EXHIBIT 10.3


 


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


 


TECHNOLOGY SERVICES AGREEMENT


 


THIS TECHNOLOGY SERVICES AGREEMENT (“Agreement”) is made this 19th day of September,
2007 by and between Republic Bank & Trust Company (“Republic”),
a Kentucky banking corporation, with its principal office at 601 W. Market
Street, Louisville, KY  40202, and
Jackson Hewitt Technology Services LLC (“JHTSL”), a Delaware
limited liability company, with its principal office at 501 N. Cattlemen Road, Suite 300,
Sarasota, Florida 34232.


 


RECITALS


 


WHEREAS, Jackson Hewitt Inc. (“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, JHI and Republic have entered into that
certain Program Agreement of even date herewith respect to the Program (the “Program Agreement”); and


 


WHEREAS, Republic desires, and JHTSL agrees to
provide, certain technology services, personnel and related support to Republic
and EROs in connection with the Program.


 


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.                                      General Terms.


 


1.1.                              Additional Definitions: 
The following additional definitions apply for purposes of this Agreement:


 


(a)                                  “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.


 


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


 

















 


[*]
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)                                  “Customer” shall mean a Jackson Hewitt Tax Service customer
that is 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”.


 


(d)                                 “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 1.4
hereof.


 


(e)                                  “Money Now Loan” means a loan by Republic 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), with proceeds of such
loan available on the same day the loan is approved by Republic, offered during
a Tax Season.


 


(f)                                    “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.


 


(g)                                 [*]


 


(h)                                 “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 Services (“IRS”) without the taxpayer requesting an extension,
typically April 15 of such calendar year.


 


1.2.                              The Services. In advance of each Tax Season during the Term
(as defined in Section 5.1), JHTSL and Republic shall mutually agree on
the technology needs related to the Program for each Tax Season (or other
related period), including systems and software modification, incorporation and
implementation of specifications in, and the coordination of systems between, ProFiler®, the Jackson Hewitt Tax
Service electronic filing software program and the related systems and servers
(“ProFiler”) and Republic’s systems (collectively, the “Services”). JHTSL agrees
that it shall provide the agreed upon Services. JHTSL shall provide additional
technology services upon the terms and conditions to be agreed in writing with Republic.
This Agreement applies to the Services set forth herein to be performed in
connection with the facilitation of Financial Products by Jackson Hewitt Tax
Service locations during the 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.


 


1.3.                              Deliverables. In advance of each Tax Season, JHTSL and Republic
shall agree in writing as to the Deliverables required under this Agreement for
the relevant Tax Season (or other related period) and the timeline of the
required Deliverables. As used herein, “Deliverables” shall include, but not be
limited to, all obligations and procedures required of both parties in this Agreement.
The parties agree that they shall provide the agreed-upon Deliverables. In the
event the parties are unable to reach agreement on the nature or scope of Deliverables
or related timeline, the parties shall seek the assistance of a mediator to
assist them in such efforts. Each party shall use reasonable efforts to
implement all requested Deliverables on or before mutually agreed upon
completion dates, but shall not be held liable for matters not completed for
the beginning of a Tax Season if such requests have been agreed to after August 31st
preceding a Tax Season. The agreed upon Deliverables shall be documented and may be
amended from time to time by mutual agreement of the parties.


 


1.4                                 New Financial Products. If the parties agree to introduce new
Financial Products as part of the Program, pursuant to the terms and
conditions of the Program Agreement, the parties shall devote sufficient time
and resources to implement technology solutions for such new Financial Products,
and shall amend Schedule A hereto as necessary.


 


1.5                        Fees. In consideration of the rights granted to Republic
herein and the performance of the Services, delivery of the Deliverables and
expenses incurred by JHTSL in connection with the Program, Republic shall pay
to JHTSL fees as follows:


 


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


 


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


 


(c)                                  For
the 2010 Tax Season, Republic shall pay to JHTSL an amount equal to [*]. To the
extent that JHTSL has designated Republic to be the Financial Product provider
under the Program for any Additional 2010 Designations (as defined in the
Program Agreement), Republic shall pay to JHTSL 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 JHTSL pursuant to this Section 1.5 shall be
paid by wire transfer per written instructions signed by JHTSL’s Chief
Financial Officer. Republic shall make all payments as provided in such written
instructions unless JHTSL provides Republic revised payment instructions in an
original written notice that is signed by any two (2) of the following
officers of JHTSL:  (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, JHTSL shall have the
right to direct Republic to make payments directly to other entities or third
parties.


