EXHIBIT 10.2


 


[*] designates portions
of this document that have been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.


 


PROGRAM AGREEMENT


 


THIS PROGRAM AGREEMENT (“Agreement”)
is made this 19th day of September, 2007 by and between Republic
Bank & Trust Company (“Republic”), a
Kentucky corporation, with its principal office at 601 W. Market Street,
Louisville, KY  40202, and Jackson Hewitt
Inc. (“JHI”), a Virginia corporation, with
its principal office at 3 Sylvan Way, Parsippany, NJ  07054.


 


RECITALS


 


WHEREAS, JHI (i) is the franchisor of the Jackson Hewitt Tax
ServiceÒ tax preparation system to independently owned and operated franchisees (“Franchisees”) and (ii) through Tax Services of America,
Inc., a wholly owned subsidiary, owns and operates Jackson Hewitt Tax Service
locations (“Corporate Stores,” and together
with Franchisees, “EROs”); and


 


WHEREAS, the EROs provide income tax return
preparation with electronic filing and related services to customers; and


 


WHEREAS, Republic offers products to customers of
tax service companies; and


 


WHEREAS, Republic desires to offer and provide certain
financial products to customers of certain EROs designated by JHI from time to
time, and JHI desires that Republic provide such services, on the terms and
subject to the conditions hereinafter set forth (the “Program”);
and


 


WHEREAS, Republic
desires, and JHI agrees to provide, its marketing and training services and
personnel in connection with and to devote support and additional resources in
support of the Program; and


 


WHEREAS, simultaneous
with the execution of this Agreement Republic shall enter into a technology
services agreement with Jackson Hewitt Technology Services LLC (“JHTSL”) in connection with Republic administering and
offering the Program (“Technology Services
Agreement”).


 


NOW, THEREFORE, in consideration of the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:


 


TERMS AND CONDITIONS


 


1.                                      ERO Participation; General Terms


 


1.1.                              Definitions


 


(a)           “Business Day” shall mean any day that is not a Saturday,
Sunday, legal holiday or any day recognized by the Federal Reserve Bank as a
legal holiday.


 


(b)           “Customer” shall mean a Jackson Hewitt Tax Service customer
that was also a customer of a financial institution that provided financial
products facilitated by EROs and such customer received a RAL, a funded Federal
AR, or a funded State AR from such other financial institution. For purposes of
this definition, joint borrowers or joint recipients of such a financial
product shall constitute one “Customer” and a customer that receives both a RAL
or funded Federal AR and a funded state AR shall count as two “Customers”.


 

















 


[*] designates portions
of this document that have been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.


 


(c)           “Financial Product” shall mean any product offered by
Republic under the Program, including, without limitation, a RAL, Money Now
Loan, Federal or state AR, and any similar or modified product offered from
time to time, or other product agreed to by the parties in accordance with
Section 3.1 hereof.


 


(d)                   “Tax Season” shall mean the period beginning on January 2 of
a calendar year and ending on the last day an individual is permitted to file a
federal income tax return with the Internal Revenue Service (“IRS”) without the taxpayer requesting an extension,
typically April 15 of such calendar year.


 


1.2           ERO Participation.


 


Republic and JHI agree to offer the Program to those
EROs designated by JHI from time to time as provided in Article 2 hereof. JHI
shall require all EROs designated to participate in the Program to enter into
separate agreements with Republic, on an annual basis in advance of the
relevant Tax Season (as defined herein), in a form to be mutually agreed to by
JHI and Republic, and with such changes thereto as the parties, from time to
time, shall agree (the “Republic Financial
Product Agreement”) and to facilitate the offer of Financial Products
to customers of such EROs in accordance with the terms thereof. JHI shall
further require all EROs designated to participate in the Program to (i) sign
the Republic Financial Product Agreement; (ii) retain copies of all signed
Republic Financial Product Agreements; and (iii) deliver, electronically or via
US Mail, all executed copies of the Republic Financial Product Agreement to
Republic prior to the first day of each Tax Season.


 


2.                                      Limited Exclusivity.


 


2.1           ERO
Locations.


 


(a)                                  Republic
shall be the sole, exclusive and designated Financial Product provider for the
ERO locations as set forth in, or as determined by JHI in accordance with the
terms of, this Agreement. To the extent an ERO location is designated by JHI as
a Republic location for a Tax Season (and any related period of time), then
such ERO location shall not be permitted to accept applications for Financial
Products (or products substantially similar thereto) during the same Tax Season
on behalf of any financial institution other than Republic without the prior
written approval of Republic.


 


(b)                                 For
Tax Season 2008, Republic shall offer, and shall be the sole and exclusive
provider of, Financial Products to Jackson Hewitt Tax Service customers of all
locations operated as Corporate Stores located only in the following states:  [*] (the “Designated ERO Locations”).


 


(c)                                  For
all Tax Seasons (and related periods) after Tax Season 2008 under this
Agreement, JHI shall determine the ERO locations at which Republic shall be the
sole, exclusive and designated Financial Product provider, whether by state,
ERO or otherwise, for such Tax Season, subject to the other terms and
conditions of this Agreement, including Section 2.2 hereof. JHI shall
provide notice of such designation to Republic no later than the [*] prior to such applicable Tax
Season.


 


2

















 


[*] designates portions
of this document that have been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.


 


(d)                                 Notwithstanding
anything herein to the contrary, designations made herein, if made by state, shall
be modified by and subject to the requirements of the multi-state operations of
an ERO as defined by processing center and may result in certain locations,
whether within designated states or outside designated states, being excluded
or included, as the case may be, in the list of designated locations for Republic
under the Program in any given Tax Season.


 


2.2.                              ERO Designations.


 


(a)                                  For
Tax Season 2008, the parties agree that Republic shall be the sole and exclusive
Financial Product provider under the Program for the Designated ERO Locations.


 


(b)                                 For
Tax Season 2009, JHI shall designate Republic as the sole and exclusive Financial
Product provider under the Program for the Designated ERO Locations (or equivalent
locations); provided, however, that JHI may, with Republic’s mutual
understanding and agreement, also designate Republic as the sole and exclusive
Financial Product provider under the Program for EROs [*], the “Additional 2009 Designations” and, collectively with the
Designated ERO Locations (or equivalent locations), the “2009
Designated ERO Locations”). The parties shall mutually agree on the
percentage of Additional 2009 Designations by  [*].
[*].


 


(c)                                  For
Tax Season 2010, JHI shall designate Republic as the sole and exclusive
Financial Product provider under the Program for the Designated ERO Locations
(or equivalent locations); provided, however, that JHI may, [with Republic’s
mutual understanding and agreement], also designate Republic as the sole and
exclusive Financial Product provider under the Program for EROs [*], the “Additional 2010 Designations”). The parties shall mutually
agree on the percentage of Additional 2010 Designations by [*]. [*].


 


(d)                                 All
management personnel of ERO locations designated by JHI shall be subject to
approval by Republic, in advance, through Republic’s ERO underwriting
guidelines.


 


3.                                      Financial Products.


 


3.1.                              Product Offering.


 


(a)                                  Products Generally. Republic shall offer and provide
Financial Products to customers of designated EROs, on the terms and subject to
the conditions set forth herein, and such other products and services as the
parties may, from time to time agree.


