Exhibit
10.23


 


SANTA BARBARA BANK & TRUST


5770 Oberlin Drive


San Diego, CA 92121


 


 


March 14, 2005


 


 


Jackson Hewitt Inc.

7 Sylvan Way

Parsippany, NJ 07054


 


 


Gentlemen:


 


Reference is made to the
Program Agreement, dated as of May 5, 2004, by and between Santa Barbara Bank
& Trust and Jackson Hewitt Inc. (the “Agreement”).  The parties hereby agree that the Agreement is
amended as follows:


 


Exhibits A, B, C and D (the “Exhibits”)
attached hereto shall be the Exhibits to the Agreement for the 2005 Tax Season
and are hereby made a part of the Agreement.  Except to the extent modified herein, the
Agreement shall remain in full force and effect according to the terms thereof.


 


Kindly indicate your
acceptance of the foregoing terms by signing on the signature line set forth
below.


 


Very truly yours,


 


SANTA BARBARA BANK &
TRUST


 


 


	
  By:

  	
  /s/ Richard H. Turner

  	
   

  
	
  Name: Richard H. Turner

  
	
  Title: Senior Vice President

  
	
   

  
	
   

  
	
  Accepted and agreed to:

  
	
   

  
	
  JACKSON HEWITT INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Bill SanGiacomo

  	
   

  
	
  Name: Bill SanGiacomo

  
	
  Title: Vice President – Bank Products

  
				



 





















 


Exhibit A


to


Program Agreement Between

Santa Barbara Bank & Trust and Jackson Hewitt Inc.


 


SANTA BARBARA BANK & TRUST


2005 BANK PRODUCT AGREEMENT


 


THIS AGREEMENT IS BEING PROVIDED TO
YOU ELECTRONICALLY AS PART OF THE ENROLLMENT PROCESS WITH SANTA BARBARA BANK & TRUST (SBBT).  YOU MUST AGREE TO THE FOLLOWING TERMS AND
CONDITIONS BEFORE YOU CAN BE ACCEPTED INTO SBBT’S REFUND ANTICIPATION LOAN
PROGRAM (PROGRAM) AND SUBMIT AN APPLICATION FOR AN SBBT REFUND ANTICIPATION LOAN
(RAL), ACCELERATED CHECK, CASH OR CASH CARD REFUND (ACR), ACCELERATED DIRECT
DEPOSIT (ADD) OR HOLIDAY LOAN.  PLEASE
READ THIS AGREEMENT CAREFULLY.


 


BACKGROUND: SBBT is a nationally chartered bank that
provides RALs, ACRs, ADDs and holiday loans (collectively, with other products
that may be developed by SBBT from time to time, “Bank Products”) to qualifying
taxpayers based upon the amount of their expected Fedoral or State income tax
refund.  SBBT Bank Products are offered
to taxpayers (“Clients”) through Jackson Hewitt Tax Services franchisees.  This Agreement is by and between you (“you” or
“Participant”) and SBBT, and sets forth your rights and obligations vis a vis
SBBT in connection with the Program.


 


I.  GRANT OF
RIGHT TO OFFER BANK PRODUCTS.  SBBT hereby
grants Participant the right, on SBBT’s behalf and on the terms and subject to
the conditions set forth herein, to offer Bank Products to Clients and to
charge application fees relating thereto.  SBBT has the sole right to establish the
terms, conditions and fees of all Bank Products.


 


II. 
PARTICIPANT’S REPRESENTATIONS AND 
WARRANTIES.  Participant makes the
following representations, warranties and acknowledgements to SBBT as of the
date of this Agreement and at all times during the term hereof as follows:


 


2.1  Independent Contractor.  Participant is an independent contractor.  Neither this Agreement nor any actions taken
pursuant hereto shall constitute a joint
venture nor create a partnership, agency or employment relationship between the
parties.


 


2.2  Right to Participate.  Participant understands that Participant’s
initial and continued right to participate in the Program is subject to SBBT’s
approval.