 


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.


 


(f)                                    The
parties agree that JHTSL 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.


 


1.6                        Additional Fees. For each Tax Season under this Agreement, Republic
shall pay additional consideration to JHTSL for additional services performed
and additional resources required to support expansion in the Program over such
Tax Seasons. [*].


 


2.                                       JHTSL’s Obligations and Procedures. JHTSL agrees, in connection
with the operation of the Program, to perform, and enable ProFiler to perform all
required functions, including, as applicable, the following specific duties:


 


2.1                        Personnel. JHTSL shall devote a sufficient number of
employees to meet its obligations under this Agreement.


 


2.2                        Training. JHTSL shall devote employees and resources as it
deems necessary to provide training to EROs and corporate staff in connection
with the operation of ProFiler in connection with the Program.


 


2.3                        System Errors. JHTSL shall consult with Republic to develop
a process for eliminating transmission errors, to the extent practicable.


 


2.4                        Support. JHTSL shall operate a call center to support EROs
in connection with the operation of ProFiler as it relates to the facilitation
of the Program.


 


2.5                        Computer Network. JHTSL shall establish and maintain a
technology and communication center, at a location designated by JHTSL, for use
in electronically transmitting returns, applications and other related
materials to Republic in a secure manner.


 


2.6                        Transmission of Customer Information. After JHTSL has
transmitted the Customer’s income tax return to the IRS and received from the
IRS acknowledgment of its acceptance thereof and the debt indicator relating
thereto (to the extent provided) as described by Chapter 3 of the IRS e-file
Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns
(Publication 1345, including Rev. Proc. 2000-31), as the same may be
amended from time to time (the “Notification”),
JHTSL shall electronically transmit to Republic all data required to be
extracted from the IRS transmission file and the Republic customer application
in accordance with Republic’s Refund Anticipation Loan File Layouts and
Specifications (“Specifications”), which shall
be provided to JHTSL no later than the November 1 immediately preceding
each Tax Season and shall be incorporated herein by reference, together with
information, if any, received in the Notification. JHTSL shall not transmit any
Application information for a Money Now Loan which does not also make an application
for a RAL. Except in the case where an IRS reject will no longer permit EF or
changes in the tax return information further disqualifies a customer for a
RAL, in which case of the latter, the customer will be applying for an AR. Notwithstanding
the foregoing, if Republic shall notify JHTSL (as described in Section 3.1)
that it is no longer accepting Applications (as defined in the Program
Agreement) from an ERO, then JHTSL shall immediately halt all transmissions to Republic
in respect of such ERO. In the event it no longer becomes feasible to process
Applications in the manner specified in this Section 2.6 due to
circumstances beyond the control of the parties, then the parties shall
endeavor in good faith to take all commercially reasonable actions necessary to
promptly modify the Program so as to resolve the problems.


 


4

















 


2.7                        Check Disbursements; Lost Checks; Check Reconciliations.


 


(a)                                  Check Disbursements. If a Customer has chosen a Republic
cashier’s check as the method of disbursement, then upon receipt of notice from
Republic that it has approved a Customer’s RAL Application, or that the IRS has
funded a Customer’s AR, JHTSL shall transmit a check print authorization to the
ERO to permit the ERO to print a disbursement check from the consecutively numbered
blank check stock supplied to it by Republic. Such check shall evidence the
amount of the RAL, Money Now Loan, or AR, less all fees and charges authorized
by the Customer to be deducted therefrom, and shall bear an imprint of the
facsimile signature of an authorized Republic signatory as provided by Republic.


