**Exhibit 10.3**

 

 

 

TRANSITIONAL AGREEMENT

 

 

among

 

 

CENDANT CORPORATION,

 

 

CENDANT OPERATIONS, INC.

 

 

and

 

 

JACKSON HEWITT TAX SERVICE INC.

 

 

Dated as of June 25, 2004

 

 

 

----

 

TABLE OF CONTENTS

 
| ARTICLE I                |                                                                     |
|-------------------------------|--------------------------------------------------------------------------|
|                          |                                                                     |   |
| SERVICES                      |                                                                     |
|                          |                                                                     |   |
| Section 1.1              | Provision  of Services                                                   |   |
| Section 1.2              | Additional  Services                                                     |   |
| Section 1.3              | Obligations  as to Additional Services                                   |   |
| Section 1.4              | Term  of Agreement and Services                                          |   |
| Section 1.5              | Subcontracting  of Services                                              |   |
| Section 1.6              | Standard  of Service                                                     |   |
| Section 1.7              | Right  to Decline Services                                               |   |
| Section 1.8              | Compensation  and Other Payments                                         |   |
| Section 1.9              | Billing  and Payment Terms                                               |   |
| Section 1.10             | Interruption  of Services                                                |   |
| Section 1.11             | Supervision  and Compensation                                            |   |
| Section 1.12             | Staffing  of Personnel                                                   |   |
|                          |                                                                     |   |
| ARTICLE II               |
|                          |                                                                     |   |
| COSTS AND EXPENSES            |
|                          |                                                                     |   |
| Section 2.1              | Allocation  of Costs and Expenses Related to the Initial Public Offering |   |
|                          |                                                                     |   |
| ARTICLE III              |
|                          |                                                                     |   |
| MUTUAL OBLIGATIONS; COVENANTS |
|                          |                                                                     |   |
| Section 3.1              | Legal  Actions                                                           |   |
| Section 3.2              | Providing  Periodic Reports                                              |   |
| Section 3.3              | Public  Announcements                                                    |   |
| Section 3.4              | Means  of Providing Services                                             |   |
| Section 3.5              | Further  Assurances                                                      |   |
|                          |                                                                     |   |
| ARTICLE IV               |
|                          |                                                                     |   |
| TAX MATTERS                   |
|                          |                                                                     |   |
| Section 4.1              | Preparation  and Filing of Returns; Payment of Taxes                     |   |
| Section 4.2              | Indemnification                                                          |   |
| Section 4.3              | Amendments  of Tax Returns; Refunds and Credits                          |   |
| Section 4.4              | Notice;  Control of Contests                                             |   |
| Section 4.5              | Cooperation                                                              |   |
| Section 4.6              | Tax  Sharing Agreements                                                  |   |
| Section 4.7              | Tax  Treatment                                                           |   |
| Section 4.8              | Survival;  Conflicts                                                     |   |
| Section 4.9              | Service  Taxes                                                           |   |
| Section 4.10             | Limitation  of Damages                                                   |   |

 

i

----

 
| ARTICLE V                                           |
|----------------------------------------------------------|
|                                                     |   |   |
| ACCESS TO INFORMATION, PERSONNEL AND  HISTORICAL RECORDS |
|                                                     |   |   |
| Section 5.1                                         | Information  and Personnel Shared Historical Records |   |
| Section 5.2                                         | Access  to Information |   |
| Section 5.3                                         | Litigation  Cooperation |   |
| Section 5.4                                         | Attorney  Client Privilege |   |
|                                                     |   |   |
| ARTICLE VI                                          |
|                                                     |   |   |
| CONFIDENTIALITY                                          |
|                                                     |   |   |
| Section 6.1                                         | Confidential  Information |   |
| Section 6.2                                         | Exceptions |   |
| Section 6.3                                         | Additional  Responsibilities |   |
|                                                     |   |   |
| ARTICLE VII                                         |
|                                                     |   |   |
| DISCLAIMER AND LIMITATION OF LIABILITY                   |
|                                                     |   |   |
| Section 7.1                                         | Disclaimer  of Warranties |   |
| Section 7.2                                         | Limitation  of Consequential Damages |   |
|                                                     |   |   |
| ARTICLE VIII                                        |
|                                                     |   |   |
| BUSINESS AND REGISTRATION STATEMENT  INDEMNIFICATION     |
|                                                     |   |   |
| Section 8.1                                         | General  Cross Indemnification |   |
| Section 8.2                                         | Registration  Statement Indemnification |   |
| Section 8.3                                         | Contribution |   |
| Section 8.4                                         | Procedure |   |
| Section 8.5                                         | Other  Matters |   |
|                                                     |   |   |
| ARTICLE IX                                          |
|                                                     |   |   |
| OTHER PROVISIONS                                         |
|                                                     |   |   |
| Section 9.1                                         | Records |   |
| Section 9.2                                         | Inspection  Rights |   |
| Section 9.3                                         | Non-Solicitation |   |
|                                                     |   |   |
| ARTICLE X                                           |
|                                                     |   |   |
| TERMINATION                                              |
|                                                     |   |   |
| Section 10.1                                        | Termination |   |
| Section 10.2                                        | Termination  Notices |   |

 

ii

----

 
| Section 10.3  | Consequences  of Termination                  |   |
|--------------------|-----------------------------------------------|--------|
| Section 10.4  | Survival                                      |   |
|               |                                          |   |
| ARTICLE XI    |
|               |                                          |   |
| MISCELLANEOUS      |
|               |                                          |   |
| Section 11.1  | Force  Majeure                                |   |
| Section 11.2  | Assignment                                    |   |
| Section 11.3  | Relationship  of the Parties                  |   |
| Section 11.4  | Governing  Law and Submission to Jurisdiction |   |
| Section 11.5  | Entire  Agreement                             |   |
| Section 11.6  | Notices                                       |   |
| Section 11.7  | Negotiation  and Mediation                    |   |
| Section 11.8  | Conflicting  Provisions                       |   |
| Section 11.9  | Severability                                  |   |
| Section 11.10 | Interpretation                                |   |
| Section 11.11 | Counterparts                                  |   |
| Section 11.12 | Further Cooperation                           |   |
| Section 11.13 | Amendment and Waiver                          |   |
| Section 11.14 | Duly Authorized Signatories                   |   |
| Section 11.15 | Waiver of Trial By Jury                       |   |
| Section 11.16 | Descriptive Headings                          |   |
| Section 11.17 | No Third Party Beneficiaries                  |   |
| Section 11.18 | Binding Nature of Agreement                   |   |
| Section 11.19 | Certain Definitions                           |   |

 
| Exhibit  A |
|------------|
| A-1        |   | Tax  Administration |
| A-2        |   | Human  Resources |
| A-3        |   | Event  Marketing |
| A-4        |   | Financial  Systems Management |
| A-5        |   | Treasury  Services |
| A-6        |   | Revenue  Audit Services |
| A-7        |   | Call  Support |
| A-8        |   | Accounts  Payable |
| A-9        |   | Public  and Regulatory Affairs |
| A-10       |   | Payroll |
| A-11       |   | Information  Technology and Telecommunications |
| A-12       |   | Legal  Document Management Systems |
| A-13       |   | Executive  Financial Consulting Services Program |

 

iii

----

 

TRANSITIONAL AGREEMENT (this “Agreement”), dated as ofJune 25, 2004 (the “Effective Date”), by and among CendantOperations, Inc., a Delaware corporation (“Cendant Operations”), CendantCorporation, a Delaware corporation (together with its Subsidiaries, “Cendant”)and Jackson Hewitt Tax Service Inc., a Delaware corporation (“Jackson Hewitt”).  Each of Cendant Operations, Cendant and JacksonHewitt is sometimes referred to herein as a “Party” and collectively, asthe “Parties.”

 

WITNESSETH:

 

WHEREAS, Cendant is the indirect owner of all of the issued andoutstanding common stock, par value $.01 per share (the “Common Stock”),of Jackson Hewitt immediately prior to the date hereof; and

 

WHEREAS, Cendant Operations and Jackson Hewitt have each determinedthat it is desirable to enter into this Agreement, which sets forth the termsof certain relationships and other agreements among Cendant Operations, Cendantand Jackson Hewitt following the date of the closing (the “Closing Date”)of the Initial Public Offering.

 

NOW, THEREFORE, in contemplation of Jackson Hewitt ceasing to be sowholly owned by Cendant and in consideration of the foregoing and the covenantsand agreements set forth herein, the Parties, intending to be legally boundhereby, agree as follows:

 

ARTICLE I

 

SERVICES

 

Section 1.1                                      Provisionof Services.  Upon the terms andsubject to the conditions set forth in this Agreement, Cendant Operationsagrees to provide to Jackson Hewitt those services described in Exhibit Aattached hereto, each on and pursuant to the terms set forth therein (together,with the Additional Services (as defined in Section 1.2), the “Services”).

 

Section 1.2                                      AdditionalServices.  From time to time duringthe Term (as defined in Section 1.4), Jackson Hewitt may find it desirableto request, in addition to the Services described in Exhibit A, additionalservices to be made available to Jackson Hewitt by Cendant Operations (“AdditionalServices”).  In the event thatJackson Hewitt makes a written request that Cendant Operations provideAdditional Services and Cendant Operations agrees to provide such AdditionalServices, the Parties shall negotiate in good faith and execute amendments toExhibit A for such Additional Services that shall set forth, among otherthings, (a) the time period during which the Additional Services shall beprovided, (b) a description of the Additional Services, and (c)

 

1

----

 

and the estimated charge for the Additional Services.  Cendant Operations’s obligations withrespect to providing any such Additional Services shall become effective onlyupon an amendment to Exhibit A being duly executed and delivered by eachParty.  It is understood that CendantOperations has no obligation to provide Additional Services and may reject anyrequest by Jackson Hewitt for Additional Services for any reason or for noreason.

 

Section 1.3                                      Obligationsas to Additional Services.  CendantOperations agrees to enter into discussions with Jackson Hewitt to provide anyAdditional Services that (i) Jackson Hewitt is unable to obtain from a thirdparty provider, (ii) are directly dependent upon or inextricably intertwinedwith the Services and (iii) were inadvertently and unintentionally omitted fromthe list of Services; provided, however, that Cendant Operations shall not beobligated to provide such Additional Services if, following good-faithnegotiation, the Parties are unable to reach agreement on such terms.

 

Section 1.4                                      Termof Agreement and Services.  The termof each Service identified in Exhibit A shall commence upon the Effective Dateand, unless earlier terminated by the Parties as provided herein, shall expireon the date as set forth for each Service in Exhibit A (the “Term”).

 

Section 1.5                                      Subcontractingof Services.  Jackson Hewittacknowledges that prior to the Effective Date, Cendant Operations may havesubcontracted with unaffiliated third parties to provide services in connectionwith all or any portion of the Services to be provided hereunder.  Cendant Operations reserves the right tosubcontract with unaffiliated third parties to provide the Services or to enterinto new subcontract relationships for any Service provided that the level ofservice remains consistent with the level of service previously provided toJackson Hewitt.

 

Section 1.6                                      Standardof Service.  Cendant Operationsagrees that in providing (or causing others to provide) the Services under thisAgreement, it shall (and shall cause each affiliate or advisor and, to theextent practicable, any or other third-party service provider to): (i) conductitself in accordance with (A) standards of quality consistent with thestandards applied by Cendant Operations as of the Effective Date with respectto the specific matters in question, and (B) standards of quality consistentwith those applied by Cendant Operations hereafter with respect to the specificmatters in question in its own business; (ii) comply with all laws, regulationsand orders applicable to the conduct of the activities contemplated hereby inall material respects; (iii) comply in all material respects with anyapplicable standards, procedures, policies, operating guidelines, practices andinstructions set forth in Exhibit A, describing the relevant Services; and (iv)comply in all material respects with any commercially reasonable standards,procedures, policies, operating guidelines, practices and instructions imposedby third-parties in connection with the Services.  Notwithstanding the foregoing, it shall not be deemed to be abreach of this Agreement if Cendant Operations fails to meet the standardsrequired under this Section 1.6 because of the failure of Jackson Hewittto cooperate with or provide information or services to Cendant Operations asrequired under this Agreement.