 


2.3.  Valid
EFIN.  Participant has a current and
valid Electronic Filer Identification Number (EFIN) issued by the Internal
Revenue Service (IRS).  Participant
understands that he or she shall be deemed by SBBT to be the originator of all
income tax returns accepted by Participant and that, as such, Participant is
required to process all returns under his or her own EFIN.  Participant further understands that he/she
will be suspended from the Program immediately upon notice if he/she accepts
tax returns for electronic filing without a valid EFIN.


 


2.4  Excessive
Loan Loss.  Participant understands and
agrees that if he/she generates excessive loan loss (determined in SBBT’s sole
discretion), then Participant may be immediately suspended from the Program
upon notice.  Participant further
understands that SBBT shall consider requests for re-acceptance into the
Program on a case-by-case basis, and shall make determinations with respect
thereto based upon: (i) subsequent recoveries of loan losses through IRS direct
deposits or other means, (ii) the completeness and accuracy of loan
documentation, and (iii) such other factors deemed relevant by SBBT.  For purposes of this Agreement, any loan not
paid in full seven days after its expected refund date (expected refund date
being approximately 10-17 days after the IRS acknowledgment date), shall be
deemed “delinquent” by SBBT and shall be used in calculating loan loss ratios.


 


III. 
PARTICIPANT’S DUTIES AND OBLIGATIONS.  Participant covenants and agrees with SBBT as
follows:


 


3.1 
Compliance.  Participant agrees to
comply with all procedures and requirements relating to the Program provided by
SBBT prior to the 2005 tax season, including those set forth in the 2005 Bank
Program User Manual available for printing and downloading on JHNet.


 


3.2  Completion
of Applications; Proper Identification.  Participant
shall exercise due care in, and shall be solely responsible for, accurately
inputting and submitting with each RAL/ACR/ADD application (“Application”) all
material information, including social security number(s), received from
Clients.  Participant shall exercise due
diligence in ensuring that the Client has presented two forms of proper
identification, as defined in the Application, and shall properly verify the
social security numbers of primary and secondary filers as well as all
dependent children listed on the tax return.


 


3.3.  Valid
Income Documents.  Participant agrees to
carefully scrutinize each income document, such as W-2s and Form 1099s, to
ensure that they have been issued by a valid entity.  Participant shall not accept questionable
documents or file any return relating thereto.


 





















 


3.4 
Unacceptable practices: ERO shall comply with both the letter and spirit
of Fair Lending laws that govern financial institutions.  Specifically, ERO shall not engage in any
unacceptable practices, including but not limited to the following: telling
consumers they must apply for a bank product in order to receive their refund,
charging excessive fees or fees unrelated to the preparation and filing of a
tax return or bank product, failing to provide the consumer with any required
bank product disclosures, requiring a consumer to sign disclosures before
reading them, intentionally misrepresenting any material fact concerning the
bank’s products or its program including pricing or timing of disbursements,
or, intentionally steering a consumer to a RAL when that customer has expressed
a desire for a different product.  An ERO
who engages in unacceptable practices may be suspended from the Program at the
discretion of SBBT.  A list of
unacceptable practices is provided in the Bank Program User Manual, however, it
remains the sole discretion of SBBT to determine whether or not an ERO has
engaged in behavior that SBBT deems to be “unacceptable”.


 


3.5.  False RAL
Information.  Participant shall not
knowingly assist any person in fraudulently obtaining a Bank Product and shall
not knowingly transmit false or incomplete information on RAL, ACR or ADD
records to SBBT.  Participant agrees to
notify SBBT immediately if he/she becomes aware of any attempt to obtain a Bank
Product by fraud or pursuant to any untrue or false tax return.  Any breach by Participant of its obligations
under this Section 3.4 shall, and any suspicion of fraud by SBBT among
Participant’s Bank Product requests may, result in Participant’s immediate
suspension from the Program upon notice.  Further, Participant agrees to pay to SBBT the
amount of any RAL that is not collected by SBBT if such failure is the result
of (i) Participant’s knowing assistance of a Client’s fraud, or (ii)
Participant’s failure to accurately submit Application information to SBBT as
received from a Client.  Participant
shall pay all such amounts within 30 days after notice from SBBT.


