Exhibit 10.42
AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT
     THIS AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT (the
“Agreement”) is dated as of February 3, 2010 and effective as of May 1, 2010
(other than Section 16 hereof, which shall be effective immediately upon
execution and delivery of the Agreement), by and among RSM McGladrey, Inc.
(“RSMM”), which is an indirect wholly-owned subsidiary of H&R Block, Inc.
(“HRB”), McGladrey & Pullen, LLP (“M&P”) and, solely for purposes of
Section 11.3, HRB.
RECITALS
     WHEREAS, M&P is licensed to hold itself out as a licensed certified public
accounting firm in numerous states and jurisdictions;
     WHEREAS, M&P desires to continue to focus its effort, energy and expertise
on the provision of Public Accounting Services (as defined below) (the
“Business”), and to accomplish this goal, desires to outsource certain
administrative functions of the Business to RSMM;
     WHEREAS, M&P desires to retain certain administrative services of RSMM in
connection with the provision of certain services and products relating to the
Business that do not involve the provision of Public Accounting Services and
RSMM desires to provide such administrative services to M&P;
     WHEREAS, M&P and RSMM have agreed upon a fair compensation for the
administrative services provided by RSMM hereunder;
     WHEREAS, RSMM has performed the administrative services under (a) an
Administrative Services Agreement dated August 2, 1999, which was terminated on
January 30, 2006, and (b) an Administrative Services Agreement dated January 30,
2006 (the “2006 Agreement”);
     WHEREAS, on July 21, 2009, M&P provided notice to RSMM of its intent to
terminate the 2006 Agreement, and on September 15, 2009, RSMM provided notice to
M&P of its intent to terminate the 2006 Agreement (together, the “Termination
Notices”);
     WHEREAS, in consideration of the premises and the mutual covenants
hereinafter set forth and in the Governance and Operations Agreement, dated as
of even date herewith, among the parties thereto (the “Governance and Operations
Agreement”), M&P and RSMM desire to withdraw their respective Termination
Notices; and
     WHEREAS, the parties desire to modify certain of the rights and obligations
of the parties set forth in the 2006 Agreement by amending and restating the
2006 Agreement in its entirety on the terms and conditions set forth herein,
effective as of May 1, 2010.
AGREEMENT
     NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereby agree to amend and restate the 2006
Agreement in its

 

--------------------------------------------------------------------------------

 

entirety, effective as of May 1, 2010 (other than Section 16 hereof, which shall
be effective immediately upon execution and delivery of the Agreement), as
follows:
1. Obligations of RSMM.
     1.1 Appointment of RSMM; Administrative Services. M&P hereby retains RSMM
and RSMM agrees to provide the administrative services described in Schedule 1.1
hereto (collectively, the “Administrative Services”). From time to time, RSMM
may replace any of its employees or independent contractors (including hiring
and firing employees and terminating the relationship with any independent
contractors providing the Administrative Services hereunder), and may obtain
alternative types or sources of the Administrative Services in RSMM’s reasonable
discretion.
     1.2 Records. Solely for purposes of providing the records management and
Administrative Services for M&P under this Agreement, RSMM shall be granted
access to M&P files and may use such files subject to reasonable restrictions
imposed by M&P on RSMM’s management of client engagement files related to Public
Accounting Services (as defined below). Such files shall be maintained at RSMM’s
and/or M&P’s offices and such offsite storage as may be obtained by RSMM. Client
information shall be subject to and protected by applicable state and federal
law, rules and regulations governing Public Accounting Services, including those
promulgated by state boards of accountancy, the AICPA, and the PCAOB.
     1.3 Limitation on RSMM’s Authority. Administrative Services shall not
include, and RSMM shall not at any time or in any manner engage, pursuant to
this Agreement, in providing to M&P or any client or customer of M&P, any
services that, under applicable state or federal law, cannot be provided by a
firm that is not licensed as a CPA firm under applicable state law, such
services to be collectively referred to, herein as “Public Accounting Services.”
For clarification, “Public Accounting Services” shall not include any services
deemed to be practiced before the Internal Revenue Service as defined in
Treasury Department Circular No. 230, Title 31 Code of Federal Regulations,
Subtitle A, Part 10. If any Administrative Services or acts required or
requested of RSMM herein would be reasonably likely to be construed by a court
of competent jurisdiction or the applicable state agency, board or other
authority charged under the laws of the state with the licensing, registration
and/or regulation of public accountants (each a “State Board”) or by the Public
Company Accounting Oversight Board (“PCAOB”) to be Public Accounting Services,
the requirement or other request to perform that act shall be deemed waived. In
order to preserve auditor independence and audit quality, M&P shall have
complete control and supervision over its provision of any Public Accounting
Services including, but not limited to (i) the establishment and maintenance of
quality assurance policies, (ii) the hiring, training, promotion, compensation
and termination of professional staff and partners, (iii) the acceptance,
continuation of, and fee arrangements with clients, and (iv) the management and
supervision of client engagements. Anything in this Agreement to the contrary
notwithstanding, although M&P has delegated to RSMM under the terms of this
Agreement various ministerial administrative matters, M&P retains the exclusive
right, through its own personnel, to manage its own Business (including Public
Accounting Services) subject to the surviving terms and conditions of the
Governance and Operations Agreement, the Amended and Restated Trademark
Assignment and Joint Ownership Agreement of even date herewith (the “Joint
Ownership

2

--------------------------------------------------------------------------------

 

