Exhibit 10.1

PROGRAM MANAGEMENT AGREEMENT

By and Between

EMERALD FINANCIAL SERVICES, LLC,

and

BofI FEDERAL BANK

 

 

Dated as of

August 31, 2015

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TABLE OF CONTENTS

 

         Page   ARTICLE 1 DEFINITIONS; ORDER OF PRECEDENCE; RULES OF
INTERPRETATION      2   

1.1

 

Definitions

     2   

1.2

 

Order of Precedence

     14   

1.3

 

Rules of Interpretation

     14    ARTICLE 2 PROGRAM DESCRIPTION      15   

2.1

 

Establishment of the Program

     15   

2.2

 

Financial Products

     16   

2.3

 

Bank Obligations

     16   

2.4

 

EFS Obligations

     17   

2.5

 

Program Economics

     19   

2.6

 

Distributors

     19   

2.7

 

Franchisees

     19   

2.8

 

Website Supporting the Program

     20   

2.9

 

Promotion of Program; Program Marketing Plan

     20   

2.10

 

Back-Up Account Originator

     21   

2.11

 

Program Eligibility Policy

     21   

2.12

 

Servicing Responsibilities

     21   

2.13

 

Service Level Agreements

     22   

2.14

 

Expenses

     22   

2.15

 

Settlement Statements

     22   

2.16

 

Nevada Office

     22   

2.17

 

Program Infrastructure

     22   

2.18

 

Annual Program Fee

     23    ARTICLE 3 PROGRAM SUPPORT      24   

3.1

 

Communications; Dispute Resolution

     24   

3.2

 

Dispute Resolution

     25   

ARTICLE 4 DECISION-MAKING AUTHORITY; REGULATORY COORDINATION; COMPLIANCE
OBLIGATIONS; BANK OVERSIGHT; BANK COMPLIANCE PROGRAM

     26   

4.1

 

Decision-Making Authority

     26   

4.2

 

Regulatory Coordination

     27   

4.3

 

Compliance Obligations

     27   

4.4

 

Bank Oversight

     28   

4.5

 

Bank Compliance Program

     28   

 

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ARTICLE 5 EXCLUSIVITY; NEW PRODUCTS; CHANGES TO EXISTING PRODUCTS AND PROGRAM   
  29   

5.1

 

Bank’s Right to Offer Financial Products to Others

     29   

5.2

 

EFS to Offer Only Financial Products of Bank

     29   

5.3

 

EFS Right to Suspend Offering of Financial Product

     30   

5.4

 

Enhancements to Financial Products

     30   

5.5

 

Changes to Program During Tax Season

     30   

5.6

 

New Products

     31   

5.7

 

Staffing Plan

     31   

ARTICLE 6 ACCOUNT DOCUMENTATION; MARKETING; CROSS MARKETING

     31   

6.1

 

Account Documentation, Marketing Materials and Servicing Materials

     31   

6.2

 

Cross Marketing

     32   

6.3

 

Customers of Bank

     33   

6.4

 

Cross Marketing of IRAs

     33   

6.5

 

Cross Marketing of Mortgage Products

     35   

ARTICLE 7 OUTSOURCING RESTRICTIONS; SERVICE PROVIDERS

     36   

7.1

 

Outsourcing Restrictions

     36   

7.2

 

Service Providers

     37   

ARTICLE 8 AUDIT RIGHTS; REPORTING

     38   

8.1

 

Bank Audit Rights and Obligations

     38   

8.2

 

EFS Audit Rights and Obligations

     39   

8.3

 

Audits by Regulatory Authorities

     41   

8.4

 

Reporting

     41   

8.5

 

SEC Reporting and Public Announcements

     42   

8.6

 

OCC 2013-29

     43   

8.7

 

OCC Oversight

     43   

ARTICLE 9 INTELLECTUAL PROPERTY; LICENSE TO USE MARKS; OWNERSHIP RIGHTS

     43   

9.1

 

Licensing Agreements

     43   

9.2

 

Ownership and Licenses of Intellectual Property

     43   

ARTICLE 10 REPRESENTATIONS, WARRANTIES AND COVENANTS

     44   

10.1

 

EFS’s Representations, Warranties and Covenants

     44   

10.2

 

Bank’s Representations, Warranties and Covenants

     46   

10.3

 

Mutual Covenants

     48   

ARTICLE 11 CONFIDENTIALITY

     48   

11.1

 

Confidential Information

     48   

11.2

 

Limits on Use and Disclosure

     49   

11.3

 

Regulatory Requests

     50   

11.4

 

Disposition of Confidential Information

     50   

11.5

 

Unauthorized Use or Disclosure

     50   

 

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ARTICLE 12 PRIVACY AND DATA SECURITY

     51   

12.1

 

Privacy

     51   

12.2

 

Data Security

     52   

12.3

 

Collection, Ownership and Use of Program Customer Data

     53   

ARTICLE 13 EVENTS OF DEFAULT

     54   

13.1

 

EFS Event of Default

     54   

13.2

 

Bank Event of Default

     54   

ARTICLE 14 TERM AND TERMINATION

     55   

14.1

 

Term

     55   

14.2

 

Mutual Termination Rights

     56   

14.3

 

Additional Termination Rights of EFS

     56   

14.4

 

Cross Termination of Product Schedules

     57   

ARTICLE 15 RIGHTS UPON TERMINATION

     57   

15.1

 

EFS Purchase Options

     57   

15.2

 

Evaluation Data

     58   

15.3

 

Determination of Purchase Price

     58   

15.4

 

Purchase Mechanics

     59   

15.5

 

Duties After Termination or Expiration

     59   

15.6

 

Wind-Down by Bank

     60   

15.7

 

Communication with Accountholders

     61   

15.8

 

Applicability

     61   

ARTICLE 16 INDEMNIFICATION; LIMITATION OF LIABILITY

     61   

16.1

 

Indemnification of Bank by EFS

     61   

16.2

 

Indemnification of EFS by Bank

     62   

16.3

 

Notice

     63   

16.4

 

Right to Defend Claims; Coordination of Defense

     63   

16.5

 

Settlement of Claims

     64   

16.6

 

Subrogation

     64   

16.7

 

Indemnification Payments

     65   

16.8

 

Apportionment of Costs

     65   

16.9

 

Limitation of Liability

     65   

ARTICLE 17 MISCELLANEOUS

     65   

17.1

 

Assignment

     65   

17.2

 

Entire Agreement; Amendments

     65   

17.3

 

No Third-Party Beneficiaries

     66   

17.4

 

Non-Waiver of Default

     66   

 

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17.5

 

Severability

     66   

17.6

 

Further Assurances

     66   

17.7

 

Notices

     67   

17.8

 

Force Majeure

     68   

17.9

 

Interpretation

     68   

17.10

 

Exhibits and Schedules

     68   

17.11

 

No Agency

     68   

17.12

 

Relationship of Parties

     69   

17.13

 

Governing Law

     69   

17.14

 

Consent to Jurisdiction

     69   

17.15

 

Waiver of Trial by Jury

     69   

17.16

 

Cumulative Remedies; Waivers

     69   

17.17

 

Binding Agreement

     70   

17.18

 

Survival

     70   

17.19

 

Multiple Counterparts and Facsimile Signatures

     70   

Signature Page

     S-1   

 

List of Schedules

 

Schedule 2.1(a):    Financial Products By Territory Schedule 2.4(f):    EFS
Audit Plan Schedule 3.1(a)(i):    Initial Designated Executives
Schedule 3.1(b)(i):    Initial Senior Program Managers Schedule 7.1:    List of
Internationally Outsourced Service Providers Schedule 7.2(a):    Material Third
Party Service Providers Schedule 15.3:    Calculation of Fair Value of Emerald
Advance Participation Interests Schedule 15.6    Specified Parties

 

List of Product Schedules

 

Schedule A:    Prepaid Products Product Schedule Schedule B:    Refund Transfer
Product Schedule Schedule C:    Emerald Advance Product Schedule Schedule D:   
Credit Card Product Schedule Schedule E:    Deposit Products Schedule Schedule
F:    Service Level Agreements

 

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PROGRAM MANAGEMENT AGREEMENT

THIS PROGRAM MANAGEMENT AGREEMENT (this “Agreement”), dated as of August 31,
2015 is made by and between EMERALD FINANCIAL SERVICES, LLC, a limited liability
company organized under the laws of Delaware (“EFS”), and BofI FEDERAL BANK, a
federal savings bank (“Bank”). EFS and Bank are at times hereinafter referred to
as the “Parties” and each individually as a “Party.”

RECITALS:

A. Bank has purchased certain assets and assumed certain liabilities related to
accounts (“Purchased Accounts”) held by H&R Block Bank (“HRB Bank”) under an
Amended and Restated Purchase and Assumption Agreement, dated August 5, 2015
(“Purchase Agreement”).

B. HRB Tax Group, Inc., a Missouri corporation (“HRB Tax Group”), and certain of
its subsidiaries are in the business of providing (or making available through
Franchisees) tax preparation and related products and services to consumer
customers (including customers of Franchisees) (“Company Customers”) throughout
the Program Territory.

C. HRB Tax Group and EFS are indirect subsidiaries of H&R Block, Inc., a
Missouri corporation (“Block, Inc.”; and together with all its subsidiaries, the
“Company”).

D. In conjunction with other products and services offered by the HRB Tax Group
and its subsidiaries, HRB Bank developed and offered a prepaid card program and
companion financial products and services to Company Customers (collectively,
the “HRB Bank Financial Products”).

E. Concurrent with closing under the Purchase Agreement (the “Closing”), HRB
Bank will no longer offer the HRB Bank Financial Products.

F. Bank has developed, and shall continue to develop, various prepaid card
programs, under which it issues reloadable and non–reloadable prepaid cards, as
well as a series of card–related products and services in conjunction therewith,
including products and services similar to the HRB Bank Financial Products.

G. It is the intention of the Parties that upon Closing, the BINs, ICA numbers
and customer relationships related to the HRB Bank Financial Products be
transferred by HRB Bank to Bank, and that Bank thereafter offer to Company
Customers Financial Products upon terms and conditions that are the same or
substantially similar to those applicable to the HRB Financial Products, as well
as such future Bank sponsored and EFS marketed products and services as the
Parties may from time to time mutually agree (collectively, the “Program”).

H. Bank now desires to engage EFS, and EFS desires to be engaged, to serve as
program manager and provide program management and processing services in
connection with the Program subject to the terms and conditions set forth
herein.

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AGREEMENT

ACCORDINGLY, in consideration of the mutual covenants and agreements of the
Parties herein contained and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Parties hereby agree as
follows:

ARTICLE 1

DEFINITIONS; ORDER OF PRECEDENCE; RULES OF INTERPRETATION

1.1 Definitions. Capitalized terms used in this Agreement shall have the
meanings set forth below; provided, however, that with respect to any
capitalized term specifically defined in any Product Schedule, such term shall
have the meaning set forth in such Product Schedule:

“Account” means (a) each loan account, deposit account and prepaid account
originated by Bank for a Company Customer associated with any Financial Products
offered in connection with the Program, and (b) each Purchased Account.

“Account Documentation” means, with respect to an Account, the applications,
Accountholder agreements, disclosures, privacy notices, change of terms notices,
including any and all amendments or modifications thereto, however and wherever
stored or kept, and any other written information relating to such Account’s
terms and conditions.

“Accountholder” means any Person who holds or has held an Account.

“Accountholder Data” means all Personally Identifiable Information regarding an
Accountholder received by or on behalf of Bank or by EFS in connection with a
Financial Product, or obtained by or on behalf of Bank or EFS in connection with
an Account but shall not include Company Customer Data.

“Accounts Receivable” means any and all amounts owing from time to time by an
Accountholder on an Account, whether billed or unbilled, including any unpaid
balances for purchases, accrued finance charges, late fees and any other charges
and fees assessed on an Account.

“Acquiring IP Party” has the meaning set forth in Section 9.2(a) (Ownership of
Intellectual Property).

“Affected Party” has the meaning set forth in Section 12.2(b) (Data Security).

“Affiliate” means any Person that, directly or indirectly, through one or more
intermediaries, (a) owns or controls another Person, (b) is owned or controlled
by another Person, or (c) is under common control or ownership with another
Person, and “ownership” means the direct or indirect beneficial ownership of
more than 30% of the equity securities of a Person, or, in the case of a Person
that is not a corporation, more than 30% of the voting and/or equity interest of
such Person.

 

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“Agreement” has the meaning set forth in the Preamble.

“Applicable Law” means any and all laws, treaties, rules, regulations,
regulatory guidance and determinations of a Regulatory Authority, mandatory
written direction from a Regulatory Authority, and orders opinions and
interpretations of any Regulatory Authority, including under the Bank Secrecy
Act, UDAAP, laws relating to anti-money laundering (including customer due
diligence and enhanced due diligence necessary to meet “know your customer”
requirements), identity theft, fraud schemes, and predatory, unfair or deceptive
acts, any and all sanctions or regulations enforced by OFAC, and statutes or
regulations of any state relating to gift cards, money transmission or unclaimed
property, that are applicable to the Program, or otherwise applicable to any of
the Parties, or any Distributor or Franchisee.

“Applicant” means any Person who has submitted an application to Bank for a
Financial Product.

“Applicant Data” means all Personally Identifiable Information regarding an
Applicant received by or on behalf of Bank (including by EFS as servicer) in
connection with such Applicant’s application for a Financial Product, but shall
not include Company Customer Data or Bank Customer Data.

“Assumed Accounts Purchase Date” has the meaning set forth in Section 15.1 (EFS
Purchase Options).

“Assumed Liabilities” has the meaning set forth in Section 15.1 (EFS Purchase
Options).

“Back-Up Account Originator” has the meaning set forth in Section 2.10 (Back-Up
Account Originator).

“Back-Up Notice” has the meaning set forth in Section 2.10 (Back-Up Account
Originator).

“Bank” has the meaning set forth in the Preamble.

“Bank Corrective Plan” has the meaning set forth in Section 8.2(b) (Bank Audit
Rights and Obligations).

“Bank Customer” means any individual who has or had a banking relationship with
Bank that was not originated through the Program or acquired under the Purchase
Agreement.

“Bank Customer Data” means data relating to Bank Customers, other than Program
Customer Data.

“Bank Event of Default” has the meaning set forth in Section 13.2 (Bank Event of
Default).

“Bank Indemnified Parties” has the meaning set forth in Section 16.1
(Indemnification of Bank by EFS).

 

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“Bank Licensed Marks” means the trademarks, trade names, service marks, logos
and other proprietary designations of Bank licensed to certain subsidiaries of
Block, Inc. by Bank under the Block Licensing Agreement.

“Bank Licensing Agreement” means the Trademark Licensing Agreement substantially
in the form attached as Exhibit L to the Purchase Agreement, pursuant to which
HRB Innovations is granting a license to Bank.

“Bank Matters” has the meaning set forth in Section 4.1(a) (Bank Matters).

“Bank Rules” means the policies, procedures, operating rules and regulations of
Bank, as amended from time to time by Bank in the exercise of its reasonable
discretion, and incorporated into the Operating Procedures or Product Schedules.

“Bank Senior Program Manager” has the meaning set forth in Section 3.1(b)(i)
(Program Managers).

“Bank Service Provider” means a third-party service provider (including an
Affiliate of Bank or a Material Bank Service Provider) used by Bank in
connection with the performance of Bank’s obligations under this Agreement,
other than EFS or an EFS Service Provider.

“BIN” has the meaning set forth in Section 15.5(b) (ABA Routing Number; BIN;
ICA).

“Block, Inc.” has the meaning set forth in the Recitals.

“Block Licensing Agreement” means the Trademark Licensing Agreement
substantially in the form attached as Exhibit M to the Purchase Agreement,
pursuant to which Bank is granting a license to certain subsidiaries of Block,
Inc.

“Business Day” means any day, except a Saturday, Sunday or a federal legal
holiday.

“Claim” means any claim, demand, suit, legal action, regulatory action,
administrative action, arbitration or proceeding, including those brought in
connection with allegations of misrepresentations, breach of warranty, breach of
contract, violation of Applicable Law, unfair or deceptive acts or practices, or
otherwise seeking to recover Indemnified Losses.

“Closing” has the meaning set forth in the Recitals.

“Code” has the meaning set forth in Section 6.2(a) (Cross Marketing).

“Company” has the meaning set forth in the Recitals.

“Company Applicable Law” has the meaning set forth in Section 4.3(b) (Compliance
Obligations).

“Company Customer” has the meaning set forth in the Recitals.

 

4

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“Company Customer Data” means all Personally Identifiable Information regarding
a Company Customer or tax return information (as defined in IRC § 7216) obtained
in connection with the provision of Company products and services to such
Company Customer.

“Company Distribution Agreement” means the Company Financial Products
Distribution Agreement in substantially the form attached as Exhibit J to the
Purchase Agreement.

“Company Licensed Marks” means the trademarks, trade names, service marks, logos
and other proprietary designations of Company licensed to Bank under the Bank
Licensing Agreement.

“Company Location” means a location that is using Company Licensed Marks in the
Program Territory doing business with the public, including an electronic
location (such as a Company Website), other direct access media within the
Program Territory that is owned or operated by Company or any Franchisee
Locations.

“Company Website” means that portion of the worldwide web internet sites
operated by Company in support of the Program.

“Confidential Information” has the meaning set forth in Section 11.1(a)
(Confidential Information).

“Conversion Date” has the meaning set forth in Section 15.5(a) (Continuation of
Rights and Obligations under Agreement).

“Credit Card Product” means the H&R Block MasterCard Credit Card as described in
Schedule D (Credit Card Product Schedule).

“Data Security Requirements” has the meaning set forth in Section 12.2(a) (Data
Security).

“Deposit Products” means the individual retirement accounts as described in
Schedule E (Deposit Product Schedule).

“Designated Executive” has the meaning set forth in Section 3.1(a)(i)
(Designated Executives).

“Disclosing Party” has the meaning set forth in Section 11.2(b) (Limits on Use
and Disclosure).

“Dispute” has the meaning set forth in Section 3.2(a) (Dispute Resolution).

“Disputed Program Change Notification” means written notice (that has been
delivered in compliance with Section 17.7 (Notices)) describing with
particularity the Party’s basis for disputing a Program Change covered by such
notice.

“Distributors” means HRB Tax Group, HRB Enterprises, HRB Eastern Enterprises and
HRB Digital.

 

5

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“Durbin Regulatory Event” shall have occurred if, for any reason, the applicable
Financial Products, as currently structured, do not qualify to receive the
highest interchange fees permitted for federally insured depository
institutions.

“Effective Date” means the Closing Date (as defined in the Purchase Agreement).

“EFS” has the meaning set forth in the Preamble.

“EFS Audit Parties” means EFS and any of its Affiliates that are specifically
covered by the EFS Audit Plan.

“EFS Audit Plan” means an audit plan with respect to the Financial Products
maintained by EFS and approved by Bank in the form set forth as Schedule 2.4(f)
(EFS Audit Plan), except as otherwise from time to time agreed between the
Parties in writing or required by Applicable Law, as determined by Bank in its
reasonable discretion.

“EFS Corrective Plan” has the meaning set forth in Section 8.1(b) (Bank Audit
Rights and Obligations).

“EFS Event of Default” has the meaning set forth in Section 13.1 (EFS Event of
Default).

“EFS Indemnified Parties” has the meaning set forth in Section 16.2
(Indemnification of EFS by Bank).

“EFS Matters” has the meaning set forth in Section 4.1(b) (EFS Matters).

“EFS Purchase Option” has the meaning set forth in Section 15.1 (EFS Purchase
Options).

“EFS Senior Program Manager” has the meaning set forth in Section 3.1(b)(i)
(Program Managers).

“EFS Service Provider” means a third-party service provider (including an
Affiliate of EFS but excluding Franchisees) used by EFS in connection with the
performance of EFS’s obligations under this Agreement, including a Material EFS
Service Provider. For the avoidance of doubt, a third-party service provider
that enters into a tri-party agreement among itself, EFS and Bank is an EFS
Service Provider.

“Emerald Advance” means an open-end line of credit offered by Bank under the
Program whereby Company Customers may obtain credit as further described in
Schedule C (Emerald Advance Product Schedule).

“Emerald Card” means a reloadable, general purpose debit card associated with a
demand deposit account offered by Bank to Company Customers under the Program as
further described in Schedule A (Prepaid Products Product Schedule).

“Event of Default” means any EFS Event of Default or Bank Event of Default.

 

6

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“Executive Officer” has the meaning set forth in Section 3.2(b) (Dispute
Resolution).

“Exercise Notice” has the meaning set forth in Section 15.1 (EFS Purchase
Options).

“Final Wind-Down Date” has the meaning set forth in Section 15.6 (Wind-Down by
Bank).

“Financial Products” means the Prepaid Products, Refund Transfer, Emerald
Advance, Credit Card Product, and any New Product, in each case offered by Bank
and distributed by EFS pursuant to this Agreement.

“FIS” means Fidelity National Information Services, Inc., and its Affiliates.

“Force Majeure Event” has the meaning set forth in Section 17.8(a) (Force
Majeure).

“Franchisee” means a Person party to a Franchisee Distribution Agreement with
Bank and EFS. No H&R Block franchisee that has not signed a Franchisee
Distribution Agreement with Bank may participate in the Program or be considered
a Franchisee under this Agreement.

“Franchisee Distribution Agreement” means the Franchisee Financial Products
Distribution Agreement in substantially the form attached as Exhibit K to the
Purchase Agreement.

“Franchisee Location” means any physical retail office open to the public for
the preparation of Returns operated by any Franchisee.

“GLBA” means, collectively, Title V – Privacy of the Gramm–Leach–Bliley Act,
P.L. 106–102 and implementing regulations promulgated thereunder, and the
standards for safeguarding customer information set forth in 12 CFR Part 364 and
16 CFR Part 314, all as they may be amended, supplemented and/or interpreted in
writing from time to time by any federal Regulatory Authority.

“HRB Bank” has the meaning set forth in the Recitals.

