestem to Bank of the Purchase Price
on any Closing Date, title to the Receivables acquired by Bluestem shall vest in
Bluestem, whether or not the foregoing conditions precedent to such purchase were in
fact satisfied and any Party’s sole remedy for damages on account of failure to satisfy
such conditions precedent shall be limited to indemnification as provided in Section
12.

10. Term and Termination.

	 	(a)	 	This Agreement shall take effect on the Effective Date and continue through
January 13, 2015 (the “Initial Term”) and shall renew automatically for
successive additional terms of one (1) year each (each a “Renewal Term”),
unless Bluestem notifies Bank of non-renewal at least one hundred and twenty (120) days
prior to the end of the Initial Term or any Renewal Term or Bank notifies Bluestem of
non-renewal at least one hundred and eighty (180) days prior to the end of the Initial
Term or any Renewal Term (together, the “Term”). Notwithstanding the foregoing, this
Agreement shall terminate immediately upon the effectiveness of the termination or
expiration of the Program Agreement, subject to fulfillment of Bluestem’s obligations
in Section 10(e) below.

 

 

	 	(b)	 	Bank may terminate this Agreement immediately upon written notice to Bluestem
if Bluestem defaults on any obligation to make a payment to Bank as provided in Section
2 hereof and such default remains uncured for more than two (2) Business Days after
Bank provides Bluestem notice of such default.

	 	(c)	 	A Party shall have a right to terminate this Agreement immediately upon written
notice to the other Party and upon written notice to the Administrative Agent in any of
the following circumstances:

	 	(1)	 	any financial statement, certificate, representation or
warranty furnished by the other Party in the Program Documents shall be
incorrect in any material respect and shall not have been corrected within
thirty (30) Business Days after written notice thereof has been given to such
other Party;

	 	(2)	 	the other Party shall default in the performance of any
obligation or undertaking under the Program Documents and such default shall
continue for thirty (30) Business Days after written notice thereof has been
given to such other Party; provided, however, that either Party, in its sole
discretion, may terminate this Agreement without such a cure period if the
default pertains to a material failure and substantially similar failures (for
which notices of default have been provided) have occurred two (2) or more
times in any rolling twelve (12) month period;

	 	(3)	 	the other Party shall commence a voluntary case or other
proceeding seeking liquidation, reorganization, or other relief with respect to
itself or its debts under any bankruptcy, insolvency, receivership,
conservatorship or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, conservator, custodian, or
other similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of a trustee, receiver,
liquidator, conservator, custodian, or other similar official or to any
involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any corporate action to authorize
any of the foregoing;

	 	(4)	 	an involuntary case or other proceeding, whether pursuant to
banking regulations or otherwise, shall be commenced against the other Party
seeking liquidation, reorganization, or other relief with respect to it or its
debts under any bankruptcy, insolvency, receivership, conservatorship or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, conservator, custodian, or other similar official of it
or any substantial part of its property; or an order for relief shall be
entered against either Party under the federal bankruptcy laws as now or
hereafter in effect;

 

 

	 	(5)	 	there is a material adverse change in the financial condition
of Bluestem (in the case of a termination by the Bank);

	 	(6)	 	there is a material adverse change in the financial condition
of the Bank (in the case of a termination by Bluestem) in one of the following
respects that remains uncured for a period of ninety (90) days (or such shorter
period during which a Regulatory Authority requires Bank to cure such matter):
(i) Bank’s risk-based capital ratio falling below ten percent (10%); (ii)
Bank’s Tier 1 risk-based capital ratio falling below six percent (6%); (iii)
Bank’s leverage ratio falling below five percent (5%); or (iv) Bank being
subject to any written agreement, order, capital directive, or prompt
corrective action relating to capital issued by the OTS; Bank shall provide
written notice to Bluestem within five (5) Business Days of the occurrence of
any such material adverse change, and the terms “total risk-based capital
ratio,” “Tier 1 risk-based capital ratio,” and “leverage ratio” shall have the
meanings set forth in the OTS’s Capital Maintenance Regulations, 12 C.F.R. pt.
567; or

	 	(7)	 	as permitted by Section 18.

	 	(d)	 	The termination of the Program Documents either in part or in whole shall not
discharge either Party from any obligation incurred prior to such termination,
including any obligation with respect to Receivables sold prior to such termination. No
termination nor rejection or failure to assume the executory obligations of this
Agreement in the bankruptcy of either Party shall be deemed to impair or affect the
obligations pertaining to any executed sale or executed obligations, including, without
limitation, pre-termination breaches of representations and warranties by either Party.

	 	(e)	 	Notwithstanding anything to the contrary in this Section 10, upon the
termination of this Agreement:

	 	(1)	 	Bluestem shall, pursuant to the terms of this Agreement,
purchase any Receivables originated by Bank under the Program Agreement that
have not already been purchased by Bluestem for so long as Bank is required to
settle any amount in connection with any Account, including any Receivables
originated by Bank following termination of the Program Documents in the event
Bluestem requests Bank to continue operating the Program in accordance with the
terms of Program Agreement;

	 	(2)	 	Bank agrees to transfer, assign, set-over, and otherwise convey
to Bluestem or the Successor, without recourse and without further
consideration, all Accounts and Account Records.

	 	(f)	 	The terms of Sections 10(d), (e) and (f) shall survive the expiration or
earlier termination of this Agreement.

11. Confidentiality.

 

 

	 	(a)	 	Each Party agrees that Confidential Information of the other Party shall be
used by such Party solely in the performance of its obligations and exercise of its
rights pursuant to the Program Documents. Except as required by Applicable Laws, a
Regulatory Authority or legal process, neither Party (the “Restricted Party”)
shall disclose Confidential Information of the other Party to third parties; provided,
however, that the Restricted Party may disclose Confidential Information of the other
Party (i) to the Restricted Party’s Affiliates, agents, representatives or
subcontractors for the sole purpose of fulfilling the Restricted Party’s obligations
under this Agreement (as long as the Restricted Party exercises reasonable efforts to
prohibit any further disclosure by its Affiliates, agents, representatives or
subcontractors), (ii) to the Restricted Party’s auditors, accountants and other
professional advisors, (iii) to the Administrative Agent, Bluestem’s other financing
sources and other lenders to Bluestem, and (iv) to any other third party as mutually
agreed by the Parties.