 


3

















 


[*] designates portions
of this document that have been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.


 


(b)                                 Financial Product Definitions:


 


(i)                                     “Refund Anticipation Loan” or 
“RAL” shall mean a loan to a Customer
based upon, among other things, the Customer’s anticipated federal income tax
return refund (as identified in IRS Form 8453 or similar form), subject to any
limitations that may be imposed thereon due to the application of certain
underwriting criteria or other factors.


 


(ii)                                  “Money Now Loan” means a loan based upon, among other things,
the Customer’s anticipated federal income tax return refund (as identified in
IRS Form 8453 or similar form), with proceeds of such loan available on the
same day the loan is approved by Republic, offered during a Tax Season.


 


(iii)                               “Assisted Refund” or “AR” shall mean a non-loan financial
product through which a Customer’s federal and/or state income tax refund (as
identified in IRS Form 8453 and any applicable state tax form, respectively) is
deposited into an account established by Republic and (i) disbursed, net of
authorized fees and charges, to the Customer by (x) check or (y) debit card, or
(ii) disbursed, net of authorized fees and charges and via an automated
clearing house credit (“ACH”) to the Customer’s designated bank account.


 


(c)                                  State Products. Republic shall provide AR services to all Applicants
requesting the same, if approved, with respect to all states whose taxing
authority accepts state income tax returns electronically and disburses refund
amounts via direct deposit. 


 


(d)                                 Product Development. Republic and JHI may agree, from time
to time, to develop and add additional financial products to the Program. The
description of such additional products and the terms and conditions governing
their offer shall be set forth in separate agreement between Republic and JHI,
and if agreed to shall be included in the definition of Financial Products
under this Agreement.


 


4.                                      Fees.


 


Fees. In
consideration of the rights granted to Republic herein and the performance of
services and expenses incurred by JHI in connection with the Program, Republic
shall pay to JHI fees as follows:


 


(a)                                  For
the 2008 Tax Season, Republic shall pay to JHI [*].


 


(b)                                 For
the 2009 Tax Season, Republic shall pay to JHI [*]. To the extent that JHI has
designated Republic to be the Financial Product provider under the Program for
any Additional 2009 Designations, as set forth in Section 2.2(b), Republic
shall pay to JHI an additional fee [*].


 


4

















 


[*] designates portions
of this document that have been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.


 


(c)                                  For
the 2010 Tax Season, Republic shall pay to JHI [*]. To the extent that JHI has
designated Republic to be the Financial Product provider under the Program for
any Additional 2010 Designations, as set forth in Section 2.2(c), Republic
shall pay to JHI an additional fee [*].


 


(d)                                 The
above fees shall be due and paid in three monthly installments each Tax Season
as follows:  [*] on the second to last
Business Day of January; [*] on the last business day of February; and [*] on
the last business day of March.


 


(e)                                  All
payments due from Republic to JHI pursuant to this Article 4 shall be paid by
wire transfer per written instructions signed by JHI’s Chief Financial Officer.
Republic shall make all payments as provided in such written instructions
unless JHI provides Republic revised payment instructions in an original
written notice that is signed by any two (2) of the following officers of JHI:  (i) Chief Financial Officer and Treasurer,
(ii) General Counsel, (iii) Controller, and (iv) Vice President – Treasury
& Investor Relations. Subject to the requirements set forth in the
preceding sentence, JHI shall have the right to direct Republic to make
payments directly to other entities or third parties.


 


(f)                                    The
parties agree that JHI shall have no right to any fees earned by Republic in
connection with its offering of Financial Products. The parties agree that Republic
is the sole owner of the Financial Products made under the Program.


 


5.                                      RAL Eligibility.


 


The parties agree that only those Jackson Hewitt Tax
Service customers that apply for a Financial Product from Republic (“Applicants”) whose federal income tax returns are filed
electronically and such return sets forth an anticipated federal income tax
refund shall be eligible to receive a RAL. An Applicant who meets the foregoing
requirements shall nevertheless be subject to underwriting criteria developed
by Republic.


 


6.                                      JHI’s Obligations and Procedures.


 


JHI agrees, in connection with the
operation of the Program, to: (i) conduct such advertising; (ii) prepare forms
and other written materials; (iii) cause its EROs to be equipped with computer
equipment and hardware; (iv) maintain personnel; (v) train such personnel and
EROs with respect to the Program Guidelines (as defined in Section 7.7); and
(vi) take such other actions, in each case as reasonably necessary to advertise
and accommodate the facilitation of Financial Products to Applicants at its
expense, as well as the following specific duties:


 


6.1.                              [*].


 


6.2.                              Preparation and Filing of Returns. JHI shall require EROs
participating in the Program to prepare and/or collect and file with the
appropriate taxing authorities federal and state income tax returns for
Customers.


 


5

















 


6.3.                              Application Process. JHI shall require participating EROs to
require that each Applicant (i) complete and sign an application in a form
developed by Republic and reviewed by JHI prior to each Tax Season (the “Application”), which application may also include a loan
agreement (the “Loan  Agreement”)
and a disclosure statement meeting the requirements of the federal
Truth-in-Lending Act (the “Disclosure Statement”),
and (ii) is given a copy of any and all disclosures required to be provided
pursuant to applicable State or local law (“State Disclosure
Documents”). The Application shall include, among other things, a
request for certain information and certifications, as well as an
authorization, signed by the Customer, to (A) use the tax return information
for the application process in accordance with Section 301.7216-3(b) of the U.S.
Treasury Department regulations and (B) allow Republic to repay any delinquent
RAL or Money Now Loan with the proceeds of the Financial Product obtained
pursuant to the Application. Participating EROs shall be responsible, pursuant
to the terms of the Republic Financial Product Agreement, for ensuring that the
Application is complete and accurately reflects all material information
received from the Customer, including social security number(s); provided,
however, if the ERO uses commercially reasonable due diligence and fraud
prevention measures in accordance with the Program Guidelines, neither JHI nor
the ERO shall be held responsible for false or inaccurate information provided
by Customers.


 


6.4.                              Completion of IRS Form 8453. In connection with each Application,
JHI shall require each participating ERO to complete IRS Form 8453 and the
direct deposit designation in the electronic portion of the Applicant’s federal
(and state, if applicable) income tax return which shall include information
provided by Republic (such as the applicable Republic check routing number and
Customer account number) and shall name Republic as the financial institution. The
forms shall be signed by an employee of the ERO and by the Customer, and shall
also indicate that the account is a checking account and that the source is “other”.
JHI shall cause the same information to be contained in the appropriate data
field as part of the income tax return electronically filed by the ERO.


 


6.5.                              Customer Copies. JHI shall require each participating ERO to
timely provide to each Applicant a signed copy of the Application, Loan
Agreement, Disclosure Statement, and State Disclosure Documents (which may be
combined into one form), signed IRS Form 8453 or similar form, together with
any other agreements or documents that Republic reasonably may require, as
identified to and reviewed by JHI prior to each Tax Season; provided that Republic
shall be solely responsible for the form and content of all of the
aforementioned documents, subject to JHI review prior to each Tax Season, and
for their compliance with applicable laws, rules and regulations (“Applicable Law”).