“HRB Bank Financial Products” has the meaning set forth in the Recitals.

“HRB Digital” means HRB Digital LLC, a Delaware limited liability company.

“HRB Eastern Enterprises” means H&R Block Eastern Enterprises, Inc., a Missouri
corporation.

“HRB Enterprises” means H&R Block Enterprises LLC, a Missouri limited liability
company.

“HRB Innovations” means HRB Innovations, Inc., a Delaware corporation.

“HRB Tax Group” has the meaning set forth in the Recitals.

 

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“ICA” has the meaning set forth in Section 15.5(b) (ABA Routing Number; BIN;
ICA).

“Indemnification Threshold Amount” has the meaning set forth in Section 16.7(a)
(Indemnification Payments).

“Indemnified Losses” means any and all losses, liabilities, costs and expenses
of any kind, nature or description imposed or incurred in connection with this
Agreement (including reasonable attorneys’ fees and expenses, reasonable
out-of-pocket costs, interest and penalties), settlements, equitable relief,
judgments, damages (including liquidated damages), claims (including counter and
cross-claims, and allegations whether or not proven) demands, offsets, defenses,
actions, investigations or proceedings by whomsoever asserted (including
Regulatory Authorities).

“Indemnified Party” has the meaning set forth in Section 16.3 (Notice).

“Indemnifying Party” has the meaning set forth in Section 16.3 (Notice).

“Intellectual Property” means, on a worldwide basis, any and all: (i) rights
associated with works of authorship, including copyrights, moral rights and
mask-works; (ii) trademarks and service marks and the goodwill associated
therewith; (iii) trade secret rights; (iv) patents, designs, algorithms and
other industrial property rights; (v) other intellectual and industrial property
rights of every kind and nature, however designated, whether arising by
operation of law, contract, license or otherwise; and (vi) applications,
registrations, renewals, extensions, continuations, divisions or reissues
thereof now or hereafter in force (including any rights in any of the
foregoing).

“IP Owner” has the meaning set forth in Section 9.2(a) (Ownership of
Intellectual Property).

“IRA Accounts” means traditional, rollover, and Roth individual retirement
accounts from time to time offered by Bank.

“Knowledge” means, with respect to EFS the actual and imputed knowledge, after
reasonable inquiry, of the Chief Financial Officer of Block, Inc., President or
most senior executive officer of EFS, CFO or most senior financial officer of
EFS and COO or most senior operations officer of EFS, and with respect to Bank,
the actual and imputed knowledge, after reasonable inquiry, of the chief
executive officer, the chief financial officer and the chief operating officer
of Bank.

“Marketing Deadline” means (a) with respect to Emerald Advance, September 15th
of each Program Year, and (b) for all other Financial Products, October 15th of
each Program Year.

“Marketing Materials” means all advertisements, brochures, applications,
telemarketing scripts, point of purchase displays, packaging, television
advertisements, radio advertisements, electronic web pages, electronic web
links, and any other type of advertisement, solicitation material, or
interactive media developed, launched or distributed for purposes of marketing
or promoting the Program, including any and all amendments or modifications
thereto, however stored or kept.

 

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“Marketing Templates” has the meaning set forth in Section 2.9(a) (Promotion of
Program; Program Marketing Plan).

“Material Bank Service Provider” has the meaning set forth in Section 7.2(a)
(Service Providers).

“Material EFS Service Provider” has the meaning set forth in Section 7.2(a)
(Service Providers).

“Mortgage Products” means residential real estate secured loan products as from
time to time offered by Bank.

“New Product” has the meaning set forth in Section 5.6(a) (New Products).

“New Product Offering Plan” has the meaning set forth in Section 5.6(a) (New
Products).

“No Interest Notice” has the meaning set forth in Section 15.1 (EFS Purchase
Options).

“Nominated Purchaser” has the meaning set forth in Section 15.1 (EFS Purchase
Options).

“Non-Surviving Obligations” means the obligations of a Party set forth in this
Agreement that do not continue following a Termination Date, which include the
obligations under Sections 5.2 (EFS to Offer only Financial Products of Bank)
and 6.2(a) (Cross Marketing).

“Notified Party” has the meaning set forth in Section 8.5 (SEC Reporting and
Public Announcements).

“Notifying Party” has the meaning set forth in Section 8.5 (SEC Reporting and
Public Announcements).

“OCC” means the Office of the Comptroller of the Currency.

“OFAC” means the Office of Foreign Assets Control.

“Operating Procedures” has the meaning set forth in Section 2.12(a) (Servicing
Responsibilities).

“Party” has the meaning set forth in the Preamble.

“Payment Network” means MasterCard, Visa and any other network, including reload
networks, as selected by EFS and approved by Bank (such approval not to be
unreasonably withheld), facilitating financial transactions through the use of a
credit, debit or prepaid product.

 

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“Payment Network Rules” means (i) the applicable bylaws, rules, bulletins,
regulations, documentation and manuals promulgated or adopted by each of the
Payment Networks, and (ii) any applicable rule or requirement of NACHA - The
Electronic Payments Organization, in each case as such rules, manuals and other
items may be amended or supplemented from time to time.

“Performance Material Adverse Effect” means, with respect to a Party, any event,
change, occurrence or effect that, individually or in the aggregate, has or
could be reasonably anticipated to have a material and adverse effect on such
Party’s ability to perform its duties and obligations under the terms of this
Agreement (including the Product Schedules).

“Person” means and includes any individual, partnership, joint venture,
corporation, limited liability company, bank, trust, unincorporated
organization, government or any department, agency or instrumentality thereof.

“Personally Identifiable Information” means any information that alone, or in
combination with other information, relates to a specific, identifiable
individual or can be used to identify an individual, including any information
defined as “nonpublic personal information” for purposes of GLBA.

“Pilot Program” has the meaning set forth in Section 2.10(b) (Back-Up Account
Originator)

“Prepaid Products” means the Emerald Card, employee incentive cards and gift
cards co-branded with Company’s name as offered by Bank under the Program, in
each case as further described in Schedule A (Prepaid Products Product
Schedule).

“Privacy Notice” has the meaning set forth in Section 12.1(b) (Privacy Notice).

“Processing Services” means any and all services necessary or convenient for
operation of the Program, including the issuance of cards or the processing of
transactions or settlements in accordance with applicable Payment Network Rules
and Applicable Law. Such services shall include: set-up and maintenance of
cardholder accounts, transaction authorization, processing, clearing and
settlement, Payment Network access, cardholder dispute resolution, Payment
Network compliance, regulatory compliance, security and fraud control, customer
service, collections and activity reporting.

“Processor” means a third-party provider of some or all of the Processing
Services, including any EFS Service Provider and any Bank Service Provider.

“Product Schedules” means the product schedules set forth in Schedule A (Prepaid
Products), Schedule B (Refund Transfer), Schedule C (Emerald Advance), Schedule
D (Credit Card Product), and Schedule E (Deposit Product).

“Program” has the meaning set forth in the Recitals.

“Program Change” means any change to the terms, pricing, conditions,
underwriting or other characteristics of, or the Account Documentation,
Marketing Materials, Servicing

 

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Materials or any other Program documentation or requirements for, any Financial
Product, or any other aspect of the Program or the obligations of EFS or Bank
under the Program, made after the date of this Agreement.

“Program Customer” means any Accountholder or any Applicant.

“Program Customer Data” means Accountholder Data and Applicant Data.

“Program Data Site” means a secure content management website containing the
Operating Procedures and other documents agreed by the Parties for the Program
as set forth in this Agreement.

“Program Eligibility Policy” means the policies, procedures, strategies,
guidelines and implementation procedures for the establishment and maintenance
of Financial Products and the extension of credit thereunder, if applicable,
including all Account eligibility decisioning activities (including application
decisioning criteria/procedures, score cutoff strategies, judgmental decisioning
policies/procedures and screenings relating to anti-money laundering, Bank
Secrecy Act, OFAC and customer identification programs) and Account management
activities (including authorizations, line management, delinquency management,
fraud monitoring and plastic reissue strategies).

“Program Fee” has the meaning set forth in Section 2.18(a) (Annual Program Fee).

“Program Guidelines” means the policies, procedures and guidelines for the
operation of the Program and the distribution of the Financial Products by the
Distributors and the Franchisees.

“Program Marketing Plan” has the meaning set forth in Section 2.9(e) (Promotion
of Program; Program Marketing Plan).

“Program Material Adverse Effect” means any event, change, occurrence or effect
that, individually or in the aggregate, has or could be reasonably anticipated
to have a material and adverse effect upon the financial or other performance of
the Program as set forth on its pro forma financial statements as developed by
the Parties.

“Program Territory” means the United States, Guam, Puerto Rico and certain U.S.
military bases outside the United States as identified in Schedule 2.1(a)
(Financial Products by Territory).

“Program Year” means the twelve-month period commencing on July 1st of each
calendar year (or as applicable, a shorter period for the first Program Year)
and ending on June 30th of the following calendar year.

“Prospect Data” means all Personally Identifiable Information regarding a
Prospective Customer used by the Parties in connection with determining whom to
solicit for the Program.

 

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“Prospective Customer” means Company Customers and any other Persons selected by
the Parties to receive Program offers.

“Purchase Agreement” has the meaning set forth in the Recitals.

“Purchase Option Exercise Period” has the meaning set forth in Section 15.1 (EFS
Purchase Options).

“Purchase Option Expiration Date” means, with respect to any one or more Product
Schedules or the entire Agreement, as applicable, the earliest date upon which
one of the following occurs: (a) EFS issues a No Interest Notice, (b) the
Purchase Option Exercise Period has expired without EFS issuing an Exercise
Notice, (c) the time period for EFS or its designee to enter into a purchase
agreement(s) for the purchase of the Purchased Assets and the assumption of the
Assumed Liabilities has expired and EFS or its designee has not entered into
such agreement(s) as set forth in Section 15.4 (Purchase Mechanics), (d) the
time period for EFS or its designee to consummate the purchase of the Purchased
Assets and the assumption of the Assumed Liabilities under the purchase
agreement(s) has expired and EFS or its designee has not consummated such
purchase as set forth in Section 15.4 (Purchase Mechanics), (e) the purchase and
assumption agreement for the Purchased Assets and the Assumed Liabilities has
been terminated by a Party as permitted pursuant to the terms thereof, or
(f) EFS (or its permitted designee) otherwise ceases to have the option to
purchase the Purchased Assets and assume the Assumed Liabilities.

“Purchase Price” has the meaning set forth in Section 15.3(a) (Determination of
Purchase Price).

“Purchased Accounts” has the meaning set forth in the Recitals.

“Purchased Assets” has the meaning set forth in Section 15.1 (EFS Purchase
Options).

“Reasonable and Related Outside Counsel Transaction Expenses” has the meaning
set forth in Section 15.5(c) (Conversion Costs).

“Receivables Participation Agreement” means the Emerald Advance Receivables
Participation Agreement in substantially the form of Exhibit I attached to the
Purchase Agreement, governing the ongoing purchases of Emerald Advance Accounts
Receivables and other unsecured Accounts Receivables by HRB Participant I, LLC
from Bank, which purchases and sales of receivables are intended to be true
sales for all purposes.

“Receiving Party” has the meaning set forth in Section 11.2(b) (Limits on Use
and Disclosure).

“Refund Transfer” means a banking service offered by Bank under the Program in
which Program Customers receive income tax refunds under the Program in a
limited-use deposit account via direct deposit from the U.S. Treasury, from
which amounts authorized by Program Customers are deducted and as further
described in Schedule B (Refund Transfer Product Schedule).

 

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“Regulatory Authority” means, as the context requires, any federal, state or
local, domestic, foreign or supranational governmental, regulatory or
self-regulatory authority, agency, court, tribunal, commission or other
governmental, regulatory or self-regulatory entity with jurisdiction over a
Party, any Distributor or any Franchisee.

“Regulatory Request” has the meaning set forth in Section 11.2(b) (Limits on Use
and Disclosure).

“Relevant Audit Portions” has the meaning set forth in Section 8.2(d) (EFS Audit
Rights and Obligations).

“Returns” means the federal, state and local income tax returns prepared by
Company or any of the Franchisees or by a Person using the Company Website.

“SEC” means the U.S. Securities and Exchange Commission.

“Security Breach” has the meaning set forth in Section 12.2(b) (Data Security).

“Senior Program Manager” has the meaning set forth in Section 3.1(b)(i) (Program
Managers).

“Servicing Materials” means any correspondence, documents and reports relating
to the customer servicing and collections for the Accounts, including any and
all amendments or modifications thereto, however stored or kept.

“Settlement Account” means an account used for settlement of all transactions
with respect to the Program.

“Settlement Statement” has the meaning set forth in Section 2.15 (Settlement
Statements).

“Solvent” as to a Person, means (a) the present fair salable value of such
Person’s assets is in excess of the total amount of its liabilities, (b) such
Person is presently able generally to pay its debts as they become due, and
(c) such Person does not have unreasonably small capital to carry on such
Person’s business as theretofore operated and all business in which such Person
is about to engage. The phrase “present fair salable value” of a Person’s assets
is intended to mean that value which can be obtained if the assets are sold
within a reasonable time in arms’-length transactions in an existing and not
theoretical market.

“Specified Party” means those Persons listed in Schedule 15.6 (Block Specified
Parties).

“Suspended Product” has the meaning set forth in Section 5.3 (EFS Right to
Suspend Offering of Financial Product).

“Tax Season” means the period from November 1st of a given year through
April 30th of the following year.

“Term” has the meaning set forth in Section 14.1 (Term).

 

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“Termination Date” means, as applicable, the date on which this Agreement or a
Product Schedule terminates or expires in accordance with Article 14 (Term and
Termination).

“Third Party Guidance” has the meaning set forth in Section 8.6 (OCC 2013-29).

“Transaction” means a card usage that is processed through a Payment Network and
its members, or through a Processor, including a load or reload, a deposit, a
purchase, a cash withdrawal, or a refund.

“UDAAP” means Sections 1031 and 1036 of the Dodd Frank Wall Street Reform and
Consumer Protection Act, 12 USC § 5536, and implementing regulations issued
pursuant thereto, and Federal Reserve Regulation AA, which prohibit unfair,
deceptive or abusive acts or practices.

“United States” means each of the fifty (50) states or commonwealths comprising
the United States of America and the District of Columbia.

1.2 Order of Precedence. This Agreement and the Schedules and Exhibits contain
the base terms that govern the relationship between EFS and Bank. In the event
any provision of any Schedules (including any Product Schedule) or Exhibits
conflicts with a provision of this Agreement, the provision of this Agreement
shall control, unless such provision of the Schedule (including any Product
Schedule) or Exhibit expressly states that it supersedes a
specifically-identified section of this Agreement. To the extent that there are
any inconsistencies or conflicts arising between the provisions of this
Agreement and any other agreements entered into between Bank and EFS, the
provisions of this Agreement shall control unless otherwise expressly provided
in such other agreements.

1.3 Rules of Interpretation. Unless otherwise expressly provided in this
Agreement or the context otherwise requires, the following rules apply hereto:

(a) the singular includes the plural and the plural includes the singular;

(b) all references to the masculine gender include the feminine gender (and vice
versa);

(c) “include,” “includes” and “including” are not limiting and are deemed to be
followed by the words “without limitation”;

(d) references to a particular agreement, instrument or document also refer to
and include all renewals, extensions, modifications, amendments and restatements
of such agreement, instrument or document;

(e) a reference in this Agreement to an Article, Section, Schedule or Exhibit is
to the Article, Section, Schedule or Exhibit of or to this Agreement;

(f) a reference to an Article or Section in this Agreement refers to all
sub-parts or sub-components of any such article or section, unless otherwise
indicated;

 

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(g) words such as “hereunder,” “hereto,” “hereof,” and “herein,” and other words
of like import refer to the whole of this Agreement and not to any particular
section, subsection or clause hereof;

(h) a lower-case reference in this Agreement to a “party” or “parties” includes
any Person;

(i) the headings and subheadings of the sections of this Agreement are inserted
for convenience of reference only and do not control or affect the meaning or
construction of any of the agreements, terms, covenants and conditions of this
Agreement in any manner;

(j) a reference to “unreasonably withheld” means “unreasonably withheld, delayed
or conditioned;”

(k) any approval, consent or notice required hereunder means “written approval,”
“written consent” or “written notice,” as applicable; and

(l) any reference made in this Agreement to Applicable Law means such Applicable
Law as may be amended from time to time, and to any successor Applicable Law
relating to the same subject.

(m) Any provision in this Agreement that allows a Party to unilaterally exercise
(i) reasonable discretion, (ii) a right of final approval, or (iii) similar
decision-making authority, shall automatically include a requirement that, upon
exercise of such unilateral right, and a written request by the other Party
(signed by a person, and delivered to a person, in each case included in the
definition of Knowledge), the Party exercising such unilateral right shall
provide a written explanation of the basis for such Party’s exercise of such
right.

ARTICLE 2

PROGRAM DESCRIPTION

2.1 Establishment of the Program.

(a) Commencement of Program; Program Scope. Bank and EFS shall establish the
Program within the Program Territory. Specifically, Bank and EFS shall offer
Financial Products within the United States under the Program pursuant to the
terms and conditions of this Agreement and the Product Schedules. Additionally,
Bank and EFS shall offer such Financial Products to qualified consumers in the
United States Territories of Puerto Rico, Guam and on certain U.S. military
bases as further described in Schedule 2.1(a) (Financial Products by Territory)
pursuant to the terms and conditions of this Agreement and the Product
Schedules.

(b) Account Ownership. Bank shall be the sole owner of the Accounts under the
Program. The Parties acknowledge (i) EFS’s participation interests as set forth
in the Receivables Participation Agreement, and (ii) the EFS Purchase Option.

 

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2.2 Financial Products.

(a) Prepaid Products. A description of the Prepaid Products is set forth in
Schedule A (Prepaid Products Product Schedule).

(b) Refund Transfer. A description of the Refund Transfer product is set forth
in Schedule B (Refund Transfer Product Schedule).

(c) Emerald Advance. A description of Emerald Advance product is set forth in
Schedule C (Emerald Advance Product Schedule).

(d) Credit Card Product. A description of the Credit Card Product is set forth
in Schedule D (Credit Card Product Schedule).

(e) Deposit Product. A description of the Deposit Products is set forth in
Schedule E (Deposit Products Schedule).

(f) New Products. Descriptions of New Products shall be set forth in new product
schedules, as may be agreed by the Parties from time to time pursuant to
Section 5.6 (New Products).

2.3 Bank Obligations. Subject to the terms and conditions of this Agreement,
Bank shall perform the following tasks, and such other tasks as Bank and EFS
shall mutually agree:

(a) exercise final decision-making authority with respect to whether Account
Documentation, Marketing Materials and Servicing Materials comply with
Applicable Law, as further described in Section 6.1(c) (Account Documentation,
Marketing Materials and Servicing Materials);

(b) be willing and able to offer the Financial Products to the markets described
in the Product Schedules in volumes no less than the greater of (i) the
historical volumes set forth in the Product Schedules or (ii) the projected
volumes for the current Tax Season as reasonably determined by the Parties;
subject, however, in each case to compliance with Bank’s underwriting policies
and standards for each Financial Product, and Bank’s overall risk management
policies;

(c) subject at all times to its compliance obligations under Applicable Law,
fulfill all of Bank’s obligations hereunder in accordance with the Operating
Procedures and the applicable Product Schedules;

(d) maintain all appropriate books and records reflecting Accountholder Data
with respect to the Program in accordance with the Operating Procedures;

(e) establish the Program Eligibility Policy in accordance with Section 2.11
(Program Eligibility Policy), including establishing credit criteria for the
Emerald Advance and Credit Card Product;

 

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(f) review and process Financial Product applications in accordance with the
Program Eligibility Policy and this Agreement;

(g) open and administer Accounts in connection with the Financial Products it
provides to each Applicant whom Bank has approved for issuance of a Financial
Product, including extending credit where applicable on Accounts;

(h) jointly prepare and update the Operating Procedures with EFS pursuant to
Section 2.12(a) (Servicing Responsibilities);

(i) supervise, monitor and review the offering of Financial Products at Company
Locations as set forth in Section 4.4 (Bank Oversight);

(j) design, establish and maintain a detailed compliance program as set forth in
Section 4.5 (Bank Compliance Program);

(k) in its reasonable discretion and in consultation with EFS, develop
appropriate training and informational support for Company Location personnel in
support of the Program;

(l) jointly review with EFS, and, if approved by Bank, sign, the annual Program
Marketing Plan for the marketing and promotion of the Program;

(m) review and, if Bank deems appropriate, approve the EFS Audit Plan and any
changes thereto;

(n) comply with Applicable Law, the Operating Procedures and the Payment Network
Rules applicable to Bank’s conduct of its activities with respect to the
Program; and

(o) in consultation with EFS, use commercially reasonable efforts to maintain
and enhance the technical and operational systems required to support the
Program in a manner that is competitive in the marketplace for financial
products and services that are substantially similar to, or substantially
competitive with, the Financial Products in the manner in which they are offered
to Prospective Customers, all as determined by Bank in its reasonable
discretion.