 

2

----

 

(a)                                  Inaddition to the provisions of Section 1.6, if Jackson Hewitt desires ahigher quality of the Services than Cendant Operations is otherwise obligatedto provide pursuant to Section 1.6 or any of the other provisions of thisAgreement, including Exhibit A, Jackson Hewitt will be entitled toreceive such higher level of quality after giving no less than 30 days’ priorwritten notice to Cendant Operations if (i) Jackson Hewitt agrees to pay forall additional Actual Costs associated with such increased level and (ii) inthe sole judgment of Cendant Operations, such increased level does not imposean additional burden on Cendant Operations.

 

(b)                                 CendantOperations shall promptly notify Jackson Hewitt of any event or circumstance ofwhich Cendant Operations or any of its representatives has knowledge that wouldor would be reasonably likely to cause a disruption in the Services.

 

Section 1.7                                      Rightto Decline Services. Notwithstanding anything contained herein or in Exhibit A, CendantOperations may decline to provide all or any part of any particular Services,if Cendant Operations reasonably believes that the performance of itsobligations relating thereto would violate any applicable law, regulation,judicial or administrative ruling or decision, any property right or agreementor any announcement, policy or standard applicable to its business, but only(a) to the extent reasonably necessary for Cendant Operations to ensurecompliance therewith, (b) after Cendant Operations has applied commerciallyreasonable efforts to reduce the amount and/or effect of any such restrictionsand (c) after Cendant Operations has delivered written notice to Jackson Hewittspecifying in reasonable detail the nature of the applicable restrictions andof any proposed resulting modification in Cendant Operations’s obligations.

 

Section 1.8                                      Compensationand Other Payments. Jackson Hewitt agrees to pay Cendant Operations, inaccordance with Section 1.9, an amount equal to the sum of the followingitems (collectively, the “Jackson Hewitt Payables”):

 

(a)                                  Anamount in cash equal the amounts set forth in Exhibit A;

 

(b)                                 Ifapplicable, the Actual Cost of any Additional Services provided by CendantOperations pursuant to Section 1.2; and

 

(c)                                  Ifapplicable, incremental increases in the Actual Cost of Services for increasedlevels of Services provided by Cendant Operations pursuant toSection 1.6(a).

 

Section 1.9                                      Billingand Payment Terms. 

 

(a)                                  JacksonHewitt agrees to pay Cendant Operations in accordance with, and subject to, thebilling and payment terms set forth in Exhibit A for each of theServices.  Amounts not paid in accordancewith this Section 1.9(a) within the period due as set forth in ExhibitA shall accumulate interest at the rate of 10 percent per annum or themaximum lawful rate, whichever is less (such rate being referred to herein asthe “Interest Rate”).  Upon thetermination of the Services, Cendant Operations will invoice Jackson Hewitt forServices incurred or other applicable charges since the last

 

3

----

 

invoice in accordance with the terms and conditions set forth hereinand in Exhibit A.

 

(b)                                 Inthe event Jackson Hewitt does not pay any sum, or any part thereof, inaccordance with this Section 1.9, Cendant Operations shall, effective 30days following the delivery of written notice to Jackson Hewitt of such paymentdefault, have no further obligation pursuant to this Agreement to provideServices to Jackson Hewitt until such unpaid balance plus all accrued interestat the applicable Interest Rate shall have been paid; provided thatCendant Operations shall not be relieved of any of its obligations to provideServices pursuant to this Agreement if, following the delivery of such writtennotice but prior to 30 days following such delivery, Jackson Hewitt deliverswritten notice to Cendant Operations written notice setting forth in detail thereasons that such charges are not due and payable.  If Cendant Operations determines in good faith that such amountsare still due and payable and Jackson Hewitt has not paid such amounts withinfive (5) Business Days of such notice, Cendant Operations may suspend allServices under this Agreement and the disputed invoices shall be referred toresolution under Section 11.7 hereunder.

 

(c)                                  JacksonHewitt shall promptly notify Cendant Operations in writing of any amountsbilled to it that are in dispute.  Uponreceipt of such notice, Cendant Operations will research the items in questionin a reasonably prompt manner and cooperate to resolve any differences withJackson Hewitt.  In the event that theParties mutually agree that any amount that was paid by Jackson Hewitt was notproperly owed, Cendant Operations will refund that amount to Jackson Hewittwithin 20 days of the delivery of such notice (or, alternatively, CendantOperations may deduct the dollar amount from the next invoice submitted toJackson Hewitt).  In the event agreementis not reached by the Parties within 30 days of delivery of the notice referredto above, the matter shall be referred to resolution in accordance with Section 11.7.

 

Section 1.10                                Interruptionof Services.  Except as otherwiseprovided herein, Cendant Operations will use its commercially reasonableefforts to provide uninterrupted Services through the Term.  In the event, however, that CendantOperations or its respective suppliers or subcontractors are wholly orpartially prevented from providing a Service or Services to Jackson Hewitt orif a Service or Services are interrupted or suspended, in either case by reasonof any force majeure event set forth in Section 11.1, or CendantOperations shall deem it reasonably necessary to suspend delivery of a Servicehereunder for purposes of maintenance, repair or replacement of equipment partsor structures, Cendant Operations shall not be obligated to deliver suchService during such periods provided that Cendant Operations: (a) has given,whenever possible, reasonable written notice of the interruption in accordancewith Section 11.6 within a reasonable period of time, explaining thereason, purpose and likely duration thereof; and (b) use commercially reasonableefforts to minimize the duration and impact of the interruption.  If such interruption of Services has asignificant negative impact on Jackson Hewitt’s business and Cendant Operationscannot readily reinstate the Service involved, Cendant Operations will use itscommercially reasonable efforts to assist Jackson Hewitt in securingalternative services to minimize such negative impact on Jackson Hewitt.

 

4

----

 

Section 1.11                                Supervisionand Compensation. Cendant Operations shall select, employ, pay, supervise,direct and discharge all the personnel providing Services hereunder.  Subject to Section 1.7, CendantOperations shall be solely responsible for the payment of all benefits and anyother direct and indirect compensation for Cendant Operations personnelassigned to perform services under this Agreement, as well as such personnel’sworker’s compensation insurance, employment taxes, and other employerliabilities relating to such personnel as required by law.  Cendant Operations shall be an independentcontractor in connection with the performance of Services hereunder and theemployees performing Services in connection herewith shall not be deemed to beemployees of Jackson Hewitt.

 

Section 1.12                                Staffingof Personnel.  Cendant Operationsshall be solely responsible for assigning personnel to perform the Services,which personnel will be instructed by Cendant Operations to perform theServices in a timely, efficient and workmanlike manner.

 

ARTICLE II

 

COSTS AND EXPENSES RELATED TO THE INITIAL PUBLIC OFFERING

 

Section 2.1                                      Allocationof Costs and Expenses.  Cendantshall pay for all fees, costs and expenses incurred by Jackson Hewitt directlyrelated to the Initial Public Offering, including, but not limited to, any andall fees, costs and expenses related to (a) the preparation and negotiation ofthis Agreement and of all of the documentation related to the Initial PublicOffering, (b) the preparation and execution or filing of any and all furtherdocuments, agreements, forms, applications, contracts or consents associatedwith the Initial Public Offering, (c) Jackson Hewitt’s organizationaldocuments, (d) the preparation, printing and filing of the IPO S-1, includingall fees and expenses of complying with applicable federal, state or foreignsecurities laws and domestic or foreign securities exchange rules andregulations, together with fees and expenses of counsel retained to effect suchcompliance, (e) the preparation, printing and distribution of each of theprospectuses for the Initial Public Offering, (f) the initial listing of theCommon Stock on the New York Stock Exchange and (g) the preparation, prior tothe Closing Date, of the documentation related to implementing Jackson Hewitt’semployee benefit plans, retirement plans and equity-based plans as a result ofthe Initial Public Offering. Notwithstanding the foregoing, Cendant shall not be responsible for thepayment of any costs and expenses (including, without limitation, legal fees)incurred by Jackson Hewitt in connection with any exercise by the underwritersin the Initial Public Offering of their option to purchase additional shares ofCommon Stock, the Debt Financing or the negotiation of the Program Agreement,dated as of May 5, 2004, by and between Jackson Hewitt Inc. and Santa BarbaraBank & Trust.

 

5

----

 

ARTICLE III

 

MUTUAL OBLIGATIONS; COVENANTS

 

Section 3.1                                      LegalActions.

 

(a)                        Within five Business Days ofany Party becoming a party to, or threatened with, or otherwise receives noticeof, any legal or regulatory proceeding or investigation (including inquiries orcomplaints from any federal agency, state attorney general’s office, from alegislator on behalf of a constituent or from any Better Business Bureau orsimilar organization) (in each case, a “Proceeding”) arising out of orin connection with the Services provided hereunder, it is agreed that suchParty will promptly provide written notification of such event to the otherParty and, to the extent reasonably requested or appropriate, the other Partywill cooperate with such Party to defend, settle, compromise or otherwiseresolve such Proceeding; provided that any costs incurred by the otherParty related to its cooperation shall be borne by the Party against whom theProceeding has been brought if it is determined that such Party has beennegligent or engaged in willful misconduct.

 

(b)                       No Party shall have theauthority to institute, prosecute or maintain any Proceeding on behalf of theother Party without the prior written consent of the other Party.

 

(c)                        This Section 3.1 shall notapply to the extent provided otherwise by the provisions of Article IV orArticle VIII.

 

Section 3.2                                      ProvidingPeriodic Reports.  CendantOperations will provide, upon reasonable written notice, such periodic reportswith respect to the Services it provides hereunder as are reasonably requestedby Jackson Hewitt, including such reports as are specified in Exhibit A.

 

Section 3.3                                      PublicAnnouncements.  Neither Cendant Operationsnor Jackson Hewitt shall issue a press release or other public announcementmaking reference to the other Party, the other Party’s products or the Servicesprovided hereunder, other than in the Registration Statement or Prospectus orotherwise required by law, unless such Party has received the written approvalof the other Party with respect to the proposed text of such press release orannouncement, which approval shall not be unreasonably withheld or delayed, andneither Party shall make or publish any statement that is, or may be reasonablyconsidered to be, disparaging of the other Party or its affiliates, directors,employees, products or services.

 

Section 3.4                                      Meansof Providing Services.  With respectto any particular Service(s) to be provided hereunder, Cendant Operationsshall, unless otherwise specified in Exhibit A, determine the means andresources used to provide such Service(s) in accordance with its prudentbusiness judgment; provided that Cendant Operations shall not take any actionwith respect to its provision of such Service(s) that materially increase thecost to Jackson Hewitt, except as required to provide such Services, or thatsignificantly disrupt Jackson Hewitt operations or materially increase the

 

6

----

 

scope of its responsibility under this Agreement.

 

Section 3.5                                      FurtherAssurances.  Each of CendantOperations and Jackson Hewitt shall execute and deliver such further documentsand shall take such other actions as each of them may reasonably request of theother as may be necessary to effect or enable the provision of the Servicescontemplated hereunder.

 

ARTICLE IV

 

TAX MATTERS

 

Section 4.1                                      Preparationand Filing of Returns; Payment of Taxes. Jackson Hewitt shall prepare and timely file (or cause to be preparedand timely filed) all Tax Returns that are required to be filed by JacksonHewitt or any of its Subsidiaries for all taxable years.  Jackson Hewitt shall timely pay (or cause tobe paid) all Taxes relating to Tax Returns required to be prepared and filed(or cause to be prepared and timely filed) by Jackson Hewitt pursuant to thisSection 4.1.

 

Section 4.2                                      Indemnification.

 

(a)                        Cendant shall indemnify andhold Jackson Hewitt and each of its Subsidiaries harmless from and against:(i)  all Taxes imposed on Jackson Hewittor any of its Subsidiaries under section 1.1502-6 of the TreasuryRegulations (and corresponding provisions of state, local or foreign Tax law)as a result of Jackson Hewitt or any of its Subsidiaries being a member of aCendant Income Tax Group, and (ii) all Losses relating or attributable to abreach of any covenant or obligation of Cendant or any of its Subsidiariescontained in this Article IV.

 

(b)                       Jackson Hewitt shall, and shallcause its Subsidiaries to, indemnify and hold the Cendant Group harmless fromand against: (i) all Taxes of relating or attributable to Jackson Hewitt andeach of its Subsidiaries for all taxable periods, provided, however,that Taxes described in this Section 4.2(b)(i) shall not include any Taxesof a Cendant Income Tax Group imposed on Jackson Hewitt or any of itsSubsidiaries under 1.1502-6 of the Treasury Regulations (and correspondingprovisions of state, local and foreign Tax law); and (ii) all Losses relatingor attributable to a breach of any covenant or obligation of Jackson Hewitt orany of its Subsidiaries contained in this Article IV.