 


6.6.                              Retention and Handling of Documents.


 


(a)                                  Retention. JHI shall require each participating ERO to
retain a copy of the signed Application, Loan Agreement and Disclosure
Statement, State Disclosure Documents, if any, as well as a copy of the federal
and state income tax returns, in the Customer’s file maintained by them for a
period of five years following the preparation and filing thereof (after which
time such documents may be discarded). At the reasonable request of Republic,
JHI shall cause EROs to deliver to Republic a copy of any Application.


 


(b)                                 Tax Returns. For fraud detection, underwriting and
collection purposes, subject to JHI’s receipt of the Customer’s consent as
provided in Section 7216 of the Internal Revenue Code, JHI shall provide to Republic
electronic copies of each Republic Customer’s electronically filed federal
income tax return, in the format prescribed by the IRS, simultaneously with or
promptly after the Application information is transmitted to Republic.


 


6

















 


[*] designates portions
of this document that have been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.


 


6.7.                              Lost Checks. If a Republic Customer notifies an ERO that a
check disbursed by it has become lost, or that he or she has not received a
check mailed by Republic within 14 days, then JHI shall require the ERO and
Customer to immediately request Republic to stop payment thereon and complete
any required documentation, including an indemnification bond, in a form
satisfactory to Republic. When Republic receives the request, the completed indemnification
bond and any other documentation required by Republic, a new check will be
issued at Republic’s sole discretion. All issuing and re-issuing of checks,
including a waiting period, if applicable, will be at Republic’s sole discretion.


 


6.8.                              Collection Assistance. At the reasonable request of Republic,
and subject to Applicable Law, JHI shall provide reasonable assistance to Republic
in the collection of past due RALs. Such assistance may include, among other
things, providing updated addresses and phone numbers for Customers, to the
extent permitted by law.


 


6.9.                              JHTSL. JHI and Republic acknowledge and agree that JHTSL shall
provide certain technology expertise, software modification and implementation
and processing services, personnel and related support to JHI, Republic and
EROs in connection with the Program pursuant to the terms and conditions of the
Technology Services Agreement.


 


7.                                      Republic’s Obligations and Procedures.


 


7.1.                              Processing of Applications. Republic shall, on each day
during the Term, process Applications and provide Financial Products with
respect thereto for all Applications received electronically in accordance with
Republic’s underwriting criteria in effect at that time (as the same may be
amended from time to time by the mutual consent of the parties) and in
accordance with industry standards; provided that Republic shall use
commercially reasonable efforts to process (i) Money Now Loan Applications and
any other similar instant Financial Product within three minutes of receipt of
such Application from JHI and (ii) RAL Applications within two hours (if a
credit bureau is employed to evaluate the creditworthiness of a RAL applicant,
then within eight hours; if there is a positive match to the Office of Foreign Assets
Control List, then within twelve hours) after having received from JHI an
acknowledgment of the due filing of the related tax return, together with any
corresponding debt indicator, as received from the IRS. The foregoing process
times shall, in each case, be met [*] of the time (i.e., a [*] service level). Notwithstanding
the foregoing, Republic shall not accept any Applications at any time if Republic
(i) receives notification from the IRS that an ERO is under investigation, (ii)
reasonably suspects fraudulent activity originating through an ERO, or (iii)
considers loan delinquencies on RALs originating through an ERO to be
unacceptable, in its reasonable discretion. Republic shall be responsible for
decisions made by it to approve or deny loan Applications, including, without
limitation, the provision to applicants of adverse action notices or other
notices required by Applicable Law.


 


7

















 


7.2.                              Disbursement/Check Print Authorizations. Republic shall
promptly communicate disbursement authorizations to JHI (i) immediately upon
approval of a Money Now Loan or RAL or (ii) for other Financial Products upon
receipt of and after processing IRS or state refund pre-note files to the
extent such practice does not violate any applicable bank regulations, provided
that federal and state funding shall be released by Republic no later than the
effective date designated by the IRS or applicable state taxing authority,
respectively. Republic shall be responsible for all disbursement/check
authorizations issued by it, including losses incurred as a result of its
issuance of duplicate or multiple check print authorizations or checks issued
by Republic in error or with information inconsistent with the information in
the disbursement request received from JHI. JHI agrees to cooperate with
Republic in the recovery all duplicate checks. Additionally, the ERO shall be
responsible for and indemnify Republic for any losses incurred as a result of
printing duplicate checks from a single check print authorization; provided,
however, that such ERO shall have no indemnity obligations if the ERO complies
with the requirements set forth in the Program Guidelines regarding check print
authorizations and duplicate checks.


 


7.3.                              Establishment of Accounts; Availability of Funds.


 


(a)                                  Republic
shall establish and maintain at Republic a segregated account for the benefit
of Republic Customers (each, a “Deposit Account”),
which account shall conform to the requirements of 12 C.F.R. 330.5 so as to
afford such Customers FDIC insurance with respect to such Deposit Accounts. Upon
notification to JHI that a RAL has been approved or that an AR has been funded,
Republic shall transfer the amount of the net loan proceeds or net refund,
respectively, to the Deposit Account. All disbursements to Republic Customers
shall be drawn on the Deposit Account and shall be paid promptly upon
presentment. Republic shall make all disbursements in the manner elected by the
Republic Customer, as set forth in the Application and Loan Agreement. Republic
shall have the right to offset against the Deposit Account all fees and charges
authorized by the Republic Customer to be paid to Republic, the ERO or
otherwise  pursuant to such Customer’s Application
and Loan Agreement for a Financial Product in an amount up to the amount of the
Financial Product.


 


(b)                                 Upon
notification to JHI that an AR has been funded, Republic shall transfer funds
via ACH from the Deposit Account into the account designated for receipt
thereof by the Republic Customer. If the ACH transfer is not successful, then Republic
shall disburse the refund via a check drawn on the Deposit Account and printed
by the Republic Customer’s ERO or mailed directly by Republic.


 


(c)                                  Republic
shall have sufficient funds available at all times to pay all disbursements
authorized by Republic under the Program.


 


7.4.                              Deduction of Additional Charges; Timing and Order of Disbursements.


 


(a)                                  Republic
shall remit payment to the appropriate ERO of all fees and charges authorized
by Customers to be paid to such ERO (e.g., tax preparation and other fees) upon
funding of non-loan type Financial Products and upon approval of loan-type Financial
Products. The foregoing shall be set forth in greater detail in the applicable Republic
Financial Product Agreement between such ERO and Republic and in the Program
Guidelines.


 


8

















 


(b)                                 All
Financial Product disbursements shall be made to the Customer net of all
authorized fees, deductions or charges. If Republic receives a state tax refund
before the IRS tax refund, then any and all Republic and ERO fees may be
deducted from the state refund prior to disbursement to the Customer, unless
otherwise prohibited by law. If an IRS or state tax refund deposit is received
in an amount less than anticipated, then disbursements will be made in the
following order: first, to cover fees owed to Republic; second, to cover ERO
fees; third, to pay any outstanding RAL obligations the Customer may have; and
fourth, to pay the Customer disbursement.