	 	(b)	 	A Party’s Confidential Information shall not include information that:

	 	(1)	 	is generally available to the public;

	 	(2)	 	has become publicly known, without fault on the part of the
Party who now seeks to disclose such information (the “Disclosing
Party”), subsequent to the Disclosing Party acquiring the information;

	 	(3)	 	was otherwise known by, or available to, the Disclosing Party
prior to entering into this Agreement; or

	 	(4)	 	becomes available to the Disclosing Party on a non-confidential
basis from a Person, other than a Party to this Agreement, who is not known by
the Disclosing Party to be bound by a confidentiality agreement with the
non-Disclosing Party or otherwise prohibited from transmitting the information
to the Disclosing Party.

	 	(c)	 	Upon written request or upon the termination of this Agreement, each Party
shall, within thirty (30) days, return to the other Party all Confidential Information
of the other Party in its possession that is in written form, including by way of
example, but not limited to, reports, plans, and manuals, and delete any digitally or
optically stored versions of Confidential Information of the other Party; provided,
however, that each Party may maintain in its possession all such Confidential
Information required to be maintained under Applicable Laws relating to the retention
of records for the period of time required thereunder and each Party may maintain in
its possession such Confidential Information of the other Party as may be required to
be maintained in order to enforce its rights with respect to any Receivables purchased
hereunder.

	 	(d)	 	In the event that a Restricted Party is requested or required (by oral
questions, interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose any Confidential Information

 

 

	 	 	 	of the other Party, the Restricted Party will provide the other Party with prompt
notice of such request(s) so that the other Party may seek an appropriate protective
order or other appropriate remedy. In the event that the other Party does not seek
such a protective order or other remedy, or such protective order or other remedy is
not obtained, the Restricted Party may furnish that portion (and only that portion)
of the Confidential Information of the other Party which the Restricted Party is
legally compelled to disclose and will exercise such efforts to obtain reasonable
assurance that confidential treatment will be accorded any Confidential Information
of the other Party so furnished as the Restricted Party would exercise in assuring
the confidentiality of any of its own confidential information.

	 	(e)	 	Nothing in this Section 11 shall restrict or prohibit Bluestem from using
Customer Information in any manner permitted by the Program Agreement.

	 	(f)	 	The terms of this Section 11 shall survive the expiration or earlier
termination of this Agreement.

12. Indemnification.

	 	(a)	 	Bank agrees to indemnify and hold harmless Bluestem and its Affiliates, and the
officers, directors, members, employees, representatives, shareholders, agents and
attorneys of such entities (the “Bluestem Indemnified Parties”) from and
against any and all claims, actions, liability, judgments, damages, costs and expenses,
including reasonable attorneys’ fees (“Losses”), that may arise from (i) the gross
negligence or willful misconduct of Bank or its agents or representatives (other than
Bluestem or its agents or assigns) in connection with Bank’s performance of its
obligations under this Agreement, (ii) breach of any of Bank’s obligations or
undertakings or representations or warranties under the Program Documents other than
any breach resulting from Bluestem’s performance of Bluestem’s obligations under the
Program Documents) by Bank or its agents or representatives (other than Bluestem or its
agents or assigns), or (iii) violation by Bank or its agents or representatives (other
than Bluestem or its agents or assigns) of any of the Applicable Laws.

	 	(b)	 	Bluestem agrees to indemnify and hold harmless Bank and its Affiliates, and the
officers, directors, members, employees, representatives, shareholders, agents and
attorneys of such entities (the “Bank Indemnified Parties”) from and against
any and all Losses that may arise from (i) the gross negligence or willful misconduct
of Bluestem, or its agents or representatives, in connection with Bluestem’s
performance of its obligations under this Agreement, (ii) breach of any of Bluestem’s
obligations or undertakings or representations or warranties under the Program
Documents by Bluestem or its agents or representatives, (iii) violation by Bluestem or
its agents or representatives of any Applicable Laws; or (iv) any claim pertaining to
the Existing Accounts arising prior to or as a result of the transfer of the Existing
Accounts from Existing Bank to Bank, including, but not limited to, (A) the
administration, marketing, operation, processing or servicing of

 

 

	 	 	 	the Existing Accounts prior to the transfer of the Existing Accounts
from the Existing Bank to Bank, (B) the failure of Existing Bank to perform its
obligations under the account transfer agreement between Existing Bank and Bank; or
(C) any claim that Bank is a debt collector under the Fair Debt Collection Practices
Act or any similar state law with respect to the Existing Accounts.

	 	(c)	 	The Bluestem Indemnified Parties and the Bank Indemnified Parties are sometimes
referred to herein as the “Indemnified Parties”, and Bluestem or Bank, as
indemnitor hereunder, is sometimes referred to herein as the “Indemnifying
Party”.

	 	(d)	 	Any Indemnified Party seeking indemnification hereunder shall promptly notify
the Indemnifying Party, in writing, of any notice of the assertion by any third party
of any claim or of the commencement by any third party of any legal or regulatory
proceeding, arbitration or action, or if the Indemnified Party determines the existence
of any such claim or the commencement by any third party of any such legal or
regulatory proceeding, arbitration or action, whether or not the same shall have been
asserted or initiated, in any case with respect to which the Indemnifying Party is or
may be obligated to provide indemnification (an “Indemnifiable Claim”),
specifying in reasonable detail the nature of the Loss, and, if known, the amount, or
an estimate of the amount, of the Loss, provided that failure to promptly give such
notice shall only limit the liability of the Indemnifying Party to the extent of the
actual prejudice, if any, suffered by such Indemnifying Party as a result of such
failure. The Indemnified Party shall provide to the Indemnifying Party as promptly as
practicable thereafter information and documentation reasonably requested by such
Indemnifying Party to defend against the claim asserted.