 

Section 4.3                                      Amendmentsof Tax Returns; Refunds and Credits. Jackson Hewitt shall be entitled toamend any Tax Return required to be filed by Jackson Hewitt or any of itsSubsidiaries pursuant to Section 4.1 of this Agreement.  Jackson Hewitt shall be entitled to allrefunds or credits relating to any Tax Return required to be filed by JacksonHewitt or any of its Subsidiaries pursuant to Section 4.1 of thisAgreement.

 

Section 4.4                                      Notice;Control of Contests. Each party shall promptly notify the other in writingof any notice of deficiency, proposed adjustment, adjustment, assessment,audit, examination or other administrative or court proceeding, suit, disputeor other Tax claim (“Tax Claim”) that may reasonably be likely to resultin liability for

 

7

----

 

Taxes of the other party or any of its Subsidiaries; provided, however,that the failure by a party to promptly notify the other party of any suchnotice shall not relieve the first party from its obligations under thisArticle IV in whole or in part except to the extent the other party ismaterially and adversely prejudiced as a consequence of such failure.  Jackson Hewitt shall control all contestsrelating to Tax Returns required to be filed by Jackson Hewitt pursuant toSection 4.1 hereof or Taxes for which Jackson Hewitt is required to indemnifyCendant pursuant to Section 4.2(b) hereof.

 

Section 4.5                                      Cooperation.Each Party and its Subsidiaries shall provide such cooperation and informationas the other party shall reasonably request, on a timely basis, in connectionwith the preparation or filing of any Tax Return or claim for Tax Refund or inconducting any Tax audit, Tax examination, or Tax dispute.  Notwithstanding anything to the contrarycontained in this Agreement or otherwise, neither Jackson Hewitt nor any of itsSubsidiaries shall have the right to receive or obtain any information relatingto Taxes of Cendant, any of its Affiliates or any of its predecessors, in eachcase, other than information relating solely to Jackson Hewitt or any of itsSubsidiaries.

 

Section 4.6                                      TaxSharing Agreements.  As of theClosing Date, all Tax Sharing Agreements (including the Cendant Tax SharingAgreement) between Jackson Hewitt and/or any of its Subsidiaries, on the onehand, and Cendant and/or any of its Subsidiaries other than Jackson Hewittand/or any of its Subsidiaries, on the other hand, shall be terminated as ofthe Closing Date and, after the Closing Date, none of such parties to any suchTax Sharing Agreement shall have any further rights or obligations under anysuch agreement.  Notwithstanding anythingto the contrary contained this Agreement, this Section 4.6 shall notoperate to terminate any Tax Sharing Agreement (including the Cendant TaxSharing Agreement) between or as its relates to Cendant, on the one hand, andany of its Subsidiaries (other than Jackson Hewitt and/or its Subsidiaries), onthe other hand.

 

Section 4.7                                      TaxTreatment.  The parties hereto agreethat any payment made pursuant to this Article IV shall be treated aseither (i) in the case of any payment made by Cendant to Jackson Hewitt, acapital contribution by Cendant to Jackson Hewitt made immediately prior to theClosing Date and (ii) in the case of any payment made by Jackson Hewitt toCendant, a distribution by Jackson Hewitt to Cendant made immediately prior tothe Closing Date.

 

Section 4.8                                      Survival;Conflicts.  Notwithstanding anyother provision of this Agreement to the contrary, all indemnities, covenantsand obligations of the parties pursuant to this Article IV shall surviveindefinitely.  In the event of a conflictbetween this Article IV of this Agreement and the Cendant Tax SharingAgreement or any other provision of this Agreement, this Article IV shallgovern and control.

 

Section 4.9                                      ServiceTaxes.  Jackson Hewitt shall pay orcause to be paid all sales, service, valued added, use, excise, occupation, andother similar taxes and duties (together in each case with all interest,penalties, fines and additions thereto) that are assessed against either partyon the provision of Services as a whole, or any particular

 

8

----

 

Service (including with respect to amounts paid by Cendant to thirdparties), including Additional Services, received by Jackson Hewitt or any ofits Subsidiaries from Cendant or any of its Affiliates pursuant to the terms ofthis Agreement (collectively, “ServiceTaxes”).  If required under applicable law (or, in thecase of Service Taxes relating to amounts paid by Cendant to third parties),Cendant shall invoice Jackson Hewitt for the full amount of all Service Taxes,and Jackson Hewitt shall pay, in addition to the other amounts required to bepaid pursuant to the terms of this Agreement, such Service Taxes to Cendant.

 

Section 4.10                                Limitationof Damages.  Notwithstandinganything to the contrary contained in this Agreement, Cendant shall not beliable for any claim in respect of Services relating to Taxes or Tax Returns ofJackson Hewitt or any of its Subsidiaries (including those Services provided byCendant to Jackson Hewitt set forth in Exhibit A-1 and Exhibit A-10), except tothe extent that such claim arises from the willful misconduct or grossnegligence of Cendant.

 

ARTICLE V

 

ACCESS TO INFORMATION, PERSONNEL AND HISTORICAL RECORDS

 

Section 5.1                                      Informationand Personnel Shared Historical Records. Within 30 days of the Effective Date, Cendant shall deliver to JacksonHewitt copies of all historical records, including but not limited to, thebooks, records, and such other records, files, information and/or data, orportions thereof (the “Records”), related primarily to the business ofJackson Hewitt.  The provision of anyRecords shall not be deemed a waiver of any Privilege and the parties shall usereasonable efforts to maintain and protect such Privileges with reasonableprior notice and in consultation with the other parties.

 

Section 5.2                                      Accessto Information.  Subject to theconfidentiality provisions set forth in Article VI below and any otherrestrictions contained in this Agreement:

 

(a)                        Cendant and Jackson Hewittshall provide, upon written request, any information within such Party’spossession that the requesting Party reasonably needs (i) to comply withrequirements imposed on the requesting Party by a governmental authority; (ii)for use by such requesting Party in any proceeding or to satisfy audit,accounting, tax or similar requirements; or (iii) to comply with suchrequesting Party’s obligations under this Agreement or any other agreementexecuted by Cendant and Jackson Hewitt in connection with this Agreement or theInitial Public Offering.

 

(b)                       Jackson Hewitt shall provide toCendant, at no expense to Cendant, all financial and other data and informationthat Cendant determines is necessary and advisable in the preparation ofCendant’s financial statements and any reports or filings with any governmentalagency.

 

9

----

 

Section 5.3                                      LitigationCooperation.  The Parties agree tothe extent reasonably necessary to cooperate and consult in the defense andsettlement of any threatened or filed third-party action, claim or disputewhich jointly involves Cendant or Jackson Hewitt or any of their Subsidiaries(“Third Party Action”) which primarily relates to matters, actions,events or occurrences taking place prior to the Closing Date.  In addition, both Cendant and Jackson Hewittwill use their reasonable best efforts to provide assistance to the other Partywith respect to any Third Party Action, and to make available to the otherParty directors, officers, other employees and agents of such assisting Partyas witnesses in legal, administrative or other proceedings.  The Party providing information, consultingor witness services under this Section 5.3 shall be entitled toreimbursement from the other Party for reasonable and documented expenses.  This Section 5.3 shall not apply to theextent provided otherwise by the provisions of Article IV orArticle VIII.

 

Section 5.4                                      AttorneyClient Privilege.  Neither Cendantnor Jackson Hewitt will be required to provide any information pursuant to thisAgreement if the provision of such information would serve as a waiver of anyPrivilege afforded such information.

 

ARTICLE VI

 

CONFIDENTIALITY

 

Section 6.1                                      ConfidentialInformation.  For purposes of thisAgreement, “Confidential Information” means any information disclosed by aParty (the “Providing Party”) to the other Party (the “ReceivingParty”) pursuant to this Agreement relating to the business, finances,technology or operations of the Providing Party.  The Receiving Party will (a) treat as confidential allConfidential Information of the Providing Party, (b) not use such ConfidentialInformation except to exercise its rights and perform its obligations underthis Agreement, and (c) not disclose such Confidential Information to any thirdparty.  Each Party will use at least thesame degree of care (and not less than a reasonable degree of care) it uses toprevent the disclosure of its own confidential information of like importance,to prevent the disclosure of the Providing Party’s Confidential Informationincluding the execution of confidentiality agreements with its employees andconsultants having access to such Confidential Information.  Each Receiving Party will promptly notifythe Providing Party of any actual or suspected misuse or unauthorized disclosureof the Providing Party’s Confidential Information.

 

Section 6.2                                      Exceptions.  Confidential Information excludesinformation that: (a) was in the public domain at the time it was disclosed orhas become in the public domain through no fault of the Receiving Party; (b)becomes known to the Receiving Party through lawful means, at the time ofdisclosure, and was acquired by such Receiving Party after the Effective Dateas demonstrated by the Receiving Party; (c) was independently developed by theReceiving Party without any use of the Confidential Information; or (d) becomesknown to the Receiving Party, without restriction, from a source other than theProviding Party; provided that such information was provided (i)

 

10

----

 

under the circumstances of disclosure that the Receiving Party does nothave a duty of non-disclosure owed to such third party, (ii) to the ReceivingParty’s knowledge, the disclosing party’s disclosure is not violative of a dutyof non-disclosure owed to another, including the Receiving Party, and (iii) thedisclosure by the third party is not otherwise unlawful.  In the event that the Receiving Party, orany of its representatives, becomes legally compelled by deposition,interrogatory, request for documents, subpoena, civil investigative demand orsimilar judicial or administrative process to disclose any Providing Party’sConfidential Information, the Receiving Party shall provide prompt priorwritten notice of such requirement and cooperate with the Providing Party toobtain a protective order or similar remedy to cause the Providing Party’sConfidential Information not to be disclosed, including interposing allavailable objections thereto.  In theevent that such protective order or other similar remedy is not obtained, theReceiving Party shall furnish only that portion of the Providing Party’sConfidential Information that has been legally compelled and shall exercisecommercially reasonable efforts to obtain assurance that “highly confidential”treatment will be accorded such Confidential Information.

 

Section 6.3                                      AdditionalResponsibilities.  Each Party willinform its employees, agents and consultants having access to ConfidentialInformation of the other Party of the confidentiality provisions hereof, andwill diligently enforce such provisions, and will be responsible for actions ofsuch employees, agents and consultants in this respect

 

ARTICLE VII

 

DISCLAIMER AND LIMITATION OF LIABILITY

 

Section 7.1                                      Disclaimerof Warranties.  CENDANT OPERATIONSMAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITHRESPECT TO THE SERVICES TO BE PROVIDED UNDER THIS AGREEMENT.

 

Section 7.2                                      Limitationof Consequential Damages.  NO PARTYSHALL UNDER ANY CIRCUMSTANCES BE LIABLE TO ANY OTHER PARTY FOR ANY SPECIAL,INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OFPROFITS OR REVENUE) RESULTING OR ARISING FROM THE SERVICES, ANY PERFORMANCE ORNONPERFORMANCE OF THE SERVICES OR TERMINATION OF THE SERVICES.  THIS LIMITATION APPLIES REGARDLESS OFWHETHER SUCH DAMAGES OR OTHER RELIEF ARE SOUGHT BASED ON BREACH OF WARRANTY,BREACH OF CONTRACT, NEGLIGENCE, STRICT LIABILITY IN TORT, OR ANY OTHER LEGAL OREQUITABLE THEORY.

 

11

----

 

ARTICLE VIII

 

BUSINESS AND REGISTRATION STATEMENTINDEMNIFICATION

 

Section 8.1                                      GeneralCross Indemnification.

 

(a)                        Cendant agrees to indemnify andhold harmless Jackson Hewitt and each of the officers, directors, employees andagents of Jackson Hewitt against any and all costs and expenses arising out ofthird party claims (including, without limitation, attorneys’ fees, interest,penalties and costs of investigation or preparation for defense), judgments,fines, losses, claims, damages, liabilities, demands, assessments and amountspaid in settlement (collectively, “Losses”), in each case, based on,arising out of, resulting from or in connection with any claim, action, causeof action, suit, proceeding or investigation, whether civil, criminal,administrative, investigative or other (collectively, “Actions”), basedon, arising out of, pertaining to or in connection with (i) any breach byCendant of this Agreement or any other agreement between Cendant and JacksonHewitt executed in connection with this Agreement and (ii) the operation orconduct of the business of Cendant, whether before, on or after the datehereof, other than the business of Jackson Hewitt, its Subsidiaries or itspredecessors.