 


(c)                                  If
the Customer’s refund received from the IRS exceeds the total amount owed
pursuant to the RAL, or if after a RAL is denied, the return is accepted by the
IRS and a direct deposit is made to the Deposit Account, then Republic shall
send a disbursement authorization record in the amount of the excess or the
deposit, respectively (after adjusting for and posting fees), to JHI. If the
refund is less than the amount anticipated, then Republic shall notify the ERO
and the Customer of such shortfall, and demand prompt payment to Republic of
the outstanding amount.


 


7.5.                              Establishment of Fees and Underwriting Criteria. The pricing,
fees, and terms  for the Program shall be
developed for each Tax Season by Republic in consultation with JHI, provided,
however, that in the event Republic and JHI cannot agree on the pricing and
fees for the Financial Products, Republic’s decision will control, subject to
the parameters set forth in this Section. The underwriting criteria for the
Financial Products will be developed by Republic and may be modified from time
to time at Republic’s sole discretion. The pricing, fees, terms and
underwriting criteria must be commercially reasonable, substantially similar to
the pricing, fees and terms of financial product programs offered in other
Jackson Hewitt Tax Service offices, and within regulatory guidelines, based on
the best information available that Tax Season, including IRS prior-year
funding trends, competitive product offerings and Customer and ERO behavior. Republic
acknowledges that Jackson Hewitt Tax Service operates through multiple
locations and not all of which are subject to the terms of this Agreement. Toward
that end, notwithstanding anything herein to the contrary, Republic agrees that
it will accommodate commercially reasonable requests of JHI with respect to the
Program to ensure that JHI’s programs are not inconsistent and impractical or
unduly burdensome. Republic alone shall be responsible for all expenses
associated with accommodating any requests agreed to as of the date of this
Agreement, and if Republic agrees to accommodate a request that has not been
agreed upon by the parties as of the date of this Agreement, the parties will
mutually agree to the allocation of cost of the request. The pricing, fees and terms
shall be set forth in writing and agreed to by the parties no later than
November 1st preceding each Tax Season during the Term. The
underwriting criteria will be set by Republic no later than November 30th preceding
each Tax Season during the Term.


 


9

















 


[*] designates portions
of this document that have been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.


 


7.6.                              Development of Forms/Materials. Republic shall develop
reasonable program guidelines for the offering, marketing, receipt and
processing of Applications, the making of loans and the delivery of Financial
Product proceeds (“Program Guidelines”)
and shall create and distribute to JHI for its prior review forms to be used by
participating EROs of each of the following: the Application, Loan Agreement,
Disclosure Statement, and disbursement checks. For the avoidance of doubt, the
term “Program Guidelines” shall not include Guidelines or other materials that
are developed by JHI, including, without limitation, materials that are
developed by JHI and reviewed by Republic pursuant to Section 11.1 hereof
or otherwise. Republic may create solicitation, marketing and promotional
materials relating to the Program, each of which shall be subject to JHI’s
prior review. Republic shall provide such assistance as JHI reasonably may
request in connection with the preparation and dissemination to Customers of
State Disclosure Documents. Republic covenants and agrees that the Program Guidelines
and all documents and materials provided by it hereunder (including, without
limitation, the Application, Loan Agreements, Disclosure Statements,
disbursement checks, solicitation materials and marketing and promotional
materials) shall comply with Applicable Law.


 


7.7.                              Screening. [*]  Republic
shall provide to JHI the text of any disclosures required by Applicable Law to
be provided to Customers. The results of such screening process shall be set
forth in an electronic file and shall be presented in such form as JHI shall reasonably
determine. Responsibility for the cost of activities undertaken pursuant to
this Section 7.8 shall be determined by the mutual agreement of the
parties.


 


7.8.                              Check Stock. Republic shall provide and distribute to each
participating ERO an adequate supply of consecutively numbered checks upon
which they may affix a facsimile signature of an authorized Republic signatory
as provided by Republic, and shall promptly replenish such stock upon the ERO’s
request at no charge, unless the ERO requests overnight delivery (in which case
the ERO shall pay for such delivery).


 


7.9.                              Reports. Republic shall provide weekly reports to JHI
describing all ACH transmissions from the IRS to Republic and all paid items,
and covering such other matters and in such form as JHI reasonably may request.
Republic covenants and agrees that each such report will be true, correct and
complete in all respects and all such reports shall be available to JHI on a
secure website on a real-time basis.


 


7.10.                        Applicable Law. Without limiting or conditioning the
obligations of JHI and the EROs to comply with Applicable Law, Republic shall consider
reasonable steps proposed by JHI to address concerns raised by JHI with respect
to the operation of the Program and the facilitation of Financial Products as
it relates to JHI and EROs being in compliance with Applicable Law or potential
violations of Applicable Law.


 


7.11.                        Additional Products. Upon terms to be agreed by the parties,
Republic shall facilitate the offering of such additional products as JHI and Republic
may develop. Notwithstanding anything to the contrary contained herein, if Republic
does not offer any participating ERO all financial product(s) being facilitated
by EROs that are not under the Program, then JHI may make alternative
arrangements to provide for such product(s) to be facilitated by such ERO
through an alternative financial product provider.


 


10

















 


[*] designates portions
of this document that have been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.


 


7.12.                        Loan Denial Notice. Republic shall send a proper loan denial
notice under the Equal Credit Opportunity Act, Regulation B and other
Applicable Laws to each applicant whose loan request was declined by Republic.


 


7.14                           ERO Designations. Republic agrees that it will offer and
provide Financial Products to Customers of the EROs designated by JHI pursuant
to Section 2.2 hereof in accordance with the terms and conditions of this
Agreement.


 


7.15                           Fraud Detection. Republic shall cooperate with JHI in
developing and implementing procedures to detect Fraudulent Activity in the
Program. Republic shall immediately inform JHI when it suspects Fraudulent Activity
originating through an ERO and JHI shall inform Republic of the actions it
takes in response to such notification. Furthermore, JHI agrees to take additional
action as requested by Republic in reference to any participating ERO’s Fraudulent
Activity, to the extent commercially reasonable. As used herein, “Fraudulent
Activity” means [*].


 


8.                                      Representations, Warranties and Covenants.


 


8.1.                              JHI
represents and warrants to Republic that JHI is a corporation in good standing
under the laws of its jurisdiction of incorporation and is duly qualified to
transact business in each jurisdiction in which the operation of its business
or the ownership of its properties requires such qualification (except where
the failure to so qualify would not have a material adverse effect on its
business). Republic represents and warrants to JHI that Republic is a Kentucky
state chartered bank in good standing under the laws of its jurisdiction of
incorporation and is duly qualified by Kentucky and the Federal Deposit
Insurance Corporation to transact business in each jurisdiction in which the
operation of its business or the ownership of its properties requires such
qualification (except where the failure to so qualify would not have a material
adverse effect on its business). Each party represents and warrants to the
other that (i) its execution and delivery of this Agreement does not and will
not violate its Certificate of Incorporation or charter or breach or constitute
a default under any agreement or arrangement to which it is a party; (ii) it
has the legal right to enter into and perform its obligations hereunder; (iii)
its execution and delivery hereof has been duly authorized by all necessary
corporate action on its part and this Agreement constitutes its legal and
binding agreement, enforceable against it in accordance with its terms; and (iv)
its Marks (as defined below) do not infringe upon the intellectual property
rights of any third party.