 


3.6  Completed
and Signed Tax Return.  Participant shall
complete the direct deposit designation in the electronic portion of the
Client’s Federal (and State, if applicable) income tax return.  The direct deposit designation shall include
information provided by SBBT (including the SBBT check routing number and
client account number), and shall name SBBT as the financial institution.  The designation shall also indicate that the
account is “checking” and that the source is “other.” Participant shall cause
the same information to be contained in the appropriate data fields as part of
the electronically filed return. 
Participant shall obtain the Client’s signature on an e-filed tax return
via a completed and signed IRS Form 8453 or by using the Client’s self select
PIN (Personal Identification Number).


 


3.7  Client
Copies.  Participant shall deliver to
each Client a signed copy of the Application, Loan Agreement and Disclosure
Statement (each, as provided by SBBT), together with any other agreements or
documents that SBBT reasonably may require, as identified and provided to
Participant.


 


3.8  Document Retention.  Participant shall retain with respect to each
Client a signed copy of the Application, Loan Agreement and Disclosure
Statement, together with copies of all the tax returns, W-2s, and (to the
extent feasible) taxpayer identifications, for a period of five (5) years, and,
upon request, shall deliver the same to SBBT within 48 hours.


 


3.9  Secure Check Storage.  Participant understands that, if printing
checks on site, he/she will have the care and custody of consecutively numbered
SBBT checks upon which Participant may affix an SBBT facsimile signature of an
authorized SBBT signatory.  Participant
agrees to store the check supplies in a secure, locked area in the same manner
as it stores cash, and to allow access to authorized personnel only.  Participant acknowledges that mishandling of
check supplies may be cause for immediate suspension from the Program.


 


3.10  Lost/Stolen/Voided Checks:  Participant shall reimburse SBBT, within 30
days of notice, the amount of each SBBT cashier’s check that is stolen by an
employee of Participant, given to the incorrect Client or reported lost and/or
voided by the Participant’s office if (i) the check has cleared SBBT and (ii)
SBBT is otherwise unable to recover such funds.


 


3.11  Compliance with Laws; Client Consents.  Participant shall comply with all applicable
laws, rules and regulations (including, without limitation, applicable State
licensing requirements) relating to the preparation and transmission of income
tax returns and his/her performance under this Agreement.  Participant accepts full responsibility for
obtaining Client consents, on behalf of SBBT,
in connection with the offer and sale of Bank Products.


 


IV.  SBBT’S
DUTIES AND OBLIGATIONS,


 


4.1  Processing Applications.  SBBT shall timely process Applications in
accordance with industry standards and provide Bank Products with respect to
all Applications received electronically from Participant according to SBBT’s
credit criteria, as in effect from time to time.  SBBT shall establish such credit criteria, as
well as bank fees relating to Bank Products, in its sole discretion.  SBBT shall disburse RALs and tax refunds to
Clients in accordance with the terms set forth in the Application and Loan
Agreement.


 


4.2  Check Stock.  SBBT shall provide and distribute to Participant
the necessary check stock to participate in the Program, and shall replenish
such stock promptly upon Participant’s request (provided, however, that if
Participant requests overnight delivery, then Participant shall pay the cost of
such delivery).


 





















 


4.3  ACH Fee
Payments: SBBT shall pay all fees owing to Participant as set forth in the RAL
or ACR/ADD records received by SBBT via automated clearing house (“ACH”) credit
to the bank account designated by Participant to Jackson Hewitt Inc.  Such funds shall be withheld from the Bank
Product and paid (i) on the business day following receipt of the check
reconciliation file by SBBT, in the case of an approved RAL, or (ii) upon
SBBT’s receipt of the IRS tax refund, in the case of an ACR or ADD.  Notwithstanding the foregoing, Participant authorizes
SBBT to accept and act in accordance with instructions SBBT receives from
Jackson Hewitt Inc. to pay Participant fees to Jackson Hewitt Inc. whenever
Jackson Hewitt Inc. claims that such monies are owed.