	 	(e)	 	The Indemnifying Party shall have thirty (30) days after receipt of any
notification of an Indemnifiable Claim (a “Claim Notice”) to undertake, conduct
and control, through counsel of its own choosing, and at its own expense, the
settlement or defense thereof and the Indemnified Party shall cooperate with the
Indemnifying Party in connection therewith if such cooperation is so requested and the
request is reasonable; provided that the Indemnifying Party shall hold the Indemnified
Party harmless from all its out-of-pocket expenses, including reasonable attorneys’
fees incurred in connection with the Indemnified Party’s cooperation. If the
Indemnifying Party assumes responsibility for the settlement or defense of any such
claim, (i) the Indemnifying Party shall permit the Indemnified Party to participate in
such settlement or defense through counsel chosen by the Indemnified Party (subject to
the consent of the Indemnifying Party, which consent shall not be unreasonably
withheld); provided that, other than in the event of a conflict of interest requiring
the retention of separate counsel, the fees and expenses of such counsel shall not be
borne by the Indemnifying Party; and (ii) the Indemnifying Party shall not settle any
Indemnifiable Claim without the Indemnified Party’s consent, which consent shall not be
unreasonably withheld or delayed for any reason if the settlement involves
only the payment of money, and which consent may be withheld for any reason if the
settlement involves more

 

 

	 	 	 	than the payment of money, including any admission by the
Indemnified Party. So long as the Indemnifying Party is vigorously contesting any
such Indemnifiable Claim in good faith, the Indemnified Party shall not pay or
settle such claim without the Indemnifying Party’s consent, which consent shall not
be unreasonably withheld.

	 	(f)	 	If the Indemnifying Party does not notify the Indemnified Party within thirty
(30) days after receipt of the Claim Notice that it elects to undertake the defense of
the Indemnifiable Claim described therein, or if the Indemnifying Party fails to contest
vigorously any such Indemnifiable Claim, the Indemnified Party shall have the right,
upon notice to the Indemnifying Party, to contest, settle or compromise the
Indemnifiable Claim in the exercise of its reasonable discretion; provided that the
Indemnified Party shall notify the Indemnifying Party of any compromise or settlement of
any such Indemnifiable Claim. No action taken by the Indemnified Party pursuant to this
Section 12(f) shall deprive the Indemnified Party of its rights to indemnification
pursuant to this Section 12.

	 	(g)	 	The terms of this Section 12 shall survive the expiration or earlier termination
of this Agreement.

13. Limitation of Liability.

	 	(a)	 	No Special Damages. No Party shall be liable to any other Party for any
special, indirect, incidental, consequential, punitive or exemplary damages, including,
but not limited to, lost profits, even if such Party has knowledge of the possibility
of such damages; provided, however, that the limitations set forth in this Section
shall not apply to or in any way limit the obligations of a Party to indemnify another
Party for third party claims which are otherwise covered by the indemnity obligations
under this Agreement.

	 	b)	 	Disclaimers of Warranties. The Parties specifically disclaim all warranties of
any kind, express or implied, arising out of or related to this Agreement, including
without limitation, any warranty of marketability, fitness for a particular purpose or
non-infringement, each of which is hereby excluded by agreement of the Parties.

	 	c)	 	The terms of this Section 13 shall survive the expiration or earlier
termination of this Agreement.

14. Assignment. This Agreement and the rights and obligations created under it shall be
binding upon and inure solely to the benefit of the Parties and their respective successors and
permitted assigns. Neither Party shall be entitled to assign or transfer any interest under this
Agreement without the prior written consent of the other Party, except that Bank may assign this
Agreement or any of its rights or obligations arising hereunder to the surviving entity in a
merger, sale, acquisition, or consolidation in which it participates. No assignment under this
Section 14 shall relieve a Party of its obligations under this Agreement. Notwithstanding the
foregoing, Bank hereby acknowledges and consents to (i) the sale, transfer and assignment by

 

 

Bluestem of all of its right, title and interest (but excluding all obligations) in, to and under
the Receivables, the Account Agreements and the Program Documents, whether now existing or
hereafter acquired (the “Assigned Interests”), pursuant to the Receivables Purchase Agreement
(“RPA”), dated as of August 20, 2010 between Bluestem and Fingerhut Receivables I, LLC (“Fingerhut
Receivables”), as the same may be amended, supplemented or otherwise modified, or refinanced,
restated or replaced (with the same or different financing sources), from time to time in
accordance with the terms thereof, and (ii) in connection with the Credit Agreement (“Credit
Agreement”) dated as of August 20, 2010 by and among Goldman Sachs Bank USA, as administrative
agent (in such capacity, and including any successor thereto, the “Administrative Agent”),
collateral agent (in such capacity, and including any successor thereto, the “Collateral Agent”),
joint lead arranger, joint bookrunner, syndication agent and documentation agent and J.P. Morgan
Securities Inc., as joint lead arranger and joint bookrunner, as the same may be amended,
supplemented or otherwise modified, or refinanced, restated or replaced (with the same or different
financing sources), from time to time in accordance with the terms thereof, the grant of a security
interest by Fingerhut Receivables in all of its right, title and interest in the Assigned Interests
to the Collateral Agent, and the enforcement of such security interest by the Collateral Agent, in
each case pursuant to the Security Agreement (the “Security Agreement”) dated as of August 20, 2010
between Collateral Agent and Fingerhut Receivables, as the same may be amended, supplemented or
otherwise modified, or refinanced, restated or replaced (with the same or different financing
sources), from time to time in accordance with the terms thereof. Bank hereby further acknowledges
and consents to the exercise of the rights, title and interest in the Assigned Interests directly
by Fingerhut Receivables to the extent permitted by the RPA, and by the Collateral Agent to the
extent permitted by the Security Agreement.