 


8.2.                              Republic
covenants to and agrees with JHI that it shall comply with all Applicable Laws,
rules and regulations in connection with the offer and sale of Financial
Products and the performance of its obligations under this Agreement. Without
limiting the foregoing, Republic covenants and agrees that its evaluation and
processing of Applications, its provision and documentation of loans, the fees
charged by it for such loans and its activities involving the collection of
outstanding RALs shall comply with all applicable state and federal laws, rules
and regulations, including, without limitation, the Truth-In-Lending Act (15
U.S.C. Sec 1601-1667), the Equal Credit Opportunity Act (15 U.S.C. Sec.
1691-1691f), the Electronic Fund Transfer Act (15 U.S.C. 1693, et seq.) and
other applicable provisions of the Consumer Credit Protection Act (15 U.S.C
Sec. 1601).


 


11

















 


8.3.                              Each
party further covenants to and agrees with the other that it shall fulfill its
obligations hereunder in a diligent and timely fashion, consistent with the
best practices in the industry; that all hardware, software, processes and
procedures each party uses in providing the services hereunder are owned or
properly licensed to such party and will not violate the trademark or copyright
rights, right of publicity or privacy of, or constitute libel or slander
against, or involve plagiarism or violate any other rights of, any person or
entity and that such party’s use of them will comply with all Applicable Laws;
that all processing systems, software and hardware, and policies or procedures
used by each party and all rules and protocols covering such party’s employees,
agents and independent contractors providing services hereunder, contain
protections and security enhancements, consistent with industry standards, and
provide safeguards and system protections, consistent with industry standards,
to prevent hacking, viruses, security breaches, loss of data, any breach of the
Gramm-Leach-Bliley Act and applicable regulations promulgated thereunder, any
breach of the confidentiality provisions hereof, identity theft and fraud
against JHI and Customers effecting transactions contemplated by this
Agreement.


 


8.4                                 JHI
covenants to and agrees with Republic that it shall comply with all applicable
Program Guidelines and Applicable Law in connection with the performance by it
of its obligations under this Agreement. JHI shall comply in all material
respects, and shall instruct EROs to comply, with all Program Guidelines provided
by Republic in advance of each Tax Season and Applicable Law concerning the
preparation and processing of Applications.


 


8.5                                 JHI
agrees that each participating ERO must have an Electronic Filer’s
Identification Number (“EFIN”).


 


9.                                      Term and Termination.


 


9.1.                              Term. This Agreement shall be effective upon its execution
and applicable to the Program for Tax Seasons 2008, 2009 and 2010 and all
related periods. This Agreement shall terminate and expire on October 31, 2010,
unless extended by written agreement of the parties (the “Term”).


 


9.2.                              Termination by Either Party. Either party may at its option
terminate this Agreement upon twenty (20) days’ prior written notice if (i) the
other party has materially breached any of the terms hereof and has failed to
cure such breach within such twenty day time period; (ii) the continued
operation of the Program or the electronic filing program is no longer
commercially feasible or practical, or no longer provides the same opportunity,
to the terminating party due to legal, legislative or regulatory
determinations, enactments or interpretations or significant external events or
occurrences beyond the control of the terminating party; provided, however,
that in the case of clause (ii), the parties shall first mutually endeavor in
good faith to modify the Program in a manner resolving the problems caused by
legal, legislative or regulatory or external events or occurrences; or (iii)
immediately upon receipt of written notice of termination of the Technology
Services Agreement; provided however if it is ultimately determined that the
Technology Services Agreement was wrongfully terminated, then such party shall
be liable for wrongful termination under this Agreement. In addition, either
party may terminate this Agreement immediately upon notice to the other party,
upon (x) the filing by or against the other party of any petition in bankruptcy
or for reorganization or debt consolidation under the federal bankruptcy laws
or under comparable law; (y) the other party’s making of an assignment of all
or substantially all of its assets for the benefit of creditors; or (z)
application of the other party for the appointment of a receiver or trustee of
its assets.


 


12
















 


[*] designates portions of this document that
have been omitted pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.


 


9.3.                              Termination
by JHI. JHI may terminate this Agreement immediately after a good
faith discussion as to alternatives if Republic’s processing systems are not
available for any reason (including any Force Majeure Event, as defined in Section 14.2)
for two (2) consecutive days or more during any Tax Season, or for 30
consecutive days or more during any other time.


 


9.4.                              Termination
by Republic. [*].


 


9.5.                              Continuation
of Program. In the event of a termination of the Program under this
Agreement during a Tax Season, both parties shall continue to provide the
Program through the end of such Tax Season, unless otherwise agreed in writing
by the parties or prohibited by law or regulation, and all the relevant
provisions of and obligations under this Agreement and the Technology Services
Agreement shall survive until such obligations have been completed including
any payment obligations for such Tax Season. In addition, either party may elect
to discontinue providing the Program during a Tax Season if the termination is
due to an event with respect to the other party described in the last sentence
of Section 9.2 occurs or an event with respect to Republic described in
the last sentence of Section 9.4 occurs.


 


10.                               Ownership
of Loans.


 


The parties agree that Republic will be the sole owner of the Financial
Products loans made under the Program. In addition, Republic shall have the
authority to transfer or assign such loans at any time, provided that Republic
shall continue to be liable for any violation of law of such transferee or
assignee. Without limiting the foregoing, (i) any such transfer or
assignment (a) shall comply with all Applicable Laws, rules and
regulations, and (b) shall not cause Republic to breach any of its
representations or obligations hereunder, and (ii) the transferee or
assignee shall (a) represent, warrant and covenant to comply with all
Applicable Laws, rules and regulations in the servicing and collection of
such loans, (b) agree to provide customer service at a level at least as
high as that offered by Republic and (c) demonstrate to Republic’s
reasonable satisfaction the ability to comply with such representations,
warranties and covenants.


 


11.                               Marketing
and Other Materials.


 


11.1.                       Review. Each party shall have the right to review and
approve all marketing materials used to promote the Program (in all events such
review to be completed within [*] of receipt thereof) and approval shall not be
unreasonably withheld. The parties agree to negotiate in good faith to resolve
any differences and to agree upon mutually agreeable alternative language
within two (2) Business Days after either party notifies the other of its
disapproval. Republic shall review such materials for compliance with
Applicable Laws specifically relating to the offering of Financial Products
(e.g., compliance with Regulation Z) and JHI may rely on such review;
provided, however, that JHI agrees to indemnify Republic for any damages
incurred by Republic due to JHI’s failure to adopt any revisions required by
Republic for such materials to comply with Applicable Laws specifically
relating to the offering of Financial Products. For the avoidance of doubt,
Republic may, but shall have no responsibility to, review such materials for
compliance with Applicable Laws relating to the offering of goods and services
generally, including, without limitation, federal and state laws regulating
misleading, unfair or deceptive statements, acts or practices or unfair
competition. JHI shall be responsible for the compliance of such materials with
all other Applicable Laws, including, without limitation, the Applicable Laws
described in the preceding sentence, and Republic may rely on JHI’s
review.