 


4.4.  Fees on Denied RALs.  If SBBT denies a RAL, then the request will be
converted automatically to an ACR application, and Participant’s fee will be
collected and disbursed upon funding of the return by the IRS.  If SBBT denies a RAL due to an outstanding
RAL debt, then SBBT shall pay the Participant’s fees at the time the RAL is
denied.


 


4.5.  Collection of Outstanding Participant
Fees.  SBBT shall not reimburse
Participant fees on unfunded ACRs or ADDs.  Notwithstanding the foregoing, SBBT agrees to
act as a third party debt collector on behalf of Participant to collect any
outstanding tax preparation or other Participant fees of a prior Client.  To the extent any such collection efforts are
successful, Participant fees, if any, will be deducted from the proceeds of a
Bank Product (after deduction of all bank fees and charges and after deduction
of a 10% charge) and paid to Participant.  Participant will be responsible for
substantiating any disputed debts.  This Section 4.5
shall survive the termination or expiration of this Agreement.


 


4.6  Compliance
with Laws.  SBBT covenants and agrees
that all Program documentation (including the Application, Loan Agreement,
Disclosure Statement, disbursement checks and marketing materials, if any)
provided to Participant, and SBBT’s performance under this Agreement, shall
comply with applicable laws, rules and regulations.


 


V.  TERM.


 


5.1  Term.  This Agreement shall become effective on the
date Participant executes and delivers the same to Jackson Hewitt Inc. and shall
continue until December 31, 2005.


 


5.2 
Termination.  This Agreement may
be terminated by SBBT immediately upon notice to Participant if Participant has
breached any of the representations made, or has materially defaulted in the
performance of any of his/her obligations, hereunder.


 


VI.  PRIVACY. 
No party shall make any unauthorized disclosure of or use any personal
information of Clients that it receives from the other or on the other’s behalf
other than to carry out the purposes for which such information is received,
and each party shall comply, to the extent applicable, with the requirements of
the implementing regulations of Title V of the Gram-Leach-Bliley Act of 1999,
specifically including 16 Code of Federal Regulations, Chapter 1, Subchapter C,
Parts 313.11 and 313.13.


 


VII.  INDEMNITY.


 


7.1 
Indemnification by Participant.  Participant
shall indemnify, defend and hold harmless SBBT and its officers, directors,
employees and agents, from and against any and all expenses and costs
(including reasonable attorney’s fees and court costs) or liabilities
(including amounts paid in settlement) incurred by SBBT in connection with any
claim, dispute, controversy or litigation arising out of or resulting from any
breach by Participant of any of his/her representations or obligations
hereunder.


 


7.2  Indemnification by SBBT.  SBBT
shall indemnify, defend and hold harmless Participant and his/her officers,
directors, employees and agents, from and against any and all expenses and
costs (including reasonable attorney’s fees and court costs) or liabilities
(including amounts paid in settlement) incurred by any of them in connection
with any claim, dispute, controversy or litigation arising out of or resulting
from (i) the offer and sale of Bank Products hereunder (excluding acts or
omissions by Participant in connection with such offer and sale); (ii) any
violation or alleged violation of applicable law (including, without
limitation, the Truth-in-Lending Act or any regulation of the Federal Reserve
Board or other applicable Federal or State banking or consumer finance laws or
regulations); or (iii) any breach by SBBT of any of its representations or
obligations hereunder.


 


VIII.  OTHER
AGREEMENTS.


 


8.1  Exclusivity. 
Participant agrees not to submit applications for any Bank Products, or
any products substantially similar thereto, on behalf of any Client (which term shall include both the husband and wife
with respect to taxpayers filing jointly) to any entity other than SBBT while
participating in the Program.  Any breach
of this Section 8.1 will result in Participant’s immediate suspension from
the Program upon notice to Participant.


 


8.2  Participant Incentives.  Participant acknowledges and agrees that,
except as expressly provided herein, Participant shall not be entitled to, and
SBBT shall not pay, any compensation in connection with the Program.  SBBT understands and agrees that Participant
may charge application or other fees in connection with the sale of Bank
Products to Clients in amounts determined by Participant.  The parties further acknowledge that Jackson
Hewitt Inc. may determine whether to offer Participant an incentive


 





















 


program and that the availability of any such
program, and the terms thereof, shall be made in Jackson Hewitt Inc.’s sole
discretion.