15. Third Party Beneficiaries. Nothing contained herein shall be construed as creating a
third-party beneficiary relationship between either Party and any other Person; provided, however,
(i) Fingerhut Receivables, (ii) the Administrative Agent and (iii) Collateral Agent (collectively,
the “Third Party Beneficiaries”) shall each be a third party beneficiary of this Agreement.

16. Notices. All notices and other communications that are required or may be given in
connection with this Agreement shall be in writing and shall be deemed received (i) on the day
delivered, if delivered by hand; (ii) or the day transmitted, if transmitted by facsimile or e-mail
with receipt confirmed; or (iii) three (3) Business Days after the date of mailing to the
applicable Party if mailed first-class mail postage prepaid, at the following address, or such
other address as any such Party shall specify in a notice to the other Parties:

	 	 	 	 	 

	 

	 	Two Copies to Bank:
	 	MetaBank d/b/a Meta Payment Systems
	 

	 	 	 	Attn: General Counsel and SVP of
Credit 5501 S.
 Broadband Lane

	 

	 	 	 	Sioux Falls, SD 57108

	 

	 	 	 	Facsimile: 605-977-7501

	 
	 	 	 	 
	 

	 	To Bluestem:
	 	Bluestem Brands, Inc.
	 

	 	 	 	Attn: SVP and Chief Credit Officer
	 

	 	 	 	6509 Flying Cloud Drive
	 

	 	 	 	Eden Prairie, MN 55344
	 

	 	 	 	Telephone: (952) 656-3916
Facsimile: (952) 656-4117

 

 

	 	 	 	 	 

	 

	 	With copies to:
	 	Bluestem Brands, Inc.
	 

	 	 	 	Attn: General Counsel
	 

	 	 	 	6509 Flying Cloud Drive
	 

	 	 	 	Eden Prairie, MN 55344
	 

	 	 	 	Telephone: (952) 656-3916
	 

	 	 	 	Facsimile: (952) 656-4117
	 
	 	 	 	 
	 

	 	 	 	Goldman Sachs Bank USA
	 

	 	 	 	Attn: Account Manager
	 

	 	 	 	6011 Connection Drive
	 

	 	 	 	Irving TX 75039
	 

	 	 	 	Telephone: (972) 368-5099
	 

	 	 	 	Facsimile: (972) 368-5000

17. Relationship of Parties. Each Party agrees that in performing their
responsibilities pursuant to this Agreement, they are in the position of independent contractors.
This Agreement is not intended to create, nor does it create and shall not be construed to create,
a relationship of partner or joint venturer or any association for profit between Bank and
Bluestem.

18. Agreement Subject to Applicable Laws. If (a) any Party has been advised by legal
counsel of a change in Applicable Laws or any judicial decision of a court having jurisdiction over
such Party or any interpretation of a Regulatory Authority that, in the view of such legal counsel,
would have a materially adverse effect on the Program, the rights or obligations of such
Party under this Agreement or the financial condition of such Party, (b) any Party shall
receive a lawful written request of any Regulatory Authority having jurisdiction over such Party,
including any letter or directive of any kind from any such Regulatory Authority, that prohibits or
restricts such Party from carrying out its obligations under this Agreement, (c) any Party has been
advised by legal counsel that there is a material risk that such Party’s or the other Parties’
continued performance under this Agreement would violate Applicable Laws, (d) any Regulatory
Authority shall have determined and notified either Party that the arrangement between the Parties
contemplated by the Program Documents constitutes an unsafe or unsound banking practice or is in
violation of Applicable Law, or (e) a Regulatory Authority has commenced an investigation or action
against a Party which the other Party, in its reasonable judgment, determines threatens such
Party’s ability to perform its obligations under the Program Documents, then, in each case, the
Parties shall meet and consider in good faith any modifications, changes or additions to the
Program or the Program Documents that may be necessary to eliminate such result. Notwithstanding
any other provision of the Program Documents, including Section 10 hereof, if the Parties are
unable to reach agreement regarding modifications, changes or additions to the Program or the
Program Documents within ten (10) Business Days after the Parties initially meet, either Party may
terminate this Agreement upon thirty (30) days prior written notice to the other Party and without
payment of a termination fee or other penalty. A Party shall be able to suspend performance of its
obligations under this Agreement, or require the other Party to suspend its performance of its
obligations under this Agreement, if (i) any event described in Section 18(b) above occurs and (ii)
such Party reasonably determines that continued performance hereunder may result in a fine, penalty
or other sanction being imposed by the applicable

 

 

Regulatory Authority, or in material civil
liability, unless with regards to civil liability, the other Party agrees to indemnify the Party.
For the avoidance of doubt, nothing in this Section 18 shall obligate a Party to disclose, share,
or discuss any information to the extent prohibited by Applicable Law or a Regulatory Authority.

19. Expenses.

	 	(a)	 	Except as otherwise provided in this Agreement, the Parties shall pay their own
expenses (including, without limitation, the fees and expenses of their own agents,
representatives, counsel, and accountants) incidental to the preparation and
performance of this Agreement. Each Party shall further be responsible for payment of
any federal, state, or local taxes or assessments associated with the performance of
its obligations under this Agreement and for compliance with all filing, registration
and other requirements with regard thereto.

	 	(b)	 	Allocation of Costs for Program. As between the Parties, any and all costs and
expenses (excluding the Bank’s internal administrative expenses and legal fees and
those expenses Bank has specifically agreed to pay under this Agreement) related to the
Program shall be paid by Bluestem as part of its obligation to administer, market and
service the Accounts; such costs and expenses include, without limitation, costs of
preparing, printing, storing any mailing any Program materials, billing statements,
adverse action notices, collection notices, and any other materials relating to the
Program; costs of any subcontractor retained by Bluestem in connection with the
Program; and costs of obtaining credit reports, delivering adverse action notices,
processing and completing Account
documentation and closing credit extensions (including all attorney costs and
filings fees and any taxes, except Bank’s income taxes).