2.4 EFS Obligations. Subject to the terms and conditions of this Agreement, EFS
shall be exclusively responsible for the day-to-day management of the Program
and shall perform the following tasks and such other tasks as Bank and EFS shall
mutually agree:

(a) subject to the oversight of and final approval by Bank as set forth in
Section 6.1(b) (Account Documentation, Marketing Materials and Servicing
Materials), develop and implement Account Documentation, Marketing Materials and
Servicing Materials, and the Operating Procedures;

(b) develop, and jointly review with Bank, and after approval by Bank in Bank’s
reasonable discretion, sign, the annual Program Marketing Plan for the marketing
and promotion of the Program, and then implement the approved Program Marketing
Plan in accordance with Section 6.1(a) (Account Documentation, Marketing
Materials and Servicing Materials) and the Operating Procedures;

 

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(c) subject at all times to its compliance obligations under Applicable Law,
fulfill all of EFS’s obligations hereunder in accordance with the Operating
Procedures and the applicable Product Schedules, including distribution of all
materials developed pursuant to Section 2.4(a) and Section 2.4(b);

(d) maintain all appropriate books and records reflecting Account data with
respect to the Program as set forth in the Product Schedules and in accordance
with the Operating Procedures;

(e) provide servicing for the Financial Products and Accounts as set forth in
the Product Schedules;

(f) maintain and comply in all material respects with the EFS Audit Plan, which
is set forth in Schedule 2.4(f);

(g) comply with Applicable Law, Bank Rules and the Operating Procedures
applicable to EFS’s conduct of its activities with respect to the Program and as
from time to time instructed in writing by Bank, in the exercise of its
reasonable discretion;

(h) comply with UDAAP for the operation of the Program, as applicable to the
Program and/or as from time to time instructed in writing by Bank, in the
exercise of its reasonable discretion;

(i) subject to Bank’s approval, which approval may be granted or withheld in
Bank’s reasonable discretion, which shall be exercised in a prompt fashion, and
to Bank’s continuing oversight, develop and provide appropriate training and
informational support for Company Location personnel in support of the Program;

(j) in consultation with Bank, use commercially reasonable efforts to maintain
and enhance the technical and operational systems and equipment required to
facilitate the distribution and offering of customer servicing for the Financial
Products through Company Locations in a manner that is competitive in the
marketplace for financial products and services that are substantially similar
to, or substantially competitive with, the Financial Products in the manner in
which they are offered to Prospective Customers, all as determined by EFS in its
reasonable discretion;

(k) collect, verify and record all required customer identification information
in accordance with the Operating Procedures;

(l) subject to Bank’s approval, which approval may be granted or withheld in
Bank’s reasonable discretion, and Bank’s continuing oversight, implement the
Program Guidelines to be followed by the Franchisees and the Distributors
participating in the Program;

 

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(m) provide Bank with reports of its customer service activities in such
frequency and format as mandated by the Operating Procedures, or as Bank may
otherwise from time to time designate by written notice in the exercise of its
reasonable discretion; and

(n) regularly notify Bank of all consumer or third party complaints received in
connection with the Program, and promptly respond to, and resolve, such
complaints as instructed by Bank in the exercise of its reasonable discretion.
In addition, EFS shall cooperate with Bank in assessing and evaluating the
frequency, nature or underlying causes for any consumer complaints, and
preventing recurrence thereof.

2.5 Program Economics. The economics and accounting for the Program will be
structured on a Product Schedule-by-Product Schedule basis as set forth in each
Product Schedule.

2.6 Distributors. EFS and the Distributors will make available the Financial
Products offered by Bank to Company Customers as set forth in the Product
Schedules. Except as may otherwise be required by Applicable Law, as from time
to time determined by Bank in its reasonable discretion, Bank shall make all
Financial Products available in Company Locations (including the on-line,
digital and DIY channels) owned or operated by the Distributors as provided in
the Company Distribution Agreement. The Company Distribution Agreement shall
establish the obligations and liabilities of each of Bank, EFS and the
Distributors with respect to the other parties thereto. Any responsibilities of
EFS with respect to the Distributors are as set forth in the Company
Distribution Agreement.

2.7 Franchisees.

(a) Subject to Section 4.4 (Bank Oversight), and except as may otherwise be
required by Applicable Law, as from time to time determined by Bank in its
reasonable discretion, Bank shall make all Financial Products available to each
Franchisee in the Program Territory as provided in the Franchisee Distribution
Agreement executed by such Franchisee.

(b) Franchisees shall not be deemed third-party beneficiaries of this Agreement.

(c) Each Franchisee Distribution Agreement shall establish the obligations and
liabilities of each of Bank, EFS and the Franchisee with respect to the other
parties thereto. Any responsibilities of EFS with respect to Franchisees are as
set forth in the respective Franchisee Distribution Agreements. Notwithstanding
the foregoing, except to the extent Bank is otherwise directed by a Regulatory
Authority, or Bank’s legal counsel determines that such Franchisee’s continued
distribution of Financial Products or involvement with the Program is not
consistent with safe and sound banking practices and thus that immediate
termination of such Franchisee or the taking of enforcement action under the
Franchisee Distribution Agreement is required, Bank shall provide notice to EFS
prior to (i) withdrawing any Financial Products from distribution to any
Franchisee, or (ii) taking any enforcement actions against a Franchisee under
the Franchisee Distribution Agreement.

 

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2.8 Website Supporting the Program. EFS shall be responsible for the
establishment of Company Websites in support of and to service the Program,
subject to Bank’s approval of content related to the Program or the Financial
Products to the extent such content describes the Financial Products or is
required by Applicable Law (other than Company Applicable Law), as determined by
Bank in its reasonable discretion.

2.9 Promotion of Program; Program Marketing Plan.

(a) EFS shall market and support the Program, including complying with its
obligations regarding promotion of the Program as set forth in the then-current
Program Marketing Plan. EFS acknowledges that any use or distribution of
Marketing Materials that may not be in strict compliance with all legal and
regulatory requirements may pose regulatory, legal and reputational risks to
Bank. In order to protect against any inadvertent noncompliance with said legal
and regulatory requirements, Bank shall develop and make available to EFS by
September 1 of each Program Year, pre-approved templates of the Marketing
Materials (the “Marketing Templates”).

(b) Prior to distributing or using any Marketing Materials, EFS shall either:

(i) Ensure that the Marketing Materials conform with the then-current version of
the Marketing Templates; or

(ii) Provide a copy of any Marketing Materials that may not conform with the
Marketing Templates to Bank for its review and approval, which approval may be
given or withheld in Bank’s sole discretion to be exercised in good faith.

(c) Promptly after receipt of any Marketing Materials proposed to be used by
EFS, Bank shall give EFS written notice of (i) approval and authorization for
implementation of the Marketing Materials as presented, (ii) approval and
authorization for implementation of the Marketing Materials as revised by Bank,
or (iii) rejection of the Marketing Materials.

(d) Notwithstanding anything to the contrary herein, in no event shall EFS, or
any of its Affiliates, Franchisees, Distributors, officers, directors,
employees, representatives or agents, use or distribute any Marketing Materials
prior to meeting the requirements of either subpart (b)(i) or (b)(ii) of this
Section 2.9. It is expressly understood that Bank’s review and approval of
Marketing Materials shall be for Bank’s independent purposes, and shall not
(i) constitute an assumption of risk on the part of Bank, (ii) give rise to any
claim, action or cause of action by EFS against Bank, or (iii) release EFS from
any liability with respect to such Marketing Materials.

(e) Subject to Sections 3.1(a) (Designated Executives) and 3.1(b) (Program
Managers), EFS will propose, and Bank will (i) review a marketing plan for the
upcoming year for the Program, including a marketing calendar for the next Tax
Season, forecast of Program transactional volume, and seasonal check-ins (such
annual plan, the “Program Marketing Plan”), and (ii) if Bank so determines in
its reasonable discretion, approve the Program Marketing Plan by no later than
September 15th of each Program Year.

 

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2.10 Back-Up Account Originator.

(a) Provided that it has given Bank at least thirty (30) days’ prior written
notice (the “Back-Up Notice”) thereof, EFS may contract with another federally
insured depository institution (the “Back-Up Account Originator”) at any time to
make prior arrangements for the fulfillment of certain duties (i) after this
Agreement or any Product Schedule is terminated or expires or (ii) in the event
Bank is unable to perform its obligations under this Agreement or any of the
Product Schedules. The Back-Up Notice shall identify the Back-Up Account
Originator. EFS may provide the Back-Up Account Originator with access to the
Program agreements and such other information as is reasonably necessary to
assume Bank’s obligations under this Agreement and any of the Product Schedules,
provided that such Back-Up Account Originator agrees to confidentiality, data
security and privacy covenants in favor of Bank substantially similar to those
set forth in Articles 11 and 12.

(b) Notwithstanding any other provision of this Agreement, during the Term, the
Back-Up Account Originator and EFS may issue a limited number of Financial
Products in one or more pilot programs (each a “Pilot Program”) to ensure that
the backup system is operational, provided that such Pilot Programs shall not
involve substantial promotional efforts, or more than the minimum number of
customers reasonably necessary to test the backup system. Moreover, EFS shall
take all reasonable steps to ensure that any Pilot Program does not serve to
undermine the Program or impugn Bank or its reputation in any manner. In
addition, any Pilot Program may be expanded to cover any volume of Financial
Products necessary to achieve projected volumes desired by EFS and not agreed to
by Bank pursuant to Section 2.3(b)(ii) (Bank Obligations).

2.11 Program Eligibility Policy. Bank shall, in its sole discretion but with
such consultation with EFS as Bank reasonably deems appropriate, (a) establish
the Program Eligibility Policy for each Financial Product and Account, and
(b) provide prior written notice of any material change to the Program
Eligibility Policy to EFS.

2.12 Servicing Responsibilities.

(a) The Parties agree to, in good faith, jointly develop and implement joint
operating agreements that address the operating policies and procedures
applicable to the Program (the “Operating Procedures”), provided, however, that
in order to ensure full compliance with Applicable Law, Bank shall have a right
of final approval with respect to the Operating Procedures. The Parties shall
cooperate to review, update and modify the Operating Procedures on an ongoing
basis as appropriate. The Parties agree that they shall continue to use such
Operating Procedures in substantially the same form throughout the Term unless
changes are otherwise agreed in writing by the Parties or are required by
Applicable Law as determined by Bank in its reasonable discretion.

(b) Bank shall be responsible for monitoring and updating the Operating
Procedures to comply with changes in Applicable Law that relate to Financial
Products covered hereunder.

 

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2.13 Service Level Agreements. Except as otherwise provided in a Schedule
applicable to any Financial Product, the applicable service level agreements for
each of Bank and EFS shall be as described in Schedule F (Service Level
Agreements).

2.14 Expenses. Except as expressly set forth in this Agreement or any of the
Product Schedules or otherwise agreed by the Parties, each Party shall be
responsible for costs associated with its respective obligations under this
Agreement.

2.15 Settlement Statements. No later than the fifteenth (15th) day of each month
(if a Business Day, or if not, the next Business Day), EFS will provide to Bank
one or more monthly settlement statements (each a “Settlement Statement”)
setting forth:

(a) the total amounts for the month owed to or by EFS, Bank, any participant or
other third party pursuant to each Product Schedule and the Receivables
Participation Agreement, with line item specificity; and

(b) any other amounts owed to or by EFS, Bank, any participant or other third
party, as explicitly provided for herein, in the Receivables Participation
Agreement or as otherwise agreed by the Parties in writing, with line item
specificity, which amounts may be netted.

Each Settlement Statement shall be prepared and delivered in accordance with the
procedures and requirements set forth in the applicable Product Schedule.

2.16 Nevada Office. Bank will (i) maintain its Nevada Branch and will issue and
book the Financial Products at the Nevada Branch, (ii) take all reasonable
actions at the Nevada Branch necessary for Bank to export Nevada interest rates
(and rely upon Nevada usury rates) on the Emerald Advance and other credit
products, including the actions specified in the Emerald Advance Product
Schedule, and (iii) provide that all Account Documentation is subject to and
governed by U.S. federal and Nevada law.

2.17 Program Infrastructure. During the Term, EFS shall maintain, operate, or
engage in, as the case may be, the following items in support of the Program:

(a) Compliance Management System. EFS will maintain a compliance risk management
system, including appropriate and necessary internal controls designed to
reasonably ensure that all EFS duties, obligations, and services provided
pursuant to the Program, and the actions of any Distributors or Franchisees
participating in the Program, will be in compliance with Applicable Law, and
conform to the standards set forth in the Agreement. The Program will be
substantially in its current form, modified as reasonably requested by Bank, to
ensure compliance with Applicable Law.

(b) Quality Control. EFS shall maintain such systems and quality controls as may
be necessary or as Bank may reasonably request to (i) enable Bank to adequately
monitor the operations of the Program, (ii) react to fraud and promptly, when
necessary, respond to and resolve consumer complaints and inquiries so that risk
is managed and complaints are reasonably addressed and (iii) provide reports
summarizing information as Bank may reasonably require.

 

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(c) Documentation Review and Approval. EFS shall ensure that any of Account
Documentation, Marketing Materials, Program Eligibility Policy, Program
Guidelines, and Program Documents (including any changes thereto) over which it
has ownership and responsibility are in compliance with Applicable Law. EFS
shall submit such Marketing Materials, Program Guidelines, and Program Documents
to Bank for review and approval prior to use, such approval not to be
unreasonably withheld.

(d) Distributor Relationships. EFS shall maintain Bank approved Company
Distribution Agreements with all Distributors, maintain appropriate records with
respect to each and every Distributor performing under the Program, and provide
reports to Bank with respect to such Distributors in a form and manner as the
Bank may reasonably require.

(e) System Access. EFS shall provide Bank with access to all reports and such
other data and information as Bank reasonably requests to facilitate settlement,
balance and reconcile accounts, monitor for fraudulent financial transactions,
and to comply with Bank Secrecy Act and OFAC obligations. Program Manager shall
provide summaries in various forms as reasonably requested by Bank in order to
monitor performance of EFS.

2.18 Annual Program Fee.

(a) May 31st Program Fee Payment. On May 31st of each year during the Term of
this Agreement, EFS will pay to Bank a program fee (the “Program Fee”) of $7.5
million, in addition to fees otherwise due hereunder.

(b) Partial Program Fee Payment Provisions. During the Term of this Agreement
with respect to any partial year between June 1st of a given year and May 31st
of the following year:

(i) if termination of this Agreement occurs on or after June 1st, but prior to
the start of the first full calendar month after the anniversary of the
Effective Date, no partial Program Fee will be due; or

(ii) if termination of this Agreement occurs after the start of the first full
calendar month after the anniversary of the Effective Date, but prior to the
subsequent May 31st, then a partial Program Fee will be due. The partial portion
of $7.5 million Program Fee will be an amount equal to $625,000 multiplied by
the number of full calendar months between the anniversary of the Effective Date
and the date of termination of this Agreement.

 

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ARTICLE 3

PROGRAM SUPPORT

3.1 Communications; Dispute Resolution.

(a) Designated Executives.

(i) Each Party shall designate one or more of its senior executives to serve as
a high level point of contact to facilitate the efficient operation of the
Program (each a “Designated Executive”). The initial Designated Executives are
set forth in Schedule 3.1(a)(i) (Initial Designated Executives).

(ii) The Designated Executives shall communicate as needed to discuss the
Program and address any issues that may arise in connection therewith.

(b) Program Managers.

(i) Each Designated Executive shall appoint a senior officer to facilitate the
overall management of the Program under this Agreement (respectively, the “Bank
Senior Program Manager” and “EFS Senior Program Manager”, and each, a “Senior
Program Manager”). The names of the individuals initially designated as the EFS
Senior Program Manager and Bank Senior Program Manager are set forth in Schedule
3.1(b)(i) (Initial Senior Program Managers). Each Senior Program Manager shall
have sufficient knowledge and experience to effectively and efficiently perform
his or her responsibilities. Each Party shall endeavor to provide stability and
continuity in the Senior Program Manager positions.

(ii) The Senior Program Managers shall review all changes to terms and
conditions of the Financial Products offered by Bank as part of the Program,
including Bank pricing and Program Eligibility Policy, and to EFS’s manner of
offering the Financial Products and administering the Program through the
Distributors and Franchisees.

(c) Roles and Responsibilities of Senior Program Managers.

(i) The Senior Program Managers shall have the responsibility to coordinate,
handle and make decisions regarding the day-to-day operations for the Program.

(ii) In the event of a situation that either Party determines in good faith to
be an “emergency,” each of the Senior Program Managers shall have the
responsibility to promptly notify the other Senior Program Manager and each
shall promptly notify the appropriate officers within its respective
organization of such emergency.

(d) The Parties shall work together in good faith to facilitate the
implementation of the Program, conduct the Program in an efficient manner,
provide for appropriate advance planning and such other coordination as shall be
necessary or appropriate.

 

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3.2 Dispute Resolution.

(a) In the event of any dispute, controversy, or claim arising out of or
relating to this Agreement or the making, construction, interpretation,
performance, breach, termination, enforceability or validity thereof
(hereinafter, a “Dispute”), the Party raising such Dispute shall provide written
notice to the other Party promptly. The Parties shall cooperate and attempt in
good faith to resolve any Dispute promptly by negotiating between Persons who
have authority to settle the Dispute and who are at a higher level of management
than the Persons with direct responsibility for administration and performance
of the provisions or obligations of this Agreement that are the subject of the
Dispute. Notwithstanding the foregoing, the failure of a Party to promptly
provide notice of a Dispute, does not waive any rights of such Party with
respect to such Dispute (except to the extent of harm caused by the failure to
give prompt notice).

(b) To the extent that Disputes remain unresolved within seven (7) Business Days
of being raised, or such other date as agreed between the Chief Financial
Officer of Block Inc. and the Chief Executive Officer of Bank, such Dispute
shall immediately be referred to the Chief Financial Officer of Block Inc. and
the Chief Executive Officer of Bank, or their respective designees (each, an
“Executive Officer”), for their review and resolution.

(c) If and only after Executive Officers are unable to reach an agreement within
seven (7) Business Days of such referral, the Parties may pursue their
respective remedies or exercise their respective rights pursuant to the Program,
this Agreement, any of the Product Schedules, any of the Financial Products, or
the agreements and transactions contemplated hereby and thereby, including a
court action for appropriate remedies, including damages and injunctive relief.

(d) Except as expressly set forth herein, nothing in this Section 3.2 shall
limit a Party’s right to give notice of termination or otherwise pursue its
right to terminate this Agreement or any Product Schedule or pursue any other
rights set forth in this Agreement or relevant Product Schedule.

(e) Notwithstanding anything to the contrary in this Agreement, with respect to
any Financial Product being offered during a Program Year or planned for an
upcoming Tax Season, if a Dispute arises regarding a particular Financial
Product with respect to the (i) terms and conditions of the then-current
offering of such Financial Product, including such Financial Product’s features,
Accountholder terms and conditions, functionality or availability compared to
those of its prior offering or (ii) manner in which it is being offered or was
most recently offered, then either Party may unilaterally elect to have the
Dispute immediately escalated to the Executive Officers for review and
resolution.

(f) The foregoing provisions of this Section 3.2 notwithstanding, each of Bank
and EFS shall have the right to take any action that it is advised by outside
counsel is required by

 

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Applicable Law, or refrain from taking any action that it reasonably determines
or is advised by counsel is prohibited by Applicable Law, without first
complying with the Dispute resolution procedures set forth herein.

ARTICLE 4

DECISION-MAKING AUTHORITY; REGULATORY COORDINATION; COMPLIANCE OBLIGATIONS;

BANK OVERSIGHT; BANK COMPLIANCE PROGRAM

4.1 Decision-Making Authority.

(a) Bank Matters. Subject to Applicable Law and the provisions hereunder, Bank
shall have decision-making authority with respect to the following matters:

(i) compliance with respect to Applicable Law (other than Company Applicable
Law);

(ii) use of Bank Licensed Marks;

(iii) changes to Bank information technology and processing systems that would
not be reasonably likely to have a Program Material Adverse Effect;

(iv) compliance with respect to bank-related regulatory matters, including
changes required by Applicable Law;

(v) Bank capital expenditures;

(vi) management and retention of Bank personnel;

(vii) establishment of Program Eligibility Policy;

(viii) Financial Product descriptions and Account Documentation required by
Applicable Law;

(collectively, the “Bank Matters”).

(b) EFS Matters. Except to the extent reserved to Bank in Section 4.1(a),
subject to Applicable Law and the provisions hereunder, EFS shall have
decision-making authority with respect to the following matters:

(i) compliance with respect to Company Applicable Law;

(ii) use of Company Licensed Marks;

(iii) changes to EFS information technology and processing systems that would
not be reasonably likely to have a Program Material Adverse Effect;

(iv) compliance with respect to tax preparation-related matters, including
changes required by Applicable Law;

(v) EFS capital expenditures;

 

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(vi) management and retention of EFS personnel;

(vii) execution of the Program Marketing Plan in Company Locations;

(viii) marketing design and development of the Program Marketing Plan;

(ix) distribution of Financial Products through Company Locations; and

(x) customer service for the Financial Products and Accounts arranged by EFS
consistent with the Product Schedules.

(collectively, the “EFS Matters”).

4.2 Regulatory Coordination. The Parties shall cooperate in (i) analyzing and
reacting to pending material Applicable Law changes and discussing regulatory
developments affecting the Program, including any of the Financial Products or
Accounts established thereunder, and (ii) subject to Applicable Law regarding
the confidentiality of Bank supervisory matters, responding to Regulatory
Authorities regarding regulatory-related requests to the Parties.

4.3 Compliance Obligations.

(a) Bank shall have final decision making authority with respect to any issues
involving compliance of the Program or any aspect thereof with Applicable Law,
Bank Rules and Payment Network Rules, including issues arising in connection
with disclosure and compliance requirements for Financial Products and Accounts.
Subject to the requirements of Section 4.2 (Regulatory Coordination), if Bank,
as determined by Bank in its reasonable discretion, determines that certain
changes to the Program are necessary solely to comply with Applicable Law and
Payment Network Rules, the Parties shall work together in good faith with
respect to any such changes prior to their implementation.

(b) Except to the extent that any such matters relate to compliance of the
Program with Applicable Law as set forth in Section 4.3(a), EFS shall be solely
responsible for decisions regarding compliance with Applicable Law related to
EFS and Company operations, including (i) tax preparation and tax-related
products and services (other than the Financial Products), and (ii) disclosure,
licensing and compliance requirements of EFS and Company related to EFS and
Company operations (“Company Applicable Law”).

(c) Each Party shall cooperate in a commercially reasonable manner with the
other Party in support of and compliance with any Program policies implemented
by such Party that are required by Applicable Law.

(d) Each Party shall offer Financial Products and maintain the Accounts in
compliance with Applicable Law. In addition to the compliance obligations set
forth in this Agreement, any of the Product Schedules or the Program Data Site,
EFS shall advise Bank with respect to any Applicable Law with which EFS
reasonably believes Bank must comply in connection with the Program, and Bank
shall advise EFS with respect to any Applicable Law with which Bank reasonably
believes EFS must comply in connection with the Program.