Agreement”) and the Amended and Restated Loan Agreement of even date herewith
(the “Loan Agreement”).
     1.4 Execution of Contracts. RSMM is hereby authorized to execute contracts
on behalf of M&P provided that the contracts so executed relate to the provision
of Administrative Services, and do not relate to the performance of Public
Accounting Services. M&P grants to RSMM a limited and special power of attorney
(the “Power of Attorney”) for the execution of contracts (with amounts due and
payable there-under not to exceed One Hundred Thousand Dollars ($100,000)).
Notwithstanding the foregoing, RSMM may execute contracts (including those
exceeding $100,000 in annual expenditures) that benefit both RSMM and M&P and
relate to services provided by RSMM under this Agreement. A form of the Power of
Attorney is set forth as Exhibit 1.4 hereto. The M&P Board of Directors (the
“M&P Board”) or Managing Partner, or his/her or its designees, must authorize
contracts with total amounts due and payable thereunder in excess of such amount
or which relate to the performance of Public Accounting Services.
2. Term. Other than Section 16 hereof, which shall be effective immediately, the
term of this Agreement shall commence on May 1, 2010 (the “Effective Date”) and
shall continue for a period of five years after the Effective Date (unless
sooner terminated pursuant to Sections 9 or 10 hereof) (the “Initial Term”),
which term will automatically be extended five additional years on the fifth
anniversary of the Effective Date (a “Renewal Term”) and on the fifth
anniversary of the first May 1 of each Renewal Term such that the term of this
Agreement will be automatically renewed and extended for successive five-year
terms indefinitely unless and until terminated in accordance with the terms
hereof.
3. Shared Expenses and Fee. RSMM and M&P shall agree to jointly share in certain
common overhead costs which are necessary operating expenses for the performance
of attest, accounting, tax and consulting services (the “Shared Expenses”). Such
Shared Expenses may include but are not limited to certain human resources,
client service, sales and marketing, equipment and technology, and
administrative expenses. RSMM and M&P agree that such cost sharing arrangement
will be allocated each quarter based upon actual Shared Expenses and an
allocation method (the “Allocation Method”) based to the extent feasible and
reasonable on actual usage by the respective parties and agreed upon in advance
by the President of RSMM and the M&P Board. Shared Expenses will be paid based
upon a budget with true-up calculations and adjustments reflecting services
actually performed and as recorded in year-to-date financial reports for August,
November, February and April. Adjustments will be made in each of the months
following August, November and February. April adjustments will be made in
April. The Shared Expenses and the Allocation Method shall be reviewed by the
parties on an annual basis. RSMM will be responsible for payment of the Shared
Expenses (except those expenses directly related to the practice of Public
Accounting Services, which shall be fully paid directly by M&P) and will be
reimbursed monthly by M&P for its portion of the Shared Expenses based on the
Allocation Method. M&P shall pay RSMM an annual administration fee (the
“Administration Fee”) for all of its Administrative Services equal to 3% of
M&P’s share of the budgeted Shared Expenses, payable monthly in arrears. The
Administration Fee will be reviewed by the parties on an annual basis in
connection with planning objectives and updated forecasts to ensure that the
Administration Fee is an arms-length arrangement and provides fair market value
to RSMM for the Administrative Services actually being rendered. If M&P

3

--------------------------------------------------------------------------------

 

believes that a portion of the Administration Fee is unauthorized,
unsubstantiated or otherwise improper and the parties cannot resolve such
disputed fee in the regular annual Administration Fee review process, then M&P
may submit a written notice of dispute to RSMM and the parties will follow the
dispute escalation and resolution process described in Section 9.3 hereof
(recognizing that the dispute escalation and resolution process cannot lead to a
termination of this Agreement unless the process occurs after the third
anniversary of the Effective Date).
4. Occupancy and Partner Benefits.
     4.1 Occupancy of Premises. M&P shall be entitled to occupy all office space
from time to time occupied by RSMM on the terms and subject to the conditions of
this Section 4.1.
     4.1.1 Allocation of Occupancy Costs. Following the Effective Date, upon the
entry into or renewal by RSMM of any lease for office space that is or will be
shared with M&P, M&P will enter into a sublease agreement with RSMM for the
proportion of the space that will be utilized by M&P on substantially the same
terms as the underlying lease. The proportion of space allocated to M&P will be
determined initially at lease inception and then adjusted annually based on the
fiscal year end actual number of each level of professional personnel M&P has
housed in the premises compared to RSMM taking into account the size of
workstation each personnel level is assigned. The proportion of the space
utilized by RSMM or M&P will be subject to calculation as set forth in
Schedule 4.1.1. The cost allocated to M&P under this sublease will be based on
the cost of the lease to RSMM without any mark-up or profit to RSMM and will not
be subject to the Administration Fee described in Section 3 of this Agreement.
The term of the sublease will be the lesser of the term of the RSMM lease or
five (5) years. If RSMM commits to an initial lease term in excess of five
(5) years and M&P continues to occupy the space after the initial five (5) year
sublease term, then M&P will renew the sublease for the lesser of the remaining
term of the original RSMM lease or five (5) years.
     4.1.2 Notice to Vacate Premises. Unless otherwise required under any lease
or sublease entered into pursuant to Section 4.1.1 hereof, M&P agrees to give
RSMM at least 270 days’ prior written notice of its intention to vacate any
particular office space then occupied by M&P. RSMM agrees to give M&P at least
270 days’ prior written notice of its intention to vacate any office space at
the time occupied by both RSMM and M&P, unless such intent to vacate is due to
an office relocation or closing which is generally known. Except as may be
otherwise provided in any sublease agreement entered into pursuant to Section
4.1.1 hereof, in the event of any termination of this Agreement by either party
for any reason, except for a default by M&P for nonpayment of fees, M&P shall in
any case be entitled if it so elects to occupy all office space which it then
occupies for 270 days after such termination, subject to having received earlier
notice of RSMM’s intention to vacate such space as stated above. In the event
M&P occupies such office space after termination of this Agreement, the parties
shall agree on rent payable during M&P’s continued occupancy, or if they fail to
do so, the rent shall be prorated according to the Allocation Method described
in Section 4.1.1.
     4.2 Partner Benefits. RSMM and M&P agree that certain partner benefits may,
if the parties agree, be paid by RSMM and in such case M&P will reimburse RSMM
for the payment

4

--------------------------------------------------------------------------------

 

of those benefits. In such case, RSMM and M&P will agree to the allocation
methodology as a part of the annual budgeting process and payment for such
benefits will be made monthly by M&P.
     4.3 Independent Identity. M&P shall continue to maintain a separate legal
identity and shall observe all legal requirements and customary practices
necessary to maintain M&P as a separate legal entity distinct from any other
person or entity, including RSMM. Consistent with the Joint Ownership Agreement,
M&P shall also maintain its own business identity, including, without
limitation, letterhead and business cards and shall have the right at its option
to conduct its own marketing activities. Nothing herein shall prevent M&P from
being acquired by or otherwise combining with any other person, in which case
this Agreement may be terminated in accordance with the terms of this Agreement.
For the avoidance of doubt, Section 9.5.2 shall continue to be effective in the
event of termination in connection with an acquisition or merger of M&P. In
addition, any proceeds from the sale of M&P or its assets shall remain the sole
property of M&P subject to the terms of the Loan Agreement.
5. Engagement Letters, Billing and Collection of Fees; Accounting.
     5.1 Engagement Letters. M&P will prepare engagement letters in accordance
with its policies for services and/or products to be provided by M&P to its
clients. The content of such letters shall be solely under the control of M&P
and shall be executed only by a partner or employee of M&P.
     5.2 Billing and Collection. As part of the Administrative Services, RSMM
shall prepare and mail statements for all services provided by or on behalf of
M&P to clients of M&P based upon time records, expense payments and other
information provided by M&P to RSMM. M&P shall and shall cause its partners and
employers to provide RSMM all records reasonably necessary for billing and
collection of accounts pursuant to the provisions of this Section.
     5.3 Accounting. As a part of the Administrative Services, RSMM shall
maintain books of account for M&P. In addition, RSMM shall prepare the monthly
and annual operational and financial reports for M&P.
6. Mutual Nondisclosure. Except as provided in the Loan Agreement or Governance
and Operations Agreement, neither M&P nor RSMM shall at any time or in any
manner, directly or indirectly, use or disclose to any third party any trade
secrets or other Confidential Information (defined herein) learned or obtained
from the other party hereto as a result of its relationship with the other party
hereto or any direct or indirect subsidiary or affiliate (i.e., a person which
controls, is controlled by or under common control with a party) of the other
party, except as may be required by law or legal, regulatory or judicial
process; provided that the disclosing party shall give prompt written notice to
the other party of such requirement, disclose no more information than is so
required, and cooperate with any attempts by the other party to obtain a
protective order or similar treatment; or to its or its affiliates’ directors,
officers, attorneys, accountants, advisors or consultants who need to know such
information in such capacities and who agree to comply with the non-disclosure
obligations set forth in this Section 6. As used herein, the term “Confidential
Information” means confidential, proprietary or personal information of a party
or its affiliates that is not generally known in the industry in which the