 

(b)                       Jackson Hewitt agrees toindemnify and hold the Cendant Group and their officers, directors, employeesand agents against any and all Losses, in each case, based on, arising out of,resulting from or in connection with any Actions, based on, arising out of,pertaining to or in connection with (i) any breach by Jackson Hewitt of thisAgreement or any other agreement between Cendant and Jackson Hewitt executed inconnection with this Agreement and the Initial Public Offering, (ii) theownership or the operation of the assets or properties, and the operation orconduct of the business of, including contracts entered into and any activitiesengaged in by, Jackson Hewitt, its Subsidiaries and its franchisees, whetherbefore, on or after the date hereof, including with respect to any pendinglitigation against the Cendant Group with respect thereto as of the date, (iii)any acts or omissions arising out of the performance of this Agreement or anyother agreement between the Cendant Group and Jackson Hewitt executed inconnection with this Agreement and the Initial Public Offering, whether in thepast or future and (iv) any guaranty, keepwell or financial conditionmaintenance agreement of or by the Cendant Group provided to any Person withrespect to any actual or contingent obligation of Jackson Hewitt or any of itsSubsidiaries.

 

(c)                        The indemnity agreementcontained in Sections 8.1(a) and (b) shall be applicable whether or not anyAction or the facts or transactions giving rise to such Action arose prior to,on or subsequent to the date of this Agreement.

 

Section 8.2                                      RegistrationStatement Indemnification.

 

(a)                        Jackson Hewitt agrees toindemnify and hold harmless Cendant and its officers, directors, employees andagents (collectively, the “RegistrationIndemnitees”) from andagainst any and all Losses arising out of or based upon any untrue statement oralleged untrue statement of a material fact contained in any Offering Document,or arising out of or based upon any omission or alleged omission to statetherein a material fact required to be stated therein or necessary to make thestatements

 

12

----

 

therein not misleading, except insofar as such Losses arise out of orare based upon any untrue statement or omission or alleged untrue statement oromission which has been made therein or omitted therefrom in reliance upon andin conformity with (i) information relating to Cendant (other than the JacksonHewitt business) furnished in writing to Jackson Hewitt by Cendant relating toinformation specifically about Cendant (other than the Jackson Hewitt business)in any Offering Document expressly for use in such Offering Document and (ii)information relating to any underwriter furnished in writing to Jackson Hewittby or on behalf of such underwriter expressly for use in such OfferingDocument.

 

(b)                       Cendant agrees to indemnify andhold harmless Jackson Hewitt and its officers, directors, employees and agents,to the same extent as the foregoing indemnity from Jackson Hewitt to eachRegistration Indemnitee, but only with respect to (i) information relating toCendant (other than the Jackson Hewitt business) furnished in writing toJackson Hewitt by Cendant relating to information specifically about Cendant(other than the Jackson Hewitt business) expressly for use in any OfferingDocument.  For purposes of thisSection 8.2(b), any information relating to any underwriter that iscontained in an Offering Document shall not be deemed to be informationrelating to a Registration Indemnitee. If any Action shall be brought against Jackson Hewitt, any of itsdirectors, officers, employees or agents, based on any Offering Document and inrespect of which indemnity may be sought against a Registration Indemniteepursuant to this paragraph (b), such Registration Indemnitee shall have therights and duties given to Jackson Hewitt by Section 8.4 hereof (exceptthat if Jackson Hewitt shall have assumed the defense thereof such RegistrationIndemnitee shall not be required to do so, but may employ separate counseltherein and participate in the defense thereof, but the fees and expenses ofsuch counsel shall be at such Registration Indemnitee’s expense), and JacksonHewitt, its officers, directors, employees and agents shall have the rights andduties given to such Registration Indemnitee by Section 8.4 hereof.

 

Section 8.3                                      Contribution.

 

(a)                        If the indemnification providedfor in this Article VIII is unavailable to an indemnified party underSection 8.2 hereof in respect of any Losses referred to therein, then anindemnifying party, in lieu of indemnifying such indemnified party, shall contributeto the amount paid or payable by such indemnified party as a result of suchLosses in such proportion as is appropriate to reflect the relative fault ofJackson Hewitt on the one hand and the applicable Registration Indemnitee onthe other in connection with the statements or omissions that resulted in suchLosses.  The relative fault of JacksonHewitt on the one hand and the applicable Registration Indemnitee on the otherhand shall be determined by reference to, among other things, whether the untrueor alleged untrue statement of a material fact or the omission or allegedomission to state a material fact relates to information supplied by JacksonHewitt on the one hand or by such Registration Indemnitee on the other hand andthe parties’ relative intent, knowledge, access to information and opportunityto correct or prevent such statement or omission.

 

13

----

 

(b)                       No person guilty of fraudulentmisrepresentation (within the meaning of Section 11(f) of the SecuritiesAct) shall be entitled to contribution from any person who was not guilty ofsuch fraudulent misrepresentation.

 

Section 8.4                                      Procedure.  If any Action shall be brought against aRegistration Indemnitee or any other person entitled to indemnificationpursuant to this Article VIII (collectively with the RegistrationIndemnitees, the “Indemnitees”) in respect of which indemnity may be soughtagainst Jackson Hewitt, such Indemnitee shall promptly notify Jackson Hewitt,and Jackson Hewitt shall assume the defense thereof, including the employmentof counsel and payment of all fees and expenses.  Such Indemnitee shall have the right to employ separate counselin any such action, suit or proceeding and to participate in the defensethereof, but the fees and expenses of such counsel shall be at the expense ofsuch person unless (i) Jackson Hewitt has agreed in writing to pay such feesand expenses, (ii) Jackson Hewitt has failed to assume the defense and employcounsel, or (iii) the named parties to an Action (including any impleadedparties) include both an Indemnitee and Jackson Hewitt and such Indemniteeshall have been advised by its counsel that representation of such indemnifiedparty and Jackson Hewitt by the same counsel would be inappropriate underapplicable standards of professional conduct (whether or not suchrepresentation by the same counsel has been proposed) due to actual orpotential differing interests between them (in which case Jackson Hewitt shallnot have the right to assume the defense of such Action on behalf of suchIndemnitee).  It is understood, however,that Jackson Hewitt shall, in connection with any one such Action or separatebut substantially similar or related Actions in the same jurisdiction arisingout of the same general allegations or circumstances, be liable for thereasonable fees and expenses of only one separate firm of attorneys (inaddition to any local counsel) at any time for all such indemnified persons nothaving actual or potential differing interests among themselves, and that allsuch fees and expenses shall be reimbursed as they are incurred.  Jackson Hewitt shall not be liable for anysettlement of any such Action effected without its written consent, but ifsettled with such written consent, or if there be a final judgment for theplaintiff in any such Action, Jackson Hewitt agrees to indemnify and holdharmless each Indemnitee, to the extent provided in the preceding paragraph,from and against any Losses by reason of such settlement or judgment.

 

Section 8.5                                      OtherMatters.

 

(a)                        No indemnifying party shall,without the prior written consent of the indemnified party, effect anysettlement of any pending or threatened Action in respect of which anyindemnified party is or could have been a party and indemnity could have beensought hereunder by such indemnified party, unless such settlement includes anunconditional release of such indemnified party from all liability on claimsthat are the subject matter of such Action.

 

(b)                       Any Losses for which an indemnifiedparty is entitled to indemnification or contribution under thisArticle VIII shall be paid by the indemnifying party to the indemnifiedparty as such Losses are incurred.  Theindemnity and contribution agreements contained in this Article VIII shallremain operative and in full

 

14

----

 

force and effect, regardless of (i) any investigation made by or onbehalf of any Indemnitee, Jackson Hewitt, its directors, officers, employees oragents and (ii) any termination of this Agreement.

 

(c)                        The parties hereto shall, andshall cause their respective subsidiaries to, cooperate with each other in areasonable manner with respect to access to unprivileged information andsimilar matters in connection with any Action. The provisions of this Article VIII are for the benefit of, and areintended to create third party beneficiary rights in favor of, each of theindemnified parties referred to herein.

 

ARTICLE IX

 

OTHER PROVISIONS

 

Section 9.1                                      Records.  Cendant Operations agrees to maintainaccurate records arising from or related to any Services provided hereunder,including accounting records and documentation produced in connection with therendering of any Services.  Cendant Operationsaccounting records shall be reasonably sufficient to permit the computation andverification of all payments due hereunder.

 

Section 9.2                                      InspectionRights.  During the Term and for 60days thereafter, Cendant Operations shall, upon 20 days’ prior written noticefrom Jackson Hewitt, permit Jackson Hewitt or its authorized representatives toinspect and audit Cendant Operations records relating to the Services duringregular business hours; provided that Jackson Hewitt shall comply with CendantOperations reasonable security and safety procedures as such procedures arecommunicated to Jackson Hewitt and that any expenses (including relating tocopying) in connection the inspection or audit shall be the sole obligation ofJackson Hewitt.

 

Section 9.3                                      Non-Solicitation.  For a period of two years following theClosing Date, neither Cendant on the one hand nor Jackson Hewitt on the otherhand will, without the prior written consent of the other party, eitherdirectly or indirectly, on their own behalf or in the service or on behalf ofothers, solicit, or attempt to solicit, any person employed by the other partywhose annual base salary plus cash bonus exceeds $150,000, excluding anyequity-based compensation element of such bonus (the “Restricted Employees”),whether or not such employee is a full-time or a temporary employee of eitherCendant or Jackson Hewitt (as applicable), and whether or not such employmentis pursuant to written agreement; provided, that the foregoing will not (i)prevent either party from soliciting or hiring any such person after thetermination of such employee’s employment by their respective employer unlessspecifically prohibited by such employee’s separation agreement, if any, withCendant or Jackson Hewitt or (ii) prohibit either party from placing publicadvertisements or conducting any other form of general solicitation which isnot specifically targeted towards the Restricted Employees; provided, further,that a general solicitation conducted by an employment agency on behalf of oneof the parties which inadvertently contacts a Restricted Employee will nottrigger this Section 9.3, so long as such Restricted Employee is not hiredby such party conducting the general solicitation for employees.

 

15

----

 

ARTICLE X

 

TERMINATION

 

Section 10.1                                Termination.

 

(a)                        Any Service provided hereundermay be terminated (x) by mutual written agreement of the Parties, (y) as setforth in Exhibit A or (z) by either Party upon written notice to the otherParty if:

 

(i)                                     the other Partyfails to adequately perform in any material respect any of its obligationsunder this Agreement or otherwise breaches a material obligation under thisAgreement (the “Defaulting Party”) and such failure to perform or breachof an obligation is not cured within 30 days of the date on which writtennotice is received by the Defaulting Party setting forth in reasonable detailthe manner in which the Defaulting Party failed to perform its obligationshereunder; or

 

(ii)                                  the other Party makesa general assignment for the benefit of creditors, becomes insolvent, areceiver is appointed, or a court approves reorganization or arrangementproceedings.

 

(b)                       Any Service or Services providedhereunder may be terminated by Cendant Operations upon written notice toJackson Hewitt if performance of any such Service or Services has been renderedimpossible or impracticable by reason of the occurrence of any of the eventsdescribed in Section 11.1.

 

Section 10.2                                TerminationNotices.  Any termination noticedelivered by either Party shall specify the effective date of termination and,where applicable, in detail the Service or Services to be terminated.

 

Section 10.3                                Consequencesof Termination.  In the event anyService is terminated for any reason (other than the expiration of the Term):

 

(a)                        Upon request, each Party shallreturn to the other Party all tangible personal property, books and recordsowned by the other Party in their possession (including all ConfidentialInformation) as of the termination date; and

 

(b)                       Other than in the event of atermination that is the result of the expiration of the Term, as set forth in ExhibitA or pursuant to Section 10.1(b), Jackson Hewitt will be responsibleto Cendant Operations for reasonable and proper termination charges that willinclude all reasonable cancellation costs incurred by Cendant Operations orcosts for materials acquired in connection with the provision of the Services; provided,however, that Cendant Operations agrees to use commercially reasonableefforts to minimize the cost associated with such cancellation ormaterials.  Invoices for such chargesshall be prepared in reasonable detail by Cendant Operations and payment shallbe due 30 days from the date of such invoice.