 

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4.4 Bank Oversight. The Parties acknowledge and agree that Bank has the right
and the duty to supervise, monitor and review the provision of the Financial
Products, Accounts and related services offered under the Program, including at
Company Locations. Subject to at least three (3) days’ advance notice to EFS and
Company Locations (other than with respect to Bank’s rights to use “mystery
shoppers” pursuant to Section 8.1(a) (Bank Audit Rights and Obligations), for
which advance notice shall not be required), Bank and its designated third-party
representatives shall have access rights to Company Locations in order to
supervise, monitor, review and audit the activities at such Company Locations to
ensure that such activities comply with the Operating Procedures, and Applicable
Law. EFS shall, as soon as reasonably practicable, take all actions reasonably
necessary to remedy any non-compliance identified pursuant to Bank’s supervisory
rights under this Section 4.4, including causing such remedial actions to be
taken at the applicable Company Locations.

4.5 Bank Compliance Program.

(a) Bank shall design, establish and maintain a detailed compliance program
consistent with this Agreement, to ensure adequate monitoring, supervision and
control over EFS and the Program activities that EFS performs for Bank and the
Financial Products offered and Accounts maintained by Bank. The compliance
program shall include, at a minimum, the following features:

(i) The compliance program shall be reviewed by Bank’s board of directors and
senior management not less frequently than annually.

(ii) Bank shall designate a compliance officer responsible for the development,
implementation and management of Bank’s compliance program. The compliance
officer shall have responsibility for the oversight of EFS’s performance of
customer servicing activities related to the Program, the Financial Products and
Accounts offered by Bank.

(iii) Not less frequently than annually, Bank shall conduct a compliance risk
assessment for the Program. Bank and EFS shall cooperate to develop a true and
comprehensive depiction of actual risks in the Program.

(iv) Not less frequently than annually, the Bank compliance officer shall review
the compliance program to determine if EFS is operating in accordance with
Bank’s established policies and procedures regarding the activities relating to
the Program, the Financial Products and Accounts offered by Bank.

(v) Bank shall conduct an annual internal or external audit review of the
compliance program, which shall include a review and update of the training
program and training materials.

 

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(vi) Bank shall require the compliance officer to provide annual written
compliance and audit reports to Bank’s board of directors. Such reports shall
include evidence of appropriate remedial actions taken (or to be taken) to
address any identified deficiencies in the compliance program.

(vii) Bank shall develop and maintain a system for tracking and recording
consumer complaints regarding the Program in a timely manner. The compliance
officer shall provide an annual written report of consumer complaints regarding
the Program, and the resolution of such complaints, to Bank’s board of
directors.

(viii) Bank shall maintain a review process for all Account Documentation,
Marketing Materials and Servicing Materials used in the Program.

(ix) Bank shall comply with any other requirements or conditions that a
Regulatory Authority deems appropriate for Bank with regard to the Program.

(x) EFS may, with the consent of Bank (such consent not to be unreasonably
withheld), implement compliance standards and practices for the Program that
supplement, but do not conflict, with those prescribed by Bank.

(xi) EFS may, with the consent of Bank (such consent not to be unreasonably
withheld), implement compliance standards and practices for the Program that
implement legal stipulations, settlements and contractual agreements with third
parties.

ARTICLE 5

EXCLUSIVITY; NEW PRODUCTS;

CHANGES TO EXISTING PRODUCTS AND PROGRAM

5.1 Bank’s Right to Offer Financial Products to Others. Except as set forth in
Section 6.2(b) (Cross Marketing) and Article 12 (Privacy and Data Security),
nothing in this Agreement is intended or shall be construed to prohibit or limit
Bank’s right to offer financial products and services that are similar to the
Financial Products, with or through any Person.

5.2 EFS to Offer Only Financial Products of Bank.

(a) At Company Locations, EFS and its Affiliates will offer and distribute only
Bank’s Financial Products, and will not offer or distribute financial products
issued or originated by other insured depository institutions that are
substantially similar to the Financial Products, except:

(i) as otherwise provided in this Agreement;

 

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(ii) for financial products issued or originated after the termination of this
Agreement or, with respect to a particular financial product, after the
termination of the Product Schedule for the substantially similar Bank Financial
Product;

(iii) EFS and its Affiliates shall have the right to offer a “second look”
program with a different set of eligibility criteria for selected Financial
Products for which Bank has declined to offer based on those eligibility
criteria; and

(iv) any entity that becomes an Affiliate of Company after the date of this
Agreement may continue to offer financial products of another insured depository
institution that are substantially similar to the Financial Products, if such
Affiliate was offering such financial products prior to such Affiliate being
acquired by, or otherwise becoming an Affiliate of, Company.

(b) Nothing in this Agreement is intended or shall be construed to prohibit or
limit the rights of EFS and its Affiliates to offer or distribute any other
financial product or service that is not substantially similar, in all respects,
to a Financial Product.

5.3 EFS Right to Suspend Offering of Financial Product. Notwithstanding any
other provision of this Agreement, EFS and its Affiliates shall have the right,
in their sole discretion, to suspend the offering of one or more Financial
Products (a “Suspended Product”) in one or more states (or other jurisdictions)
without terminating the relevant Product Schedules or triggering a termination
right under this Agreement; provided, however, that following any such
suspension if EFS elects to resume offering any such Suspended Product during
the Term, EFS shall offer such Suspended Product only through Bank.

5.4 Enhancements to Financial Products. Bank and EFS may agree upon enhancements
or other changes to the Financial Products offered under the Program. The
Parties shall periodically meet to discuss new features or functionalities to
existing Financial Products under the Program. After approval by both Parties,
the offering of such new features or functionalities to existing Financial
Products shall be implemented by a written amendment of the relevant Product
Schedule(s).

5.5 Changes to Program During Tax Season. Notwithstanding any other provision of
this Agreement or any Product Schedule:

(a) Unless otherwise permitted under this Agreement, any changes proposed for
the Program shall require the prior consent of Bank and EFS. Bank shall use
commercially reasonable efforts in good faith to delay any changes to Financial
Products until the conclusion of the Tax Season. Bank may not require that EFS
make changes to or cease offering any Financial Product during a Tax Season,
unless Bank has received a specific written directive from its primary federal
regulator that changes to, or cessation of the offering of, a Financial Product
are required, provided, however, that before requiring EFS to cease offering a
Financial Product during the Tax Season, Bank shall make reasonable efforts to
work with EFS to make changes to the Financial Product or the distribution of
such product to address regulatory concerns.

(b) If there are any potential material changes to the Program of which Bank is
aware or contemplates implementing, Bank shall promptly notify EFS of such
potential material changes.

 

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5.6 New Products.

(a) EFS and Bank may agree to offer a new financial product or service by
developing, negotiating and executing a plan to offer the new product (a “New
Product Offering Plan”) and a new product schedule (when so finalized, a “New
Product”). Upon execution of the new product schedule and the New Product
Offering Plan, the New Product will become a Financial Product and the product
schedule will become a Product Schedule, covered by the Program and subject to
the terms of this Agreement.

(b) Nothing in this Agreement is intended or shall be construed to require
(i) Bank to offer or distribute any proposed new product developed by EFS;
(ii) Bank to offer or distribute through EFS and its Affiliates any proposed new
product that Bank develops; (iii) EFS to give Bank a first look or right of
first refusal on any proposed new product developed by EFS; or (iv) Bank to give
EFS a first look or right of first refusal to distribute or service any proposed
new product developed by Bank.

5.7 Staffing Plan. Bank shall develop and implement a Staffing Plan designed to
ensure adequate support of the Program, including the compliance obligations
associated therewith, which is acceptable to Bank’s regulators. Bank shall make
each of Bank’s employees or independent contractors assigned to assist on
matters relating to or in connection with the Program or this Agreement aware of
the confidentiality provisions of Section 11.2 (Limits on Use and Disclosure)
(unless such contractors are subject to independent duties of confidentiality).

ARTICLE 6

ACCOUNT DOCUMENTATION; MARKETING; CROSS MARKETING

6.1 Account Documentation, Marketing Materials and Servicing Materials.

(a) EFS shall be responsible for implementing the Program Marketing Plan
consistent with Company’s tax services marketing plan and the terms of this
Agreement and will review the Program Marketing Plan, Marketing Materials and
Marketing Template with Bank.

(b) EFS shall be responsible for developing, modifying, and implementing the
Account Documentation, Marketing Materials, and Servicing Materials, subject to
final approval by Bank, including approval with respect to any content
(i) required by Applicable Law, or (ii) containing Bank Licensed Marks, unless
use is in a format preapproved by Bank. Material changes to Account
Documentation, Marketing Materials, and Servicing Materials by EFS shall require
the prior approval of Bank, as soon as practicable and in no event later than
five (5) Business Days after notice, and shall be paid for in their entirety by
EFS. EFS shall administer

 

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Accounts in compliance with Account Documentation, Applicable Law, Bank Rules
and Payment Network Rules, and clearly disclose in any cardholder agreement all
fees to be paid by Accountholders and/or Applicants. All dormant Accounts will
be processed in accordance with Applicable Law, including relevant escheat and
abandonment statutes.

(c) Bank shall have final decision-making authority with respect to Account
Documentation, Marketing Materials, Marketing Templates and Servicing Materials
and shall have the right to require changes to those materials as required by
Applicable Law or relating to any changes in Bank Licensed Marks. Bank has the
right to set, and make changes to, the terms of the Financial Products,
including interest rates and fees for the Financial Products. Any material
changes to Account Documentation, Marketing Materials, Marketing Templates and
Servicing Materials by Bank that (i) are not required by Applicable Law or
(ii) do not relate to any changes in Bank Licensed Marks shall: (x) require the
prior approval of EFS as soon as practicable and in no event later than five
(5) Business Days after notice, such approval not to be unreasonably withheld
and (y) be implemented by EFS within thirty (30) days of EFS approval.
Notwithstanding Section 6.1(b), any material changes to Account Documentation,
Marketing Materials, Marketing Templates and Servicing Materials made by Bank
without the concurrence of EFS that (i) are not required by Applicable Law or
(ii) which relate to changes in Bank Licensed Marks, shall be paid for in their
entirety by Bank. Solely for purposes of the preceding sentence, “required by
Applicable Law” means as reasonably determined by Bank upon advice of outside
counsel.

6.2 Cross Marketing.

(a) Without obligating either Party, EFS and Bank agree to explore ways to
cross-market their respective products to the other Party’s customers on terms
satisfactory to each of the Parties, in their sole discretion, and appropriately
documented. Any such marketing shall in all cases be subject to Applicable Law,
including Sections 6713 and 7216 of the Internal Revenue Code of 1986 (the
“Code”) and GLBA, and also subject to the ownership and rights to customer data
provisions of this Agreement under Section 12.3 (Collection, Ownership and Use
of Program Customer Data).

(b) Except as expressly authorized in this Agreement or otherwise agreed in
writing by EFS:

(i) Bank shall not use Applicant Data, Prospect Data, Company Customer Data
and/or Accountholder Data to do any of the following: (A) solicit Applicants,
Prospective Customers or Program Customers for product or service offerings
(including offerings by third parties); provided, however, that use of the same
by Bank for fraud and BSA monitoring purposes is permitted hereunder; and
provided, further, that to the extent permitted by Law, EFS is committed to work
with Bank on analytics and modeling; or (B) use or disclose the names of
Applicants, Prospective Customers or Program Customers, or any other information
relating to the Accounts or to the Applicants, Prospective Customers or Program
Customers; and

(ii) Bank shall not insert any Bank or any third-party’s offerings in statements
provided to Program Customers or target Company Customers for Bank products and
services (other than the Financial Products) or offerings by third parties. For
the avoidance of doubt, any Applicant Data, Prospect Data, Company Customer Data
and/or Accountholder Data that Bank obtains in connection with the Program may
only be used for purposes of fulfilling its obligations and exercising its
rights under this Agreement and the Program.

 

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(c) EFS may use Program Customer Data, and other information relating to Program
Customers, to the fullest extent permitted by Applicable Law and the Privacy
Notice.

(d) Notwithstanding the restrictions set forth in Section 6.2(b) (Cross
Marketing):

(i) Bank may make solicitations for goods and services to the public in its own
name, and may use prospect lists it develops independently of the Program or
that are provided by third parties, which may include the names of one (1) or
more Program Customers; provided that Bank does not (A) target such
solicitations to Program Customers or Company Customers, (B) other than as
expressly authorized by this Agreement, use or permit a third-party to use any
list of or information regarding Program Customers obtained by Bank pursuant to
its activities related to the Program, or (C) refer to or otherwise use the name
of Company or EFS in connection with such solicitation; and

(ii) Bank shall not be obligated to redact the names of Program Customers from
general marketing lists it develops independently of the Program or acquires
from third parties (e.g., subscription lists) that it uses for solicitations.

(iii) Bank shall be permitted to engage in business with any Person who contacts
it independently of activities involving the Financial Products.

6.3 Customers of Bank. For all purposes hereof, Accountholders are, and for all
intents and purposes shall be deemed to be, customers of Bank, having a direct
relationship with Bank. Bank shall be free to contact Accountholders and
potential Accountholders regarding matters specifically related to their
existing Accounts, without notice to EFS, and at all times in compliance with
this Agreement, including Section 6.2(b) (Cross Marketing), Section 6.4 (Cross
Marketing of IRAs), Section 6.5 (Cross Marketing of Mortgage Products) and in
Article 12 (Privacy and Data Security).

6.4 Cross Marketing of IRAs.

(a) The Company and Bank agree to negotiate in good faith the terms upon which
the Parties desire for Bank to offer, promote and market IRA Accounts to
Prospective

 

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Customers through Company Locations. The Company will not offer any individual
retirement accounts of other parties at Company Locations during the first 5
years of the Term of this Agreement. The offering of IRA Accounts to Prospective
Customers by Bank shall not be subject to the restrictions set forth in
Section 6.2(b) (Cross Marketing).

(b) In addition to the terms set forth herein, any IRA Account Product Schedule
shall set forth the respective duties and obligations of Bank, EFS and Company
with respect to such IRA Accounts, including, as applicable, features, marketing
channels, functionality, competitiveness, pricing, economics, fees, and product
specific regulatory compliance and indemnification. The Parties agree that the
IRA Account Product Schedule shall, among other things, specify that:

(i) Bank will pay a fee of no more than ten dollars ($10.00) to the Company for
each IRA Account opened and funded at Bank by a Prospective Customer (the intent
of which is to drive volume, and thus a reasonable portion of such fee will be
used by Company to pay field employees);

(ii) the Company will be responsible for, and pay for all costs related to
incorporating the IRA Account offering into (A) the DIY offerings, (B) the
in-office tax preparation software and customer interview, (C) the cost of
training tax professionals with respect to offering Bank’s IRA Accounts, and
(D) the costs to Company associated with account opening and funding process
(including knowing your customer procedures).

(iii) the Company acting in good faith will control time, place and manner of
presentation of the IRA Accounts in conformance with the terms of this
Section 6.4;

(iv) the Company will facilitate Bank required training of tax professionals on
cross-marketing the IRA Account product;

(v) Bank will provide competitive rates and terms on the IRA Account;

(vi) Bank will cap its fees and charges for the IRA Account in an amount to be
reasonably determined from time to time by agreement of the Parties;

(vii) Bank and Company shall negotiate in good faith on an IRA marketing plan
including social media, placement of retargeting tracking pixels, tracking
links, web articles and blogging, an outbound email campaign and banner
advertisements on the Company’s website; provided, however, any advertising Bank
desires to place on third party websites will be at Bank’s expense;

 

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(viii) Company shall allow placement of Bank’s promotional material in Company
stores and make such materials available to Franchisee offices; and

(ix) Except for damages arising as a result of the grossly negligent, willful or
fraudulent acts of the Company, Bank will fully indemnify the Company with
respect to third party claims, including reasonable court costs and legal fees,
incurred by the Company with respect to IRA Accounts.

The Parties acknowledge that this Section 6.4 does not contain all the terms
that will need to be negotiated and remains subject to Section 5.6 (New
Products). However, as stated above, the Parties agree to negotiate in good
faith.

(c) The Parties will cooperate to obtain all required regulatory approvals or
non-objections to any new IRA Product Schedule agreed upon consistent with the
approval conditions associated with the Purchase Agreement.

(d) Nothing in this Section 6.4 is intended or shall be construed to restrict,
prohibit or curtail Company (i) from acquiring or being acquired by, any Person
that offers, promotes or cross markets IRA Accounts or to limit the ongoing
operations or growth of such entity; or (ii) from making general referrals or
offering advice in connection with financial planning or similar advisory
services.

(e) The Company shall allow placement of Bank’s promotional material for IRA
Accounts in Company Locations and make such materials available to Franchisee
Locations for the Tax Season starting November 1, 2015. The Parties shall
cooperate to allow Bank to offer the IRA Accounts, as contemplated by
Section 6.4(b), during the Tax Season starting November 1, 2016. The Company
will include Bank IRA Account messaging for reasonable periodic rotation in the
Company’s Facebook, Twitter and other social media channels, a link to Bank’s
IRA Accounts on the Company’s customer facing webpages and the Company’s
employee facing intranet site.

(f) For purposes of this Section 6.4, Company Locations only includes Franchisee
Locations if the Franchisee has agreed to the offering of IRA Accounts in such
Franchisee Location.

6.5 Cross Marketing of Mortgage Products.

(a) During the Term of this Agreement, to the extent permitted by Law and in a
manner reasonably determined by Company after good faith negotiations by Company
and Bank, the Company will permit cross-marketing of Bank’s Mortgage Products
by:

(i) including Bank mortgage loan messaging for reasonable periodic rotation in
the Company’s Facebook, Twitter and other social media channels;

 

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(ii) placing a link to Bank’s mortgage lending page and rotating banner
advertisements on the Company’s customer facing webpages and the Company’s
employee facing intranet site;

(iii) conducting trial outbound email campaigns;

(iv) placing Bank’s promotional material in Company stores and making such
materials available to franchisee offices;

(v) permitting Bank to attend Company’s franchisee annual convention and host an
exhibition booth;

(vi) allowing Bank to provide to Company web articles on mortgage products for
educational purposes and tax concepts;

(vii) in no event shall Bank, with respect to this Section 6.5(a), be obligated
to provide any consideration (including any closed loan fee, lead fee, or
marketing fee) to Company, any Franchisee, or any employee or agent of either in
connection with any lead or mortgage transaction sourced through the marketing
activities contemplated by this Section 6.5(a). The Company acknowledges that
marketing of Mortgage Products pursuant to this Section 6.5(a) is occurring
solely as an accommodation and value add to Company Customers; and

(viii) Bank and Company agree to facilitate periodic executive and operational
mortgage marketing program reviews to develop and refine the activities listed
in Section 6.5(a)(i)-(vii).

(b) Subject to Section 5.6 (New Products), the Parties will explore additional
means for the Bank to cross-market its Mortgage Products to Company Customers.
The Parties will cooperate to obtain all required regulatory approvals or
non-objections to any new Mortgage Products Product Schedule agreed upon
consistent with the approval conditions associated with the Purchase Agreement.

(c) Except for damages arising as a result of the grossly negligent, willful or
fraudulent act of the Company, Bank will fully indemnify the Company and EFS for
cross-marketing Bank’s Mortgage Products.

ARTICLE 7

OUTSOURCING RESTRICTIONS; SERVICE PROVIDERS

7.1 Outsourcing Restrictions.

Neither Party shall, without the written consent of the other Party, outsource
any servicing functions relating to the Accounts that would result in Program
Customer Data being transmitted outside of the United States; provided, however,
EFS shall be permitted to utilize the servicing functions of the service
providers located outside the United States as set forth in Schedule 7.1 (List
of Internationally Outsourced Service Providers).

 

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7.2 Service Providers.

(a) The material third-party service providers for each of Bank and EFS
(“Material Bank Service Providers” and “Material EFS Service Providers,”
respectively) are set forth in Schedule 7.2(a) (Material Third-Party Service
Providers). Modification of the engagement by Bank of Material Bank Service
Providers or EFS of Material EFS Service Providers, as applicable, for the
Program shall be subject to the other Party’s prior notice and consultation
rights; provided, however, neither Party shall change or add a Material Bank
Service Provider or Material EFS Service Provider, as applicable, without prior
written notice to and consultation with the other Party.

(b) The use by a Party of Bank Service Providers or EFS Service Providers, as
applicable, to perform services related to this Program shall not relieve such
Party of any of its obligations under this Agreement, and for the avoidance of
doubt, such Bank Service Providers or EFS Service Providers, as applicable,
shall be held to the same standards of care as would be applicable to such Party
if it were to perform the service itself. The Party engaging any Bank Service
Providers or EFS Service Providers, as applicable, will be responsible for all
payments to such Bank Service Providers or EFS Service Providers, as applicable,
and shall be responsible for (i) ensuring the performance or non-performance of
such Bank Service Providers or EFS Service Providers, as applicable, as if such
performance or nonperformance were that of such Party and (ii) requiring such
Bank Service Providers or EFS Service Providers, as applicable, to obtain all
necessary permits, licenses, authorizations and approvals of Regulatory
Authorities. For the avoidance of doubt, any breach of the provisions of this
Agreement by a service provider to a Party shall constitute a breach by such
Party as if it had performed the outsourced services itself, and be subject to
all provisions of this Agreement applicable to such breach, including the notice
and cure provisions set forth in Sections 13.1 (EFS Event of Default), 13.2
(Bank Event of Default) and 14.2(a) (Mutual Termination Rights).

(c) Neither Party shall make material changes to the services provided under
agreements with Material Bank Service Providers or Material EFS Service
Providers in connection with the Program without prior written notice to and
consultation with the other Party other than pricing changes for which Bank or
EFS, as applicable, is responsible.