	 	(c)	 	Costs and Expenses Paid by Bank. Except as otherwise provided in this
Agreement, Bank shall be solely responsible for all fines, penalties and other amounts
assessed by any Regulatory Authority due to any act, omission, or failure of Bank or
any agents retained by Bank (other than Bluestem and its agents) to perform any of
Bank’s obligations under this Agreement; provided, it is understood that approval,
acquiescence or failure by Bank or its agents to reject any proposal, action, or
activity by Bluestem shall not relieve Bluestem of any obligation under this Agreement.

	 	(d)	 	Costs and Expenses Paid by Bluestem. In addition to any expenses specifically
set forth elsewhere in this Agreement, Bluestem shall be solely responsible for the
following:

	 	(1)	 	All expenses associated with Borrower or third party fraud.

	 	(2)	 	All fines, penalties, reimbursements, and other amounts
assessed by any Regulatory Authority due to Bluestem’s actions, inactions, or
omissions or the actions, inactions or omissions of any third party retained by
Bluestem.

 

 

	 	(3)	 	All reasonable third-party expenses associated with completing
a due diligence review for any third party outsource vendor relationships
contemplated in this Agreement

20. Force Majeure. If any Party shall be unable to carry out the whole or any part of its
obligations under this Agreement by reason of a Force Majeure Event, then the performance of the
obligations under this Agreement of such Party as they are affected by such cause shall be excused
during the continuance of the inability so caused, except that should such inability not be
remedied within thirty (30) days after the date of such cause, the Party not so affected may at any
time after the expiration of such thirty (30) day period, during the continuance of such inability,
terminate this Agreement on giving written notice to the other Party. A “Force Majeure Event” as
used in this Agreement shall mean an unanticipated event that is not reasonably within the control
of the affected Party or its subcontractors (including, but not limited to, acts of God, acts of
governmental authorities, strikes, war, terrorist attacks, riot and any other causes of such
nature), and which by exercise of reasonable due diligence, such affected Party or its
subcontractors could not reasonably have been expected to avoid, overcome or obtain, or cause to be
obtained, a commercially reasonable substitute therefore. No Party shall be relieved of its
obligations hereunder if its failure of performance is due to removable or remediable causes which
such Party fails to remove or remedy using commercially reasonable efforts within a reasonable time
period. Either Party rendered unable to fulfill any of its obligations under this Agreement by
reason of a Force Majeure Event shall give prompt notice of such fact to the other Party, followed
by written confirmation of notice, and shall exercise due diligence to remove such inability with
all reasonable dispatch.

21. Examination. Each Party agrees to submit to any examination that may be required by a
Regulatory Authority having jurisdiction over the other Party, during regular business hours and
upon reasonable prior notice, and to otherwise provide reasonable cooperation to the other Party in
responding to such Regulatory Authorities’ inquiries and requests relating to the Program.

22. Inspection. Each Party, upon reasonable prior notice from the other Parties, agrees to
submit to an inspection of its books, records, accounts, personnel and facilities relevant to the
Program, from time to time, during regular business hours subject, in the case of Bank, to the duty
of confidentiality it owes to its customers and banking secrecy and confidentiality requirements
otherwise applicable under Applicable Laws. Except as otherwise set forth in this Agreement, all
expenses of inspection shall be borne by the Party conducting the inspection. Bluestem further
agrees to provide timely and thorough responses to any findings resulting from inspections, audits,
reviews, assessments, and the like conducted by Bank or a third party on behalf of Bank.

23. Cooperation. Each Party hereto agrees to cooperate fully with the other Party hereto in
furnishing any information or performing any action reasonably requested by such Party that is
needed by the requesting Party to perform its obligations under this Agreement or to comply with
Applicable or any request from a Regulatory Authority.

24. Governing Law; Waiver of Jury Trial. The Parties acknowledge that Bank, as a federal
savings bank, is regulated by the OTS, and is therefore subject to federal law, and entitled to
preemption from state laws to the fullest extent permitted by law. In any matters not so

 

 

preempted
(if any), this Agreement shall be interpreted and construed in accordance with the laws of the
State of Iowa, without giving effect to the rules, policies, or principles thereof with respect to
conflicts of laws. THE PARTIES HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING HEREUNDER. The terms of this Section 24 shall survive the
expiration or earlier termination of this Agreement.

25. Manner of Payments. Unless the manner of payment is expressly provided herein or
otherwise mutually agreed to by the Parties, all payments under this Agreement shall be made by ACH
transfer to the bank accounts designated by the respective Parties. Notwithstanding anything to the
contrary contained herein, no Party shall fail to make any payment required of it under this
Agreement as a result of a breach or alleged breach by another Party of any of its obligations
under this Agreement or any other agreement, provided that the making of any payment hereunder
shall not constitute a waiver by the Party making the payment of any rights it may have under the
Program Documents or by law.

26. Referrals. No Party has agreed to pay any fee or commission to any agent, broker,
finder, or other person for or on account of services rendered as a broker or finder in connection
with this Agreement or the transactions contemplated hereby that would give rise to any valid claim
against the other Parties for any brokerage commission or finder’s fee or like payment.

27. Financial Information to be Provided. During the term of this Agreement, Bank will make
available to Bluestem via the internet (i) its Thrift Financial Report (www.fdic.gov); and
(ii) complete and correct copies of its balance sheets and related statements of income and cash
flow (www.metacash.com). During the term of this Agreement, Bluestem agrees to provide Bank
with unaudited quarterly financial statements within forty-five (45) days following the end of each
calendar quarter, which shall include, at a minimum, a balance sheet, income statement and cash
flow statement in such detail reasonably acceptable to Bank and certified by Bluestem’s Treasurer
or Chief Financial Officer, and audited annual financial statements within one hundred

twenty (120) days after the end of Bluestem’s fiscal year (or such longer period during which
Bluestem’s principal third-party creditors may permit it to provide its audited annual financial
statements; provided that Bluestem provides advance notice of such delay to Bank that is reasonable
under the circumstances), which shall include, at a minimum, a balance sheet, income statement, and
cash flow statement, in such detail reasonably acceptable to Bank and prepared by an independent
certified public accountant in accordance with generally accepted accounting principles.