 


13

















 


11.2.                       License. During the Term and subject to the terms and
conditions of this Agreement, each party grants to the other a non-exclusive,
non-assignable right and license to use, reproduce and display its names,
trademarks, service marks, trade names, service names or logos (“Marks”), solely in connection with the marketing, making and
processing of Financial Products to Customers in connection with the Program. Neither
party shall adopt or use, or seek to register, without the other party’s prior
written consent, any variation of such other party’s Marks, or any mark similar
thereto or likely to be confused therewith. Any and all goodwill arising from
either party’s use of the Marks of the other party shall inure solely to the
benefit of such other party, and neither during nor after the termination or
expiration of this Agreement shall either party assert any claim to the other party’s
Marks or associated goodwill. Neither party shall use the Marks of the other
party for any purpose except those specifically set forth herein. All rights in
and to the Marks of a party which are not specifically granted to the other
party herein shall remain with such party


 


12.                               Confidential
Information.


 


12.1.                       Confidentiality Rights of the Parties. The parties hereto
understand that implementation and operation of the Program involves the use of
certain systems, computer programs, marketing, product development, risk
management, strategy data and other information, including business information
and trade secrets (“Proprietary Information”), that are proprietary to the
respective parties. Each party shall safeguard all Proprietary Information made
available to it by the other party, taking reasonable precautions to withhold
the same from disclosure to the same extent that it would take to safeguard its
own confidential information and data. Such Proprietary Information shall not
include information which is (i) shown to have been known by the receiving
party prior to disclosure to it by the other party, (ii) generally known
to others engaged in the same trade or business as the furnishing party, (iii) available
to the public through no act or omission by the receiving party or its
representatives or professional advisors, or (iv) which is rightfully
obtained by the receiving party from third parties (other than professional
advisors or other representatives) without restriction of confidentiality. In addition
to the foregoing, Republic specifically agrees not to make copies of or to
disclose to any other person or firm, other than to employees of Republic who
need-to know such information in order to perform Republic’s obligations
under this Agreement and who have agreed to be bound by this Article 12,
any Proprietary Information (including, without limitation, the names of EROs
or Customers or any other identifying information obtained through its
relationship with JHI as set forth in this Agreement) for any purpose other
than performing its obligations hereunder. The foregoing sentence shall not
preclude Republic from using its own records of loans which were declined under
the Program as reference material in the event any Customer whose Application was
declined subsequently applies directly to Republic for a loan. Upon the
termination or expiration of this Agreement or the earlier written request of
the furnishing party, the parties will return to any furnishing party all
Proprietary Information received in connection with this Agreement and certify
in writing to such furnishing party that such receiving party has not retained
any copies of such Proprietary Information.


 


12.2.                       Privacy. No party shall make any unauthorized disclosure of
or use any personal information of individual consumers which it receives from
the other party or on the other party’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 Gramm-Leach Bliley Act of 1999, specifically including, 16
Code of Federal Regulations, Chapter I, Subchapter C, Part 313.11 and
313.13. JHI and Republic shall each adopt and maintain a comprehensive privacy
policy with respect to its handling of the personal information of individual
Customers submitted by such Customers to JHI (through the EROs) and to Republic.
JHI’s and Republic’s privacy policy shall be available on their respective
Internet web sites and each shall comply with the provisions of their
respective privacy policies.


 


14

















 


[*] designates portions of this document that
have been omitted pursuant to a request for confidential treatment filed
separately with the Securities and Exchange Commission.


 


13.                               Indemnification.


 


13.1.                       Indemnification by JHI. JHI shall indemnify, defend and hold
harmless Republic, its affiliates and their respective officers, directors and
employees 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 Republic in connection with any third party claim,
dispute, controversy or litigation (individually a “claim”) arising out of or
resulting from (i) JHI’s violation of Applicable Law (except when such
violation is directly caused by JHI’s compliance with Program Guidelines); (ii) any
material breach by JHI of any representation, warranty, covenant or agreement hereunder
or (iii) the negligence or willful misconduct of JHI in connection with
the performance by it of its obligations under this Agreement. [*]. JHI agrees
to cooperate with all reasonable requests from Republic for information and
documents necessary to investigate any Fraudulent Activity.


 


13.2.                       Indemnification by Republic. Republic shall indemnify,
defend and hold harmless JHI, its affiliates, and their respective 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 third party claim, dispute, controversy or litigation (individually, a
“claim”) arising out of or resulting from (i) the Program Guidelines; (ii) the
administration, offer and sale of Financial Products pursuant to the Republic
Financial Product Agreement and the Program Guidelines hereunder; (iii) any
violation or alleged violation of Applicable Law (including, without
limitation, the Federal 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) by Republic, the Financial Products offered by Republic or
the Program Guidelines, (iv) the use of the names, trademarks, service
marks, trade names, service names, and logos of Republic in any materials
produced hereunder and approved by Republic in connection with the Program; (v) any
material breach by Republic of any representation, warranty, covenant or
agreement hereunder; or (vi) the negligence or willful misconduct of
Republic in connection with the performance by it of its obligations under this
Agreement.


 


13.3.                       Procedures. The indemnitee shall promptly notify the
indemnitor in writing of any claim that may be the subject of
indemnification under this Article 13, and shall promptly tender to the
indemnitor sole control of the defense and any settlement thereof; provided,
however, that the failure of an indemnitee to so notify the indemnitor shall
not relieve the indemnitor of its indemnification obligations hereunder to the
extent that such failure does not actually prejudice the indemnitor with
respect to such claim; and provided, further that the indemnitor shall not
compromise or settle any claim or action without the prior approval of the
indemnitee. The indemnitee shall have the right (but not the obligation) to
defend such action or proceeding by retaining attorneys of its own selection to
represent it at the indemnitor’s reasonable expense; provided that the
indemnitor shall in all events have the right to participate in such defense;
and provided further that the indemnitee shall not compromise or settle any
such claim or action without the prior approval of the indemnitor.


 


15

















 


14.                               Limitation
of Liability.


 


14.1.                       Consequential Damages. No party will be liable to the other
party for incidental, special, indirect or consequential damage, or loss of profits,
income, use or other benefits, arising out of or in connection with the
performance of its obligations under this Agreement or any failure of such
performance; unless such damage or loss is subject to the indemnification
provisions of this Agreement or arises from that party’s gross negligence or
willful misconduct.


 


14.2.                       Force Majeure. Notwithstanding any other provision herein to
the contrary, either party shall be excused from performance hereunder for
failure to perform any of the obligations if (i) such failure to perform occurs
by reason of any of the following events (“Force Majeure Events”): act of God,
fire, flood, storm, earthquake, tidal wave, communications failure, sabotage,
war, military operation, terrorist attack, national emergency, mechanical or
electrical breakdown, general failure of the postal or banking system, civil
commotion, strikes, or the order, requisition, request or recommendation of any
governmental agency or acting governmental authority, or either party’s
compliance therewith or government proration, regulation, or priority, or any
other similar cause beyond either party’s reasonable control and (ii) such
Force Majeure Event is beyond such party’s reasonable control. The party
excused from performance shall be excused from performance (i) only after
notice from the party whose performance is impaired, (ii) only during the
continuance of the Force Majeure Event and (iii) only for so long as such
party continues to take reasonable steps to mitigate the effect of the Force Majeure
Event and to substantially perform despite the occurrence of the Force
Majeure Event. The party whose performance is not impaired may terminate
this Agreement by giving notice to the other party after two (2) consecutive
days’ failure of performance during any Tax Season or upon thirty (30)
consecutive days’ failure of performance at any other time, effective
immediately upon written notice to such party.