 


8.3  Rights of
Access.  Participant hereby grants to
SBBT access to its offices upon notice, for the purpose of performing physical
inspections of SBBT check stock, Application forms, Clients’ Forms 8453 and any
other record reasonably related to the Program, and to observe the operation of
the Program and the procedures followed by office personnel.


 


8.4  Ownership
of Loans.  SBBT shall be the sole owner
of RALs made under the Program.  SBBT
shall have the authority to transfer or assign such loans at any time.


 


8.5  Limitation
of Liability.  Neither party shall be
liable to the other for incidental, special, indirect or consequential damage
or loss of profits or other benefits, arising out of or in connection with the
performance (or failure thereof) of its obligations hereunder, unless such
damage or loss arises from that party’s gross negligence or wilful misconduct.


 


8.6  Excusable Delay.  No party shall be liable to any other party
for any delay in performance or nonperformance of its obligations under this
Agreement where such delay or nonperformance is caused by circumstances or acts
beyond its control, including failure of communication lines, equipment or
systems of third parties; acts of God; civil disturbances, war or other
violence; strikes or labor disputes.


 


8.7  Attorneys’ Fees.  The non-prevailing party will pay all costs
and expenses, including reasonable attorneys’ fees and court costs, incurred by
the prevailing party to enforce this Agreement, including collection of amounts
owed under this Agreement.


 


8.8  Notices.  Any notice required or permitted to be given
hereunder shall be in writing and shall be deemed to have been given on the
date of delivery, if made personally or by facsimile transmission, or on the
second business day after mailing, if mailed by registered or certified mail,
return receipt requested.  Notices shall be
sent to SBBT at the address set forth below, and to Participant at the address
on file at Jackson Hewitt Inc.


 


8.9  Integration.  This Agreement expresses the entire
understanding and agreement of the parties concerning to the subject matter
hereof, and supercedes all prior agreements, understandings, arrangements or
commitments with respect to such subject matter, written or oral, including
(without limitation) any agreements to which Participant and SBBT may be a
party prior to the date hereof, each of which are hereby void and of no further
force and effect (except to the extent certain provisions therein by their
terms or nature survive termination or expiration).


 


8.10  Rights of Jackson Hewitt.  Nothing in this Agreement is intended to nor
shall limit any rights or remedies of Jackson Hewitt Inc. in connection with
the Program or the offer thereof. 
Jackson Hewitt Inc. is expressly made a third party beneficiary of this
Agreement, and shall be entitled to enforce the provisions hereof.


 


By signing below, I certify that I have been approved
by the IRS to prepare and electronically file income tax returns and that I
have a current and valid EFIN.  I acknowledge
that I have read, understand and agree to be bound by all of the terms and
conditions set forth in this Agreement.  I
further authorize SBBT to check my credit record through any nationally
recognized credit bureau.


 


	
  Processing Center

  	
   

  	
   

  	
  Entity No.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Printed Name

  	
   

  	
  Signature

  	
  Date

  
									



 


Notice: A signed copy of this Agreement must be
received by Jackson Hewitt Inc. before you can be activated in the Program.


 


On behalf of SBBT:


 


 


	
  /s/Richard H. Turner

  	
   

  
	
   

  
	
  Richard H. Turner

  
	
  Senior Vice President

  
	
  Santa Barbara Hank & Trust.

  
	
  1021 Anacapa Street, 3rd Floor

  
	
  Santa Barbara, CA 93101

  



 





















 


Exhibit B


to


Program
Agreement Between

Santa Barbara Bank & Trust and Jackson Hewitt Inc.