5

--------------------------------------------------------------------------------

 

parties or any of their direct or indirect subsidiaries or (in the case of
information of or about clients of either party) clients is engaged, including
such information that in any way relates to the products, processes, services,
inventions (whether patentable or not), formulas, techniques or know-how,
including, but not limited to, information relating to distribution systems and
methods, research, development, purchasing, accounting, procedures, marketing,
customers, vendors, merchandising and selling, of RSMM or M&P or any of their
respective direct or indirect subsidiaries or affiliates, or the clients of
either party, and regardless of the format in which it is presented or embodied
(written, graphic, electromagnetic or otherwise). The term “Confidential
Information,” as used herein, does not include information (a) which was already
in the public domain other than through any disclosure in violation of this
Section 6, (b) information already in the possession of the other party and not
subject to any confidentiality obligations of the other party or (c) which is or
was disclosed as a matter of right by a third party source provided such third
party source is not bound by confidentiality obligations in favor of the owner
of the Confidential Information in question. This Section 6 shall survive the
termination of this Agreement. Each party agrees that it will adopt reasonable
precautions to guard against unauthorized release or use of Confidential
Information, and that it will not use or disclose such Confidential Information
in any manner that will unfairly benefit itself or damage the other party
hereto. Each party agrees to return to the other party all such Confidential
Information pertaining to the other party upon termination of this Agreement. In
lieu of returning all Confidential Information, a party may destroy such
Confidential Information provided that the other party hereto has agreed in
writing that destruction is acceptable.
7. Administrative Services, Warranties, Disclaimers, Limitations on Liability
and Required Notices. RSMM will act diligently and use reasonable care in
providing Administrative Services to M&P. M&P and each Partner hereby release
and forever discharge RSMM and its affiliates, parents, employees,
subcontractors, agents and assigns from any liability in any way connected with
this Agreement or the Administrative Services, except for any liability for
intentional torts or gross negligence. RSMM does not warrant the success or
results of M&P. RSMM shall not be liable to M&P or any Partner under any
circumstances for special, exemplary, punitive or consequential damages relating
to the Administrative Services except for intentional torts or gross negligence.
Neither M&P nor any Partner shall be liable to RSMM for special, exemplary,
punitive or consequential damages relating to this Agreement.
RSMM hereby agrees to indemnify and hold harmless M&P and its affiliates from
and against any liability or losses (including, without limitation, attorneys’
fees) arising out of any claims, actions, litigations, disputes or proceedings
brought by any third parties against M&P or its affiliates as a result of any
negligence, willful misconduct or fraud by RSMM in connection with its provision
of any services under this Agreement (excluding, for clarity, any Public
Accounting Services). M&P hereby agrees to indemnify and hold harmless RSMM and
its affiliates from and against any liability or losses (including, without
limitation, attorneys’ fees) arising out of any claims, actions, litigations,
disputes or proceedings brought by any third parties against RSMM or its
affiliates as a result of any negligence, willful misconduct or fraud by M&P in
connection with the provision of Public Accounting Services.
8. Mutual Provision of Professional Services. RSMM and M&P may from time to time
request assistance from the other’s professionals and other personnel in meeting
the Contractor’s professional service obligations to its clients (the
“Professional Services”). The party requesting

6

--------------------------------------------------------------------------------

 

such assistance and billing the client for the Professional Services rendered is
referred to in this Section 8 as the “Contractor”. The party providing the
requested Professional Services to or on behalf of the Contractor and billing
the Contractor is referred to in this Section 8 as the “Subcontractor”. In no
case shall the Administrative Services rendered by RSMM to M&P pursuant to other
sections of this Agreement be subject to this Section 8. The Subcontractor may
at its sole option and discretion, provide or decline to provide the requested
Professional Services to the Contractor. The provisions set forth below shall
apply with respect to all Professional Services so provided pursuant to this
Section 8.
     8.1 Nature of Requests. Such a request may be made by any person authorized
by the Contractor to do so, and such request may be accepted by any person
authorized by the Subcontractor to do so. No formalities are required.
     8.2 Contractor to Bill Client. The Contractor shall have sole
responsibility for billing and collecting from its own client with respect to
the Subcontractor’s Professional Services. No delay or failure by the client to
pay for such Professional Services shall relieve the Contractor from its
obligations to pay the Subcontractor for such Professional Services as provided
herein.
     8.3 Subcontractor’s Billing for Services Rendered. The Subcontractor shall
bill the Contractor for actual hours expended by its personnel to provide
Professional Services to the client of the Contractor. The rate to be charged
shall be mutually agreed upon from time to time, but no less frequently than
annually, between Contractor and Subcontractor, in writing. The fees in effect
as of the date hereof are an agreed percentage of the standard rate typically
charged by the Subcontractor to its own clients consistent with the rates
currently in place between the shared services of locations of RSMM and M&P.
Contractor shall make payment to the Subcontractor for Professional Services
provided hereunder within 30 days after the end of the month in which the
Professional Services were provided by the Subcontractor.
     8.4 Subcontractor Responsible for Own Expenses. Subcontractor is solely
responsible for the payroll, benefits, training, equipment and facilities
necessary for its personnel to provide Professional Services to the Contractor’s
client, and for its own profitability or lack thereof, relating to the rendition
of such Professional Services. Travel and living expenses away from
Subcontractor’s office normally employing personnel used to perform the
Professional Services shall be billed to Contractor as disbursements at the
actual amount paid to vendors, and Contractor will reimburse Subcontractor
within thirty (30) days following the end of the month during which expenses are
incurred.
     8.5 Compliance With Laws, Rules and Professional Standards. Contractor and
Subcontractor agree to comply, and to cause their respective partners and
employees to comply, with Rule 301, Confidential Client Information, of the Code
of Professional Conduct of the American Institute of Certified Public
Accountants. In addition, the parties shall, in connection with providing of
such Professional Services, observe the mutual nondisclosure provisions of
Section 6 of this Agreement. The parties also agree to comply, and to cause
their respective partners and employees to comply, with Section 7216 of the
Internal Revenue Code in connection with providing Professional Services to each
other’s clients. RSMM agrees to comply with Interpretation 101-14 under Rule 101
of the Code of Professional Conduct of the American Institute of Certified
Public Accountants and, unless an exception is agreed to by