 


15.                               Commitment
to Negotiation; Mediation and Arbitration of Disputes.


 


15.1.                       Negotiation. Except with respect to either party’s wrongful
use of the Marks of the other party for which the aggrieved party may seek
injunctive or such other relief as such aggrieved party may deem
appropriate, or litigation brought against JHI by third parties, neither party
shall institute any proceeding in any court or administrative agency or any
arbitration to resolve a dispute between the parties before that party has
sought to resolve the dispute through direct negotiation with the other party.
If the dispute is not resolved within three weeks after a demand for direct
negotiation, the parties shall then attempt to resolve the dispute through
mediation and/or arbitration as provided in this Article 15.


 


16

















 


15.2.                       Scope of Arbitration. Except for either party’s wrongful use
of the Marks for which the aggrieved party may seek injunctive or such
other relief as such aggrieved party may deem appropriate, or litigation
brought against JHI by third parties, all controversies, disputes or claims
between JHI and Republic (and any owners, guarantors, affiliates and employees
of Republic, if applicable, but in no event shall any of such owners,
guarantors, affiliates and employees be deemed third-party beneficiaries of
this Agreement), arising out of or related to: (i) this Agreement or any
other related agreement between JHI and Republic, or any provision of any such
agreements; (ii) the relationship of the parties; (iii) the validity
of this Agreement or any other related agreement between JHI and Republic or
any provision of any such agreements; or (iv) any problem arising from the
undertakings hereunder, will be submitted for mediation, as set forth below in Section 15.3
and, in the event mediation is not demanded by a party or does not result in a
resolution of the dispute, for binding arbitration in accordance with the rules of
the American Arbitration Association on demand of either party. Republic agrees
to cause its owners, guarantors, affiliates and employees of Republic reasonably
likely to be involved in such controversies, disputes and claims to agree to be
bound by the provisions of Sections 15.2, 15.3, 15.4, 15.5 and 15.6 hereof.


 


Such arbitration proceeding will be conducted
at a mutually agreeable location and will be heard by a panel of three
arbitrators in accordance with the then current Commercial Arbitration Rules of
the American Arbitration Association, provided that the Federal Rules of
Evidence shall be applicable to the arbitration hearing and any evidence obtained
for or presented at the hearing and that the arbitrators shall be attorneys
familiar with the Federal Rules of Evidence. All other matters relating to
arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1
et seq.) and not by any state arbitration law.


 


The decision and award of the arbitrators
will be binding and conclusive upon both JHI and Republic, and enforceable in
any court of competent jurisdiction. The arbitrators have the right, in their
discretion, to award or include in the award any lawfully appropriate relief
(including, punitive damages) and to assess costs or expenses to one or both
parties and may award attorneys’ fees and legal costs to the prevailing
party as part of such award, provided that the arbitrator will not have
the right to declare any Mark generic or otherwise invalid.


 


JHI and Republic agree to be bound by the
provisions of any limitation on the period of time in which claims must be
brought under Applicable Law or this Agreement, whichever expires earlier. JHI
and Republic further agree that, in connection with any such arbitration
proceeding, each must submit or file any claim which would constitute a
compulsory counterclaim (as defined by Rule 13 of the Federal Rules of
Civil Procedure) within the same proceeding as the claim to which it relates.
Any such claim which is not submitted or filed as described above will be
forever barred.


 


Each party agrees that arbitration will be
conducted on an individual, not a class-wide, basis, and that an arbitration
proceeding between JHI and Republic may not be consolidated with any other
arbitration proceeding between JHI and any other person, corporation, limited
liability company or partnership, provided that JHI or Republic may consolidate
any arbitration proceeding commenced under this Section 15.2 with any
arbitration proceeding commenced by JHI, JHTSL or Republic under any other
agreement executed in connection herewith, including, without limitation, the
Technology Services Agreement.


 


Notwithstanding anything to the contrary
contained in this Section, JHI and Republic shall each have the right in a
proper case to obtain temporary restraining orders and temporary or preliminary
injunctive relief from a court of competent jurisdiction; provided, however,
that JHI or Republic must contemporaneously submit the dispute for arbitration
on the merits as provided herein and the submission to the court shall not
waive the right to arbitration.


 


17

















 


15.3.                       Mediation. If a dispute is not resolved by direct
negotiation, as provided hereinabove, either party may demand mediation. In
the event mediation is demanded, it shall take place with a mediator to be
agreed upon by the parties. In the event the parties are unable to agree upon a
mediator, one will be appointed by the AAA. The mediation will take place at a
mutually agreeable location. A demand for mediation will not preclude a party
from filing a demand for arbitration, but the parties will agree to a stay of
any arbitration proceedings for a period of a minimum of three months from the
date mediation is demanded to permit the mediation to take place.


 


15.4.                       Governing Law. All matters relating to arbitration will be
governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.). Except to
the extent governed by the Federal Arbitration Act, the United States Trademark
Act of 1946 (Lanham Act, 15 U.S.C. §§1051 et seq.), or other federal law, this
Agreement and all claims arising from the relationship between JHI and Republic
will be governed by the laws of the state of New York without regard to its
conflict of laws principles.


 


15.5.                       Consent to Jurisdiction. Each party agrees that the other
party may institute any action against it (which is not required to be
arbitrated hereunder) and any action to confirm or to enforce an arbitration
award hereunder in any state or federal court of competent jurisdiction and
irrevocably submits to the jurisdiction of such courts and waives any objection
it may have to either the jurisdiction of or venue in such courts.


 


15.6.                       Waiver of Jury Trial. JHI and Republic irrevocably waive
trial by jury in any action, proceeding or counterclaim, whether at law or in
equity, brought by either of them against the other party.


 


16.                               No
Joint Venture.


 


This Agreement or any acts pursuant hereto shall not constitute a joint
venture or create a partnership, agency or employment relationship between the
parties. Except as expressly provided in this Agreement, no party shall have,
or hold itself out as having, any right, power or authority to act or create
any obligation, express or implied, on behalf of the other.


 


17.                               Audit
Rights.


 


17.1.                       During the
Term and for a period of one year thereafter, Republic shall (a) maintain
reasonably adequate books and records with respect to any fees or compensation
to be provided to JHI hereunder and otherwise with respect to its obligations
hereunder; (b) upon reasonable written request, provide access to such
books and records to JHI and its authorized agents (including, but not limited
to, its auditors); and (c) cooperate with, and provide to, JHI and such
agents such assistance as they reasonably may require. JHI shall pay for
the expenses associated with the conduct of such audit, provided that if such
audit reveals an underpayment by Republic of more than five percent (5%) of any
amount due hereunder, then Republic shall, promptly upon JHI’s request, tender
the amount of such underpayment to JHI and reimburse JHI for such audit
expenses.