 


Pricing and
Loan Ranges


 


Santa
Barbara Bank & Trust

March 14, 2005


 


1.1.                              I.  Refund Anticipation Loan “RAL”


 


	
  LOAN
  AMOUNT RANGES

  	
   

  	
  SBBT Finance Charge

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  RAL
  Loan Amount Between:

  	
   

  	
   

  	
   

  
	
  Sum of All Fees + $1 - $7,000

  	
   

  	
  3.00% of
  Loan

  	
   

  
	
  Minimum Fee

  	
   

  	
  $

  	
  10

  	
   

  
	
  Maximum Fee

  	
   

  	
  $

  	
  80

  	
   

  
	
  Surcharge on RALs if EIC is claimed

  	
   

  	
  $

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Money Now* loan up to $1100

  	
   

  	
  $

  	
  35

  	
   

  



 


II.
 Accelerated Check Refund “ACR”/Assisted
Direct Deposit “ADD”


 


	
  All Amounts:

  	
   

  	
  $

  	
  25

  	
   

  



 


III.
 Federal Tax Refund Limit


 


	
  Minimum
  Refund Amount:

  	
   

  	
  Sum of All Fees + $1

  	
   

  
	
  Maximum Refund Amount - ACR:

  	
   

  	
  $

  	
  999,999

  	
   

  
	
  Maximum Refund Amount - RAL:

  	
   

  	
  $

  	
  9,999

  	
   

  



 


Product features and
pricing are subject to change at
the discretion of Santa Barbara Bank & Trust with reasonable advance notice
to Jackson Hewitt.


 


3





















 


Exhibit C


to


Program Agreement


Between


Santa Barbara Bank & Trust and
Jackson Hewitt Inc.


March 14,
2005


 


I.  Source of Fees


 


1.  SBBT shall collect the following handling fees
(“Handling Fees”) on Bank Products originating from

EROs:


 


$25 per funded
ACR or RAL


$10 per funded
State ACR


$35 per funded
Money NowSM loan


 


A funded Bank
Product is one with respect to which SBBT receives all or part of the Customer’s
expected refund from the IRS or state taxing authority sufficient to pay the
applicable Handling Fee.


 


2.  In addition to the applicable Handling Fee, a
finance charge shall be charged to each Customer obtaining a RAL approved by
SBBT.  The finance charge shall be a
percentage (determined each year) of the total RAL dollar amount.  SBBT shall, within one business day following
the receipt of the IRS direct deposit of the Customer’s refund, disburse to JHI
$.75 of the finance charge associated with each RAL approved by SBBT by ACH
direct deposit to JHI’s bank account (as identified by JHI) or as otherwise
directed (the “Finance Fee”).  Except as specifically
set forth in Section II (C) below, SBBT shall bear sole responsibility for
loan losses.


 


II.  Disbursements


 


In
consideration of the services provided by JHI under this Agreement, SBBT shall
pay the following amounts to JHI, except in jurisdictions that the parties
agree prohibit such payment:


 


A.  Handling Fee Disbursements


 


1.   The
Handling Fee shall be disbursed pursuant to the following schedule:


 


	
  For each
  funded ACR and RAL:

  	
   

  	
  $

  	
  7.20 to SBBT

  	
   

  
	
   

  	
   

  	
  $

  	
  17.80 to JHI

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  For each
  funded State ACR:

  	
   

  	
  $

  	
  5.00 to SBBT

  	
   

  
	
   

  	
   

  	
  $

  	
  5.00 to JHI

  	
   

  



 


2.  The foregoing fees shall be disbursed within
one business day following the receipt of the IRS direct deposit of the
Customer’s refund.  Payments shall be
made using ACH direct deposit to JHI’s bank account (as identified by JHI) or
as otherwise directed.


 





















 


B. RAL
— Fixed Rebate


 


1. SBBT shall pay to JHI for each RAL
approved by SBBT an amount equal to: (i) $ 16.00 (the “RAL Fixed Rebate”) and
(ii) the amount of the RAL finance charge in excess of $75, if any (the “RAL Fee”).


 


2. Payments of the RAL Fixed Rebate amounts
pursuant to clause (i) above shall be disbursed within one business day
following the approval of each RAL application and payments of amounts of the
RAL Fee pursuant to clause (ii) above shall be paid no later than April 15
of each tax year.  Payments shall be made
using ACH direct deposit to JHI’s bank account (as identified by JHI) or as
otherwise directed.