28. Entire Agreement. The Program Documents, including exhibits, constitute the entire
agreement among the Parties with respect to the subject matter thereof, and supersede any prior or
contemporaneous negotiations or oral or written agreements with regard to the same subject matter.

29. Amendment and Waiver. This Agreement may not be amended orally, but only by a written
instrument signed by all Parties. The failure of any Party to require the performance of any term
of this Agreement or the waiver by any Party of any default under this Agreement shall not prevent
a subsequent enforcement of such term and shall not be deemed a waiver of any

 

 

subsequent breach.
All waivers must be in writing and signed by the Party against whom the waiver is to be enforced.

30. Severability. Any provision of this Agreement which is deemed invalid, illegal or
unenforceable in any jurisdiction, shall, as to that jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability, without affecting in any way the remaining
portions hereof in such jurisdiction or rendering such provision or any other provision of this
Agreement invalid, illegal, or unenforceable in any other jurisdiction.

31. Interpretation. The Parties acknowledge that each Party and its counsel have reviewed
and revised this Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any amendments thereto, and the same shall be construed neither
for nor against any Party, but shall be given a reasonable interpretation in accordance with the
plain meaning of its terms and the intent of the Parties.

32. Headings. Captions and headings in this Agreement are for convenience only and are not
to be deemed part of this Agreement.

33. Counterparts. This Agreement may be executed and delivered by the Parties in any number
of counterparts, and by different parties on separate counterparts, each of which counterpart shall
be deemed to be an original and all of which counterparts, taken together, shall constitute but one
and the same instrument.

34. Bank Waiver of Interest in Purchased Receivables. Bank agrees that notwithstanding any
claim, counterclaim, right of setoff or defense which it may have against Bluestem due to a breach
by Bluestem of this Agreement or the Program Agreement, or for any other reason, and
notwithstanding the bankruptcy or insolvency of Bluestem or any other event whatsoever, in no event
shall Bank assert any interest in any Receivables for which the Purchase Price for such Receivable
has been paid to Bank or take any action which would reduce or delay receipt of any payment made by
a Borrower with respect thereto.

35. Charged-Off Accounts. Bank shall transfer, assign, set-over, and otherwise convey to
Bluestem, for no fee, all Accounts opened pursuant to the Program that have been charged-off by
Bank in accordance with Bank’s policies and procedures regarding charge-offs, together with the
related Account Records.

36. Reserve Account.

	 	(a)	 	Establishment of Reserve Account. On the date on which the first Account is
opened by or transferred to Bank, Bluestem shall establish a Bank-controlled
non-interest bearing deposit account (“Reserve Account”) at Bank. The Reserve
Account shall be a segregated deposit account that shall hold only the funds provided
by Bluestem to Bank as collateral. At all times (but subject to Bank’s providing the
notices contemplated by Section 36(d)(1)), it shall be Bluestem’s responsibility to
maintain funds in the Reserve Account equal to the Required Reserve Balance. In the
event that the actual balance in the Reserve Account is at any time less than the
Required Reserve Balance, Bluestem shall within one (1)

 

 

	 	 	 	Business Day make a payment
into the Reserve Account in an amount equal to the difference between the Required
Reserve Balance and the actual balance in such account.

	 	(b)	 	Security Interest. To secure Bluestem’s obligations under the Program
Documents, Bluestem hereby grants Bank a security interest in the Reserve Account and
the funds therein or proceeds thereof, and agrees to take such steps as Bank may
reasonably require to perfect or protect such first priority security interest. Bank
shall have all of the rights and remedies of a secured party under Applicable Laws with
respect to the Reserve Account and the funds therein or proceeds thereof, and shall be
entitled to exercise those rights and remedies in its discretion. Bluestem agrees that
it will maintain the lien against the Reserve Account in favor of Bank such that no
other party has a greater seniority or priority than the interest of Bank.

	 	(c)	 	Lock-box Control Agreement. In the event that Bluestem negotiates a lock-box
control agreement that subordinates all liens, encumbrances, claims and rights of
setoff of any company now or in the future to the security interest granted to Bank by
Bluestem in connection with Bluestem’s obligation to purchase Receivables from Bank,
then, assuming the overall Program risk remains the same, the Required Reserve Amount
will be reduced to [*] from November 1 to December 25 of
each calendar year and a [*] from December 26 of each calendar year until October 31 of the following
calendar year.

	 	(d)	 	Withdrawals.

	 	(1)	 	Without limiting any other rights or remedies of Bank under
this Agreement, Bank shall have the right to withdraw amounts from the Reserve
Account to fulfill any obligations of Bluestem under the Program Documents on
which Bluestem has defaulted, either during the term of the Program Documents
or following termination or expiration thereof, upon prior written notice to
Bluestem.

	 	(2)	 	Bank shall pay to Bluestem, within one (1) Business Day of a
written request by Bluestem, any balance of the Reserve Account that exceeds
the Required Reserve Balance.

	 	(e)	 	Termination of Reserve Account. Bank shall release any funds remaining in the
Reserve Account within ten (10) calendar days after the latest to occur of: (i)
expiration or termination of this Agreement; and (ii) the date when obligations of
Bluestem under the Program Documents have been satisfied in full by Bluestem;
provided, that Bank shall release funds from the Reserve Account following
expiration or termination of this Agreement to the extent that they exceed Bluestem’s
remaining obligations under the Program Documents.

	 	(f)	 	Calculation of the Required Reserve Balance.

	 	[*]	 	Indicates confidential portions omitted pursuant to a request
for confidential treatment filed separately with the Securities and
Exchange Commission

 

 

	 	(1)	 	Except as provided for pursuant to Section 36(c) above, the
required minimum balance in the Reserve Account (the “Required Reserve
Balance”) shall be determined as follows, subject to the remaining clauses
of this Section 36(f): the greater of: (A) [*],
(B) seventy five percent (75%) of the highest daily volume of Receivables
funded by Bank during the seven (7) days most recently completed, and (C)
seventy five percent (75%) of the highest daily volume of Receivables projected
for the then-current calendar week.