(d) Except as otherwise agreed in writing among Bank, EFS and any third-party
service provider, each Party shall continue to manage all third-party
relationships managed by such Party as of the Effective Date and deemed
necessary and appropriate for such Party to perform its obligations pursuant to
this Agreement and the Product Schedules. EFS shall continue to be entitled to
all incentives and benefits arising from servicing contracts with third parties,
including its existing incentive agreement with MasterCard.

 

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ARTICLE 8

AUDIT RIGHTS; REPORTING

8.1 Bank Audit Rights and Obligations.

(a) In addition to the other rights set forth in this Agreement, subject to the
confidentiality provisions set forth in Article 11 (Confidentiality), applicable
privacy laws and other Applicable Law, the EFS Audit Parties and service
providers for which EFS and Bank have agreed to enter into tri-party agreements
shall, during normal business hours, in a manner designed to be least disruptive
and no more than once per Program Year unless more frequent audits are required
by any Regulatory Authority or are necessary to confirm that prior audit
exceptions have been rectified: (i) permit Bank, its officers, employees,
accountants, lawyers and consultants in such a manner as to minimize
unreasonable interference with the EFS Audit Parties’ normal business
operations, to, by any means reasonably acceptable to Bank, examine and audit
operations and audit, inspect, copy and make copies of all of the data, records,
files and books of account (including non-financial information) under the
control of the EFS Audit Parties if such operations, data, records, files and
books of account relate to any obligation of EFS under this Agreement or any of
the Product Schedules, including any calculation required to be made pursuant to
the terms of this Agreement or the Product Schedules, as applicable, and as
required by Applicable Law or Payment Network Rules; and (ii) use commercially
reasonable efforts to facilitate Bank’s exercise of such right granted in
subparagraph (i) of this Section 8.1(a) (including a good faith effort to obtain
any consents that may be necessary or desirable to avoid a breach of any
contractual obligations). In furtherance of and without limiting the foregoing,
(x) the EFS Audit Parties shall permit Bank to use “mystery shoppers” at Company
Locations to audit the offering of the Financial Products under the Program;
(y) the EFS Audit Parties shall permit Bank to examine and audit operations and
audit, inspect, copy and make copies of all of the data, records, files and
books of account (including non-financial information) at Company Locations if
such operations, data records, files and books of account relate to any
obligation of EFS under this Agreement or any of the Product Schedules.

(b) To the extent an audit conducted pursuant to Section 8.1(a) reveals any
error, deficiency or other failure to perform on the part of EFS, EFS will
(i) as soon as reasonably possible following the date on which it becomes aware
of such error, deficiency or other failure to perform and, in any event, no
later than fifteen (15) Business Days following such date (unless a shorter
timeframe is reasonably deemed necessary by Bank because of the critical nature
of the error, deficiency or other failure or is required by a Regulatory
Authority), deliver to Bank a written corrective plan (an “EFS Corrective Plan”)
that, if followed, is designed to correct the error, deficiency or other failure
to perform, (ii) following the approval of the EFS Corrective Plan by Bank,
promptly execute the EFS Corrective Plan and (iii) permit Bank to conduct
additional follow-up audits as Bank may deem reasonably necessary for Bank to
audit EFS’s compliance with this provision, including the correction of EFS’s
error, deficiency or other failure to perform. The EFS Audit Parties shall use
commercially reasonable efforts to deliver any document or instrument necessary
for Bank to obtain such information from any Person maintaining records for the
EFS Audit Parties. The reasonable cost and expense of any such follow-up audits
shall be expenses of EFS.

 

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(c) Except as otherwise required for Bank to be in full compliance with
Applicable Law, notwithstanding anything to the contrary contained herein, EFS
shall not be required to provide Bank or any other Person with access to
information or records to the extent that such access (i) is prohibited by
Applicable Law or Payment Network Rules; provided, however, that to the extent
that access to information or records is so prohibited, EFS (A) shall notify
Bank in writing regarding the Applicable Law or Payment Network Rules which
prohibit such access and (B) shall deliver to Bank copies of all requested
information or records, redacted as may be necessary to comply with the cited
Applicable Law or Payment Network Rules or (ii) would reasonably be expected to
cause EFS to be a consumer credit reporting agency as set forth in the Fair
Credit Reporting Act.

(d) EFS shall use commercially reasonable efforts to facilitate the maximum
level of access by Bank, its officers, employees, accountants, lawyers and
consultants in light of constraints under Applicable Law and Payment Network
Rules. No action taken by (or on behalf of) Bank pursuant to this Section 8.1
shall diminish or obviate any of the representations, warranties, covenants or
agreements of EFS contained herein.

(e) The reasonable out of pocket costs and expenses of annual examinations or
audits conducted by (or on behalf of) Bank pursuant to Section 8.1(a) shall be
the expenses of Bank (other than costs incurred by EFS in responding to the
needs of Bank or such other Person performing the audit on behalf of Bank).

(f) It is expressly understood that Bank’s exercise of its audit rights
hereunder, or the granting thereof herein, shall be for Bank’s independent
purposes, and shall not constitute an assumption of risk on the part of Bank or
release EFS from any liability hereunder or under Applicable Law.

8.2 EFS Audit Rights and Obligations.

(a) In addition to the other rights set forth in this Agreement, subject to the
confidentiality provisions set forth in Article 11 (Confidentiality), applicable
privacy laws and other Applicable Law, Bank shall, during normal business hours,
in a manner designed to be least disruptive, and no more than once per Program
Year unless more frequent audits are required by any Regulatory Authority or are
necessary to confirm that prior audit exceptions have been rectified: (i) permit
EFS, its officers, employees, accountants, lawyers and consultants in such a
manner as to minimize unreasonable interference with Bank’s normal business
operations, to, by any means reasonably acceptable to EFS, examine and audit
operations and audit, inspect, copy and make copies of all of the data, records,
files and books of account (including non-financial information) under the
control of Bank if such operations, data, records, files and books of account
relate to any obligation of Bank under this Agreement or any of the Product
Schedules, including any calculation required to be made pursuant to the terms
of this Agreement or the Product Schedules, as applicable, and as required by
Applicable Law or Payment Network Rules; and (ii) use commercially reasonable
efforts to facilitate EFS’s exercise of such right granted in subparagraph
(i) of this Section 8.2(a) (including a good faith effort to obtain any consents
that may be necessary or desirable to avoid a breach of any contractual
obligations). In furtherance of and without limiting the foregoing, Bank shall
permit EFS to

 

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examine and audit operations and audit, inspect, copy and make copies of all of
the data, records, files and books of account (including non-financial
information) at Bank if such operations, data records, files and books of
account relate to any obligation of Bank under this Agreement or any of the
Product Schedules. The Parties acknowledge and agree that that EFS’s audit
rights do not extend to Bank’s regulatory reports of examination, regulatory
communications or other documents or materials that Bank is prohibited by
Applicable Law from sharing with EFS.

(b) To the extent an audit conducted pursuant to Section 8.2(a) reveals any
error, deficiency or other failure to perform on the part of Bank, Bank will
(i) as soon as reasonably possible following the date on which it becomes aware
of such error, deficiency or other failure to perform and, in any event, no
later than fifteen (15) Business Days following such date (unless a shorter
timeframe is reasonably deemed necessary by EFS because of the critical nature
of the error, deficiency or other failure or is required by a Regulatory
Authority), deliver to EFS a written corrective plan that, if followed, is
designed to correct the error, deficiency or other failure to perform (a “Bank
Corrective Plan”), (ii) following the approval of the Bank Corrective Plan by
EFS, promptly execute the Bank Corrective Plan and (iii) permit EFS to conduct
additional follow-up audits as EFS may deem reasonably necessary for EFS to
audit its compliance with this provision, including the correction of its error,
deficiency or other failure to perform. Bank shall use commercially reasonable
efforts to deliver any document or instrument necessary for EFS to obtain such
information from any Person maintaining records for Bank.

(c) Except as otherwise required for Bank to be in full compliance with
Applicable Law, notwithstanding anything to the contrary contained herein, Bank
shall not be required to provide EFS or any other Person with access to
information or records to the extent that such access (i) is prohibited by
Applicable Law or Payment Network Rules; provided, however, that to the extent
that access to information or records is so prohibited, Bank (A) shall notify
EFS in writing regarding the Applicable Law or Payment Network Rules which
prohibit such access and (B) shall deliver to EFS copies of all requested
information or records, redacted as may be necessary to comply with the cited
Applicable Law or Payment Network Rules; or (ii) would reasonably be expected to
cause Bank to be a consumer credit reporting agency as set forth in the Fair
Credit Reporting Act.

(d) The EFS Audit Parties shall conduct audits in accordance with, and on the
schedule required by, the EFS Audit Plan. The EFS Audit Parties shall provide to
Bank the portions of such audits relating to the Program and the Financial
Products (the “Relevant Audit Portions”). The reasonable cost and expense of the
EFS Audit Parties providing the Relevant Audit Portions to Bank shall be at
EFS’s expense. The EFS Audit Parties shall deliver to Bank (i) any Relevant
Audit Portion relating to the offering of Emerald Advance no later than
December 31 of each Program Year relating to pre-season Emerald Advance audit
activity and (ii) any Relevant Audit Portion relating to the offering of the
Financial Products, including Emerald Advance, through February 15 of the Tax
Season no later than March 31 of each Program Year, and (iii) any Relevant Audit
Portion relating to the offering of the Financial Products after February 15 no
later than June 30 of each Program Year; provided, however, that if any audit
conducted by the EFS Audit Parties pursuant to the first sentence of this
Section 8.2(d) reveals any adverse material findings, the EFS Audit Parties must
provide to Bank interim reports relating to such adverse material findings
within five (5) Business Days of EFS’s receipt of such audit.

 

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(e) Bank shall use commercially reasonable efforts to facilitate the maximum
level of access by EFS, its officers, employees, accountants, lawyers and
consultants in light of constraints under Applicable Law and Payment Network
Rules. No action taken by (or on behalf of) EFS pursuant to this Section 8.2
shall diminish or obviate any of the representations, warranties, covenants or
agreements of Bank contained herein.

(f) The reasonable cost and expense of annual examinations or audits conducted
by (or on behalf of) EFS pursuant to Section 8.2 or the EFS Audit Plan shall be
expenses of EFS.

(g) It is expressly understood that EFS’s exercise of its audit rights
hereunder, or the granting thereof herein, shall be for EFS’s independent
purposes, and shall not constitute an assumption of risk on the part of EFS or
release Bank from any liability hereunder or under Applicable Law.

8.3 Audits by Regulatory Authorities. In addition to access as provided in
Sections 8.1 (Bank Audit Rights and Obligations) and 8.2 (EFS Audit Rights and
Obligations), each Party, at its own expense, will permit, in accordance with
Applicable Law, any Regulatory Authority to visit its facilities related to the
Program. Each Party will also permit, in accordance with Applicable Law, any
Regulatory Authority to review and obtain copies of the books and records in its
possession or under its control relating to the Program. The access granted
under this Section 8.3 shall occur during normal business hours with reasonable
advance notice unless otherwise required by any such Regulatory Authority and
Applicable Law.

8.4 Reporting.

(a) To the extent permitted by Applicable Law, each Party shall have the right
to require the other Party upon ten (10) days’ prior written notice or such
shorter timeframe as may be required at the request of a Regulatory Authority,
to provide reasonably necessary internal and external reports (including all
data, electronic or otherwise, forming the basis for such reports) requested in
good faith with respect to each of the Financial Products under the respective
Product Schedules in a timely manner to it from time to time, including
reporting sufficient for each Party to satisfy its reporting compliance
obligation under Applicable Law (such as reconciliation reports, fraud reports
and complaint reports). The Parties shall provide the reports as set forth in
the Program Data Site and as otherwise agreed in writing by the Parties.

(b) EFS shall cause Bank to have direct access to management reports available
to EFS from Material EFS Service Providers for the Financial Products. Each of
EFS and Bank shall provide to the other Party such additional management
reports, including reporting related to fraud losses, suspicious activity and
consumer complaints relating to the Program. Upon a Party’s reasonable request,
the other Party shall also provide any customized reports related to the Program
from time to time, to the extent reasonably practicable.

 

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(c) In the event that a Party requests additional reports or information that
will require the other Party to incur reasonable additional out-of-pocket costs,
the Party preparing the report shall be required to provide such requested
reports or information. The requesting Party shall pay the other Party for such
additional out-of-pocket costs unless the requesting Party has made such request
based on a good faith determination that such additional report or information
is required for purposes of satisfying its regulatory obligations.

(d) Each Party will cooperate with the other Party in a commercially reasonable
manner to build any necessary system interfaces with respect to each of the
Financial Products under the respective Product Schedules, including Program and
Financial Product transaction and Account level data.

8.5 SEC Reporting and Public Announcements. The Parties will work in good faith
to coordinate public disclosures that reference the Financial Products, the
Program or the other Party. The Parties shall mutually agree on the content and
timing of press releases and Form 8-Ks announcing the execution of this
Agreement.

To the extent permitted by Applicable Law, each Party (the “Notifying Party”)
shall provide the other Party (the “Notified Party”) with advance notice and
copies of all relevant portions of the Notifying Party’s anticipated regulatory
filings and other public disclosures required by U.S. securities laws that
reference the Financial Products or the Program, or that mention the Notified
Party’s name, prior to the public disclosure or filing thereof. The Notified
Party shall have the opportunity to review with its counsel and provide comments
to the Notifying Party on such disclosures and filings prior to their public
disclosure or filings with the regulators. The Notifying Party shall in good
faith discuss and consider the Notified Party’s comments and consider
incorporating such comments into its regulatory filings and other public
disclosures required by U.S. securities laws prior to their filing or public
disclosure; provided that, notwithstanding anything in this Agreement to the
contrary, a Notifying Party shall at all times control and be responsible for
the content and timing of its securities law filings and public disclosures and
be permitted to make any disclosures that it reasonably believes are required
under Applicable Law.

To the extent permitted by Applicable Law and to the extent not already covered
by the above paragraph, each Party should provide the other Party with advance
notice and copies of all relevant portions of any press releases, announcements,
similar materials and the planned text of other statements of a public nature
that reference the Financial Products or the Program, or that mention the
Notified Party’s name, prior to the public disclosure or filing thereof. The
Notified Party shall have the opportunity to review and provide comments to the
Notifying Party on such materials prior to their public disclosure or filing.
The Notifying Party shall in good faith discuss and consider the Notified
Party’s comments and consider incorporating such comments into its
communications prior to their public disclosure or filing; provided that,
notwithstanding anything in this Agreement to the contrary, a Notifying Party
shall at all times control and be responsible for the content and timing of its
communications and be permitted to make any such communications.

 

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Nothing contained in this section 8.5 shall prevent either Party from
(i) publicly discussing general plans, forecasts or other materials that do not
reference Financial Products, the Program or the other Party or (ii) issuing
press releases, announcements, similar materials or communications or making
other statements consistent with content previously shared with the other Party
pursuant to this Section 8.5 or otherwise in public domain (other than as a
result of a violation of this Section 8.5 by the Party desiring to make the
disclosure).

8.6 OCC 2013-29. The Parties acknowledge that the relationships contemplated
hereunder fall within the purview of Risk Management Guidance OCC 2013-29,
issued by the OCC on October 30, 2013 (the “Third Party Guidance”). EFS has
provided and shall continue to promptly provide to Bank such information
regarding itself, its Affiliates, and the EFS Service Providers as Bank may from
time to time reasonably request, in order to ensure compliance with Bank’s
obligations as set forth in the Third Party Guidance.

8.7 OCC Oversight. EFS acknowledges that (i) the performance of activities by
external parties for Bank is subject to OCC examination oversight, including
access to all work papers, drafts, and other materials; (ii) the OCC treats as
subject to 12 USC 1867(c) and 12 USC 1464(d)(7), situations in which a bank
arranges, by contract or otherwise, for the performance of any applicable
functions of its operations; and (iii) the OCC has the authority to examine and
to regulate the functions or operations performed or provided by third parties.

ARTICLE 9

INTELLECTUAL PROPERTY; LICENSE TO USE MARKS; OWNERSHIP RIGHTS

9.1 Licensing Agreements. On the date hereof, (a) Bank is entering into the Bank
Licensing Agreement with certain subsidiaries of Block, Inc. and (b) HRB
Innovations is entering into the Block Licensing Agreement with Bank.

9.2 Ownership and Licenses of Intellectual Property.

(a) Ownership of Intellectual Property. Each Party and HRB Innovations, Inc.
shall continue to own all of their respective Intellectual Property that existed
as of the Effective Date. Each Party and HRB Innovations, Inc. also shall own
all right, title and interest in the Intellectual Property each of them develops
independently of the other Party or HRB Innovations, Inc., as applicable, during
the Term. To the extent a Party (the “Acquiring IP Party”) acquires any rights
in or to such Intellectual Property of the other Party or HRB Innovations, Inc.
(the “IP Owner”), the Acquiring IP Party hereby assigns all such right, title
and interest in and to such Intellectual Property back to the IP Owner.
Acquiring IP Party shall execute any documents in connection with such
assignment that IP Owner may reasonably request.

(b) Joint Intellectual Property. All Intellectual Property jointly developed by
the Parties in connection with the Program shall be owned by EFS.

 

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ARTICLE 10

REPRESENTATIONS, WARRANTIES AND COVENANTS

10.1 EFS’s Representations, Warranties and Covenants.

To induce Bank to establish the Program, EFS makes the following
representations, warranties and covenants to Bank, each and all of which shall
survive the execution and delivery of this Agreement, and each and all of which
shall be deemed to be restated and remade with the same force and effect on each
day of the Term, except as otherwise stated.

(a) Corporate Existence. EFS: (i) is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware,
(ii) is duly licensed or qualified to do business as a limited liability company
and is in good standing in all jurisdictions in which the nature of the
activities conducted or proposed to be conducted by it or the character of the
assets owned or leased by it makes such licensing or qualification necessary to
perform its obligations required hereunder, and (iii) has all necessary
licenses, permits, consents or approvals from or by, and has made all necessary
notices to, all Regulatory Authorities, to the extent required for EFS’s
business, and for the performance of its obligations pursuant to this Agreement,
except where the failure to have such licenses, permits, consents or approvals
would not have a Performance Material Adverse Effect with respect to EFS or a
Program Material Adverse Effect.

(b) Capacity; Authorization; Validity. EFS has all necessary corporate power and
authority to execute and enter into this Agreement, and perform the obligations
required of EFS hereunder and the other documents, instruments and agreements
relating to the Program and this Agreement executed by EFS pursuant hereto. The
execution and delivery by EFS of this Agreement and all documents, instruments
and agreements executed and delivered by EFS pursuant hereto, and the
consummation by EFS of the transactions specified herein have been duly and
validly authorized and approved by all necessary corporate action of EFS. This
Agreement (i) has been duly executed and delivered by EFS, (ii) constitutes the
valid and legally binding obligation of EFS, and (iii) is enforceable in
accordance with its terms (subject to applicable bankruptcy, insolvency,
reorganization, receivership or other laws affecting the rights of creditors
generally and by general equity principles including those respecting the
availability of specific performance).

(c) Conflicts; Defaults; Etc. The execution, delivery and performance of this
Agreement by EFS, its compliance with the terms hereof, and its consummation of
the transactions specified herein will not:

(i) conflict with, violate, result in the breach of, constitute an event which
would, or with the lapse of time or action by a third-party or both would,
result in a default under, or accelerate the performance required by, the terms
of any material contract, instrument or agreement to which EFS is a party or by
which it is bound, or by which EFS assets are bound, except for conflicts,
breaches and defaults which would not have a Performance Material Adverse Effect
with respect to EFS;

 

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(ii) conflict with or violate the articles of incorporation or by-laws, or any
other equivalent organizational documents, of EFS;

(iii) violate any Applicable Law or conflict with, or require any consent or
approval under any judgment, order, writ, decree, permit or license, to which
EFS is a party or by which it is bound or affected, except to the extent that
such violation or the failure to obtain such consent or approval would not have
a Performance Material Adverse Effect with respect to EFS;

(iv) require the consent or approval of any other party to any contract,
instrument or commitment to which EFS is a party or by which it is bound, except
to the extent that the failure to obtain such consent or approval would not have
a Performance Material Adverse Effect with respect to EFS; or

(v) require any filing with, notice to, consent or approval of, or any other
action to be taken with respect to, any regulatory authority, except to the
extent that the failure to obtain such consent or approval would not have a
Performance Material Adverse Effect with respect to EFS.

(d) Solvency. EFS is Solvent.

(e) No Default. Neither EFS nor, to the best of its Knowledge, its Affiliates
are in default with respect to any contract, agreement, lease, or other
instrument to which it is a party or by which it is bound, except for defaults
which would not have a Performance Material Adverse Effect with respect to EFS,
nor has EFS received any notice of default under any contract, agreement, lease
or other instrument which default or notice of default would materially and
adversely affect the performance by EFS of its obligations under this Agreement.
No EFS Event of Default has occurred and is continuing.

(f) Books and Records. All of EFS’s and, to the best of its Knowledge, its
Affiliates’ records, files and books of account relating to the Program,
including records provided to Bank regarding Account activities, are in all
material respects complete and correct and are maintained in accordance with
Applicable Law.

(g) No Litigation. As of the Effective Date, no action, claim or any litigation,
proceeding, arbitration, investigation or controversy is pending against EFS, at
law, in equity or otherwise, before any court, board, commission, agency or
instrumentality of any federal, state, or local government or of any agency or
subdivision thereof or before any arbitrator or panel of arbitrators, to which
EFS is a party, which, if adversely determined, would have a Performance
Material Adverse Effect with respect to EFS.

(h) Ownership of Trademarks. HRB Innovations, Inc. is the sole legal and
beneficial owner of the trademarks and other Intellectual Property licensed to
Bank pursuant to the Block Licensing Agreement.

(i) No Convicted Individuals. No officer, director, or employee of EFS subject
to a restriction under 12 U.S.C. §1829 shall participate in any of EFS’s
activities provided for by this Agreement.

 

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10.2 Bank’s Representations, Warranties and Covenants.