 


(b)                                 Check Reconciliations. JHTSL shall immediately transmit to Republic
a check reconciliation file, the content and layout of which are described in
the Specifications, with respect to each check as to which it has received from
the ERO confirmation that the check was printed.


 


2.8                                Data Processing Systems.


 


(a)                                  Republic Communications. During the Term, JHTSL shall
develop, maintain and operate data processing systems and programs that are
capable of electronically transmitting and receiving all information, records
and file formats required by the Specifications. Specifically, JHTSL has agreed
to make certain modifications to its data processing systems and programs to
accommodate the Republic systems and programs, as more fully described in Section 3.2
below. Except as limited by Section 9.1 hereof, JHTSL shall be responsible
for any losses directly attributable to the failure of JHTSL’s data processing
systems and programs to electronically transmit and receive records and files
in accordance with the requirements set forth in the Specifications.


 


(b)                                 Electronic Filing Software. JHTSL shall distribute to each
participating ERO its proprietary electronic filing software, ProFiler, which
shall (i) enable the ERO to prepare accurately and electronically file
returns to the IRS through JHTSL and (ii) accurately populate the
Truth-in-Lending Act Disclosure Statement, applicable State Disclosure
Documents (as defined in the Program Agreement) and Applications based upon
information input by the tax preparer.


 


(c)                                  Check Writing Software. JHTSL shall distribute to each
participating ERO a check writing program, which program shall permit (i) checks
to be written only in the name of the proper Customer and only in the amount
approved by Republic, (ii) the printing of the Truth-in-Lending Act Disclosure
Statement (the text of which shall have been prepared by Republic and reviewed
by JHTSL) on a perforated stub of the Republic blank check form, and (iii) the
printing of additional disbursement checks in the event that additional funds
are received and owing to the Customer.


 


(d)                                 Software. Republic shall provide no fewer than 30 test
transmissions in a test environment on or before December 1st
preceding each Tax Season during the Term to ensure accuracy and functionality
of all such software which test cases will be performed by JHTSL which results
shall be shared with Republic. Based on the results of the test cases, Republic
shall approve or disprove software implemented for use in connection with the
performance of this Agreement, including software that is embedded in, or
otherwise is utilized in connection with, ProFiler.


 


5

















 


3.                                      Republic’s Obligations and Procedures.


 


3.1.                              Program Deliverables. Republic shall cooperate and consult
with JHTSL in accordance with Article 1 to agree on Deliverables for a Tax
Season and the related timeline.


 


3.2                        Systems.


 


(a)                                  Unless
required by applicable laws rules and regulations (“Applicable Law”), Republic
shall not alter its existing systems and software without first obtaining the
written consent of JHTSL to ensure compatibility of the proposed modifications
such that they will not adversely affect the offering of Financial Products
under the Program or render JHTSL unable to operate or use with ProFiler as it
currently exists. Republic shall cause its systems to communicate with ProFiler,
including such that Applications can be transmitted to Republic and responses
to the Applications can be received by JHTSL, ProFiler and the Jackson Hewitt
Tax Service office locations.


 


(b)                                 Republic
acknowledges that ProFiler is distributed to Jackson Hewitt Tax Service offices
nationally and to EROs through multiple locations and not all of which will
participate in the Program or ProFiler as it relates to the Program as
developed under this Agreement and that certain Program requirements or
requests as they relate to ProFiler will not be reasonable or practicable due
to the needs and requirements of Jackson Hewitt, and the operation of Jackson
Hewitt’s business and ProFiler. Toward that end, Republic agrees that it will
use its commercially reasonable efforts to accommodate reasonable requests of JHTSL
with respect to the Deliverables and Program to ensure that JHTSL’s programs
are not inconsistent, impractical or unduly burdensome on JHTSL or the
operation of the Jackson Hewitt Tax Service business. Notwithstanding the
foregoing, for the 2008 Tax Season JHTSL has agreed to make certain modifications
to its systems and ProFiler to accommodate Republic’s system and programs, at
no cost to Republic. Those accommodations are included as Deliverables.