 


18

















 


17.2.                       During the
Term and for a period of one year thereafter, JHI and all EROs shall (a) maintain
reasonably adequate books and records with respect to the Program pursuant to Section 2.2(c) hereof,
including without limitation information regarding EROs and ERO locations, and
otherwise with respect to its obligations hereunder; (b) upon reasonable
written request, provide access to such books and records to Republic and its
authorized agents (including, but not limited to, its auditors); and (c) cooperate
with, and provide to, Republic and such agents such assistance as they
reasonably may require. Republic shall pay for the expenses associated
with the conduct of such audit, provided that if such audit reveals an
inaccurate calculation of Customers of more than five percent (5%) for any Tax
Season, then JHI shall, promptly upon Republic’s request, reimburse Republic
for such audit expenses. In addition, JHI acknowledge and agree that JHI and
the EROs shall be subject to audit and review by Republic and the banking
agencies having jurisdiction over Republic to the extent provided by law.


 


17.3                          JHI
agrees that Republic may audit all participating EROs, during and after
Tax Season, for the purposes of maintaining compliance with the Program Guidelines.
Any such audits shall be conducted during the ERO’s regular business hours upon
reasonable notice.


 


18.                               Survival.


 


Upon the expiration or termination of this Agreement in accordance with
the provisions of Article 9, no party shall remain liable to the other,
except with respect to Articles 4 (to the extent JHI’s right to receive payment
has accrued), 6.5(a), 12.1, 12.2, 13.1, 13.2, 13.3, 14.1, 14.2, and Articles
15, 17, this Article 18, and Article 19, all of which shall survive
the expiration and termination hereof. Further, no party shall remain liable to
the other beyond two (2) years after the termination of this Agreement
with respect to Articles 13.1, 13.2 or 13.3.


 


19.                               Miscellaneous.


 


19.1.                       Assignment. This Agreement is binding on, and shall inure to
the benefit of, the parties hereto and their respective successors and
permitted assigns. Neither party may assign its rights or obligations
under this Agreement (other than in the context of a change in control of a
party) without the prior written consent of the other party.


 


19.2.                        Notices.    All
notices and other communications under this Agreement shall be in writing and may be
given by any of the following methods:  (a) personal
delivery against a signed receipt; (b) facsimile transmission (with
confirmation of receipt as provided below); (c) registered or certified
mail, postage prepaid, return receipt requested; or (d) overnight delivery
service. Notices shall be sent to the appropriate party at its address or
facsimile number given below (or as such other address or facsimile number for
such party as shall be specified by notice given hereunder):


 


If to Republic:


 


Republic Bank & Trust Company


601 W. Market Street


Louisville, KY 40202


Attn:                    William Nelson


Managing Director


 


with a copy to:


 


Republic Bank & Trust Company


601 W. Market Street


Louisville, KY 40202


Attn:                    General Counsel


 


19

















 


If to JHI:


 


Jackson Hewitt Inc.


3 Sylvan Way


Parsippany, NJ 07054


Attn:                    Bill San Giacomo


Group Vice President, Financial Products


 


with a copy to:


 


Jackson Hewitt Inc.


3 Sylvan Way


Parsippany, NJ 07054


Attn:                    Office of the General Counsel


 


All such notices and communications shall be
deemed delivered upon (a) actual receipt thereof by the addressee, (b) actual
delivery thereof to the appropriate address, or (c) in the case of a
facsimile transmission, upon transmission thereof by the sender and issuance by
the transmitting machine of a confirmation slip confirming that the number of pages constituting
the notice have been transmitted without error. In the case of notices sent by
facsimile transmission, the sender shall contemporaneously dispatch a copy of
the notice to the addressee at the address(es) indicated above by an overnight
courier service. However, such mailing shall in no way alter the time at which
the facsimile notice is deemed received.


 


19.3.                       Severability; Construction. The parties agree that if any
provision of this Agreement shall be determined by any court of competent
jurisdiction to be void or otherwise unenforceable, then such determination
shall not affect any other provision of this Agreement, all of which other
provisions shall remain in effect. If any provision were capable of two
constructions, one of which would render the provision valid and the other
invalid, then the provision shall have the meaning that renders it valid. In
the event that any provision hereof pertaining to fees, commissions or
underwriting criteria is held to be invalid, then the parties shall endeavor in
good faith the redesign the Program or the terms thereof in a manner consistent
with the intent and economic effect of this Agreement.


 


19.4.                       Waiver. No waiver of any breach of this Agreement shall be
effective unless in writing and signed by an authorized representative of the
waiving party. The waiver of any breach hereof shall not operate or be
construed as a waiver of any other or subsequent breach.


 


19.5.                       Integration; Subordination of JHI Obligations. This
Agreement, together with the Exhibits hereto and all agreements or documents
related hereto or delivered hereunder and the Technology Services Agreement
express fully the entire understanding and agreement of the parties concerning
the subject matter hereof, and all prior understandings or commitments of any
kind, whether oral or written, including, without limitation, the Letter
Agreement, concerning such subject matter are hereby superseded (other than
those obligations which, by their terms and nature, survive termination or
expiration). Whenever it states in this Agreement that JHI shall cause the EROs
to perform any act or do any thing, and such performance is also required
of the ERO by the terms of the Republic Financial Product Agreement by and
between the ERO and Republic, the provisions of the Republic Financial Product
Agreement shall control and JHI’s obligations shall be subordinate to the
obligations of the ERO.


 


19.6.                       Amendment. This Agreement may not be amended or
modified other than by a written agreement executed by both parties.


 


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19.7.                       Headings. Headings used in this Agreement are for
convenience of reference only and do not define, interpret, describe the scope
of or otherwise affect any provision hereof.


 


19.8.                       Counterparts. This Agreement may be executed in one or
more counterparts (including via facsimile), each of which shall be deemed an
original and all of which, taken together, shall be deemed one and the same
instrument.


 


19.9.                       Further Assurances. From time to time following the
execution of this Agreement, each party agrees to do such things and execute
and deliver such documents as may reasonably be necessary to effectuate
the intent and purposes of this Agreement.


 


19.10.                 No Third Party Beneficiaries. This Agreement has been made
for the sole benefit of Republic and JHI and is not intended to, and shall not,
confer any benefit or rights upon, nor may it be enforced by, any other
person.


 


19.11.                 Publicity; Disclosure. Neither party shall issue any press
release relating to this Agreement without the prior consent of the other party.
Each party hereto shall be permitted to disclose this Agreement to the extent
such party determines that such disclosure is required by applicable law.


 


19.12                    Joint Marketing. The Parties shall engage in joint marketing
activities pursuant to Section 7.7 of this Agreement and any other joint
marketing agreement that may be entered into from time to time.


 


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IN WITNESS WHEREOF, this Agreement has been
executed and delivered by a duly authorized officer of each party as of the
date set forth above.


 


 


	
  REPUBLIC BANK & TRUST COMPANY

  	
   

  	
  JACKSON HEWITT INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ William Nelson

  	
   

  	
  By

  	
  /s/ Bill San Giacomo

  
	
   

  	
  William Nelson

  	
   

  	
   

  	
  Bill San Giacomo

  
	
   

  	
  Managing Director

  	
   

  	
   

  	
  Group Vice President, Financial

  
	
   

  	
   

  	
   

  	
   

  	
  Products

  



 


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