7

--------------------------------------------------------------------------------

 

M&P (which agreement shall not be unreasonably withheld), M&P’s Independence and
Relationship Policies as in effect from time to time with respect to all attest
clients. The parties agree that RSMM shall not perform any Professional Service
that violates any state law governing the practice of public accounting. It is
specifically contemplated that M&P will utilize Professional Services of RSMM
only in a manner or in instances consistent with the requirements of the
governing accounting licensing laws.
     8.6 Professional Services Indemnity. Contractor agrees to indemnify and
hold harmless Subcontractor and its partners, directors, officers, employees,
agents and members, as applicable, with respect to any and all claims, losses,
damages, liabilities, judgments or settlements (including but not limited to
reasonable attorneys’ fees, costs and other expenses) incurred by Subcontractor
on account of any Professional Services conducted by Subcontractor pursuant to
this Section 8 except those arising in the ordinary course of business of
performing requested services and allocated to Subcontractor by Section 8.4
hereof; provided, however, this indemnification shall not extend to cover any
claims, losses, damages, liabilities, judgments or settlements (including
attorneys’ fees, costs and other expenses) incurred by such indemnified persons
on account of the negligence, willful misconduct or fraud of Subcontractor (or
its partners, directors, officers, employees, agents or members, as applicable).
9. Termination. Other than any termination pursuant to Section 10 hereof, this
Agreement may only be terminated in accordance with and subject to the
provisions of this Section 9. In the event of a termination under this
Section 9, the Governance and Operations Agreement shall terminate pursuant to
Section 12(a) of the Governance and Operations Agreement.
     9.1 By RSMM. RSMM may terminate this Agreement: (a) at any time pursuant to
Section 10 hereof; (b) at any time if M&P loses or has suspended its license or
certification to practice public accounting in any state significant to its
business; (c) at any time if M&P is wound up or liquidated or files for
bankruptcy or other action is taken against it under any statute for the
protection of creditors; (d) subject to Sections 9.3 and 9.4 hereof, at any
time, with or without cause, following the third anniversary of the Effective
Date, provided that (I) the effective date of any termination pursuant to this
clause (d) may only occur on a date during the period between May 1 and
August 31 of any calendar year and (II) RSMM must have provided M&P with at
least 270 days’ advance written notice of any termination (specifying the
effective date of such termination) pursuant to this clause (d) (it being
understood and agreed that RSMM may not deliver a notice of termination pursuant
to this clause (d) prior to the third anniversary of the Effective Date and that
any such purported termination pursuant to this clause (d) prior to the third
anniversary of the Effective Date shall be void and of no force or effect); or
(e) with at least 60 days’ advance written notice, upon consummation of any sale
of at least a majority interest of the M&P business to a third party, whether
accomplished by the sale of stock, sale of assets or otherwise, or any merger of
M&P with a competitor of M&P or RSMM.
     9.2 By M&P. M&P may terminate this Agreement: (a) at any time pursuant to
Section 10 hereof; (b) subject to Sections 9.3 and 9.4 hereof, at any time, with
or without cause, following the third anniversary of the Effective Date,
provided that (I) the effective date of any termination pursuant to this clause
(b) may only occur on a date during the period between May 1 and August 31 of
any calendar year and (II) M&P must have provided RSMM with at least 270 days’
advance written notice of any termination (specifying the effective date of such

8

--------------------------------------------------------------------------------

 

termination) pursuant to this clause (b) (it being understood and agreed that
M&P may not deliver a notice of termination pursuant to this clause (b) prior to
the third anniversary of the Effective Date and that any such purported
termination pursuant to this clause (b) prior to the third anniversary of the
Effective Date shall be void and of no force or effect). Notwithstanding the
foregoing, if a sale of at least a majority interest of the RSMM business to a
third party, whether accomplished by the sale of stock, sale of assets or
otherwise (a “Change of Control”), is consummated during the first two years
after the Effective Date and after consummation of such Change of Control a
business dispute between RSMM and M&P results from such Change of Control, M&P
may deliver a written notice of dispute to RSMM pursuant to Section 9.3 hereof,
even if the notice is delivered before the third anniversary of the Effective
Date. If such dispute is not resolved after good faith compliance with the
dispute escalation and resolution process described in Section 9.3 hereof, M&P
may begin the termination process and, subject to compliance with Section 9.4
hereof, terminate this Agreement.
     9.3 Escalation and Resolution Procedures. If a party is considering
termination of this Agreement following the third anniversary of the Effective
Date for any reason, other than pursuant to Section 10 hereof or, in the case of
RSMM, clauses (b) or (c) or (e) of Section 9.1 hereof, the parties, including
members of senior leadership and members of the Board of Directors of RSMM and
the M&P Board, will participate in and abide by the following escalation and
resolution process prior to issuing any notice of termination hereunder or
publicly announcing any intention to terminate this Agreement (whether to a
party, publicly or otherwise). Prior to issuing any notice of termination
pursuant to clause (d) of Section 9.1, in the case of RSMM, or clause (b) of
Section 9.2, in the case of M&P, the party desiring to terminate this Agreement
will deliver to the other party a written notice (the “Notice”) of the reasons
for which the party is considering termination of this Agreement (such notice to
detail all relevant information pertaining to the reasons, including the clear
statement that it could lead to a termination notice), which will include a
request for an initial meeting between the parties to discuss the reasons on a
date no earlier than seven days and no later than 30 days after the date of
receipt of the Notice. The parties (including representatives of the senior
leadership of each party) will meet to discuss, and negotiate in good faith to
continue the APS on the date specified in the Notice or on such other date no
later than 30 days after the date of receipt of the Notice as may be agreed by
the parties. If, following such meeting the reasons for termination still exist,
then no later than 30 days following the initial meeting (or such other date as
the parties may mutually agree) the parties will hold a second meeting
(including representatives of the senior leadership and boards of directors of
each party) to continue to negotiate in good faith to continue the APS. If,
after compliance with the foregoing procedures, such reason for termination is
not resolved, either party may submit such reason for termination to resolution
pursuant to Section 14 below. For the avoidance of doubt, termination of this
Agreement without cause in accordance with Section 9.1 or 9.2 is not subject to
the terms of Section 14. All negotiations pursuant to this Section 9.3 are
confidential and shall be treated as compromise and settlement negotiations for
purposes of applicable rules of evidence.
     9.4 Notice of Termination. If, following the second meeting of the
escalation and resolution process set forth in Section 9.3 hereof, the parties
have failed to agree to continue the APS after good faith compliance with the
escalation and resolution process set forth in Section 9.3 hereof and the board
of directors of the party that originally delivered the Notice determines to
terminate the Agreement, then such party may issue and deliver a written notice
of termination