 

16

----

 

Section 10.4                                Survival.  Expiration or termination of all or aportion of the Services for any reason shall not terminate the otherobligations of the Parties hereunder, which shall survive any such termination.  Subject to the foregoing, expiration ortermination of the Services for any reason shall not terminate either Party’sobligations and rights arising out of any willful misconduct or grossnegligence of the other Party occurring prior to such termination orexpiration, including the obligation to pay any money owed hereunder up to oras a result of the termination of such Services.

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.1                                ForceMajeure.  Neither Party shall beresponsible for the delay in the performance of any obligation hereunder due tolabor disturbances, accidents, fires, storms, floods, earthquake, explosion,wars, acts of terrorism, riots, rebellions, insurrections, blockages, strike orlabor disruption acts of governments, governmental requirements andregulations, restrictions imposed by law or any other similar conditions,beyond the reasonable control and without the fault or negligence of suchParty, and the time for performance by such Party shall be extended by theperiod of such delay.  Notwithstandingthe foregoing, in no event shall Jackson Hewitt be relieved of its paymentobligations to Cendant Operations for Services delivered.

 

Section 11.2                                Assignment.  Except as otherwise provided in thisAgreement, neither this Agreement nor any of the rights, interests orobligations of any Party hereto under this Agreement shall be assigned, inwhole or in part, by operation of law or otherwise by either of the Partieswithout the prior written consent of the other Party; provided, however,that Cendant may assign any of the foregoing to one or more of itsSubsidiaries.  Any assignment inviolation of the preceding sentence shall be void.  Subject to the preceding two sentences, this Agreement will bebinding upon, inure to the benefit of, and be enforceable by, the Parties andtheir respective successors and assigns. Other than the indemnitees under Articles IV and VIII, nothing in thisAgreement shall be construed to grant any person or entity not a Party anyrights or powers whatsoever, and no person or entity shall be a third partybeneficiary of this Agreement.  Nothingin this Section 11.2 affects the ability of either Party to terminate anyof the Services in accordance with the provisions of this Agreement.

 

Section 11.3                                Relationshipof the Parties.  Neither Party is anagent of the other Party and neither Party has any authority to bind the otherParty, transact any business in the other Party’s name or on its behalf, ormake any promises or representations on behalf of the other Party unlessprovided for in Exhibit A or agreed to in writing.  Each Party will perform all of its respective obligations underthis Agreement as an independent contractor, and no joint venture, partnershipor other relationship shall be created or implied by this Agreement.

 

Section 11.4                                GoverningLaw and Submission to Jurisdiction. This Agreement shall be governed by, enforced under and construed inaccordance with the

 

17

----

 

laws of the State of New York, without giving effect (to the fullestextent provided by law) to any choice or conflict of law provision or rulethereof which might result in the application of the laws of any otherjurisdiction.  Subject toSection 11.7, each of the Parties hereby irrevocably and unconditionallyconsents to submit to the exclusive jurisdiction of the courts of the State ofNew York and of the United States of America in each case located in the Countyof New York for any litigation arising out of or relating to this Agreement(and agrees not to commence any litigation relating thereto except in suchcourts) and further agrees that service of any process, summons, notice ordocument by U.S. registered mail to its respective address set forth inSection 11.6 (or to such other address for notice that such Party hasgiven the other Party written notice of in accordance with Section 11.6)shall be effective service of process for any litigation brought against it inany such court.  Each Party herebyirrevocably and unconditionally waives any objection to the laying of venue ofany litigation arising out of this Agreement in the courts of the State of NewYork or of the United States of America in each case located in the County ofNew York and hereby further irrevocably and unconditionally waives and agreesnot to plead or claim in any such court that any such litigation brought in anysuch court has been brought in an inconvenient forum.

 

Section 11.5                                EntireAgreement.  This Agreement and theExhibits referred to in this Agreement, which Exhibits as such Exhibits may beamended from time to time, are incorporated and made a part of this Agreementby reference, constitute the entire agreement between Cendant Operations,Cendant and Jackson Hewitt relating to the Services and obligations to beprovided by the Parties, and there are no further agreements or understandings,written or oral, between the Parties with respect thereto.

 

Section 11.6                                Notices.  All notices, requests, claims, consents,demands and other communications under this Agreement shall be in writing andshall be deemed given if delivered personally, by facsimile (that is confirmed)or sent by overnight courier (providing proof of delivery) to the Parties atthe following addresses (or at such other address for a Party as shall bespecified by like notice):

 
| If to Cendant or Cendant Operations: |
|--------------------------------------|
|                                 |   |   |
|                                 |   | Cendant Corporation |
|                                 |   | 9 West 57th Street |
|                                 |   | New York, New York 10021 |
|                                 |   | Facsimile:  (212) 413-1922 |
|                                 |   | Attention: | Eric J. Bock, Executive Vice President-Law and Corporate Secretary |
|                                 |   |   |
| If to Jackson Hewitt:                |
|                                 |   |   |
|                                 |   | Jackson Hewitt Tax Service Inc. |
|                                 |   | 7 Sylvan Way |
|                                 |   | Parsippany, New Jersey 07054 |
|                                 |   | Facsimile:  (973) 496-2810 |
|                                 |   | Attention: | Steven L. Barnett, Senior Vice President, General Counsel and  Secretary |

 

18

----

 
| Copies of all notices hereunder shall be delivered to: |
|--------------------------------------------------------|
|                                                   |   |   |
|                                                   |   | Skadden, Arps, Slate, Meagher & Flom LLP |
|                                                   |   | Four Times Square |
|                                                   |   | New York, New York 10036 |
|                                                   |   | Facsimile: (212) 735-2000 |
|                                                   |   | Attention: Gregory A. Fernicola, Esq. |

 

All such notices, requests and other communications shall be deemedreceived on the date of receipt by the recipient thereof if received prior to5:00 p.m., New York City time, and such day is a Business Day in the place ofreceipt.  Otherwise, any such notice,request or communication shall be deemed not to have been received until thenext succeeding Business Day in the place of receipt.

 

Section 11.7                                Negotiationand Mediation.

 

(a)                        Negotiation.  In the event of any dispute, controversy orclaim arising out of or relating to this Agreement or the breach, terminationor validity thereof, or the transactions contemplated hereby (a “Dispute”),upon the written notice of either Party hereto, the Parties shall attempt ingood faith to negotiate a resolution of the Dispute.  If the Parties are unable for any reason to resolve a Disputewithin 30 days after the receipt of such notice, the Dispute shall be submittedto mediation in accordance with Section 11.7(b) hereof.

 

(b)                       Mediation.  Any Dispute not resolved pursuant toSection 11.7(a) hereof shall, at the request (the “Mediation Request”)of either Party (the “Disputing Party”), be submitted to mediation inaccordance with the then-prevailing Commercial Mediation Rules of the AmericanArbitration Association, as modified herein (the “Rules”).  The mediation shall be held in New York, NewYork.  The Parties shall have twenty(20) days from receipt by a party of a Mediation Request to agree on amediator.  If no mediator has beenagreed upon by the Parties within twenty (20) days of receipt by a DisputingParty (or Parties) of a Mediation Request, then any Party may request (onwritten notice to the other Party), that the American Arbitration Associationappoint a mediator in accordance with the Rules.  All mediation pursuant to this Section 11.7(b) shall beconfidential and shall be treated as compromise and settlement negotiations,and no oral or documentary representations made by the Parties during suchmediation shall be admissible for any purpose in any subsequentproceedings.  Neither Party shalldisclose or permit the disclosure of any information about the evidence adducedor the documents produced by the other Party in the mediation proceedings orabout the existence, contents or results of the mediation award without theprior written consent of such other Party except in the course of a judicial orregulatory proceeding or as may be required by law, rule or regulation orrequested by a governmental authority or securities exchange.  Before making any disclosure permitted bythe preceding sentence, the Party intending to make such disclosure shall givethe other Party a reasonable

 

19

----

 

opportunity to protect its interests. If the Dispute has not been resolved within sixty (60) days of theappointment of a Mediator, or within ninety (90) days of receipt by a DisputingParty of notice in accordance with Section 11.6 (whichever occurs sooner)or within such longer period as the Parties may agree to in writing, then anyParty may file an action on the Dispute in any court having jurisdiction inaccordance with Section 11.4 herein.

 

Section 11.8                                ConflictingProvisions.  In the event anyprovision of Exhibit A conflicts with the provisions of this Agreement, theprovisions of this Agreement shall be controlling.

 

Section 11.9                                Severability.  If any term or other provision of thisAgreement is invalid, illegal or incapable of being enforced by any rule of lawor public policy, all other conditions and provisions of this Agreement shallnevertheless remain in full force and effect so long as the economic or legalsubstance of the transactions contemplated hereby are not affected in anymanner materially adverse to a Party. Upon such determination that any term or other provisions are invalid,illegal or incapable of being enforced, the Parties shall negotiate in goodfaith to modify this Agreement so as to effect the original intent of theParties as closely as possible in a mutually acceptable manner in order thatthe transactions be consummated as originally contemplated to the fullestextent possible.

 

Section 11.10                          Interpretation.

 

(a)                        When a reference is made inthis Agreement to an Article, Section or Exhibit, such reference shall beto an Article or Section of, or an Exhibit to, this Agreement unlessotherwise indicated.  Whenever the words“include”, “includes” or “including” are used in this Agreement, they shall bedeemed to be followed by the words “without limitation”.  The words “hereof”, “herein” and “hereunder”and words of similar import when used in this Agreement shall refer to thisAgreement as a whole and not to any particular provision of thisAgreement.  All terms defined in thisAgreement shall have the defined meanings when used in any certificate or otherdocument made or delivered pursuant hereto unless otherwise definedtherein.  The definitions contained inthis Agreement are applicable to the singular as well as the plural forms ofsuch terms and to the masculine as well as to the feminine and neuter gendersof such term.  Any agreement, instrumentor statute defined or referred to herein or in any agreement or instrument thatis referred to herein means such agreement, instrument or statute as from timeto time amended, modified or supplemented, including (in the case of agreementsor instruments) by waiver or consent and (in the case of statutes) bysuccession of comparable successor statutes and references to all attachmentsthereto and instruments incorporated therein.

 

(b)                       The Parties have participatedjointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question ofintent or interpretation arises, this Agreement shall be construed as ifdrafted jointly by the Parties and no presumption or burden of proof shallarise favoring or disfavoring any Party by virtue of the authorship of anyprovisions of this Agreement.

 

20

----

 

Section 11.11                          Counterparts.  This Agreement may be executed in any numberof counterparts, all of which shall be considered one and the same agreementand shall become effective when one or more counterparts have been signed byall Parties and delivered to the other Party.

 

Section 11.12                          FurtherCooperation.  Each Party agrees tocooperate with the other, at any other Party’s request, to execute any and alldocuments or instruments, or to obtain any consents, in order to assign,transfer, perfect, record, maintain, enforce or otherwise carry out the intentof the terms of this Agreement.

 

Section 11.13                          Amendmentand Waiver.  This Agreement(including Exhibit A) may not be amended or modified except by a writing signedby an authorized signatory of each Party. No waiver by any Party or any breach or default hereunder shall bedeemed to be a waiver of any preceding or subsequent breach or default.

 

Section 11.14                          DulyAuthorized Signatories.  Each Partyrepresents and warrants that its signatory whose signature appears below hasbeen and is on the date of this Agreement duly authorized by all necessarycorporate or other appropriate action to execute this Agreement.

 

Section 11.15                          Waiverof Trial By Jury.  TO THE EXTENTPERMITTED BY APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLE WAIVES ALL RIGHT OFTRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, ARISING OUT OF OR INCONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER.

 

Section 11.16                          DescriptiveHeadings.  The descriptive headingsof the several articles and sections of this Agreement are inserted forreference only and shall not limit or otherwise affect the meaning hereof.

 

Section 11.17                          NoThird Party Beneficiaries.  Otherthan the indemnitees under Articles IV and VIII, nothing in this Agreementshall convey any rights upon any person or entity, which is not a party or apermitted assignee of a party to this Agreement.

 

Section 11.18                          BindingNature of Agreement.  This Agreementshall be binding upon and inure to the benefit of and be enforceable by theparties hereto or their successors in interest, except as expressly otherwiseprovided herein.