 


C. RAL —
Performance Adjustments


 


1. For
purposes of this Agreement, the following terms shall have the following
meanings:


 


“Delinquency
Amount” means the total dollar value of all outstanding and unpaid RALs
issued by SBBT pursuant to the Program in the current calendar year.


 


“Loan Yield”
means with respect to any calendar year, the amount equal to the quotient of
(i) the Yield Amount, divided by (ii) the total dollar value of all RALs issued
by SBBT pursuant to the Program in such calendar year.


 


“Loan Delinquency
Rate” means with respect to any calendar year, the amount equal to the
quotient of (i) the Delinquency Amount, divided by (ii) the total dollar value
of all RALs issued by SBBT pursuant to the Program in such calendar year.


 


“Threshold
Amount” means with respect to any calendar year, one percent of the total
dollar value of all RALs issued by SBBT pursuant to the Program in such
calendar year.


 


“Yield
Amount” means with respect to any calendar year, the amount equal to (i)
the gross amount of all finance charges assessed by SBBT in respect of SBBT
approved RALs pursuant to the Program in such calendar year, minus (ii) an
amount equal to the sum of (x) the aggregate Finance Fee for such calendar
year, (y) $3.75 for each RAL included in the Finance Fee calculation, and (z)
the aggregate RAL Fee for such year.


 


2. The parties
agree that except as specifically provided for below in subparagraph (a) of
this Section 11.C.2, SBBT shall be shall be entitled, after fulfillment of
its payment obligations to JHI pursuant to the other provisions of this Exhibit
C, to retain all other amounts earned in connection with the Program.  The parties agree that except as specifically
provided for below in subparagraph (b) of this Section II.C.2, SBBT shall
be responsible for all loan losses.  The
parties further agree that notwithstanding the provisions of the preceding
sentence, nothing herein shall affect SBBT’s payment obligation to JHI or JHI’s
right to receive from SBBT, the Handling Fee or RAL Fixed Rebate or RAL Fee
payments set forth in paragraphs A and B of this Section II, JHI’s fixed
share of the finance charge pursuant to Section I (2), or the fees set
forth in Section III of this Exhibit C.


 


(a) Excess
Loan Yield.  With respect to each
calendar year during the term of this Agreement, if the Loan Yield exceeds the
Loan Delinquency Rate for a particular calendar year, each measured as of December 31
of such calendar year, by more than 100 basis points, then SBBT shall pay to JHI
50% of the amount equal to the difference between (i) the Yield Amount and (ii)
the sum of the Delinquency Amount and the Threshold Amount for such calendar
year.  Amounts, if any, payable to JHI
pursuant to the preceding sentence shall be paid within five business days
following December 31 of such calendar year.


 


2





















 


(b) Excessive
Loan Delinquency.  With respect to
each calendar year during the term of this Agreement, if the Delinquency Amount
exceeds the Yield Amount for a particular calendar year, each measured as of July 1
of such calendar year, then JHI and SBBT shall each fund 50% of the amount equal to the
difference between the Delinquency Amount and the Yield Amount for such
calendar year within five business days following such date.  In such event, all amounts recovered by SBBT
between July 1 and December 31 of such calendar year, with respect to
RALs issued in such calendar year, calculated as of December 31 of such
calendar year, shall be shared equally between the parties and paid to JHI
within five business days following such December 31st; provided, however,
that the amount payable to JHI pursuant to this sentence shall not exceed the
amounts payable by JHI pursuant to the immediately preceding sentence.


 


III. Prior and Current Year
Loans


 


SBBT shall
cooperate with other RAL issuing banks to require the collection of outstanding
RALs it originated in prior years in connection with the Program to the extent
those collection efforts do not violate law.