	 	(2)	 	Adjustments to the Required Reserve Balance pursuant to the
foregoing clause (1) shall be effective on each Friday, except that Bank may
request more frequent adjustments due to projected increases in the volume of
Receivables generated.

	 	(3)	 	Based on Bluestem’s financial condition, Funding Facility
compliance, funding line availability, loan repayment performance, funding line
availability, loan repayment performance, and product sales trends, Bank may in
its sole discretion require an increase in the balance of the Required Reserve
Balance by increasing the balance stated in (1)(B) above to one hundred percent
(100%) of the highest daily volume of Receivables funded by Bank during the
seven (7) days most recently completed, and in
(1)(C) above to one hundred percent (100%) of the highest daily volume of
Receivables projected for the then-current calendar week.

	 	(4)	 	If any Regulatory Authority with jurisdiction over Bank
notifies Bank that the Required Reserve Balance is inadequate to cover the
risks associated with the Program, Bank shall provide notice to Bluestem of the
Regulatory Authority’s finding and of the amount that Bank or such Regulatory
Authority determines will be a sufficient reserve (the “New Required
Reserve Amount”).Bluestem shall have thirty (30) days to increase the
balance in the Reserve Account to the New Required Reserve Amount, and the New
Required Reserve Amount shall then become the Required Reserve Balance.

	 	(5)	 	In the event of a material adverse change in the financial
condition of Bluestem, Bank may increase the Required Reserve Balance by an
amount reasonably in relation to such material adverse change.

37. Termination of Origination of New Accounts and Account Advances. Nothing in this
Agreement shall obligate Bank to originate new Accounts or Account Advances if Bank determines that
doing so would constitute an unsafe or unsound banking practice or contrary to Applicable Law;
provided, however, that in such an event, Bank shall notify Bluestem of its determination.
Furthermore, in the event Bluestem fails, refuses or is otherwise unable to purchase any
Receivables arising from the Program pursuant to Section 2 of this Agreement, fails to pay the
Monthly Minimum or Debt Waiver Program Fees when due, or fails to comply with its obligations under
this Agreement to maintain the Required Reserve Amount in the Reserve Account, then, in addition to
any of Bank’s other rights under this Agreement, and if

	 	[*]	 	Indicates confidential portions omitted pursuant to a request
for confidential treatment filed separately with the Securities and
Exchange Commission

 

 

such failure causes Bank in its sole
discretion to doubt the ability or willingness of Bluestem to comply with its obligations under the
Program Documents, Bank may elect to suspend the origination of new Accounts and Account Advances.
If Bank makes such an election, Bank will provide notice of such election to Bluestem. The election
shall be effective immediately upon providing any such notice. In the event Bluestem cures the
circumstances prompting any such election by Bank within five (5) Business Days of Bank’s effective
election, upon such cure, Bank’s election to terminate the origination of new Account and Account
Advances shall be deemed rescinded. Closed-End Program. Notwithstanding anything in this Agreement
to the contrary, (i) Section 3(b) shall not apply to Installment Loans, it being understood that
the sale of a “Receivable” associated with an Installment Loan includes all right, title, and
interest to such Installment Loan, and (ii) Section 35 shall not apply to Installment Loans.

[SIGNATURE PAGE FOLLOWS]

 

 

          IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly
authorized officers as of the date first written above

	 	 	 	 	 	 	 	 

	METABANK	 	 	BLUESTEM BRANDS, INC.
	 
	By: 	 John Hagy	 	By: 	  /s/ Mark P. Wagener
	 	Name: 	 John Hagy	 	 	Name: 	 Mark P. Wagener
	 	Title:	 CLO	 	 	Title:	 Executive vice President

 

 

Schedule 1 

Definitions

     (a) “ACH” means the Automated Clearinghouse.

     (b) “Account” shall have the meaning set forth in the Program Agreement.

     (c) “Account Advance” has the meaning set forth in the Program Agreement.

     (d) “Account Agreement” means the agreement between a Borrower and the Bank containing
the terms and conditions of an Account including all disclosures required by Applicable Law.

     (e) “Administrative Agent” has the meaning set forth in Section 14.

     (f) “Affiliate” means, with respect to a Party, a Person who directly or indirectly
controls, is controlled by or is under common control with such Party. For the purpose of this
definition, the term “control” (including with correlative meanings, the terms controlling,
controlled by and under common control with) means the power to direct the management or policies
of such Person, directly or indirectly, through the ownership of twenty-five percent (25%) or more
of a class of voting securities of such Person.

     (g) “Applicable Laws” means all federal, state and local laws, statutes, regulations
and orders applicable to a Party or relating to or affecting any aspect of the Program, and all
publicly available rules, orders, memoranda of understanding, formal and informal guidance,
directives and decrees of all governmental authorities (including without limitation federal, state
and local governments, governmental agencies and quasi-governmental agencies and Regulatory
Authorities) including, without limitation, Section 218 of the Office of Thrift Supervision (“OTS”)
Examination Manual (including, but not limited to, those provisions of the Truth in Lending Act,
Regulation Z and the Credit CARD Act of 2009 pertaining to consumer credit cards), as any of the
foregoing may be amended, supplemented, replaced or otherwise modified from time to time.

     (h) “Assigned Interests” has the meaning set forth in Section 14.

     (i) “Bank Indemnified Parties” has the meaning set forth in Section 12(b).

     (j) “Bluestem Indemnified Parties” has the meaning set forth in Section 12(a).

     (k) “Borrower” means a Person for whom Bank has established an Account and/or any
Person who is liable, jointly or severally, for amounts owing with respect to an Account.