 

Section 11.19                          CertainDefinitions.  For purposes of thisAgreement:

 

(a)                        “Actual Cost” means theactual cost incurred by the relevant division or business unit of Cendantproviding the Services to Jackson Hewitt under this Agreement, which shallequal the sum (without duplication) of (x) all actual out-of-pocket costs,including any sales, use, excise, service, occupation, privilege, value-addedor other similar taxes (together in each case with all interest, penalties,fines and additions thereto) in connection with the Services, paid by Cendant Operationsto third parties in connection with providing such Services; (y) all direct orindirect costs incurred by Cendant Operations in connection with providing suchServices; and (z) a reasonable

 

21

----

 

allocation of all general overhead and other similar expensesattributable to the provision of the Services allocated in accordance withCendant Operations’s then-existing methods for assessing and allocating similarsuch expenses among its Affiliates.

 

(b)                       “Actions” has the meaningset forth in Section 8.1(a).

 

(c)                        “Additional Services”has the meaning set forth in Section 1.2.

 

(d)                       “Affiliate” or “affiliate”of any person means another person that directly or indirectly, through one ormore intermediaries, controls, is controlled by, or is under common controlwith, such first person, where “control” means the possession, directly orindirectly, of the power to direct or cause the direction of the managementpolicies of a person, whether through the ownership of voting securities, bycontract, as trustee or executor, or otherwise.

 

(e)                        “Agreement” has themeaning set forth in the preamble to this Agreement.

 

(f)                          “Business Day” or “businessday” means each Monday, Tuesday, Wednesday, Thursday and Friday which isnot a day on which banking institutions in New York City are authorized orobligated by law or executive order to close.

 

(g)                       “Cendant” has the meaningset forth in the preamble.

 

(h)                       “Cendant Group” meansCendant, other than Jackson Hewitt and its Subsidiaries.

 

(i)                           “Cendant Income Tax Group”means the federal affiliated group filing a consolidated income Tax Return, orany state, local or foreign, affiliated, consolidated, combined, unitary orsimilar group, of which Cendant or any of its Subsidiaries (other than JacksonHewitt or any of its Subsidiaries) is the common parent and any of JacksonHewitt and/or any of its Subsidiaries is a member.

 

(j)                           “Cendant Operations”has the meaning set forth in the preamble.

 

(k)                        “Cendant Tax SharingAgreement” means the Tax Sharing Agreement effective as of the first day ofthe consolidated return year beginning January 1, 2003, by and betweenCendant Corporation and those Subsidiaries that file a consolidated return withCendant Corporation.

 

(l)                           “Closing Date” has themeaning set forth in the preamble.

 

(m)                     “Code” means the InternalRevenue Code of 1986, as amended.

 

22

----

 

(n)                       “Common Stock” has themeaning set forth in the preamble.

 

(o)                       “Confidential Information”has the meaning set forth in Section 6.1.

 

(p)                       “Debt Financing” meansthe issuance by Jackson Hewitt of $175 million aggregate principal amount offloating rate senior notes and the $100 revolving credit facility entered intoby Jackson Hewitt with a syndicate of financial institutions, both on theClosing Date.

 

(q)                       “Defaulting Party” hasthe meaning set forth in Section 10.1(a).

 

(r)                          “Dispute” has themeaning set forth in Section 11.7(a).

 

(s)                        “Disputing Party” hasthe meaning set forth in Section 11.7(b).

 

(t)                          “Effective Date” hasthe meaning set forth in the preamble.

 

(u)                       “Indemnitees” has themeaning set forth in Section 8.4.

 

(v)                       “Initial Public Offering”means the proposed initial public offering of the Common Stock as contemplatedby the IPO S-1 pursuant to which Cendant will dispose of all of its ownershipstake in Jackson Hewitt.

 

(w)                     “Interest Rate” has themeaning set forth in Section 1.9(a).

 

(x)                         “IPO S-1” means JacksonHewitt’s registration statement on Form S-1 (No. 333-113593) relating to theInitial Public Offering, as the same may be amended or supplemented from timeto time.

 

(y)                       “IRS” means the InternalRevenue Service.

 

(z)                         “Jackson Hewitt” hasthe meaning set forth in the preamble.

 

(aa)                  “Jackson Hewitt Payables” hasthe meaning set forth in Section 1.8.

 

(bb)                “Losses” has the meaning setforth in Section 8.1(a).

 

(cc)                  “Mediation Request” has themeaning set forth in Section 11.7(b).

 

(dd)                “Offering Document” means theRegistration Statement and the Prospectus and the private placement memorandumand the confidential offering memorandum utilized in connection with the DebtFinancing, as applicable, as well as any other disclosure document or otherinformation provided to prospective investors used in connection with theInitial Public Offering or the Debt Financing.

 

23

----

 

(ee)                  “Party” or “Parties”has the meaning set forth in the preamble.

 

(ff)                      “Privilege” means anyprivilege, including privileges arising under or related to the attorney-clientor attorney work product privileges.

 

(gg)                “Proceeding” has the meaning setforth in Section 3.1(a).

 

(hh)                “Prospectus” means theprospectus or prospectuses included in any Registration Statement, as amendedor supplemented by any prospectus supplement and by all other amendments andsupplements to such prospectus, including post-effective amendments and allmaterial incorporated by reference in such prospectus or prospectuses.

 

(ii)                        “Providing Party” hasthe meaning set forth in Section 6.1.

 

(jj)                        “Receiving Party” hasthe meaning set forth in Section 6.1.

 

(kk)                  “Records” has the meaning setforth in Section 5.1.

 

(ll)                        “Registration Indemnitee”has the meaning set forth in Section 8.2(a).

 

(mm)            “Registration Statement” means theIPO S-1, including the Prospectus relating thereto, and amendments andsupplements to such Registration Statement, including post-effectiveamendments, all exhibits and all materials incorporated by reference in suchRegistration Statement and Prospectus.

 

(nn)                “Restricted Employees” has themeaning set forth in Section 9.3.

 

(oo)                “Rules” has the meaning setforth in Section 11.7(b).

 

(pp)                “Securities Act” means theSecurities Act of 1933, as amended.

 

(qq)                “Service Taxes” has the meaningset forth in Section 4.9.

 

(rr)                      “Services” has the meaningset forth in Section 1.1.

 

(ss)                  “Subsidiary” or “subsidiary”of shall include all corporations, partnerships, joint ventures, limitedliability companies, associations and other entities (a) in which CendantOperations, Jackson Hewitt or Cendant, as applicable, owns (directly orindirectly) 50% or more of the outstanding voting stock, voting power,partnership interests or similar ownership interests, (b) of which CendantOperations, Jackson Hewitt or Cendant, as applicable, otherwise directly orindirectly controls or directs the policies or operations and (c) which wouldbe considered subsidiaries of Cendant Operations, Jackson Hewitt or Cendant, asapplicable, within the meaning of Regulation S-K or Regulation S-X of theGeneral Rules and Regulations under the Securities Act.

 

24

----

 

(tt)                      “Taxes” means any federal,state, local or foreign income, gross receipts, property, sales, use, license,excise, franchise, employment, payroll, premium, withholding, alternative oradded minimum, add valorem, transfer or excise tax, or any other tax, custom,duty, governmental fee or other like assessment or charge or any kindwhatsoever, together with any interest or penalty or addition thereto, whetherdisputed or not, imposed by any governmental entity.

 

(uu)                “Tax Claim” has the meaning setforth in Section 4.4.

 

(vv)                “Tax Return” means any return,report or similar statement required to be filed with respect to any Tax(including any attached schedules), including any information return, claim forrefund, amended return or declaration of estimated Tax.

 

(ww)            “Tax Sharing Agreement” means anyTax sharing agreement, Tax indemnification agreement or similar contract orarrangement, whether written or unwritten.

 

(xx)                    “Third Party Action” has themeaning set forth in Section 5.3.

 

(yy)                “Treasury Regulations” means theUnited States Tax regulations, including temporary regulations, promulgatedunder the Code, as the same may be amended hereafter from time to time (includingcorresponding provisions of succeeding United States Tax regulations).

 

(zz)                    “Term” has the meaning setforth in Section 1.4.

 

25

----

 

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to beexecuted on its behalf on the day and year first above written.

 

 
|   | JACKSON HEWITT TAX SERVICE INC.                                                                        |
|--------|--------------------------------------------------------------------------------------------------------|
|   |                                                                                                   |   |   |
|   |                                                                                                   |   |   |
|   | By:                                                                                                    |  /s/ Michael D. Lister |
|   |                                                                                                   | Name: |  Michael D. Lister |
|   |                                                                                                   | Title: | President and Chief Executive |
|   |                                                                                                   |   | Officer |
|   |                                                                                                   |   |   |
|   |                                                                                                   |   |   |
|   | CENDANT OPERATIONS, INC.                                                                               |
|   |                                                                                                   |   |   |
|   |                                                                                                   |   |   |
|   | By:                                                                                                    |  /s/ Eric J. Bock |
|   |                                                                                                   | Name: |  Eric J. Bock |
|   |                                                                                                   | Title: | Executive Vice President, Law |
|   |                                                                                                   |   | and Corporate Secretary |
|   |                                                                                                   |   |   |
|   |                                                                                                   |   |   |
|   | CENDANT CORPORATION (for the  applicable provisions of Articles IV, V, VI,  VII, VIII, IX and XI only) |
|   |                                                                                                   |   |   |
|   |                                                                                                   |   |   |
|   | By:                                                                                                    |  /s/ Eric J. Bock |
|   |                                                                                                   | Name: |  Eric J. Bock |
|   |                                                                                                   | Title: | Executive Vice President, Law |
|   |                                                                                                   |   | and Corporate Secretary |

 

26

----

 

**EXHIBITA**

 

----

 

**ExhibitA-1**

 

**Tax Administration**

 

**Parties Involved:**

 

Cendant Operations, Inc. (CD)

Jackson Hewitt Tax Service Inc. (JH)

 

**Services and Term:**

 

•                  CD shall provideFederal, State and local income tax preparation services to JH for purposes ofpreparing the 2003 tax return and the stub period tax return fromJanuary 1, 2004 to the date of the planned initial public offering ofJH.  CD shall provide sales and use taxreport filing for JH through 6/30/05.

 

•                  CD shall providetax-planning services to JH as reasonably requested by JH through 6/30/05.

 

•                  CD shall prepareFAS 109 tax calculations for preparation of JH quarterly and annual financialstatements through 6/30/05.

 

•                  This Exhibit A-1to the Agreement may be extended for 6 months through 12/31/05, provided bothparties agree to such extension in writing.

 

•                  CD cannotterminate the services set forth in this Exhibit A-1 until 6/30/05.  Thereafter, if this Exhibit A-1 is extended,CD must provide JH 60 days prior written notice to terminate the Servicesprovided to JH.

 

•                  JH can terminatethe services at any time upon 30 days’ prior written notice to CD.  JH must pay all fees incurred up to, andincluding, the date of termination.

 

**Fees and Payment Terms:**

 

JH will pay CD an amount equal to $150 per “person” hour spent, whichshall be billed, to JH within 30 days of the end of each month.  Such bill shall be payable by JH within 30days of the invoice date.

 

**Service Level Standards:**

 

Each Party shall: (i) conduct itself in accordance with servicestandards of no lower quality than (A) the standards applied as of the date ofthis Agreement with respect to the specific matters in question, and (B) thosestandards such Party hereafter applies in its own business; and (ii) comply inall material respects with all laws, regulations and orders applicable to theconduct of the Services in question.

 

1

----

 

**ExhibitA-2**

 

**Human Resources**

 

**Parties Involved:**

 

Cendant Operations, Inc. (“Cendant”) and Jackson Hewitt Tax ServiceInc. (“JH”).

 

**Services**:

 

Cendant will provide to JH certain human resources and administrativeservices as follows:

 

(a)                                  Employee WelfareBenefits:

 

(i)                                     Cendant willprovide to active JH employees and JH COBRA participants administrativeservices for those benefits described below in this paragraph.  JH will adopt and maintain new employeebenefit plans with the same vendors currently used by Cendant.  Cendant will continue to provide alladministrative services for these new JH plans through the remainder of2004.  The summary plan description forthe Cendant plans will remain in place for the new JH medical, dental andvision plans, except that JH will distribute to all participants an SPDsupplement explaining any differences between the Cendant plans and the new JHreplacement plans, and further explaining that JH is the sponsor of the new JHreplacement plans.  JH will distributenew summary plan descriptions for all other plans.  The benefits subject to this paragraph are medical, dental andvision benefits, and accidental death & dismemberment, group term lifeinsurance, short term disability and long term disability benefits.