 


(c)                                  Republic
shall provide JHTSL with all necessary information needed from Republic or the
Originator to create and populate required documents, including information
related to the deposit account for Customers created for the respective
Financial Product.


 


3.3                        Availability. Republic shall be available during business
hours and otherwise as reasonably necessary for consultation to JHTSL to assist
in timely completion of Deliverables and continuation of operations during Tax
Season.


 


3.4                        Confidentiality and Ownership. Republic acknowledges and
agrees (i) that it will keep all information with respect to ProFiler and
the modifications and developments hereunder confidential; and (ii) that JHTSL
maintains sole and exclusive ownership rights in ProFiler as modified, and
further disclaims on behalf of itself and all other persons any ownership or
purported ownership rights in the same.


 


3.5                        Reports. Republic shall provide weekly reports to JHTSL
describing all ACH transmissions from the IRS to Republic and all paid items,
and covering such other matters and in such form as JHTSL 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.


 


6

















 


4.                                      Representations, Warranties and Covenants.


 


4.1.                              JHTSL
represents and warrants to Republic that JHI is a limited liability company in
good standing under the laws of its jurisdiction of formation 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 JHTSL 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 Formation 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 organizational 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 in the
Program Agreement) do not infringe upon the intellectual property rights of any
third party.


 


4.2.                              Republic
covenants to and agrees with JHTSL 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).


 


4.3.                              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 JHTSL and Customers effecting transactions
contemplated by this Agreement.


 


4.4.                              JHTSL
covenants to and agrees with Republic that it shall comply with all applicable
Program Guidelines (as defined in the Program Agreement)  and
Applicable Law in connection with the performance by it of its obligations
under this Agreement.


 


7

















 


5.                                      Term and Termination.


 


5.1.                             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”).


 


5.2.                             Termination by Either Party. Either party may at its
option terminate this Agreement (i) upon twenty (20) days’ prior written
notice if the other party has materially breached any of the terms hereof and
has failed to cure such breach within such twenty-day period; or (ii) immediately
upon receipt of written notice of termination of the Program Agreement;
provided however if it is ultimately determined that the Program 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.


 


5.3                                Continuation of Program. In the event of a termination of
the Program under the Program 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
Program 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 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 5.2 occurs.


 


5.4                                Termination by JHTSL. JHTSL 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 9.2) for two (2) consecutive
days or more during any Tax Season, or for 30 consecutive days or more during
any other time.


 


6.                                      Ownership of Loans.


 


The parties agree that Republic will be the sole
owner of the Financial Products made under the Program. In addition, Republic
shall have the authority to transfer or assign such Financial Products 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.


 


7.                                      Confidential Information.


 


7.1.                             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 


 


8

















 


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 7, any Proprietary Information (including,
without limitation, the names of EROs or Customers or any other identifying
information obtained through its relationship with JHTSL 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.


 


7.2.                             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, Title
12 CFR Part 332. JHTSL 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 JHTSL. JHTSL’s
and Republic’s privacy policy shall be available on its Internet web sites and
each shall comply with the provisions of such privacy policy.


 


8.                                      Indemnification.


 


8.1.                             Indemnification by JHTSL. JHTSL shall indemnify, defend and
hold harmless Republic, its affiliates and their respective officers, directors
and employees from and against any and all losses, expenses and costs
(including reasonable attorney’s fees and court costs) caused by  the provision of information to Republic that
differs from information provided to the IRS by JHTSL or to JHTSL from the IRS or
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) JHTSL’s violation or alleged violation of
Applicable Law (except when such violation or alleged violation is directly
caused by JHI’s compliance with Program Guidelines); (ii) any material breach
by JHTSL of any representation, warranty, covenant or agreement hereunder, or (iii) the
negligence or willful misconduct of JHTSL in connection with the performance by
it of its obligations under this Agreement.


 


8.2.                             Indemnification by Republic. Republic shall indemnify,
defend and hold harmless JHTSL, 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


 


9

















 


Products pursuant to the
Program Agreement and the Republic Financial Product Agreement, and the Program
Guidelines; (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
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.