9

--------------------------------------------------------------------------------

 

(the “Notice of Termination”) to the other party, provided that M&P may not
issue (whether to RSMM, publicly or otherwise) or deliver a Notice of
Termination to RSMM unless (a) the M&P Board first calls a meeting of M&P’s
Partners, to occur no sooner than 60 days after the calling of the meeting and
in any event not before the third anniversary of the Effective Date, to vote on
the decision to terminate this Agreement and approve delivery of a Notice of
Termination and (b) the decisions to terminate this Agreement and deliver a
Notice of Termination are approved at such Partner meeting (I) by a majority of
the Partner votes held by all of M&P’s Partners and (II) in accordance with any
other vote requirement specified in the M&P Partnership Agreement, as in effect
at the time of any such M&P Partner vote. Once a Notice of Termination is issued
by a party, such Notice of Termination shall be irrevocable unless the other
party consents in writing to its withdrawal.
     9.5 Effect of Termination.
     9.5.1 Payment of Money Owed. Upon the termination of this Agreement for any
reason, M&P shall pay all amounts due to RSMM and RSMM shall pay all amounts due
to M&P under this Agreement as soon as practicable but in no event later than
sixty (60) days after the effective date of such termination, it being
understood that any amounts due to each other under any other agreements by and
between, or which may be entered into by and between, the parties shall be
payable in accordance with the provisions thereof.
     9.5.2 Survival of Certain Provisions. Sections 4.1, 6, 8.5, 8.6, 9.5, 12,
13, 14 and 16 shall survive the termination of this Agreement.
     9.5.3 Records; Files. In the event of termination for any reason, RSMM may,
at its expense, and, subject to RSMM’s compliance with any requirements for
prior client consent, copy all records or files of M&P, except for client
engagement files which contain or reflect the performance of Public Accounting
Services.
     9.5.4 License of Proprietary Systems. Nothing in this Agreement shall
prevent M&P from independently obtaining any licenses or other agreements
providing for M&P’s right to use any Proprietary and Customized Applications (as
defined below) primarily in the provision of Public Accounting Services,
including, without limitation, the application known as Caseware.
     Effective upon any termination of this Agreement by either party, RSMM
hereby grants to M&P a world-wide, royalty-free, fully paid-up, nonexclusive,
nontransferable, nonsublicensable license, sublicense, and/or right (i) to use,
for a period (at M&P’s election) of up to eighteen (18) months following the
effective date of termination hereof, in substantially the same manner and for
substantially the same purposes as used or available for use immediately prior
to such termination, all Proprietary and Customized Applications, and (ii) to
perpetually use the source code of (a) all customizations of such Proprietary
and Customized Applications in RSMM’s possession or control, which
customizations were created by or on behalf of RSMM and/or M&P (whether for use
exclusively by M&P or for use by both M&P and RSMM), and (b) all software-based
audit tools owned by RSMM, or by both RSMM and M&P, comprising the Proprietary

10

--------------------------------------------------------------------------------

 

and Customized Applications (including, without limitation, Engagement
Management, McGladrey Risk Assessment Model (MRAM), Interoffice Inspection
(IOI) and audit related Lotus Notes based databases). The licenses, sublicenses
and/or rights to use described above in this Section 9.5.4 shall only be granted
to the extent that: (x) RSMM has the legal right to do so; (y) RSMM is
contractually permitted to grant such licenses, sublicenses or rights to use to
M&P, in the event any portion of the Proprietary and Customized Applications is
provided to RSMM pursuant to a contract with any third parties (a “Third Party
Contract”); and (z) such action will not adversely affect or alter RSMM’s
pre-existing right to use such Proprietary and Customized Applications. M&P
agrees to indemnify RSMM for any breach of any Third Party Contract that may
result from RSMM’s grant of such licenses, sublicenses or rights to use to M&P
under this Section 9.5.4. The foregoing does not transfer or assign to M&P any
rights which RSMM may have or acquire in any Proprietary and Customized
Applications. As used herein, “Proprietary and Customized Applications” means,
collectively, software applications owned by RSMM or owned by one or more third
parties and licensed or otherwise provided to RSMM, and any customizations or
extensions to or other enhancements of such software applications developed
and/or owned by RSMM, that are used or available for use to provide
Administrative Services to M&P immediately prior to the effective date of
termination of this Agreement.
     In the event that RSMM is not permitted to license, sublicense or grant M&P
the right to use any Proprietary and Customized Applications as set forth above,
if and when requested by M&P during the eighteen (18) months following the
effective date of termination hereof, RSMM will use commercially reasonable
efforts to help M&P obtain (at M&P’s own cost and expense) licensing rights from
third party providers of the Proprietary and Customized Applications that are
being utilized or are available for utilization by or on behalf of RSMM to
provide Administrative Services immediately prior to the effective date of
termination hereof. For the avoidance of doubt, except as otherwise specified
herein or as otherwise agreed by RSMM and M&P, RSMM will not have any obligation
to provide its own or any third party’s Proprietary and Customized Applications
after the eighteen (18) month term set forth above.
     9.5.5 Transition Services and Return of Data. If either RSMM or M&P
delivers a Notice of Termination to the other party, each party will promptly
designate a senior level leader to represent such party in the development of a
transition services plan. The designated representatives of each party will meet
to begin to design such transition services plan as soon as reasonably
practicable following the date of the Notice of Termination and in any event at
least 180 days prior to the effective date of the termination of this Agreement.
The purpose of the transition service plan will be to enable M&P to transition,
before or after the effective date of termination, the Administrative Services
to other third party or internal M&P providers or resources. RSMM and M&P
further agree that any such transition services plan shall, at a minimum,
provide terms to facilitate RSMM’s performance of its obligations specifically
set forth in Section 9.5.4 and this Section 9.5.5. In furtherance of such
transition services plan, RSMM shall cooperate with M&P in transitioning
performance of the Administrative Services to M&P or to any third party service
provider designated by M&P; provided, however, that M&P shall pay RSMM a
reasonable agreed upon amount for any work

11

--------------------------------------------------------------------------------

 