To induce EFS to establish the Program, Bank makes the following
representations, warranties and covenants to EFS, each and all of which shall
survive the execution and delivery of this Agreement, and each and all of which
shall be deemed to be restated and remade with the same force and effect on each
day of the Term, except as otherwise stated.

(a) Corporate Existence. Bank (i) is a federal savings bank duly organized and
validly existing under the laws of the United States, and (ii) has all necessary
licenses, permits, consents or approvals from or by, and has made all necessary
notices to, all Regulatory Authorities, to the extent required for Bank’s
business, and for the performance of its obligations pursuant to this Agreement,
except where the failure to have such licenses, permits, consents or approvals
would not have a Performance Material Adverse Effect with respect to Bank or a
Program Material Adverse Effect.

(b) Capacity; Authorization; Validity. Bank has all necessary corporate power
and authority to execute and enter into this Agreement and perform the
obligations required of Bank hereunder and the other documents, instruments and
agreements relating to the Program and this Agreement executed by Bank pursuant
hereto. The execution and delivery by Bank of this Agreement and all documents,
instruments and agreements executed and delivered by Bank pursuant hereto, and
the consummation by Bank of the transactions specified herein have been duly and
validly authorized and approved by all necessary corporate action of Bank. This
Agreement (i) has been duly executed and delivered by Bank, (ii) constitutes the
valid and legally binding obligation of Bank, and (iii) is enforceable in
accordance with its terms (subject to applicable bankruptcy, insolvency,
reorganization, receivership or other laws affecting the rights of creditors
generally and by general equity principles including those respecting the
availability of specific performance).

(c) Conflicts; Defaults; Etc. The execution, delivery and performance of this
Agreement by Bank, its compliance with the terms hereof, and its consummation of
the transactions specified herein will not:

(i) conflict with, violate, result in the breach of, constitute an event which
would, or with the lapse of time or action by a third-party or both would,
result in a default under, or accelerate the performance required by, the terms
of any material contract, instrument or agreement to which Bank is a party or by
which it is bound, or by which Bank assets are bound, except for conflicts,
breaches and defaults which would not have a Performance Material Adverse Effect
with respect to Bank;

(ii) conflict with or violate the articles of incorporation or by-laws, or any
other equivalent organizational documents, of Bank;

 

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(iii) violate any Applicable Law or conflict with, or require any consent or
approval under any judgment, order, writ, decree, permit or license, to which
Bank is a party or by which it is bound or affected, except to the extent that
such violation or the failure to obtain such consent or approval would not have
a Performance Material Adverse Effect with respect to Bank;

(iv) require the consent or approval of any other party to any contract,
instrument or commitment to which Bank is a party or by which it is bound,
except to the extent that the failure to obtain such consent or approval would
not have a Performance Material Adverse Effect with respect to Bank; or

(v) require any filing with, notice to, consent or approval of, or any other
action to be taken with respect to, any regulatory authority, except to the
extent that the failure to obtain such consent or approval would not have a
Performance Material Adverse Effect with respect to Bank.

(d) Solvency. Bank is Solvent.

(e) No Default. Neither Bank nor, to the best of its Knowledge, its Affiliates
are in default with respect to any contract, agreement, lease, or other
instrument to which it is a party or by which it is bound, except for defaults
which would not have a Performance Material Adverse Effect with respect to Bank,
nor has Bank received any notice of default under any contract, agreement, lease
or other instrument which default or notice of default would materially and
adversely affect the performance by Bank of its obligations under this
Agreement. No Bank Event of Default has occurred and is continuing.

(f) Books and Records. All of Bank’s and, to the best of its Knowledge, its
Affiliates’ records, files and books of account relating to the Program,
including records provided to EFS regarding Account activities, are in all
material respects complete and correct and are maintained in accordance with
Applicable Law.

(g) No Litigation. As of the Effective Date, no action, claim or any litigation,
proceeding, arbitration, investigation or controversy is pending against Bank,
at law, in equity or otherwise, before any court, board, commission, agency or
instrumentality of any federal, state, or local government or of any agency or
subdivision thereof or before any arbitrator or panel of arbitrators, to which
Bank is a party, which, if adversely determined, would have a Performance
Material Adverse Effect with respect to Bank.

(h) MasterCard and Visa Membership. Bank will join and/or maintain membership in
any Payment Network as required to offer the Financial Products under the
Program. Bank also provides, or shall, pursuant to this Agreement and the
Purchase Agreement, acquire, one or more BINs to be used exclusively for the
Prepaid Products and the Credit Card Product. EFS is responsible for any costs
incident to initially enrolling on or transferring a Financial Product to or
from any Payment Network.

(i) No Transfer of Accounts. Bank will not assign or transfer any Account to a
third party without EFS’s prior written consent.

 

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10.3 Mutual Covenants.

(a) Notice of Litigation. To the extent permitted by Applicable Law, each Party
shall promptly notify the other Party if it receives written notice of any
pending or threatened action, claim or litigation, proceeding, arbitration,
investigation or controversy against such Party or its Affiliates, at law, in
equity or otherwise, before any court, board, commission, agency or
instrumentality of any federal, state, or local government or of any agency or
subdivision thereof or before any arbitrator or panel of arbitrators (other than
customer complaints in the ordinary course of business), to which such Party is
a party, which, if adversely determined, would reasonably be expected to have a
Performance Material Adverse Effect on such Party’s ability to perform its
obligations under this Agreement.

(b) Non-Solicitation. Each Party covenants and agrees that, until twelve
(12) months after the Final Wind-Down Date, it will not, directly or indirectly,
solicit or employ any employees of the other Party who have direct managerial
responsibility for the Program; provided, that: (i) nothing herein shall
prohibit a Party from making offers of employment to or hiring persons whose
employment with the non-soliciting Party has been terminated by the
non-soliciting Party without cause; and (ii) general advertising or searches
regarding the availability of employment opportunities (whether by print, search
firm, radio, electronic media, website or otherwise) shall not constitute
“solicitation.”

(c) Disaster Recovery Plan. Each Party agrees to maintain a disaster recovery
plan, which it shall test regularly, but at a minimum one time per calendar
year, as well as systems, equipment, facilities and trained personnel, that
shall enable it to perform its essential obligations under this Agreement
consistent with such Party’s disaster recovery plan continuously through a
disaster. Either Party may request the other Party to make its disaster recovery
plan available for review. Either Party may make changes to its disaster
recovery plan from time to time without the other Party’s consent; provided that
such changes do not materially decrease the level of protection offered by the
disaster recovery plan.

ARTICLE 11

CONFIDENTIALITY

11.1 Confidential Information.

(a) “Confidential Information” of a Party means (i) information that is provided
by or on behalf of such Party to the other Party, its Affiliates or to EFS
Service Providers or Bank Service Providers, as applicable, in connection with
the Program, or (ii) information about such Party, its Affiliates, or their
respective businesses or employees, that is otherwise obtained by the other
Party in connection with the Program, in each case including: (A) information
concerning Program Marketing Plans, marketing philosophies, objectives and
financial results; (B) information regarding business systems, methods,
processes, financing data, programs and products; (C) information unrelated to
the Program obtained by the other Party in connection with this Agreement,
including by accessing or being present at the business location

 

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of the other Party; (D) proprietary technical information, including source and
object codes; (E) competitive advantages and disadvantages, technological
development, sales volume(s), merchandise mix, business relationships and
methods of transacting business, product design, product features and
functionalities, operational and data processing capabilities, and systems
software and hardware and the documentation thereof; (F) other information
regarding the business or affairs of the other Party or its Affiliates or the
transactions contemplated by this Agreement that such other Party or its
Affiliates reasonably considers confidential or proprietary; and (G) any copies,
excerpts, summaries, analyses or notes of the foregoing. Subject to any
disclosure required by Applicable Law, the Parties agree that the terms of this
Agreement and the Product Schedules shall be Confidential Information of both
Parties.

(b) The obligations hereunder with respect to Confidential Information shall not
apply to any information that is sourced from information that (i) is publicly
known without breach of this Agreement, or (ii) either Party or its Affiliates,
EFS Service Providers or Bank Service Providers, as applicable, (A) already
knows at the time it is disclosed as shown by their written records,
(B) receives from a third-party permitted to disclose it without restriction, or
(C) develops independently without use of Confidential Information.

11.2 Limits on Use and Disclosure.

(a) Each Party shall comply with, and cause its respective directors, officers,
employees, representatives and as applicable, EFS’s Affiliates, EFS Service
Providers, Bank’s Affiliates or Bank Service Providers, to comply with the
provisions of this Section 11.2.

(b) If a Party (the “Receiving Party”) receives Confidential Information of the
other Party (the “Disclosing Party”), the Receiving Party shall not use or
disclose Confidential Information of the Disclosing Party except:

(i) to perform its obligations or enforce its rights with respect to the Program
or this Agreement;

(ii) as permitted by this Agreement;

(iii) with the prior consent of the Disclosing Party;

(iv) to respond to a valid subpoena, order or request of any Regulatory
Authority (“Regulatory Request”), or of any recognized stock exchange;

(v) based on advice of legal counsel, to the extent either Party is required by
Applicable Law or valid court or governmental agency order to disclose, in which
case the Party receiving such an order must, if permitted by Applicable Law,
give prompt notice to the other Party, allowing it to seek a protective order;

(vi) to comply with any Applicable Law, or legal or regulatory process,
including the Securities Act of 1933, the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder and related thereto; or

(vii) as otherwise required by Applicable Law.

 

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(c) A Receiving Party shall limit access to the Disclosing Party’s Confidential
Information to those employees, consultants and, as applicable, to EFS’s
Affiliates, EFS Service Providers, Bank’s Affiliates or Bank Service Providers,
that have a reasonable need to access such Confidential Information in
connection with the Program or other purposes permitted by this Agreement and
only if that Person has agreed to confidentiality obligations at least as
restrictive as those set forth in this Article 11 (Confidentiality) prior to
disclosure. The Receiving Party shall remain responsible to the Disclosing Party
for acts or omissions of individuals referred to in the preceding sentence that
if committed by the Receiving Party would constitute a violation of the
Receiving Party’s confidential obligations hereunder.

(d) Notwithstanding anything else contained in this Agreement, a Party will not
be obligated to take any action with respect to the collection, use or
disclosure of information in the Program that such Party believes in good faith
would cause, or is reasonably likely to cause, either Party to violate any
Applicable Law (including privacy and security laws and the reuse and
re-disclosure provisions of GLBA).

11.3 Regulatory Requests. If a Receiving Party receives a Regulatory Request to
disclose any Confidential Information of the Disclosing Party, the Receiving
Party shall, to the extent permitted by Applicable Law:

(a) notify the Disclosing Party thereof promptly after receipt of such
Regulatory Request;

(b) consult with the Disclosing Party with respect to such Regulatory Request;
and

(c) if disclosure is required or deemed advisable based on advise of legal
counsel of the Receiving Party, at the Disclosing Party’s request and expense,
reasonably cooperate with the Disclosing Party in any attempt by the Disclosing
Party to obtain a protective order or other reliable assurance that confidential
treatment will be accorded to the Confidential Information of the Disclosing
Party.

11.4 Disposition of Confidential Information. Upon the termination or expiration
of this Agreement or a Product Schedule, the Receiving Party shall maintain any
retained Confidential Information in accordance with the terms of this Agreement
and Applicable Law and shall dispose of any Confidential Information in
accordance with the Disclosing Party’s reasonable instructions; provided,
however, the Receiving Party in possession of tangible property containing the
Disclosing Party’s Confidential Information may retain one (1) archived copy of
such material.

11.5 Unauthorized Use or Disclosure. Each Receiving Party agrees that any
unauthorized use or disclosure of Confidential Information of the Disclosing
Party may cause immediate and irreparable harm to the Disclosing Party for which
damages may not constitute an adequate remedy. In that event, the Receiving
Party agrees that injunctive relief may be warranted in addition to any other
remedies the Disclosing Party may have at law or in equity all

 

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of which shall be cumulative and in addition to any rights and remedies
available by contract, law, rule, regulation or order. In addition, the
Receiving Party agrees to promptly advise the Disclosing Party in writing of any
unauthorized misappropriation, disclosure or use by any Person of the
Confidential Information in violation of the Receiving Party’s obligations under
this Agreement which may come to its attention and Receiving Party shall take
appropriate steps, at its own expense, as reasonably requested by the Disclosing
Party to limit, stop or otherwise remedy such misappropriation, disclosure or
use.

ARTICLE 12

PRIVACY AND DATA SECURITY

12.1 Privacy.

(a) Subject to each Party’s compliance obligations in Section 4.3 (Compliance
Obligations), each Party shall comply with Applicable Law relating to the use
and disclosure of Program Customer Data and Prospect Data, including the
applicable terms and provisions of GLBA and the Code. Without limiting the
foregoing, each Party shall implement and maintain appropriate administrative,
technical and physical safeguards to protect the security, confidentiality and
integrity of all Program Customer Data and Prospect Data.

(b) In furtherance of and without limiting the foregoing, the Parties agree to,
in good faith, jointly develop and prepare, and comply with, the privacy notice
applicable to the Program (the “Privacy Notice”).

(c) Each Party shall ensure that any third-party (other than attorneys,
accountants and any third-party advisors that are bound by a professional duty
of confidentiality to such Party) to whom Program Customer Data or Prospect Data
is transferred or made available by or on behalf of such Party signs a written
contract with the contracting Party in which such third-party agrees: (i) to
restrict its use of Program Customer Data and Prospect Data, as applicable, to
the use specified in the agreement between EFS or Bank and the third-party
(which use must be in compliance with the Party’s permitted uses of the
information, including as provided in this Article 12 (Privacy and Data
Security)); (ii) to comply with all Applicable Law, the applicable Payment
Network Rules and the Privacy Notice; and (iii) to implement and maintain
appropriate administrative, technical and physical safeguards to protect the
security, confidentiality and integrity of all Program Customer Data and
Prospect Data, including compliance with the provisions of the Data Security
Requirements.

(d) The Parties agree to negotiate in good faith, if necessary in the reasonable
business judgment of EFS or Bank, an amendment to (i) the provisions of this
Agreement related to the use and disclosure of Program Customer Data and
Prospect Data and (ii) any other applicable documents, such as privacy policies
and privacy guidelines, for the purpose of aligning the privacy policies and
practices of the Parties and assuring continued compliance with Applicable Law.

 

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12.2 Data Security.

(a) The Parties agree to, in good faith, jointly develop and prepare, and comply
with, the information security and business continuity policies and procedures
applicable to the Program as required by Applicable Law (the “Data Security
Requirements”). In addition, EFS and Bank will each establish, maintain and
implement an information security program, including appropriate administrative,
technical and physical safeguards, that is designed to meet the objectives of
the Interagency Guidelines Establishing Standards for Safeguarding Information
Security Data, including, at a minimum, maintenance of an information security
program that is designed to: (i) ensure the security and confidentiality of
Program Customer Data and Prospect Data, as applicable; (ii) protect against any
reasonably anticipated threats or hazards to the security or integrity of
Program Customer Data or Prospect Data; (iii) protect against unauthorized
access to or use of Program Customer Data or Prospect Data that could result in
substantial harm or inconvenience to any Program Customer or Prospective
Customer; and (iv) ensure the proper disposal of Program Customer Data and
Prospect Data, as applicable. Each Party shall use the same degree of care in
protecting Program Customer Data and Prospect Data against unauthorized
disclosure as it accords to its own confidential customer information, but in no
event less than a reasonable standard of care.

(b) Each of EFS and Bank shall notify the other Party promptly, and in any event
within twenty-four (24) hours, following discovery or notification of any actual
or suspected Security Breach (as defined below) of the information systems
maintained by EFS (including through EFS Service Providers) or Bank (including
through Bank Service Providers), respectively, unless such systems do not
access, process or store Program Customer Data or Prospect Data. A Party that
suffers an actual or suspected Security Breach (the “Affected Party”) agrees to
take action promptly, at its own expense, to investigate the actual or suspected
Security Breach and, if an actual Security Breach is confirmed, to identify and
mitigate its effects and to implement reasonable and appropriate measures in
response. The Affected Party shall also permit the other Party to conduct or
require the Affected Party to engage a qualified third-party to conduct its own
investigation of an actual or suspected Security Breach; provided, however, that
such investigation may not unreasonably interfere with the investigation being
conducted by the Affected Party or the operations of the Affected Party. The
Affected Party also will provide the other Party with information reasonably
requested by the other Party regarding such Security Breach to assist such other
Party in implementing its information security response program and, if
applicable, in notifying affected Program Customers and Prospective Customers,
as applicable, as well as other third parties as required by Applicable Law. The
Affected Party shall pay for the reasonable costs of any such investigation and
notification, which notification shall be mutually agreed upon by the Parties
(such agreement not to be unreasonably withheld) or other remediation reasonably
deemed necessary. “Security Breach” means the unauthorized access to or
acquisition of any record containing Program Customer Data or Prospect Data,
whether in paper, electronic, or other form, in a manner that renders misuse of
the information reasonably possible or that otherwise compromises the security,
confidentiality, or integrity of the information; provided, however, that it
shall also include any data or information security breach under Applicable Law.

(c) EFS and Bank, respectively, will use reasonable measures designed to
properly dispose of all records containing Program Customer Data and Prospect
Data, as applicable, whether in paper, electronic, or other form, including
adhering to policies and procedures that require the destruction or erasure of
electronic media containing such Program Customer Data and Prospect Data, as
applicable, so that the information cannot practicably be read or reconstructed.

 

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12.3 Collection, Ownership and Use of Program Customer Data.

(a) Ownership of Program Customer Data. The Parties recognize that Program
Customer Data is owned by Bank, subject to Article 15 (Rights Upon Termination),
and that Program Customers are Company Customers as well as Bank Customers.
Accordingly, each Party has certain ownership and use rights in the information
relating to such Program Customers. The Parties acknowledge that the same or
similar information may be included in Company Customer Data, Prospect Data,
Bank Customer Data and Program Customer Data and to the extent that there is
overlapping information in Company Customer Data, Prospect Data, Bank Customer
Data and Program Customer Data, subject to the limitations set forth in this
Agreement and Applicable Law: (i) Bank shall retain its ownership and use rights
in such Program Customer Data and Bank Customer Data; and (ii) EFS or EFS
Affiliates, as applicable, shall retain their respective ownership and use
rights in Company Customer Data and Prospect Data.

(b) EFS, its Affiliates and EFS Service Providers shall be entitled to access
and may use and disclose all Program Customer Data and Prospect Data in any
manner permitted by this Agreement, Applicable Law and the Privacy Notice. For
the avoidance of doubt, (i) Company Customer Data obtained by EFS or any EFS
Affiliate in connection with the provision of tax preparation related goods and
services that are not part of the Program and (ii) Prospect Data, in each case,
shall belong exclusively, to the extent permitted by Applicable Law, to EFS or
such EFS Affiliate, as applicable.

(c) Notwithstanding any rights they may have to use or disclose Program Customer
Data, Prospect Data and Applicant Data under Applicable Law or the Privacy
Notice, neither Bank, nor its Affiliates nor Bank Service Providers shall use or
disclose Program Customer Data, Prospect Data or Applicant Data for any purpose
other than: (i) to perform its obligations or enforce its rights with respect to
the Program; (ii) as expressly permitted by this Agreement; (iii) pursuant to a
Regulatory Request; (iv) by a Party to a Regulatory Authority as required or
requested by such Regulatory Authority; or (v) as otherwise required by
Applicable Law.

(d) Each Party shall develop the appropriate tools and resources to allow for
efficient access to Program and Financial Product transaction data and Account
and Applicant level data, subject to any restrictions under Applicable Law. The
operational method for such access shall be set forth in the Program Data Site.

(e) Each of Bank and EFS shall maintain the Privacy Notice to permit the
broadest rights allowable under Applicable Law for sharing of Program Customer
Data with the other Party and such other Party’s Affiliates.

 

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ARTICLE 13

EVENTS OF DEFAULT

13.1 EFS Event of Default.

The occurrence of any one (1) or more of the events specified in this
Section 13.1 (regardless of the reason therefor) with respect to EFS shall be an
“EFS Event of Default.”

(a) Failure to Make Payments When Due. EFS fails to make a payment of any
material amount due and payable pursuant to this Agreement that is not disputed
in good faith and such failure shall remain unremedied for a period of five
(5) Business Days after Bank shall have given notice thereof. For purposes of
this Section 13.1(a), the term “material amount” shall mean an amount greater
than $100,000.00.

(b) Failure to Settle. Notwithstanding Section 13.1(a), if EFS fails to settle
any amount that is not disputed in good faith, within three (3) Business Days
after the date on which Bank shall have given notice thereof in accordance with
Section 2.15 (Settlement Statements).

(c) Breach of EFS’s Representations, Warranties and Covenants. (i) Any
representation or warranty of EFS in this Agreement or any of the Product
Schedules shall fail to be true and correct in any material respect as of the
date when made or reaffirmed, or (ii) EFS shall fail to perform its covenants as
set forth in this Agreement or any of the Product Schedules, or any other
material covenant or other agreement contained in this Agreement or any of the
Product Schedules that EFS is required to perform; and, in either case, such
failure has a Performance Material Adverse Effect with respect to EFS and the
same shall remain uncured for a period of thirty (30) days after Bank provides
written notice thereof.

(d) Solvency. EFS (i) shall not be Solvent; (ii) shall admit in writing its
inability to pay its debts generally; (iii) shall make a general assignment for
the benefit of its creditors; (iv) shall have any proceeding instituted by or
against it seeking to adjudicate it as bankrupt or insolvent or seeking
liquidation, reorganization or any similar alternative under any law relating to
bankruptcy or relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver or other similar official for it or for any
substantial part of its property, and, in the case of any proceeding instituted
against it (but not instituted by it), either such proceeding shall remain
undismissed or unstayed for a period of thirty (30) days, or any of the actions
sought in such proceeding (including the entry of an order for relief against,
or the appointment of a receiver or other similar official for, it or any
substantial part of its property) shall occur; or (v) shall take any corporate
action to authorize any of the actions set forth in clause (iii) or (iv) of this
Section 13.1(d).