(ii)                                  Cendant will provideJH with assistance in setting up new welfare benefit plans to be sponsored byJH and to commence in 2005, when transitional administrative services byCendant end.  Cendant will provideconsulting services to JH relating to the selection of benefit vendors andstructuring future benefit plan designs and costs.

(iii)                               Cendant will continue towork out claim processing with current vendor, Core, for short term disability,long term disability and accidental death & dismemberment plan for the JHemployees through December 31, 2004, except that JH, and not Cendant, willbe the fiduciary of such plans.

(iv)                              Cendant will cause “TheAnswer Place” to continue to provide assistance with benefit plans and othermatters, subject to any practical limitations determined by Cendant.

(v)                                 Cendant business &travel accident insurance will terminate effective as of the closing of theinitial public offering.  Cendant willprovide

 

1

----

 

consulting services assisting JH in identifying and selectingreplacement coverage.

 

(b)                                 Retirement Plans:

 

(i)                                     Cendant willprovide consulting services relating to developing a new 401(k) plan to besponsored by JH effective on the date of initial public offering, as well asrelating the communications to employees about such plan.

(ii)                                  Cendant will workwith Merrill Lynch to perform an “asset spin-off” of current employees of JH tothe new JH 401(k) plan, subject to the terms of the applicable plans andapplicable law.

(iii)                               Cendant will work withMerrill Lynch and JH to develop and acceptable method to transfer existing loanbalances to new JH 401(k) plan, subject to the terms of the applicable plansand applicable law.

 

(c)                                  ESPP

 

(i)                                     Cendant willprovide consulting assistance to JH in establishing an administration systemfor the Employee Stock Purchase Plan adopted by JH.

 

(d)                                 HRTS/Payroll

 

(i)                                     Cendant willcreate any data files in the form requested by JH for purposes of transitioningpayroll and HRTS data to JH vendors, and assist in mapping data as necessary.

 

(e)                                  Compensation:

 

(i)                                     Cendant willprovide consulting assistance to JH in establishing an administration systemfor the JH 2004 Equity and Incentive Plan.

 

(f)                                    Gym Access:

 

(i)                                     Cendant willprovide to all JH employees (current and new) continued access to the companygym at 1 Campus only.  Employeesutilizing the company gym must use the employee entrance at 1 Campus, locatedon the first floor.

(ii)                                  Cendant will continueto process gym membership fees through payroll deductions on a bi-weekly basisthrough December 31, 2004, at which time all memberships to the companygym will cease.  Cendant will require JHemployees to enroll as new members beginning January, 2005 for a period of 8months; payments must be made in full in the form of a check or money ordermade payable to Cendant Corporation.

 

Cendant may also provide to JH additional services to be reasonablyagreed upon by the parties on an as-needed basis and subject to the mutualagreement of fees to be

 

2

----

 

charged for such services.  Suchservices may include administrative fees based on ongoing support from theCendant Benefits Team.

 

Cendant Enterprise HR will provide support and guidance to JH forpurposes of setting up new plans and policies associated with all HR processes.

 

**Term:**

 

(i)                                     Cendant EnterpriseHR will be required to perform the services through 12/31/04, except as notedabove.

 

(ii)                                  JH can terminate theservices at any time upon 30 days prior written notice to Cendant.

 

**Fees and Payment Terms:**

 

(i)                                     Fees will beconsistent with charges under current allocation methodology utilized in thefirst half of 2004; provided that such amount is, subject to change in theevent JH is able to assume responsibility during the transition.  JH would need to submit a written noticeaffecting this change within 30 days of termination of this contract.

(ii)                                  Any cost for creatingdata file to new payroll/HRTS vendor, as stated in current cost structure withAccenture.

(iii)                               Any cost from CORE as aresult of claims processing associated with STD and LTD.

(iv)                              Fees are payable toCendant within 30 days of the invoice date.

 

**Service Level Standards:**

 

Each party shall:  (i) conductitself in accordance with service standards of no lower quality than (A) thestandards applied as of the date of this Agreement with respect to the specificmatters in question, and (B) those standards such party hereafter applies inits own business with respect to third parties for the specific matters inquestion; and (ii) comply in all material respects with all laws, regulationsand orders applicable to the conduct of the Services in question.

 

3

----

 

**ExhibitA-3**

 

**Event Marketing**

 

**Parties Involved:**

 

Cendant Operations, Inc. (CD) and Jackson Hewitt Tax Service Inc. (JH)

 

**Services**:

 

CD will provide event planning and management services for JH’s annualfranchisee convention and annual Preferred Client Group event.  The scope of support services to be providedby CD includes financial tracking of budgeted and actual event expenses,operational and logistics management of the events and production of the eventprograms. Specific support to be provided for each event will be detailed in ascope of support and estimated time summary document.

 

This support will require a continued collaboration with JH’s ChiefExecutive Officer, his senior leadership team and staff to develop, plan andproduce the events requested.  Theprocess involves twelve months of integration with typically the most intensetime is spent beginning six months prior to the actual event.

 

**Fees and Payment Terms:**

 

The fees for providing the event planning services summarized above forthe 2004 event year will be (i) $88,000 annually or $7,333 per month for theannual franchisee convention and (ii) $5,000 annually or $417 per month for thePreferred Client Group event. The fees for subsequent event years will increaseby up to 5% per annum and will be based on CD’s internal allocation of costcalculations.  Fees are payable to CDwithin 30 days of the invoice date.

 

The direct costs of the events planned and managed by CD are theresponsibility of JH. CD Event Marketing senior management will negotiate theterms and conditions of necessary agreements for the events and an authorizedofficer of JH will execute the agreements. Any liabilities under such agreements will be the responsibility of JH.Any agreements executed by CD Event Marketing prior to the effective date ofthis agreement for events to occur during the 2004 and 2005 event years are theresponsibility of JH.  Any liabilitiesunder such agreements will be the responsibility of JH.

 

CD will audit invoices as received and indicate approval that serviceswere provided and/or merchandise was received and then will forward to JH forpayment. CD expects that JH will process these invoices within the paymentterms reflected on the invoice to maintain credit worthiness with vendorsutilized to plan the events.

 

1

----

 

**Term:**

 

These services will be provided for the 2004 and 2005 event years. Tothe extent that services are requested for event year 2006, notification isrequired by April 1, 2005 and the fee and payment terms defined abovewould be applied.

 

**Cancellation of Services:**

 

If services are cancelled after services have been contracted, anyapplicable losses, damages or cancellation fees are the responsibility of JH.

 

**Service Level Standards:**

 

Each Party shall: (i) conduct itself in accordance with servicestandards of no lower quality than (A) the standards applied as of the date ofthis Agreement with respect to the specific matters in question, and (B) thosestandards such Party hereafter applies in its own business; and (ii) comply inall material respects with all laws, regulations and orders applicable to theconduct of the Services in question.

 

2

----

 

**ExhibitA-4**

 

**Financial Systems Management**

 

**Parties Involved:**

 

Jackson Hewitt Tax Service Inc. (“JacksonHewitt”)

Cendant Operations, Inc. (“Cendant”)

 

**Services:**

 

Oracle Application Processing to include:

 

•                  Establish newflex field value or account code combination within 24 hours of flex fieldbeing approved value or account code combination (to the extent Cendant allowsa representative from each business unit to handle the setup of account codecombinations, Jackson Hewitt would be granted the same privileges)

•                  Maintain currentreporting environment

•                  Opening andClosing of Periods

•                  ConfirmInterfaces processed without exceptions

 

Hyperion Application Processing to include:

 

•                  Maintain chartof accounts; Normal monthly maintenance requests

•                  Maintain currentreporting environment

•                  Modification ofrollup structure

 

GEAC Application Processing to include:

 

•                  Maintain chartof accounts

•                  Maintain currentreporting environment

 

**Service LevelRequirements:**

 

Cendant will respond to support issues within one hour during a monthend/quarter close cycle or within 3 hours for all other times.  Cendant will employ the necessary steps toreach resolution within 2 days.

 

**Fees and Payment Terms:**

 

Jackson Hewitt will pay Cendant a fee based on a 5% portion of theoverall Cendant department cost on a monthly basis or $1,700 per month,whichever is higher.

 

Costs to setup Jackson Hewitt as a stand-alone company are included inthe monthly service charge.  However, ifthe number of man-hours involved exceeds 40 hours, then JH would be required topay Cendant for each additional hour beyond 40 hours at a rate of $75 per hour.

 

1

----

 

Fees are payable to Cendant within 30 days of the invoice date.

 

**Term:**

 

Term of services will be through December 31, 2005 commencing withthe Effective Date.

 

**Early TerminationRights:**

 

Jackson Hewitt has the ability to terminate the services with 30 dayswritten notice.

 

2

----

 

**ExhibitA-5**

 

**Treasury Services**

 

**Parties Involved:**

 

Cendant Operations, Inc. (CD) (“Treasury”) and Jackson Hewitt TaxService Inc. (JH).

 

**Services**:

 

CD will provide to JH general treasury functions including, but notlimited to:

 

•                  Consolidation ofcash

•                  Investing ofexcess cash

•                  Execution ofwire transfer requests

•                  Completion ofall requisite bank documentation

•                  Maintenance ofall bank accounts including tracking of such accounts on a database

•                  Receipt andreview of all bank cash management charges

•                  Access toon-line banking software (either through software installed on JH desktopcomputers or via Internet connection)

•                  Receipt ofperiodic files for completion of general ledger entries

•                  Generallyrelated matters in connection therewith.

 

CD may also provide to the JH services other than the services setforth in the immediately foregoing paragraph of this Exhibit A-5 on anas-needed basis and subject to the mutual agreement of fees to be charged forsuch services.  Such services mayinclude counsel with regard to bank funding arrangements, procurement of arevolving line of credit, access to the capital markets and implementation ofderivative type instruments.

 

To the extent JH would rely on CD to contract letters of credit(“LOCs”) on JH’s behalf, such LOCs will only be obtained in the event that JHhas a revolving line of credit with provision for obtaining such obligations.

 

CD will provide support and guidance to JH for purposes of setting upits Treasury functions including selecting the bank partner, setting up wiretransfer software, handling bank documentation, etc. in order to meet the12/31/04 transition deadline at no additional cost to JH.

 

1

----

 

**Term:**

 

•                  CD will berequired to perform the services through 12/31/04.

•                  The servicesunder this Exhibit A-5 may be extended for 6 months through 6/30/05, providedboth parties agree to such extension in writing.

•                  CD cannotterminate the services set forth in this Exhibit A-5 until 12/31/04.  Thereafter, if these services are extended,CD must provide 60 days prior written notice to terminate the services providedto JH.

•                  JH can terminatethe services at any time upon 30 days prior written notice to CD.  JH must pay all fees incurred up to, andincluding, the date of termination.

 

**Fees and Payment Terms:**

 

A fee of $5,000 per month for the services set forth on this ExhibitA-5; provided that such amount is, subject to change in the event JH has morethan 60 bank accounts and requests completion of more than 20 wires permonth.  Such fees are payable to Cendantwithin 30 days of the invoice date.

 

**Service Standards:**

 

Each party shall:  (i) conductitself in accordance with service standards of no lower quality than (A) thestandards applied as of the date of this Agreement with respect to the specificmatters in question and (B) those standards such party hereafter applies in itsown business with respect to third parties for the specific matters inquestion; and (ii) comply in all material respects with all laws, regulationsand orders applicable to the conduct of the Services in question.

 

**Special Requirements:**

 

•                  JH willdesignate counsel to support the completion of bank documentation by thetransaction date.  To the extent JH doesnot contract with CD (Legal) for such Services, JH will provide signatures forthe completion of signature cards, incumbency certificates and treasurercertificates as required by the bank documentation.

•                  JH distributionaccounts must be on “Positive Pay” or have a similar mechanism to preventexternal fraud.

•                  CD, in its solediscretion, has the right to select institutions to provide the services setfor in this Exhibit A-5.  CD will notprovide JH with any desktop computers or servers that may be necessary to run“bank software” or access “bank systems” for informational purposes.

•                  JH agrees tosafeguard any and all passwords or other authentication mechanisms or generalaccessibility as provided by the bank(s).