RSMM needs to perform to segregate data, delete it and/or integrate such data
with M&P and/or its third party vendor, in conjunction with such transition upon
the written request of M&P. RSMM shall return all copies of all M&P data,
materials, and information in the possession or control of RSMM (including,
without limitation, all audit-related data, files and databases) to M&P in such
form or format as reasonably requested by M&P. RSMM shall not retain any copies
of such M&P data, materials or information except as required by law. M&P shall
return all copies of all RSMM data, materials, and information in the possession
or control of M&P to RSMM in such form or format as reasonably requested by
RSMM. M&P shall not retain any copies of such RSMM data, materials, or
information except as required by law. This provision shall survive termination
of this Agreement.
10. Regulatory or Legislative Change. In the event of any material change in any
state or federal statute, regulation or definitive interpretation thereof by a
government agency or administrative body (“Laws”), or an enforcement action
against M&P or its affiliates arising under any Laws, in each case which shall
make this Agreement unlawful in whole or in material part, the parties shall
immediately enter into good faith negotiations regarding a new service
arrangement (if necessary) or basis for compensation for the Administrative
Services provided hereunder which is consistent with such Laws and approximates
as closely as possible the economic position of the parties hereunder prior to
the change. If the parties are unable to reach such an agreement within 30
business days following written notice from one party to the other, then either
party may terminate this Agreement effective upon 90 days’ prior written notice.
Termination of this Agreement pursuant to this provision shall not, however,
terminate M&P’s right to occupy such office space as it then may occupy on
premises leased by RSMM.
11. Miscellaneous.
     11.1 This Agreement shall be binding upon and shall inure to the benefit of
the successors and assignees of the parties.
     11.2 M&P shall not assign, confer any right in, assume in bankruptcy,
pledge, mortgage or otherwise encumber this Agreement, in whole or in part,
without the prior written consent of RSMM, which can be withheld in RSMM’s sole
discretion. For the avoidance of doubt, a merger, change of control,
reorganization (in bankruptcy or otherwise) or a stock sale of M&P shall be
deemed an “assignment” requiring such consent, regardless of whether M&P is the
surviving entity. For the further avoidance of doubt, Section 9.5.2 shall
continue in effect in the event of termination of this Agreement resulting from
a merger, change of control, reorganization (in bankruptcy or otherwise) or
stock sale of M&P. Any attempted action in violation of the foregoing shall be
null and void ab initio and of no force or effect. RSMM may, in its discretion,
assign this Agreement to any other direct or indirect parent, subsidiary or
affiliate of RSMM, or to any third party that in connection therewith is
acquiring all or substantially all of the assets of RSMM used in the APS, and
M&P shall be liable hereon to the same extent as if such agreement were
originally made with such other person, firm or corporation.
     11.3 If the Board of Directors of HRB (the “HRB Board”) determines to sell
RSMM and its subsidiaries in any auction or marketed sale process, M&P will be
invited to participate as

12

--------------------------------------------------------------------------------

 

a bidder in the sale process. In addition, if outside of any such sale process
the HRB Board receives from a third party a bona fide written offer to purchase
RSMM and its subsidiaries and the HRB Board subsequently determines to engage in
negotiations with such third party with the intent to consummate such offer or
to otherwise sell RSMM and its subsidiaries, it will notify the M&P Board of
such proposed sale in writing within a reasonable period of time prior to the
entry into a definitive agreement with such third party relating to such
proposed sale, providing M&P a reasonable opportunity to submit a bona fide
written offer to purchase RSMM and its subsidiaries. Any such offer must include
the proposed cash purchase price for RSMM and its subsidiaries, a summary of the
other material terms and conditions of the proposed purchase and, to the extent
financing is contemplated to fund the proposed purchase, evidence of committed
financing. The HRB Board may accept or reject M&P’s proposed offer in its sole
discretion (it being understood that if M&P’s proposed offer is rejected, the
HRB Board may consummate the proposed third party sale or any other sale in its
sole determination, regardless of whether the purchase price of the proposed
third party sale is lower than M&P’s proposed purchase price or the terms and
conditions of the proposed third party sale are less favorable to HRB than those
of M&P’s proposed offer). It is understood that the foregoing rights of M&P and
obligations of RSMM will not apply to any spin-off of RSMM or to an initial
public offering of RSMM (whether with the intent to subsequently spin off RSMM
or otherwise). M&P acknowledges and agrees that HRB will in no case be under any
obligation to accept or consummate any proposed offer to purchase RSMM and its
subsidiaries from M&P (or from any third party), that this provision does not
confer a right of first refusal on M&P, and that M&P has no rights to purchase
RSMM and its subsidiaries. M&P further acknowledges and agrees that RSMM and its
subsidiaries are not for sale and that the foregoing does not commit or in any
way reflect an intention of HRB to cause the sale of RSMM and its subsidiaries.
     11.4 This Agreement, together with the Governance and Operations Agreement,
the Loan Agreement and the Joint Ownership Agreement, contain the complete
understanding of the parties with respect to the subject matter hereof and no
modification or waiver of any provision hereof shall be valid unless in writing
and signed by the parties, unless specifically provided to the contrary. This
Agreement may not be amended except by an instrument in writing signed by RSMM
and M&P. Notwithstanding anything to the contrary herein, no party shall be
required to violate any law or the good faith reasonable exercise of such
party’s professional responsibility.
12. Governing Law. This Agreement shall be governed and interpreted in all
respects pursuant to the internal and substantive laws of the State of Missouri
without regard to conflict of laws principles which might cause the law of
another jurisdiction to apply.
13. Right to Offset. M&P agrees that RSMM may offset amounts due M&P hereunder
against amounts due RSMM hereunder. Such right to offset shall arise if M&P
fails to pay such amounts owed to RSMM within thirty (30) days after written
notice to the M&P’s Representative. In the event that any such offset is made
but is finally determined by mediation, arbitration or a court of competent
jurisdiction to be improper and such offset is revised, RSMM shall pay interest,
at the Prime Rate, on the amount of such offset for the period such offset was
in effect. “Prime Rate” means the “prime rate” as published in the “Money Rates”
section of The Wall Street Journal or successor section and/or publication. If
The Wall Street Journal ceases to publish the “prime rate,” then the “Prime
Rate” shall be the prime rate as announced from time to time by HRB’s lead agent
bank under its senior credit facilities.

13

--------------------------------------------------------------------------------

 