13.2 Bank Event of Default.

The occurrence of any one (1) or more of the events specified in this
Section 13.2 (regardless of the reason therefor) with respect to Bank shall be a
“Bank Event of Default.”

 

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(a) Failure to Make Payments when Due. Bank fails to make a payment of any
material amount due and payable pursuant to this Agreement that is not disputed
in good faith and such failure shall remain unremedied for a period of five
(5) Business Days after EFS shall have given notice thereof. For purposes of
this Section 13.2(a), the term “material amount” shall mean an amount greater
than $100,000.00.

(b) Failure to Settle. Notwithstanding Section 13.2(a), if Bank fails to settle
(i) any amount that is not disputed in good faith, within three (3) Business
Days after the date on which EFS shall have given notice thereof in accordance
with Section 2.15 (Settlement Statements), or (ii) any Payment Network
transactions.

(c) Breach of Bank’s Representations, Warranties and Covenants. (i) Any
representation or warranty of Bank in this Agreement or any of the Product
Schedules shall fail to be true and correct in any material respect as of the
date when made or reaffirmed, or (ii) Bank shall fail to perform its covenants
as set forth in this Agreement or any of the Product Schedules, or any other
material covenant or other agreement contained in this Agreement that Bank is
required to perform including the failure to meet its obligations under any
Program Marketing Plans; and, in either case, such failure results in a
Performance Material Adverse Effect with respect to Bank and the same shall
remain uncured for a period of thirty (30) days after EFS provides written
notice thereof.

(d) Solvency. Bank (i) shall not be Solvent; (ii) shall admit in writing its
inability to pay its debts generally; (iii) shall make a general assignment for
the benefit of its creditors; (iv) shall have a receiver appointed (or sought to
be appointed) by Bank’s primary federal regulator or shall have any proceeding
instituted by or against it seeking to adjudicate it as bankrupt or insolvent or
seeking liquidation, reorganization or any similar alternative under any law
relating to bankruptcy or relief of debtors, or seeking the entry of an order
for relief; or (v) shall take any corporate action to authorize any of the
actions set forth in clause (iii) or (iv) of this Section 13.2(d).

(e) Undercapitalization. Bank is deemed to be less than adequately capitalized
or determined to be in a troubled condition within the meaning of Section 38 of
the Federal Deposit Insurance Act by the appropriate federal banking agency
having primary supervisory jurisdiction over Bank.

ARTICLE 14

TERM AND TERMINATION

14.1 Term. The term of this Agreement and the Product Schedules shall commence
upon the Effective Date and end June 30, 2022, unless earlier terminated as
provided in this Agreement (the “Term”). Subject to the provisions of this
Article 14 (Term and Termination), the term of all Product Schedules will be
co-terminus with the Term. This Agreement will remain in full force and effect
to the extent any Product Schedule remains in full force and effect.

 

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14.2 Mutual Termination Rights.

(a) Events of Default. Each Party shall have the right to terminate this
Agreement or a Product Schedule upon not less than twenty (20) days’ prior
written notice if any Event of Default with respect to the other Party shall
occur and be continuing pursuant to Article 13 (Events of Default).

(b) Force Majeure Event. If a Force Majeure Event with respect to a Party has
occurred pursuant to Section 17.8 (Force Majeure) that materially prevents or
impedes the other Party’s performance hereunder and such Force Majeure Event
continues for a period of more than thirty (30) days, the other Party shall have
the right to terminate the affected Product Schedule(s) while the Force Majeure
Event continues by providing written notice to the Party experiencing the Force
Majeure Event, such termination to be effective on the date specified in the
notice of termination.

14.3 Additional Termination Rights of EFS.

(a) [Reserved]

(b) Durbin Regulatory Event. Bank shall promptly notify EFS once it knows the
combined average assets of Bank and its Subsidiaries for a calendar quarter
exceeded, or expects that they will exceed, $10 billion, as of December 31st of
any year during the Term of this Agreement. Once Bank provides notice to EFS
pursuant to this Section, the Parties shall negotiate in good faith for 30 days
to revise the terms of this Agreement in a manner that is satisfactory to EFS in
its sole and absolute discretion. After receipt of such notice and expiration of
such 30-day period, EFS may negotiate and reach agreement (provided that such
agreement shall not become effective until the actual Durbin Regulatory Event
occurs) with other card sponsor banks about becoming the successors under this
Agreement upon its termination, without such activity being a breach of this
Agreement. If a Durbin Regulatory Event occurs, EFS shall have the right, in its
sole discretion, to terminate this entire Agreement, or any of the Product
Schedules with respect to Emerald Advance, Emerald Card or Refund Transfer, upon
thirty (30) days’ prior written notice to Bank.

(c) Changed Circumstances Termination. If Bank unilaterally changes (i) the
terms, pricing, conditions, underwriting or other characteristics of, or the
Account Documentation, Marketing Materials, Servicing Materials or any other
Program documentation or requirements for, any Financial Product, or (ii) any
other aspect of the Program or the obligations of EFS under the Program, that
(A) individually or collectively have, or are reasonably expected to have, a
material adverse effect on the economic benefits that EFS and its Affiliates
reasonably expect to derive from the Financial Product based upon the pricing,
terms, conditions, underwriting or other characteristics of the Financial
Product as in effect on the date of this Agreement, or (B) expose EFS or any of
its Affiliates to what EFS, in good faith believes, is a significant increase in
the level of legal, regulatory, or litigation risk (and EFS provides thirty
(30) days’ prior written notice advising Bank’s chief executive officer that EFS
disagrees with such change and the basis for its disagreement, with
particularity, and the change remains in effect after such thirty (30) day
period), then notwithstanding anything in this Agreement to the contrary, EFS
shall have the right, in its sole discretion, to terminate this entire
Agreement, or

 

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any one or more of the Product Schedules, upon at least fifteen (15) days’ prior
written notice to Bank. For purposes of this Section 14.3(c), “material” means
$5,000,000 in consolidated pre-tax net income, or $15,000,000 in consolidated
gross revenue, of Block, Inc.

Notwithstanding the foregoing, EFS shall have no termination right with respect
to an industry wide change that is clearly necessary to comply with Applicable
Law or Payment Network Rules. The Parties acknowledge that the current Program
and Financial Products as in effect on the date of this Agreement are in
compliance with Applicable Law.

14.4 Cross Termination of Product Schedules.

(a) Subject to the terms contained herein, an individual Product Schedule may be
terminated upon the occurrence of a termination event described in Section 14.2
or 14.3 in accordance with this Article 14 (Term and Termination) without
causing the termination of any of the other Product Schedules or this Agreement.

(b) If any of the Product Schedules with respect to Emerald Advance, Emerald
Card or Refund Transfer is terminated by Bank in accordance with this Article
14, EFS, in its sole discretion, may terminate any or all of the other Product
Schedules or this Agreement; provided, however, that EFS shall have the right to
exercise the EFS Purchase Option set forth in Section 15.1 (EFS Purchase
Options) with respect to the Product Schedules that are terminated.

(c) If any of the Product Schedules with respect to the Emerald Card or Refund
Transfer is terminated by EFS in accordance with this Article 14, Bank in its
sole discretion, may terminate this Agreement.

(d) If any of the Product Schedules for Emerald Advance, Emerald Card or Refund
Transfer are terminated, then the 5 year exclusive period for marketing IRA
Accounts in Section 6.4(a) shall not apply to Company.

ARTICLE 15

RIGHTS UPON TERMINATION

15.1 EFS Purchase Options. When this Agreement expires in accordance with its
Term, or if this Agreement or any Product Schedule is terminated early for any
reason, then EFS shall have the option (each an “EFS Purchase Option”) to
purchase, have an Affiliate purchase or to arrange for a federally-insured
depository institution selected by EFS to purchase (each of EFS, an EFS
Affiliate or a federally-insured depository institution, a “Nominated
Purchaser”), all of the Accounts associated with the Program (other than those
Accounts relating to individual retirement accounts, which will remain with
Bank), or if only a Product Schedule is terminated, the Accounts associated with
the related Financial Product, and the Accounts Receivable and related rights,
funds, interest and fees (“Purchased Assets”) (which, for the avoidance of
doubt, shall include all of the related assets of the type and nature of the
“Transferred Asset” as defined in Section 2.01 of the Purchase Agreement), free
and clear of all liens, claims and encumbrances created by Bank, and to assume
the payment and performance obligations and other liabilities arising after the
closing date relating to such Purchased Assets (the “Assumed Liabilities”)
(which, for the avoidance of doubt, shall include all of the related

 

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Liabilities of the type and nature of the “Assumed Liabilities” as defined in
Section 2.03 of the Purchase Agreement). Such closing date is the “Assumed
Accounts Purchase Date.” EFS shall notify Bank in writing of a Nominated
Purchaser’s intent to purchase the Purchased Assets and the Assumed Liabilities
(an “Exercise Notice”) no later than one hundred twenty (120) days after the
Termination Date of this Agreement or of any Product Schedule (the “Purchase
Option Exercise Period”). EFS may designate different Nominated Purchasers with
respect to different EFS Purchase Options and with respect to different
Financial Products, and may designate a substitute or replacement Nominated
Purchaser, but each thereof shall be deemed to be the “Nominated Purchaser” as
defined in this Section 15.1. If EFS does not provide the Exercise Notice to
Bank before the expiration of the Purchase Option Exercise Period, then the EFS
Purchase Option under this Section 15.1 shall expire. If EFS determines not to
exercise the EFS Purchase Option, then EFS shall provide Bank with a written
notice of no interest (“No Interest Notice”).

15.2 Evaluation Data. Bank shall cooperate with EFS and the Nominated Purchaser
to provide EFS and Nominated Purchaser with access (subject to customary
confidentiality agreements) to all Program-related data and information (other
than Bank’s proprietary work product) reasonably requested by the Nominated
Purchaser for the sole purpose of due diligence regarding the purchase of the
Accounts, provided that such information is not otherwise reasonably available
from EFS or its Affiliates.

15.3 Determination of Purchase Price.

(a) In the event that EFS issues an Exercise Notice, the purchase price for the
Purchased Assets and the Assumed Liabilities (“Purchase Price”) shall be
calculated as the sum of (i) the book value of deposits associated with Emerald
Card accounts; (ii) the fair value of Emerald Advance participation interests
and receivables; and (iii) the amount of one dollar ($1.00) for all Emerald
Advance, Emerald Card, Refund Transfer, and Credit Card Accounts and the other
Program assets owned by Bank. Other Program assets will include all of the
related assets of the type and nature of the “Transferred Asset” as defined in
Section 2.01 of the Purchase Agreement. “Assumed Liabilities” shall include all
of the related liabilities of the type and nature of the “Assumed Liabilities”
as defined in Section 2.03 of the Purchase Agreement. The Purchase Price shall
be determined as of the Assumed Accounts Purchase Date. The fair value of
Emerald Advance participation interests shall be calculated in a manner
consistent with Schedule 15.3; provided however, that in the event of a dispute
in the determination of fair value, the parties shall rely on the determination
of an independent accountant firm to be selected by Bank, EFS and Nominated
Purchaser, consistent with pricing used in the Purchase Agreement.

(b) In the event that the EFS Purchase Option is validly exercised, Bank and EFS
shall, in good faith, use commercially reasonable efforts to consummate the
purchase of the Purchased Assets and the assumption of the Assumed Liabilities
by Nominated Purchaser in accordance with the terms of this Agreement (including
terms of a purchase agreement contemplated under Section 15.4 (Purchase
Mechanics) at the Purchase Price). EFS shall notify Nominated Purchaser of EFS’s
expectation that the Nominated Purchaser shall, in good faith, use commercially
reasonable efforts to consummate the purchase of the Purchased Assets and the
assumption of the Assumed Liabilities at the Purchase Price.

(c) No Purchase. If a Purchase Option Expiration Date occurs, the Accounts
retained by Bank shall be liquidated pursuant to the provisions of Section 15.6
(Wind-down by Bank); provided, however, that nothing in this Section 15.3(c)
shall be construed as limiting or relieving the obligation of Bank and EFS to
use commercially reasonable efforts to consummate the purchase of the Purchased
Assets and the assumption of the Assumed Liabilities after EFS delivers an
Exercise Notice. For the avoidance of doubt, as long as EFS uses commercially
reasonable efforts to consummate such purchase, EFS shall not be liable for a
Nominated Purchaser’s failure to purchase the Purchased Assets and assume the
Assumed Liabilities, and in no event shall EFS be obligated to purchase the
Purchased Assets and assume the Assumed Liabilities for itself.

 

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15.4 Purchase Mechanics. After EFS has delivered an Exercise Notice, Bank, EFS
and Nominated Purchaser shall, with reasonable expedition, negotiate in good
faith, execute and deliver all necessary agreements, instruments and other
documentation customary for a transaction of this kind, including a purchase and
sale agreement, which agreements may require each of Bank, EFS and Nominated
Purchaser to agree to certain representations, warranties, covenants,
indemnities, transition services and other terms and conditions usual and
customary for a transaction of this kind. All such agreements shall be in a form
reasonably acceptable to the Parties. Bank, EFS and the Nominated Purchaser
shall in good faith use commercially reasonable efforts to expeditiously
consummate the purchase of the Purchased Assets and the assumption of the
Assumed Liabilities as contemplated hereby no later than two hundred seventy
(270) days from the date on which EFS has provided an Exercise Notice to
Bank. Notwithstanding the foregoing, (a) if the Assumed Accounts Purchase Date
falls within the Tax Season, at EFS’s option, the Assumed Accounts Purchase Date
and the time to consummate the purchase shall extend to a date that is thirty
(30) days after the end of the Tax Season, and (b) the Assumed Accounts Purchase
Date shall be extended up to one hundred eighty (180) days in the event that any
application for Regulatory Authority approval that is required for the Assumed
Accounts Purchase Date remains pending.

15.5 Duties After Termination or Expiration.

(a) Continuation of Rights and Obligations under Agreement. Notwithstanding the
occurrence of a Termination Date with respect to this Agreement, the rights and
obligations of the Parties under this Agreement (other than the Non-Surviving
Obligations) shall continue until the latest of (i) the expiration of the EFS
Purchase Option or delivery by EFS of a No Interest Notice; (ii) if EFS has
delivered an Exercise Notice, the consummation of the purchase of the Purchased
Assets and the assumption of the Assumed Liabilities; or (iii) if EFS has
delivered an Exercise Notice, the expiration of the periods set forth in
Section 15.4 (Purchase Mechanics) without the consummation of the purchase of
the Purchased Assets and the assumption of the Assumed Liabilities. The Parties
shall mutually agree on a conversion plan and shall not unreasonably withhold or
delay execution of the conversion plan. Bank shall be prepared to participate in
the conversion of the Accounts to the purchaser thereof by the conversion date
to be specified in the conversion plan (the “Conversion Date”).

In addition, notwithstanding anything else to the contrary in this Agreement,
upon the occurrence of a Termination Date, the rights and obligations of the
Parties under this Agreement (other than

 

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the Non-Surviving Obligations) shall continue during the wind down period
described in Section 15.6 until the earliest of (i) the Final Wind Down Date;
(ii) the completion of the wind down prior to the Final Wind Down Date;
(iii) the date that Bank completes the implementation of a plan to replace or
substitute one or more Financial Products with similar financial products
offered by Bank that are not branded with Company Licensed Marks; or (iv) such
other date as may be agreed upon in writing by the Parties and a Nominated
Purchaser pursuant to Section 15.4.

(b) ABA Routing Number; BIN; ICA. If EFS delivers an Exercise Notice, the Bank,
EFS and Nominated Purchaser shall work together to assign or transfer to the
Nominated Purchaser the ABA routing numbers, bank identification numbers (“BIN”)
or interbank card association numbers (“ICA”) range applicable to the Financial
Products (to the extent permissible by the Payment Networks and to the extent
related to or utilized by the Financial Products) and the account numbers
relating to the Financial Products.

(c) Conversion Costs. Each Party shall bear its own costs associated with the
sale and conversion of the Purchased Assets and the assumption of the Assumed
Liabilities to the initial Nominated Purchaser; provided, however, that (i) EFS
shall pay for Bank’s reasonable outside legal fees and expenses incurred to
negotiate, draft, execute and deliver the purchase agreement and related
agreements and regulatory filings contemplated by this Article 15 (“Reasonable
and Related Outside Counsel Transaction Expenses”), to the extent such outside
legal fees and expenses exceed $200,000.00, and (ii) if for any reason EFS
designates a substitute or replacement Nominated Purchaser or if EFS extends the
timeframe beyond the initial 270 day period provided by Section 15.4, then EFS
shall pay for all of Bank’s Reasonable and Related Outside Counsel Transaction
Expenses. Third party costs and expenses, to the extent directly related to the
conversion to a Nominated Purchaser pursuant to this Article 15, shall be paid
or reimbursed by EFS.

15.6 Wind-Down by Bank. If (i) the Purchase Option Exercise Period expires,
(ii) EFS issues a No Interest Notice or (iii) EFS delivers an Exercise Notice,
but the periods set forth in Section 15.4 expire without the consummation of the
purchase of the Purchased Assets and the assumption of the Assumed Liabilities,
then as promptly as reasonably practicable and in any event within one (1) year
thereafter (the “Final Wind-Down Date”), Bank shall wind down the remaining
Accounts in the Program or relevant Product Schedule in any lawful manner which
may be expeditious or economically advantageous to Bank, including the issuance
of a replacement or a substitute card associated with an Account, as applicable;
provided, however, that Bank shall (a) remove all Company Licensed Marks from
the Financial Products and related materials as promptly as reasonably
practicable and in any event prior to the Final Wind-Down Date; (b) discontinue
originating Financial Products with Company Licensed Marks within sixty
(60) days after the Termination Date; and (c) not re-brand the Financial
Products with a Specified Party, sell the Financial Products or Program Customer
Data to a Specified Party or a Specified Party’s designee, or otherwise permit
the Financial Products or Program Customer Data to benefit a Specified Party.

During the wind down period, the rights and obligations of the Parties under
this Agreement will continue as provided in the second paragraph of
Section 15.5(a). During the wind down period,

 

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Bank and EFS shall act in good faith and shall reasonably cooperate with each
other to wind down the Program in a reasonable and efficient manner, with the
least disruption to Company Customers and Bank Customers as possible.

15.7 Communication with Accountholders. When this Agreement expires in
accordance with its Term, or if this Agreement or any Product Schedule is
terminated early for any reason, except as required by Applicable Law or Payment
Network Rules, Bank and EFS shall mutually agree upon all communications with
Accountholders regarding the termination of this Agreement and the Program or of
a Product Schedule. If Bank is required by Applicable Law or Payment Network
Rules to communicate with Accountholders, then EFS may review and approve (which
approval shall not be unreasonably withheld) such communication prior to its
distribution to Accountholders. EFS shall pay for the costs of such
communications to Accountholders.

15.8 Applicability. The Parties acknowledge and agree that the provisions of
this Article 15 shall be applicable to the termination of one or more Product
Schedules, or this entire Agreement, and that there may be more than one
exercise of the EFS Purchase Option. The respective rights and obligations of
the Parties hereunder shall apply with respect to each exercise of the EFS
Purchase Option.

ARTICLE 16

INDEMNIFICATION; LIMITATION OF LIABILITY

16.1 Indemnification of Bank by EFS. Subject to Section 6.4(b)(ix) and
Section 6.5(c), EFS agrees to protect, indemnify, defend and hold harmless Bank,
its parent, subsidiaries and Affiliates, and its and their respective
shareholders, directors, officers. employees, agents, representatives and
permitted assigns (collectively, “Bank Indemnified Parties”), from and against
any and all Indemnified Losses to the extent such Indemnified Losses arise out
of or result from:

(a) any third-party Claim brought against any of the of Bank Indemnified Parties
in connection with or in any way related to this Agreement, the Program, a
Financial Product or a Transaction, except to the extent that an Indemnified
Loss resulted from (i) a Program Change made by Bank (or at the direction of
Bank) as to which EFS has delivered a Disputed Program Change Notification to
Bank, or (ii) any cross-marketing by Bank Indemnified Parties pursuant to
Section 6.2(a) (Cross Marketing);

(b) any negligent, willful, or fraudulent act or omission of the part of EFS,
its Affiliates, any Distributor, any Franchisee, or and EFS Service Provider, or
any of their directors, officers. employees, agents, or representatives, in
connection with the Program;

(c) any breach by EFS, its Affiliates, any Distributor or any Franchisee of any
representation, warranty, covenant or other provision contained in this
Agreement or any other instrument or document delivered by EFS to Bank in
connection with the Program; and

(d) the failure of EFS, its Affiliates, any Distributor or any Franchisee to
comply with Company Applicable Law or any applicable Payment Network Rule in
connection with the Program;

 

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provided, however, that EFS shall have no obligation to indemnify any Bank
Indemnified Party under this Section 16.1 (Indemnification of Bank by EFS)
against any Indemnified Losses to the extent that such Indemnified Losses result
from (x) a grossly negligent, willful, or fraudulent act or omission of any Bank
Indemnified Party or (y) any breach by any Bank Indemnified Party of (i) any
representation or warranty (other than representations and warranties in
Section 10.2(c)(iii)) of this Agreement, or (ii) the covenants set forth in
Section 2.16 (Nevada Office), Section 6.2(b) (Cross Marketing), Article 11
(Confidentiality) and Article 12 (Privacy and Data Security). For the avoidance
of doubt, “gross negligence,” as used in this Article 16, includes repeated acts
of the same or similar negligence for which Bank has received notice from EFS
identifying the existence of the negligence and a reasonable remediable action
plan, and Bank has failed to implement such remedial action plan within a
reasonable period of time to avoid further Indemnification Losses. In addition,
EFS agrees to comply with the last two paragraphs of Section 10.02 of the
Purchase Agreement.