 


8.3.                             Procedures. The indemnitee shall promptly notify the
indemnitor in writing of any claim that may be the subject of
indemnification under this Article 8, 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.


 


9.                                      Limitation of Liability.


 


9.1.                             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.


 


9.2.                             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.


 


10

















 


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


 


10.1.                       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 JHTSL 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 10.


 


10.2.                       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 JHTSL by third parties, all controversies, disputes or claims between JHTSL
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
JHTSL 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 JHTSL 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 10.3 and,
in the event mediation is not demanded by a party or does not result in a
resolution of the dispute, for binding arbitration to the American Arbitration
Association on demand of either party. Republic agrees to cause its 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 10.2, 10.3, 10.4, 10.5 and 10.6 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 JHTSL 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.


 


JHTSL 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. JHTSL 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 JHTSL and Republic may not be consolidated
with any other arbitration proceeding between JHTSL and any other person,
corporation, limited liability company or partnership, provided that JHTSL or Republic
may consolidate any arbitration


 


11

















 


proceeding commenced under this Section 10.2
with any arbitration proceeding commenced by JHI, JHTSL or Republic under any
other agreement executed in connection herewith including without limitation
the Program Agreement.


 


Notwithstanding anything to the
contrary contained in this Section, JHTSL 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 JHTSL 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.


 


10.3.                       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.


 


10.4.                       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 JHTSL and Republic
will be governed by the laws of the state of New York without regard to its conflict
of laws principles.


 


10.5.                       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.


 


10.6.                       Waiver of Jury Trial. JHTSL 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.


 


11.                               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.


 


12.                               Audit Rights.


 


12.1.                       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 JHTSL hereunder and otherwise with respect to its obligations
hereunder; (b) upon reasonable written request, provide access to such
books and records to JHTSL and its authorized agents (including, but not
limited to, its auditors); and (c) cooperate with, and provide to, JHTSL
and such agents such assistance as they reasonably may require. JHTSL
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


 


12

















 


hereunder, then Republic
shall, promptly upon JHTSL’s request, tender the amount of such underpayment to
JHTSL and reimburse JHTSL for such audit expenses.


 


12.2.                       During
the Term and for a period of one year thereafter, JHTSL shall (a) maintain
reasonably adequate books and records 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 JHTSL shall, promptly upon Republic’s
request, reimburse Republic for such audit expenses. In addition, JHTSL
acknowledge and agree that JHTSL and the EROs shall be subject to audit,
examination and review by Republic and the banking agencies having jurisdiction
over Republic.


 


13.                               Survival.


 


Upon the expiration or termination of this Agreement
in accordance with the provisions of Article 5, no party shall remain
liable to the other, except with respect to Articles 1 (to the extent JHTSL’s
right to receive payment has accrued), 7.1, 7.2, 8.1, 8.2, 8.3, 9.1, 9.2, 10,
12, this Article 13, and Article 14, 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 9.1 and 9.2.


 


14.                               Miscellaneous.


 


14.1.                       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.


 


14.2.                       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


 


If to JHTSL:


 


13

















 


Jackson
Hewitt Technology Services LLC


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.


 


14.3.                       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.


 


14.4.                       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.


 


14.5.                       Integration; Subordination of JHTSL Obligations. This
Agreement, together with the Schedules hereto and all agreements or documents
related hereto or delivered hereunder and the Program 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, 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 JHTSL 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 JHTSL’s obligations shall be subordinate to the
obligations of the ERO.


 


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


 


14.7.                       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.


 


14

















 


14.8.                      Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which,
taken together, shall be deemed one and the same instrument.


 


14.9.                      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.


 


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


 


14.11.                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.


 


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15

















 


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 TECHNOLOGY

  SERVICES LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ William
  Nelson

  	
   

  	
  By

  	
  /s/ Bill San
  Giacomo

  
	
   

  	
  William Nelson

  	
   

  	
   

  	
  Bill San Giacomo

  
	
   

  	
  Managing
  Director

  	
   

  	
   

  	
  Group Vice
  President, Financial Products

  



 


16

















 


Schedule A


 


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


 


[*]