14. Arbitration; Interim Relief. Any controversy, claim or dispute arising out
of or relating to this Agreement or any actual or alleged breach of any
provisions hereof, including without limitation any dispute concerning the scope
of the arbitration clause set forth below (a “Dispute”), shall be resolved as
set forth below, except that (a) this Section 14 shall not apply to any
controversy, claim or dispute asserted by either party hereto against the other
arising out of or related to a controversy, claim or dispute asserted by a third
person (other than M&P and/or any of its Partners or RSMM) against either or
both parties to this Agreement, nor to any controversy, claim or dispute where a
third party (other than M&P and/or any of its Partners or RSMM) would be an
indispensable party under the Federal Rules of Civil Procedure and (b) any
Dispute subject to Section 10(a)(i) of the Governance and Operations Agreement
shall be resolved as described in Section 8 of the Final Award (as defined in
the Governance and Operations Agreement).
     14.1 In the event a Dispute arises relating to this Agreement, the parties
shall first negotiate in good faith to resolve such dispute in accordance with
the dispute escalation and resolution process described in Section 9.3 hereof
before proceeding to mediation pursuant to Section 14.2 hereof.
     14.2 In the event that the parties have complied with Section 9.3 hereof
and the Dispute has not been resolved within 60 days after service of the Notice
as provided in Section 9.3, or in the event the parties failed to meet within
30 days after delivery of a Notice, either party may demand mediation in
accordance with the CPR Institute for Dispute Resolution (“CPR”) Mediation
Procedure then currently in effect in the location where any arbitration would
be conducted as set forth below, in writing with copies to all other parties
involved in the Dispute. The notification will state with specificity the nature
of the Dispute. Unless the parties agree otherwise, the parties will select a
mediator from the CPR Panels of Distinguished Neutrals (the “Mediator”). If the
parties do not agree on the Mediator within five (5) business days after either
party delivers a demand for mediation, the CPR will provide the parties on an
expedited basis a list of three candidates, with their resumes and hourly rates.
If the parties are unable to agree on a candidate from the list within three
(3) business days following receipt of the list, each party will, within five
(5) business days following receipt of the list, send to CPR the list of
candidates ranked by order of preference. The candidate with the lowest combined
score will be appointed as the mediator by the CPR. The CPR will break any tie.
Upon appointment, the Mediator will immediately convene a telephone conference
of the parties hereto. The parties will make a representative, with full
authority to settle, available for such a conference. During the initial
telephone conference, the parties will agree on mediation procedures or, in the
event they cannot agree, the Mediator will set the mediation procedures. The
mediation procedures will provide for the mediation to be completed within
thirty (30) business days after the date of the initial demand for mediation.
The parties will participate in good faith in the mediation and will use their
best efforts to reach a resolution within the thirty (30) day time period. Each
party will make available in a timely fashion a representative with authority to
resolve the Dispute. Absent agreement of the parties otherwise, in the event
that the Dispute has not been resolved within thirty (30) days, the mediation
shall be deemed terminated. In the event that the mediation continues beyond
thirty (30) days by agreement of the parties, but is not resolved within what
the Mediator believes is a reasonable time thereafter, the Mediator will declare
the mediation terminated. Fees of the mediator shall be split equally between
RSMM, on the one

14

--------------------------------------------------------------------------------

 

hand, and M&P, on the other hand. In the event one party fails to participate in
the dispute resolution process set forth in Section 9.3, the other party can
immediately initiate mediation.
     14.3 Any Dispute that has not been resolved by negotiation or mediation as
provided herein as of the termination of the mediation and no later than 45 days
after delivery of a mediation demand shall be settled by binding arbitration in
accordance with the CPR Rules for Non-Administered Arbitration then currently in
effect, as supplemented or modified herein (the “Rules”) by three independent
and impartial arbitrators of whom each party shall designate one and those two
arbitrators shall jointly select the third arbitrator, unless they are unable to
agree on the selection of the third arbitrator, in which case the third
arbitrator shall be determined pursuant to the Rules. The arbitration shall be
governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., and judgment
upon the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. In the event one party fails to participate in accordance
with the dispute resolution process set forth in Section 9.3 or in the mediation
as set forth in Section 14.2 herein, the other party can immediately commence
arbitration. The governing law of this Agreement shall be the law used by the
arbitrators in rendering their award as set forth in Section 12, except that the
Federal Rules of Evidence shall apply and that the parties have the right and
shall be permitted to conduct and enforce full pre-hearing discovery in
accordance with and to the same extent permitted by the Federal Rules of Civil
Procedure. Pending final award, the compensation and expenses of the third
arbitrator selected by the arbitrators designated by the parties shall be split
equally between RSMM, on the one hand, and M&P, on the other hand, and each of
the parties shall bear the compensation and expenses of its designated
arbitrator. The CPR shall hold an administrative conference with counsel for the
parties within twenty (20) days after the filing of the demand for arbitration
by any one or more of the parties. The parties and the CPR shall thereafter
cooperate in order to complete the appointment of three arbitrators as quickly
as possible. Within fifteen (15) days after all three arbitrators have been
appointed, an initial meeting (which, if the arbitrators so determine, may be by
phone) among the arbitrators and counsel for the parties shall be held for the
purpose of establishing a plan for administration of the arbitration, including:
(1) definition of issues; (2) scope, timing, and types of discovery; (3)
exchange of documents and filing of detailed statements of claims, pre-hearing
memoranda and dispositive motions; (4) schedule and place of hearings; and
(5) any other matters that may promote the efficient, expeditious, and cost
effective conduct of the proceeding. The parties and the arbitrators shall
endeavor in good faith to complete the arbitration as quickly as possible. Each
party shall have the right to request that the arbitrators make specific
findings of fact.
     14.4 The majority decision of the arbitrators shall contain findings of
fact on which the decision is based, including any specific factual findings
requested by either party, and shall further contain the reasons for the
decision with reference to the legal principles on which the arbitrators relied.
Such decision of the arbitrators shall be final and binding upon the parties.
Absent agreement of the parties otherwise, the arbitration shall take place in
Minneapolis, Minnesota if the party requesting same is RSMM, or Kansas City,
Missouri, if the party requesting same is M&P. The final award may grant such
relief as authorized by the Rules, including damages and out-of-pocket costs but
which may not include exemplary or punitive damages.
     14.5 Nothing in this Agreement shall limit, interfere or delay any party
from seeking at any time interim relief from a court of competent jurisdiction.

15

--------------------------------------------------------------------------------

 

     15. Notices. Any notice, request, consent or communication under this
Agreement shall be effective only if it is in writing and (a) personally
delivered, (b) sent by certified or registered mail, return receipt requested,
postage pre-paid, (c) sent by a nationally recognized overnight delivery
service, with delivery confirmed, (d) e-mailed (with a copy simultaneously sent
by first class mail or any other delivery method permitted hereunder), or
(e) telexed or telecopied, with receipt confirmed, addressed as follows:

     
If to HRB:
  H&R Block, Inc.
 
  One H&R Block Way
 
  Kansas City, MO 64105
 
  Attn.: Brian Woram
 
  Facsimile: (816) 854-8500
 
  E-mail: Brian.Woram@hrblock.com
 
   
If to RSMM:
  RSM McGladrey, Inc.
 