16.2 Indemnification of EFS by Bank. Subject to Section 6.4(b)(ix) and
Section 6.5(c), Bank agrees to protect, indemnify, defend and hold harmless EFS,
its parent, subsidiaries and Affiliates, and its and their respective
shareholders, directors, officers, employees, agents, representatives and
permitted assigns (collectively, “EFS Indemnified Parties”), from and against
any and all Indemnified Losses to the extent such Indemnified Losses arise out
of or result from:

(a) any third-party Claim brought against any of the of EFS Indemnified Parties
in connection with or in any way related to this Agreement, the Program, a
Financial Product or a Transaction only to the extent that the Indemnified Loss
resulted from a Program Change made by Bank (or at the direction of Bank) as to
which EFS has delivered a Disputed Program Change Notification to Bank;

(b) any grossly negligent, willful or fraudulent act or omission of the part of
Bank, its parent, subsidiaries or Affiliates, or any Bank Service Provider, or
any of their directors, officers. employees, agents, or representatives, in
connection with the Program; and

(c) any breach by Bank, its parent, subsidiaries or Affiliates, or any Bank
Service Provider, of (i) any representation or warranty (other than
representations and warranties in Section 10.2(c)(iii)) of this Agreement, or
(ii) the covenants, agreements or undertakings set forth in Section 2.16 (Nevada
Office), Section 6.2(b) (Cross Marketing), Article 11 (Confidentiality) and
Article 12 (Privacy and Data Security);

provided, however, that Bank shall have no obligation to indemnify any EFS
Indemnified Party under this Section 16.2 (Indemnification of EFS by Bank)
against any Indemnified Losses to the extent that such Indemnified Losses result
from (x) a negligent, willful or fraudulent act or omission of any EFS
Indemnified Party or (y) any breach by any EFS Indemnified Party of any
representation, warranty, covenant or other provision contained in this
Agreement, or any other agreement, instrument or documents delivered to Bank in
connection with the Program. In addition, Bank agrees to comply with the last
two paragraphs of Section 10.02 of the Purchase Agreement.

 

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16.3 Notice. If a Party (the “Indemnified Party”) receives notice of any
third-party claim for which indemnification may be available under this
Agreement, the Indemnified Party must promptly notify the other Party (the
“Indemnifying Party”) in writing of the third-party claim, including, if
possible, the amount or estimate of the amount of liability arising from it. The
Indemnified Party shall use its commercially reasonable efforts to provide
notice to the Indemnifying Party no later than fifteen (15) days after receipt
by the Indemnified Party in the event a suit or action has commenced, or thirty
(30) days under all other circumstances; provided, however, that the failure to
give such notice shall not relieve an Indemnifying Party of its obligation to
indemnify except to the extent the Indemnifying Party is materially prejudiced
by such failure.

16.4 Right to Defend Claims; Coordination of Defense.

(a) Subject to Section 16.5 (Settlement of Claims), the Indemnifying Party shall
have the right to defend any such third-party claim at its expense and in the
name of the Indemnified Party and shall select the counsel for the defense of
such third-party claim as approved by the Indemnified Party, such approval not
to be unreasonably withheld, and the Indemnifying Party shall reasonably
cooperate with the Indemnified Party in the conduct of the defense against such
third-party claim. The Indemnified Party may participate, at its own expense, in
such defense and in any settlement discussions directly or through counsel of
its choice on a monitoring, non-controlling basis, or at the Indemnifying
Party’s expense and with full control if the Indemnifying Party does not fulfill
its obligations to appoint counsel to defend the Indemnified Party which is
reasonably satisfactory to the Indemnified Party within a reasonable time after
the Indemnifying Party has received written notice of such third-party claim
from the Indemnified Party. The Parties agree to cooperate in good faith to
coordinate the defense of any third-party claim that may give rise to
indemnification obligations of more than one Indemnifying Party or that may
include allegations that are not subject to indemnification.

(b) Notwithstanding the foregoing, the Indemnifying Party shall not have the
right to defend any such third-party claim on behalf of the Indemnified Party
if: (i) it contests (in whole or in part) its indemnification obligations (but
only as to the obligations specific to the Indemnifying Party’s obligation to
indemnify under this Article 16 in the event a third-party claim gives rise to
indemnification obligations of more than one Indemnifying Party); (ii) it fails
to employ counsel approved by the Indemnified Party (such approval not to be
unreasonably withheld) to assume the defense of such third-party claim or
refuses to replace such counsel upon the Indemnified Party’s reasonable request,
as provided for herein; (iii) the Indemnified Party reasonably determines that
there are issues which could raise possible conflicts of interest between the
Indemnifying Party and the Indemnified Party or that the Indemnified Party has
claims or defenses that are separate from or in addition to the claims or
defenses of the Indemnifying Party; or (iv) such third-party claim seeks an
injunction, cease and desist order, or other equitable relief against the
Indemnified Party. In each such case described in clauses (i) – (iv) above, the
Indemnified Party shall have the right to direct the defense of the third-party
claim and retain its own counsel, and the Indemnifying Party shall pay the cost
of such defense,

 

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including reasonable attorneys’ fees and expenses. If the Indemnifying Party
does not assume the defense of any such third-party claim or refuses to replace
such counsel upon the Indemnified Party’s reasonable request as provided in this
Section 16.4(b), the Indemnifying Party shall have the right to participate, at
its own expense, in the defense of such third-party claim with counsel deemed
satisfactory to it in its sole discretion.

16.5 Settlement of Claims. The Indemnifying Party shall not be liable for any
settlement of any such third-party claim effected without its written consent
(which consent shall not be unreasonably withheld) but, if settled with such
consent or if there is a judgment for the plaintiff, the Indemnifying Party
shall indemnify the Indemnified Party from and against any Indemnified Losses by
reason of such settlement or judgment to the extent required by Section 16.1
(Indemnification of Bank by EFS) or 16.2 (Indemnification of EFS by Bank), as
applicable. If the Indemnifying Party assumes the defense of any such
third-party claim, it shall be entitled to settle such third-party claim
(a) with the consent of the Indemnified Party (which consent shall not be
unreasonably withheld) or, (b) if such settlement provides for an unconditional,
irrevocable release of the Indemnified Party in connection with all matters
relating to the action or proceeding that have been asserted against such
Indemnified Party in connection with such third-party claim by the other parties
to such settlement, and such release does not include a statement as to, or
otherwise imply an admission of fault, culpability or a failure to act by or on
behalf of such Indemnified Party, or can reasonably be expected to result in an
adverse action against the Indemnified Party by a Regulatory Authority, without
the consent of such Indemnified Party which consent may be granted or withheld
in the Indemnified Party’s reasonable discretion. The amount paid or payable by
an Indemnified Party as a result of the Indemnified Losses shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such third-party claim, except where the Indemnified Party is
required to bear such expenses pursuant to this Article 16, which expenses the
Indemnifying Party shall pay as and when incurred, at the request of the
Indemnified Party, to the extent it is reasonable to believe that the
Indemnifying Party will be ultimately obligated to pay such expenses. If any
expenses so paid by the Indemnifying Party are subsequently determined to not be
required to be borne by the Indemnifying Party under this Article 16, the
Indemnified Party that received the benefit of such payment shall promptly
refund the amount so paid to the Indemnifying Party.

16.6 Subrogation. The Indemnifying Party shall be subrogated to any
counterclaims, claims in recoupment, or similar rights of the Indemnified Party
as against any third-party that directly relate to any claim made by such
third-party for which the Indemnified Party seeks indemnification under this
Article 16, but only to the extent of any amount which the Indemnifying Party is
liable to pay in satisfaction or settlement of such third-party claim under this
Article 16. The Indemnified Party shall reasonably cooperate with the
Indemnifying Party, at the Indemnifying Party’s expense, in the assertion by the
Indemnifying Party of any such claims against such third-party claimant.

 

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16.7 Indemnification Payments.

(a) An Indemnifying Party shall not be liable in respect of any indemnification
obligations under this Agreement until the cumulative aggregate amount of
Indemnified Losses exceed $100,000 (“Indemnification Threshold Amount”);
provided, however, that once the Indemnification Threshold Amount has been
exceeded, the Indemnified Party shall be entitled to recover the Indemnification
Threshold Amount and any additional amounts owed pursuant to this Article 16.

(b) Amounts owing under this Article 16 shall be paid promptly upon written
demand for indemnification containing in reasonable detail the facts giving rise
to such liability.

16.8 Apportionment of Costs. The Parties recognize and acknowledge that
third-party claims may be made as part of an action, suit, investigation or
proceeding that may give rise to the indemnification obligations of more than
one (1) Party as set forth in Section 16.1 (Indemnification of Bank by EFS) and
16.2 (Indemnification of EFS by Bank), or that may include allegations that are
not subject to indemnification, and the Parties agree that they shall cooperate
in good faith to fairly apportion the Indemnified Losses relating to such
third-party claims. Indemnified Losses incurred in defending third-party claims
shall be apportioned to the respective Party that has responsibility for each
specific third-party claim as set forth in Section 16.1 (Indemnification of Bank
by EFS) and 16.2 (Indemnification of EFS by Bank), but only to the extent that
those Indemnified Losses directly arise from such third-party claim.

16.9 Limitation of Liability.

(a) In no event shall an Indemnifying Party be liable under this Agreement or
any Product Schedule for any indirect, consequential, incidental, special,
punitive or exemplary damages or lost profits, to an Indemnified Party, whether
in contract, tort (whether in negligence or strict liability) or other legal or
equitable theory, regardless of whether such Indemnifying Party knew or should
have known of the possibility of such damages.

(b) Notwithstanding Section 16.9(a), an Indemnifying Party may be liable for
damages suffered by all Indemnified Parties relating to lost profits or revenue
of up to, but not in excess of, $10,000,000, in the aggregate, for all Claims
over the life of the Program, whether in contract, tort (whether in negligence
or strict liability) or other legal or equitable theory, regardless of whether
such Indemnifying Party knew or should have known of the possibility of such
damages.

ARTICLE 17

MISCELLANEOUS

17.1 Assignment. Any assignment by either Party of any of that Party’s rights
and obligations under this Agreement or any Product Schedule shall require the
prior consent of the other Party to this Agreement, which consent shall not be
unreasonably withheld.

17.2 Entire Agreement; Amendments. Except as it relates to the Purchase
Agreement, this Agreement, together with all Exhibits and Schedules (including
all Product

 

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Schedules) hereto, which are expressly incorporated by reference herein and made
a part hereof, and the other agreements pertaining to the transactions
contemplated hereunder and executed and delivered by a Party hereto to the
others contemporaneous with the execution and delivery of this Agreement, are
the entire agreement of the Parties with respect to the subject matter hereof
and thereof, and supersede all other prior understandings and agreements between
the Parties with respect to the subject matter hereof and thereof, whether
written or oral. It is the intent and agreement of the Parties that this
Agreement be strictly interpreted according to its express terms. This Agreement
may not be amended except by a written instrument signed by EFS and Bank.

17.3 No Third-Party Beneficiaries. Except as set forth in Article 16
(Indemnification; Limitation of Liability), nothing in this Agreement is
intended or shall be deemed to confer any rights or benefits upon any Person
other than EFS and Bank and to make or render any such other Person a
third-party beneficiary of this Agreement.

17.4 Non-Waiver of Default. The failure of either Party to insist, in any one or
more instances, on the performance of any terms or conditions of this Agreement
shall not be construed as a waiver or relinquishment of any rights granted
hereunder or of the future performance of any such term or condition, and the
obligations of the non-performing Party with respect thereto shall continue in
full force and effect.

17.5 Severability. If any provision of this Agreement or any Product Schedule is
held to be invalid, void or unenforceable, the Parties shall work in good faith
to reform such provision and all other provisions shall remain valid and be
enforced and construed to the extent permitted by law. The Parties intend all
provisions of this Agreement to be enforced to the fullest extent permitted by
Applicable Law. Accordingly, should a court of competent jurisdiction determine
that the scope of any provision hereof is too broad to be enforced as written,
the Parties intend that the court should reform the provision to such narrower
scope as it determines to be enforceable.

17.6 Further Assurances. Each Party agrees to execute all such further documents
and instruments and to do all such further things as the other Party may
reasonably request in order to give effect and to consummate the transactions
contemplated hereby, and to provide reasonable access to the other Party and the
Regulatory Authority asserting jurisdiction over the other Party to the extent
necessary for the other Party to comply with Applicable Law.

 

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17.7 Notices. All notices, demands and other communications hereunder shall be
in writing and shall be sent by electronic mail, certified mail return receipt
requested, by hand, by facsimile with verbal confirmation of receipt, or by
nationally recognized overnight courier service addressed to the Party to whom
such notice or other communication is to be given or made at such Party’s
address as set forth below, or to such other address as such Party may designate
in writing to the other Party from time to time in accordance with the
provisions hereof as follows:

If to EFS, to:

Emerald Financial Services, LLC

One H&R Block Way

Kansas City, MO 64105

Attn: Greg Quarles

Email: greg.quarles@hrblock.com

Telephone: 816-854-5709

Facsimile: 816-854-8052

Attn: Walter Pirnot

Email: wpirnot@hrblock.com

Telephone: 816-854-5757

Facsimile: 816-802-1065

with copies to:

 

H&R Block, Inc.    Stinson Leonard Street LLP One H&R Block Way    Attn: Mike
Lochmann Kansas City, Missouri 64105    1201 Walnut Street, Suite 2900 Attn: Tom
Gerke, Chief Legal Officer    Kansas City, Missouri 64106 Email:
tom.gerke@hrblock.com    Email: mike.lochmann@stinsonleonard.com Telephone:
816-854-6060    Telephone: 816-691-3208 Facsimile: 816-854-8500    Facsimile:
816-412-1249

If to Bank, to:

BofI Federal Bank

4350 La Jolla Village Drive, Suite 140

San Diego, California 92122

Attn: Gregory Garrabrants

Email: ggarrabrants@bofifederalbank.com

Telephone: 858-350-6203

Facsimile: 858-764-6561

with copies to:

BofI Federal Bank

4350 La Jolla Village Drive, Suite 140

San Diego, California 92122

Attn: Eshel Bar-Adon

Email: EBar-Adon@bofifederalbank.com

Telephone: 858-764-2905

Facsimile: 858-764-6561

or to such other Person or address as either Party shall have previously
designated to the other by written notice given in the manner set forth in this
Section 17.7. Notice shall be deemed to have

 

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been given on the day of delivery if (x) sent by certified mail; (y) sent by a
nationally recognized overnight courier service; or (z) delivered by hand or via
electronic mail. Any notice provided pursuant to this Section 17.7 shall be
effective on the day of completion of all delivery requirements.

17.8 Force Majeure.

(a) If the performance by a Party of its respective non-monetary obligations
under this Agreement is delayed or prevented (in whole or in part) by acts of
God, third-party cyber, IT or network attacks, fire, floods, storms, explosions,
accidents, epidemics, war, civil disorder, strikes, terrorism, nuclear or
biological disaster, riot or any other similar event or cause not reasonably
within such Party’s control, whether or not specifically mentioned herein (any
such event, a “Force Majeure Event”), such Party shall be excused, discharged
and released of performance to the extent such performance or obligation is so
delayed or prevented by the Force Majeure Event without liability of any kind;
provided, however, that (i) the occurrence of a Force Majeure Event shall not
excuse a Party from following the procedures set forth in its disaster recovery
plan; and (ii) the Parties shall have the termination rights set forth in
Section 14.2(b) (Force Majeure Event).

(b) The Party subject to a delay or prevention as contemplated herein shall, as
soon as practicable and in all events within three (3) Business Days following
the occurrence of a Force Majeure Event, notify the other Party of such Force
Majeure Event, which notice shall set forth: (i) the nature of the Force Majeure
Event; (ii) its expected effect(s) and duration; (iii) any expected development
which may further affect performance hereunder; and (iv) the efforts undertaken
or to be undertaken to cure such Force Majeure Event or provide substitute
performance; provided, however, that failure of a Party to provide the notice
required in this Section 17.8(b) shall not affect the operation of
Section 17.8(a) to excuse, discharge and release a Party from performance as
provided in such Section.

17.9 Interpretation. Each Party acknowledges that its legal counsel participated
in the drafting of this Agreement and that this Agreement has been fully
reviewed and negotiated by the Parties and their respective counsel.
Accordingly, in interpreting this Agreement, no weight shall be placed upon
which Party or its counsel drafted the provision being interpreted.

17.10 Exhibits and Schedules. Unless any provision hereof is specifically
excluded or modified in a particular Exhibit or Schedule, including any Product
Schedule, each such Exhibit or Schedule, including any Product Schedule, shall
be deemed to incorporate therein all the terms and conditions of this Agreement
and may contain such additional terms and conditions as the Parties may mutually
agree in writing.

17.11 No Agency. Except as expressly provided in this Agreement or mutually
agreed in writing by the Parties, nothing contained in this Agreement shall
authorize, empower or constitute EFS or Bank as agent of the other in any
manner; authorize or empower EFS and Bank to assume or create an obligation or
responsibility whatsoever, express or implied, on behalf of or in the name of
the other Party; or authorize or empower EFS and Bank to bind the other Party in
any manner or make any representation, warranty, covenant, agreement or
commitment on behalf of the other Party or permit EFS and Bank to hold itself
out as having the authority to do any of the foregoing.

 

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17.12 Relationship of Parties. EFS and Bank hereby acknowledge that it is not
their intention to create between themselves a partnership, joint venture,
fiduciary or employment or agency relationship for purposes of this Agreement,
or for any other purpose whatsoever, and nothing contained in this Agreement
shall be construed to constitute Bank and EFS as partners, joint venturers,
principal and agent, or employer and employee. Neither Party shall hold itself
in a capacity contrary to the terms of this Agreement, and neither Party shall
become liable by reason of any representations, acts or omissions of the other
contrary to the provisions hereof.

17.13 Governing Law. This Agreement and all rights and obligations hereunder,
including matters of construction, validity and performance, shall be governed
by and construed in accordance with the laws of the State of New York without
regard to its conflict of laws provisions.

17.14 Consent to Jurisdiction. Except as otherwise expressly provided in this
Agreement, any suit, action or proceeding seeking to enforce any provision of,
or based on any matter arising out of or in connection with, this Agreement or
the transactions contemplated hereby shall be in the United States District
Court for the Eastern District of Missouri, located in the City of St. Louis, or
as to those lawsuits to which the Federal Courts of the United States lack
subject matter jurisdiction, before a court located in the State of Missouri in
the City of St. Louis, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by Law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient forum. The parties acknowledge and agree that
this Agreement was executed and delivered in the State of Missouri. Process in
any such suit, action or proceeding may be served on any party anywhere in the
world, whether within or without the jurisdiction of any such court. For the
purposes of such actions and proceedings, service of process on a Party hereto
shall be deemed effective if it is dispatched by United States first class mail
to such Party’s address provided in Section 17.7 (Notices).

17.15 Waiver of Trial by Jury. EACH PARTY TO THIS AGREEMENT WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT.

17.16 Cumulative Remedies; Waivers. Except as otherwise expressly provided
herein, all remedies provided for in this Agreement shall be cumulative and in
addition to and not in lieu of any other remedies available to either Party,
whether at law, in equity, or otherwise. No release, discharge or waiver of any
provision hereof shall be enforceable against or binding upon either Party
unless in writing and executed by a duly authorized officer of each of the
Parties. Neither the failure to insist upon strict performance of any of the
agreements, terms,

 

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covenants or conditions hereof, nor the acceptance of monies due hereunder with
knowledge of a breach of this Agreement, shall be deemed a waiver of any rights
or remedies that either Party may have or a waiver of any subsequent breach or
default in any of such agreements, terms, covenants and conditions.

17.17 Binding Agreement. This Agreement is legally binding on the Parties
hereto, and their respective successors and permitted assigns.

17.18 Survival. The following provisions shall survive the expiration or
termination of this Agreement: Article 1 (Definitions; Order of Precedence;
Rules of Interpretation), Article 8 (Audit Rights; Reporting), Article 9
(Intellectual Property; License to Use Marks; Ownership Rights), Section 10.3(b)
(Non-Solicitation), Article 11 (Confidentiality), Article 12 (Privacy and Data
Security), Article 15 (Rights Upon Termination), Article 16 (Indemnification;
Limitation of Liability), and Article 17 (Miscellaneous), any other provision
identified in the survival section of any Product Schedules; and any other
provision stated by its term to survive. In addition, any payment obligations of
a Party that accrue prior to termination or expiration of this Agreement or a
Product Schedule or prior to the Final Wind-Down Date shall survive such
termination or expiration.

17.19 Multiple Counterparts and Facsimile Signatures. This Agreement may be
executed in any number of multiple counterparts, all of which shall constitute
but one and the same original. Facsimile signatures to this Agreement shall be
effective.

(signature page follows)

 

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IN WITNESS WHEREOF, the Parties have duly executed this Program Management
Agreement as of the day and year first above written.

 

EMERALD FINANCIAL SERVICES, LLC By:  

/s/ Greg M. Quarles

  Name:   Greg M. Quarles   Title:   President BofI FEDERAL BANK By:  

/s/ Gregory Garrabrants

  Name:   Gregory Garrabrants   Title:   President and CEO

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List of Schedules and Similar Attachments Omitted from Program Management
Agreement

 

Schedule 2.1(a)    Financial Products By Territory Schedule 2.4(f)    EFS Audit
Plan Schedule 3.1(a)(i)    Initial Designated Executives Schedule 3.1(b)(i)   
Initial Senior Program Managers Schedule 7.1    List of Internationally
Outsourced Service Providers Schedule 7.2(a)    Material Third Party Service
Providers Schedule 15.3    Calculation of Fair Value of Emerald Advance
Participation Interests Schedule 15.6    Specified Parties Schedule A    Prepaid
Products Product Schedule Schedule B    Refund Transfer Product Schedule
Schedule C    Emerald Advance Product Schedule Schedule D    Credit Card Product
Schedule Schedule E    Deposit Products Schedule Schedule F    Service Level
Agreements

Upon request, the registrant agrees to furnish supplementally to the Securities
and Exchange Commission a copy of any omitted schedule or similar attachment to
the Program Management Agreement; provided, however, that the registrant may
request confidential treatment of omitted items prior to any public disclosure.