     (l) “Business Day” means any day, other than (i) a Saturday or Sunday, or (ii) a day
on which banking institutions in the State of South Dakota are authorized or obligated by law or
executive order to be closed.

     (m) “Claim Notice” has the meaning set forth in Section 12(e).

 

 

     (n) “Closing Date” means each date, one Business Day after Settlement, on which
Bluestem pays Bank the Purchase Price for a Receivable and, pursuant to Section 2 hereof, acquires
such Receivable from Bank.

     (o) “Closed-End Program” shall have the meaning set forth in the Program Agreement.

     (p) “Collateral Agent” has the meaning set forth in Section 14.

     (q) “Confidential Information” means the Program Documents, Customer Information, and
any proprietary information or non-public information of a Party, including a Party’s proprietary
marketing plans and objectives, that the Disclosing Party discloses to the Restricted Party or to
which the Restricted Party obtains access in connection with the negotiation and performance of
this Agreement.

     (r) “Credit Agreement” has the meaning set forth in Section 14.

     (s) “Customer Information” means non-public personal information about Borrowers and
their Accounts as defined under the Gramm-Leach-Bliley Act.

     (t) “Daily Receivables Sale Statement” means the statement prepared each Business Day
that contains the computation of the aggregate Purchase Price to be paid by Bluestem to Bank.

     (u) “Debt Waiver Program Fees” has the meaning set forth in the Program Agreement.

     (v) “Disclosing Party” has the meaning set forth in Section 11(b)(2).

     (w) “Effective Date” has the meaning set forth in the introductory paragraph of this
Agreement.

     (x) “Existing Accounts” has the meaning set forth in the Program Agreement.

     (y) “Existing Bank” has the meaning set forth in the Program Agreement.

     (z) “Fingerhut Receivables” has the meaning set forth in Section 14.

     (aa) “Funding Amount” has the meaning assigned to such term in Schedule 1 of
the Program Agreement.

     (bb) “Funding Facility” has the meaning set forth in Section 7(a)(7).

     (cc)“Indemnifiable Claim” has the meaning set forth in Section 12(d).

     (dd) “Insolvent” means the failure to pay debts in the ordinary course of business,
the inability to pay its debts as they come due or the condition whereby the sum of an entity’s
debts is greater than the sum of its assets.

 

 

     (ee) “Installment Loan” shall have the meaning set forth in the Program Agreement.

     (ff) “Interim Interest” means, with respect to a Receivable, interest accrued during
the period between the date of Settlement and the Closing Date for such Receivable at an annual
interest rate equal to the annual percentage rate set forth in the Account Agreement for that
Receivable, without regard to any deferral or promotional rate.

     (gg) “Losses” has the meaning set forth in Section 12(a).

     (hh) “Monthly
Minimum” means [*].

     (ii) “New Required Reserve Amount” has the meaning set forth in Section 36(f).

     (jj) “Open-End Account” shall have the meaning set forth in the Program Agreement.

     (kk) “Open-End Program” shall have the meaning set forth in the Program Agreement.

     (ll) “Origination Fee” shall have the meaning set forth in Section 2(c).

     (mm) “OTS” means the Office of Thrift Supervision or any successor entity.

     (nn) “Person” means any legal person, including any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, governmental entity, or other entity of similar nature.

     (oo) “Principal” means any Person directly or indirectly owning ten percent (10%) or
more of Bluestem, and any executive officer or director of Bluestem.

     (pp) “Processing Services” has the meaning set forth in Schedule 1 of the
Program Agreement.

     (qq) “Program” shall have the meaning set forth in the Program Agreement.

     (rr) “Program Agreement” means that Program Agreement, dated as of the Effective

     Date, between Bluestem and Bank, as the same may hereafter be amended or otherwise modified
from time to time, pursuant to which Bluestem and Bank agreed to promote and operate the Program
described therein.

     (ss) “Program Documents” shall have the meaning set forth in the Program Agreement.

     (tt) “Program Year” means (a) the period from the Effective Date to the first
anniversary of such date, and (b) the period from one anniversary of the Effective Date to the next
successive anniversary of the Effective Date.

     (uu) “Purchase Price” means, with respect to each Receivable purchased by Bluestem
pursuant to this Agreement, the sum of (a) the principal amount of each corresponding Account
Advance, plus (b) the Interim Interest on such Receivable, plus (c) the Origination Fee on such
Receivable.

	 	[*]	 	Indicates confidential portions omitted pursuant to a request
for confidential treatment filed separately with the Securities and
Exchange Commission

 

 

          (vv) “Receivable” shall have the meaning set forth in the Program Agreement.

     (ww) “Records” means any Account Agreements, applications, change-of-terms notices,
credit files, credit bureau reports, copies of adverse action notices, transaction data, records,
or other documentation (including computer tapes, magnetic or electronic files, and information in
any other format) related to the Accounts, the Receivables and the Program.

     (xx) “Regulatory Authority” means any federal, state or local regulatory agency or
other governmental agency or authority having jurisdiction over a Party and, in the case of Bank,
shall include, but not be limited to, the OTS.

     (yy) “Relevant UCC State” means each jurisdiction in which the filing of a UCC
financing statement is necessary or desirable to evidence the transfer of ownership of Receivables
under this Agreement.

     (zz)“Required Reserve Balance” has the meaning set forth in Section 36(f). (aaa)
“Reserve Account” has the meaning set forth in Section 36(a).

     (bbb) “Restricted Party” has the meaning set forth in Section 11(a). (ccc)
“RPA” has the meaning set forth in Section 14.

     (ddd) “Security Agreement” has the meaning set forth in Section 14.

     (eee)“Settlement” has the meaning set forth in Schedule 1 of the Program Agreement.
(fff) “Successor” has the meaning set forth in the Program Agreement.

     (ggg) “Third Party Beneficiaries” has the meaning set forth in Section 15.

     (hhh) “Total Bank Revenue” means, with respect to a time period, the total of
Origination Fees, Debt Waiver Program Fees, and Interim Interest paid to Bank during such time
period.

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