  One South Wacker Drive, Suite 800
 
  Chicago, IL 60606
 
  Attn.: Peter Fontaine
 
  Facsimile: (312) 634-5513
 
  E-mail: Peter.Fontaine@rsmi.com
 
   
If to M&P:
  McGladrey & Pullen, LLP
 
  3600 American Blvd., Third Floor
 
  Bloomington, MN 55431-4502
 
  Attn: David Scudder
 
  Facsimile: (847) 517-7067
 
  E-mail: dave.scudder@rsmi.com
 
   
with a copy to:
  Katten Muchin Rosenman, LLP
 
  525 W. Monroe Street, Suite 1900
 
  Chicago, IL 60661
 
  Attn: Herbert S. Wander
 
  Facsimile: (312) 577-8885
 
  E-mail: hwander@kattenlaw.com

or such other persons or addresses as shall be furnished in writing by any party
to the other party. A notice shall be deemed to have been given as of the date
when (i) personally delivered, (ii) three (3) days after the date when deposited
with the United States mail properly addressed, (iii) when receipt of a notice
sent by an overnight delivery service is confirmed by such overnight delivery
service, or (iv) when receipt of the e-mail, telex or telecopy is confirmed, as
the case may be.
16. Withdrawal of Termination Notices; Integration. The parties hereby withdraw
their respective Termination Notices and agree that the 2006 Agreement shall
govern RSMM’s provision of the Administrative Services to M&P from the date of
this Agreement through and until April 30, 2010. The parties further agree that
no notice of termination of the 2006 Agreement or this Agreement may be issued
by either party during the period between the date

16

--------------------------------------------------------------------------------

 

of this Agreement and April 30, 2010, and that any such purported notice of
termination issued prior to April 30, 2010 shall be void and of no force or
effect. Effective as of May 1, 2010, this Agreement will amend and restate in
its entirety, and supersede and replace, the 2006 Agreement, without any further
action being required, and the 2006 Agreement shall have no further
applicability.
[Signature Pages Follow]

17

--------------------------------------------------------------------------------

 

\

THIS AGREEMENT CONTAINS AN ARBITRATION PROVISION WHICH IS BINDING ON THE PARTIES
HERETO.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.

            RSM MCGLADREY, INC.
      By:   /s/ C.E. Andrews       Name:   C.E. Andrews       Title:   President
      MCGLADREY & PULLEN, LLP
      By:   /s/ Dave Scudder       Name:   Dave Scudder       Title:   Managing
Partner    

The undersigned joins in this Agreement solely for purposes of Section 11.3:

            H&R BLOCK, INC.
      By:   /s/ Becky Shulman       Name:   Becky Shulman       Title:   S.V.P.
and C.F.O.  

18

--------------------------------------------------------------------------------

 

         

SCHEDULE 1.1
Administrative Services
Administrative Services to be provided by RSMM to M&P:

1.   Provision and maintenance of suitable office space for sublease.

2.   Recruiting, training and provision of nonprofessional staff, including
clerical services.

3.   Provision of office supplies, furniture, fixtures and equipment and
leasehold improvements.

4.   Provision of Information Systems development, management and support,
including but not limited to hardware, software, operating systems, network
systems and Internet Services.

5.   Provision and maintenance of a computer system and data processing
activities.

6.   Provision of billing services.

7.   Scheduling and payment of accounts payable.

8.   Assistance in collection of accounts receivable.

9.   Preparation of payroll and related tax matters.

10.   Records management as provided in Section 1.2.

11.   Development of policies and procedures relating to the Administrative
Services (except those relating to the performance of Public Accounting Services
or otherwise inconsistent with those adopted by M&P).

12.   Assistance in compliance with all regulatory requirements as requested by
M&P.

13.   Assistance in maintenance of the books and records of M&P.

14.   Provision of annual budgeting assistance.

15.   Provision and maintenance of a system of internal accounting.

16.   Provision of insurance policies and provision of risk manager services
except in each case, as to the professional liability of M&P, including the
gathering of underwriting data to submit to broker (payroll, losses, locations,
autos, etc.), securing and managing the third party administer to administer
workers’ compensation, general liability or auto claims that M&P may have,
obtaining Certificates or Evidences of Insurance for distribution with proposals
and reviewing contract language as it pertains to insurance.

 

--------------------------------------------------------------------------------

 

EXHIBIT 1.4
Form of Power of Attorney
LIMITED POWER OF ATTORNEY
     On this                      day of
                                        , 20___, McGladrey & Pullen, LLP, an
Iowa limited liability partnership (hereinafter referred to as “M&P”), hereby
authorizes and appoints as its attorney-in-fact RSM McGladrey, Inc. (hereinafter
referred to as “RSMM”), a corporation organized under the laws of the State of
Delaware and having its principal place of business at 4400 Main Street, Kansas
City, Missouri 64111, and its successors, to carry out its duties under the
Amended and Restated Administrative Services Agreement of even date herewith
(the “ASA”) in accordance with, but not limited to, the following:

  1.   To enter into and execute contracts (with amounts due and payable
thereunder not to exceed One Hundred Thousand Dollars ($100,000)) relating to
the performance of Administrative Services as defined in the ASA but do not
relate to the performance of Public Accounting Services; and     2.   To deposit
into M&P account(s), all funds, fees and revenues generated from the Business
and to make withdrawals from the M&P account(s) for payment to creditors,
including without limitation, RSMM and the employees of M&P and other persons
who perform services on behalf of M&P.

     This Limited Power of Attorney may be revoked by M&P at anytime with
respect to matters following the date of revocation. In the event of such
revocation, M&P shall indemnify and hold RSMM harmless for any and all costs,
expenses or damages incurred by RSMM as a result of the revocation.
     This Limited Power of Attorney shall terminate on the expiration or earlier
termination of the Administrative Services Agreement.
     All capitalized terms not otherwise defined herein shall have the meaning
given to them in that certain Administrative Services Agreement of even date
hereto.

            McGLADREY & PULLEN, LLP
      By:           Dave Scudder, Managing Partner             

               
STATE OF 
  )           ) ss.
 
 
COUNTY OF 
  )      

 

--------------------------------------------------------------------------------

 

     On this _____________ day of ___________, 20___, before me,
_______________________, a Notary public in and for said state, personally
appeared Dave Scudder of McGladrey & Pullen, LLP, who executed the above
document, and acknowledged to me that he is the Managing Partner of McGladrey &
Pullen, LLP, and executed the same for the purposes therein stated.
     IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year last above written.
                                                               

My commission expires:                           

2

--------------------------------------------------------------------------------

 

SCHEDULE 4.1.1
With reference to Section 4.1.1, the proportion of the space utilized by each
party shall be calculated as follows:

  1.   The relative use of space as between RSMM & M&P attest FTEs at the
inception of the subleases or March 1, 2010 (for purposes of FY 2011 planned
allocation) for all shared locations to determine annual base rents allocated to
each party. The proportionate share of annual base rents will be used to
allocate total location occupancy costs. A true-up calculation will be performed
on March 1st of each year.     2.   The relative use of space as between RSMM
and M&P on March 1st of each year will be used for both the current year’s
true-up calculation as well as for the initial budgeted allocation for the
following fiscal year. True-up adjustments will be made if the computed annual
base rents based on March 1 FTEs changed by more than 2% from the planned
allocation.     3.   Merged-in locations and add-on mergers will be added at the
merger inception date in the same manner as a new subleased location. These
locations will trigger an adjustment to both the number of FTEs at the inception
date and the number of FTE’s at the end of the fiscal year.     4.   If RSMM or
M&P exits a location under sublease, then that location will be removed from the
proportionate share calculation and both parties shall pay occupancy costs based
on the proportion of FTE’s as of the lease inception date.