 


Notwithstanding
any provision herein to the contrary, the amount of any outstanding RALs that
is collected by or paid to SBBT during calendar year 2005 that was originated
during or prior to the 2004 filing season shall be deposited into a collection
account and disbursed by SBBT on the last business day of each month as
follows: 65% to JHI and 35% to SBBT; provided, however, that for the 2005
filing season JHI shall not receive less than an amount equal to the product of  $2.00
multiplied by the number of RALs issued by SBBT pursuant to the Program in 2005.
 For calendar years subsequent to 2005,
such RALs collected by or paid to SBBT shall be disbursed by SBBT as follows:
65% to JHI and 35% to SBBT.


 


With respect
to each calendar year during the term of this Agreement commencing with the
2006 filing season, SBBT shall pay to JHI an amount (the “Additional Amount”)
equal to the product of $2.00 multiplied by the number of RALs issued by SBBT
pursuant to the Program during such calendar year (the “Measurement Year”);
provided that one of the two following tests shall be met before any payment shall
be made to JHI:


 


(a) the Loan Yield for such Measurement Year
exceeds the Loan Delinquency Rate for such Measurement Year by at least 50
basis points as of April 30th of such Measurement Year; or


 


(b) the Loan Yield for such Measurement Year
exceeds the Loan Delinquency Rate for such Measurement Year by at least 60
basis points as of December 31 of such Measurement Year.


 


In the event
both of the tests set forth in (a) and (b) are not met, JHI shall also be
entitled to the Additional Amount if: the Loan Yield for such Measurement Year
exceeds the Loan Delinquency Rate for such Measurement Year by at least 60
basis points measured as of any date through December 31 of the year next
succeeding such Measurement Year, after taking into account any and all collections
made by or paid to SBBT in such next succeeding year through such date with
respect to the RALs issued by SBBT in such Measurement Year.


 


In addition to
the foregoing, provided that an Additional Amount is otherwise earned for a
Measurement Year in accordance with above, then with respect to such Additional
Amount and such Measurement Year, if an amount equal to 25% of the total amount
of RALs issued in the calendar year immediately preceding such Measurement Year
and collected by or paid to SBBT in such Measurement Year (the “Cross
Collection Amount”) is greater than such Additional Amount for such Measurement
Year, then SBBT shall pay to JHI the Cross Collection Amount in lieu of the
Additional Amount, or the difference between such Cross Collection Amount and
such Additional Amount if such Additional Amount has previously been paid.  SBBT shall disburse such funds to JHI within
five business days of the December 31 of the year in which the first of
the above three tests is met.


 


IV. Right
of First Refusal for New Bank Products.


 


JHI shall offer SBBT a right of first refusal
to develop and/or provide New Bank Products.  JHI shall be permitted to develop,
independently or in connection with a third party, new products/services or
programs, in its discretion.  With
respect to New Bank Products that are similar to existing Bank Products, such
New Bank Product must be in response to a party determining that the
continuation of such existing Bank Product is reasonably likely to be
detrimental to a party hereto due to legislative, regulatory or other legal
issues.  Upon delivery by JHI to SBBT of
a request for a New Bank Product, SBBT shall have thirty (30) business days to
respond to any such offer, stating its


 


3





















 


intention to provide or not provide the
requested New Bank Product.  If SBBT
agrees to provide the New Bank Product, then JHI and SBBT will negotiate in
good faith to mutually agree on an acceptable time frame for development,
testing and implementation of the New Bank Product, including costs and fees of
the New Bank Product.  If the parties do
not reach such mutual agreement within thirty days of SBBT agreeing to provide
such New Bank Product or SBBT does not respond within the original thirty (30)
day period, then JHI shall be permitted to delete EROs from this Agreement and,
if it determines to do so, arrange for such EROs to align with another bank or
other vendor for all of the EROs tax related financial product needs.


 


4





















 


Exhibit D


to

Program Agreement


Between


Santa
Barbara Bank & Trust and Jackson Hewitt Inc.


March 14,
2004


 


 


SBBT’s obligation to reimburse JHI for
expenses incurred by it in connection with the activities described in Section 11.3
of this Agreement shall be subject to a yearly maximum limitation, as described
on this Exhibit D which may be amended on a yearly basis pursuant to the mutual
agreement of both parties.


 


Aggregate Maximum Limitation:
$3.6 million