•                  JH must providean investment policy and a wire transfer policy, including both signature cardsfor persons designated as having signing authority and contact information forsuch persons by the transaction date. JH must designate a Treasurer and Secretary by the transaction date forfacilitation of the bank

 

2

----

 

documentation.  JH must alsoensure that adequate documentation is completed to permit CD to provide theServices set forth in this Exhibit A-5, including making necessary boardresolutions, and identifying CD as having the authority to conducttreasury-related services on JH behalf.

 

3

----

**Exhibit A-6**

 

**RevenueAudit Services**

 

**Parties Involved:**

 

Cendant Operations, Inc. (CD) and Jackson Hewitt Tax Service Inc. (JH)

 

**Services:**

 

CD will provide franchise audit services on the Jackson Hewittfranchisee base to confirm the accuracy of franchisee royalty payments.  CD will perform approximately 100 franchiseerevenue audits during the May to November months (non-peak tax season)during the contract term.  The auditswill be performed substantially in accordance with the work program attached onExhibit A-6.

 

During CD’s annual budgeting process JH will provide CD with theexpected number of audits to be completed for the upcoming year.  During March, JH will provide a detailedlisting of specific franchisee audits for CD to perform.  During the May to November revenueaudit period, CD will provide JH with a monthly report detailing the specificaudits to be performed and the status as to completion.

 

**Term:**

 

•                  CD will providethe services through 12/31/05.

•                  Both parties mayextend the services for 1-year increments upon mutual agreement of economicterms.

•                  JH has theability to terminate the services at any time upon 30 days prior writtennotice.

•                  CD cannotterminate the services set forth in this Exhibit A-6 until 12/31/04.  Thereafter, CD must provide JH 120 daysprior written notice to terminate the services provided to JH.

 

**Fees and PaymentTerms:**

 

JH will pay CD based on actual hours incurred for performing theservices.  The rate charged to JH forsuch services will be $73 per hour incurred. The per hour rate includes estimated costs to be incurred for travelassociated with providing the services. CD will bill JH within 30 days of the end of each month and such billshall be payable within 30 days of the invoice date.  Such rate will apply through 12/31/04 and is subject torenegotiation each year thereafter.

 

**Service****LevelStandards:**

 

Each party shall:  (i) conductitself in accordance with service standards of no lower quality than (A) thestandards applied as of the date of this Agreement with respect to the specificmatters in question, and (B) those standards such party hereafter applies inits own business

 

1

----

 

with respect to third parties for the specific matters in question; and(ii) comply in all material respects with all laws, regulations and ordersapplicable to the conduct of the Services in question.

 

2

----

 

**Exhibit A-7**

 

**CallSupport**

 

**Parties Involved:**

 

Jackson Hewitt Tax Service Inc. (JH)

Cendant Operations, Inc.(“Cendant”)

 

**Services to beProvided:**

 

Customer Service Contacts to include:

 

•                  Answer callsfrom Jackson Hewitt Customer Service Line during the designated hours ofoperation which are 8:00 a.m. to 9:00 p.m. CST, 7 days per week for the periodof January 20th through February 28th and theperiod of April 1st through April 15th.  The hours of operation at all other timeswill be 9:00 a.m. to 7:00 p.m. CST.

•                  Forward customerconcerns to the Jackson Hewitt corporate office and the Jackson HewittFranchisees in accordance with procedures outlined by JH, which are attachedhereto.

 

**Fees and PaymentTerms:**

 

Jackson Hewitt agrees to pay a variable/fixed cost fee of $.95 perbillable minute based on the average per minute charge for the period 2002and  2003. The following variable andfixed costs are included in the per minute charge:

 

•                  **Variable:**

•                  Supervisor Wages

•                  Agent Wages

•                  Overtime

•                  Taxes andBenefits

•                  Bonus

•                  Inbound Telecom

 

•                  **Fixed:**

•                  Outbound Telecom

•                  Aberdeen SharedAllocation

•                  T1 Allocation

•                  Rent Allocation

 

Cendant will invoice JH by the 10th of each month for theprior month’s cost incurred. Payment is due to Cendant within 30 business daysof receipt of the invoice. By January 31 of each year this agreement is ineffect, Cendant will perform an analysis

 

1

----

 

of actual year-to-date costs incurred versus charges billed andinvoice/credit JH for the true-up to actual costs incurred. Supportingdocumentation for all billing will be provided, as requested by JH.

 

**Term:**

 

Term of services will be through December 31, 2005 commencing withthe effective date.

 

**Early TerminationRights:**

 

JH has ability to terminate upon 60 days notice.  Cendant may not terminate until 6/30/05 andthen only upon 120 days notice.

 

**Service LevelStandards:**

 

Each party shall: (i) conduct itself in accordance with servicestandards of no lower quality than (A) the standards applied as of the date ofthis Agreement with respect to the specific matters in questions, and (B) thosestandards such party hereafter applies in its own business; and (ii) comply inall material respects with all laws, regulations and orders applicable to theconduct of the services in question.

 

2

----

 

**Exhibit A-8**

 

**AccountsPayable**

 

**Parties Involved:**

 

Jackson Hewitt Tax Service Inc. (“JacksonHewitt”)

Cendant Operations, Inc. (“Cendant”)

 

**Services:**

 

Accounts Payable Processing to include:

 

•                  All manualinvoice keying in/processing

•                  Review ofvouchers for proper coding, authorized signatures, authenticity of invoices andreasonable account distribution

•                  T&E reportreview for compliance with policy, proper approval, proper coding, authenticityof receipts

•                  Set up of newvendors in Oracle, including obtaining tax information

•                  Weekly checkruns with mailing within 24 hours

•                  Problemresolution

•                  Ensuring the A/Psystem interfaces with the GL

•                  Issuance ofmanual checks

•                  Year endissuance of 1099 forms

•                  Gather monthlysales and use tax figures sent weekly

•                  American ExpressCorporate Card Administration

 

**Fees and PaymentTerms:**

 

Based on volume and actual costs incurred, Jackson Hewitt agrees to paythe following fees for regular accounts payable per item processed:

 
| • | Processing of an original invoice        | $ | 4.00  |
|--------|------------------------------------------|---|-------|
| • | Processing and payment of T&E report | $ | 10.00 |
| • | Issuance of a manual check               | $ | 25.00 |
| • | Wire transfer or stop payment            | $ | 25.00 |
| • | Reissuance cost of a 1099 form           | $ | 20.00 |

 

Jackson Hewitt Disbursement Account will be funded based on weeklycheck register review; therefore, funding a Cendant account is notrequired.  The processing fees will bebilled monthly by Cendant Corporate.

 

1

----

 

**Services:**

 

1.                           All SGA invoices will bepaid according to vendor payment terms within 3-5 business days, from receiptof invoice by Cendant.  Jackson HewittController will review the check register weekly and approve release ofpayment.

 

2.                           All payment requests markedas “Priority” will be processed within 24 hours of receipt by Cendant and paidaccording to vendor terms, including Gold Guarantee Payments when excelspreadsheet is received.  SharedServices will require Controller sign off of any Priority Payments prior toreceiving documentation for processing as these checks runs may need to begenerated more than once a week.

 

3.                           All check requests will beprocessed within 3-5 business days of receipt by Cendant and paid according tovendor terms.

 

4.                           All T&E Reports will becoded and processed according to Cendant Travel and Entertainment policy within3-5 business days, from receipt by Cendant.

 

5.                           All SGA invoices, T&EReports and check requests will be reviewed for authorized signatures.   Any unauthorized documents will be sentback to the originator with correspondence.

 

6.                           The matrix of authorizedsigners will be maintained in Shared Services AP.  The CFO will approve all exceptions or changes.

 

7.                           Sales & Use Tax paymentswill be tracked and summarized in the existing spreadsheet format by SharedServices AP.  The summary report will beprovided to the Tax Department monthly.

 

8.                           All voids, stop payments andreissues will be processed in Shared Services AP.

 

9.                           The Problem Resolution Teamwill answer all incoming phone calls regarding research of payment information.

 

10.                     On the last business day of themonth, Shared Services AP will run the prescribed period end process.

 

11.                     All AP files for fiscal year willbe maintained in Shared Services Accounts Payable or offsite storage.

 

**Term:**

 

Term of services will be through December 31, 2005 commencing withthe effective date.

 

2

----

 

**Early TerminationRights:**

 

Jackson Hewitt may terminate the services with 30 days written notice.

 

**Service LevelStandards:**

 

Each party shall: (i) conduct itself in accordance with servicestandards of no lower quality than (A) the standards applied as of the date ofthis Agreement with respect to the specific matters in question, and (B) thosestandards such party hereafter applies in its own business; and (ii) comply inall material respects with all laws, regulations and orders applicable to theconduct of the services in question.

 

3

----

 

**Exhibit A-9**

 

**Publicand Regulatory Affairs**

 

**Parties Involved:**

 

Jackson Hewitt Tax Service Inc. (“JacksonHewitt”)

Cendant Operations, Inc. (“Cendant”)

 

**Services:**

 

Cendant will provide Jackson Hewitt:

 

•                  Continuedsupport services to manage government relations activities, primarily at thestate level.

•                  Assistance inhiring a new “person” or firm to handle government relations responsibilitiesfor Jackson Hewitt after the Effective Date

•                  Coordinate thetransition to a new hire or firm

•                  Assistance inthe immediate negotiation with lobbyists in critical states to representJackson Hewitt in the future

 

**Fees and Payment Terms:**

 

Jackson Hewitt agrees to pay a fixed fee of $7,000 per month for theseservices, including travel-related expenses, within 30 days of the invoicedate.

 

**Term:**

 

The term of this service is for 12 months from the Effective Date or assoon as Jackson Hewitt has secured and transitioned to a new  “person” or firm.  Jackson Hewitt must use its commercially reasonable efforts totransition to a new provider as soon as possible.

 

**Early Termination Rights:**

 

Jackson Hewitt has the ability to terminate the service with 30 dayswritten notice.  Cendant shall not havethe right to terminate this service unless Jackson Hewitt has not paid the feesset forth above or has not used its commercially reasonable efforts totransition to a new provider.

 

**Service Level Standards:**

 

Each party shall: (i) conduct itself in accordance with servicestandards of no lower quality than (A) the standards applied as of the date ofthis Agreement with respect to the specific matters in question, and (B) thosestandards such party hereafter applies in its own business;

 

1

----

 

and (ii) comply in all material respects with all laws, regulations andorders applicable to the conduct of the services in question.

 

2

----

 

**ExhibitA-10**

 

**Payroll**

 

**Parties Involved:**

 

Jackson Hewitt Tax Service Inc. (“Jackson Hewitt”)

Cendant Operations, Inc. (“Cendant”)

 

**Services:**

 

All services will be provided in the identical manner as exists priorto the close.  This includes using thesame Cendant benefits, Cendant Bank account, with the Cendant Treasurer’ssignature on Cendant check stock.  Allprocessing will continue to run on the Cendant Payroll calendar – A Cycle,observing the same due dates for data submission.

 

**Providepayroll and HR processingthrough December 31, 2004.**

 

•                  Processing newhires

•                  Employeeterminations

•                  Time captureprocess which is currently on Cendant’s online system (Mytime)

•                  Time needs to besubmitted on Mytime or through timesheets if a change is required

•                  Processingpayroll checks/direct deposits

•                  Manual checks

•                  Providingnecessary interface to GL

•                  Ensuringbenefits deductions are carried out

•                  Interfacing with3rd party benefit providers

•                  Interfacing withoriginating bank for direct deposit payments

•                  Processing checkreconciliation files

•                  **Positive payreturn resolution for check processing

•                  Payrolldistribution services – checks/advices

•                  Garnishmentprocessing

•                  Unclaimed wageprocessing

•                  Cash transferprocessing

•                  Special OffCycle Payroll Runs for Quarter End Adjustments

 

----

**Cendant absolves itself of any liability associated withmisrepresentations of employees and fraudulent check processing at bankinginstitutions.

 

1

----

 

**Tax Filing**

 

•                  Periodic taxdepository requirements

•                  File Quarterlyand Annual Federal, State and local tax returns

•                  File Quarterlyand Annual Federal and State unemployment returns.

•                  Process Federal,State, Local and Unemployment Amended Returns

•                  Provide W-2Processing Services

•                  Provide W-2CProcessing Services

 

All filings will be done as required by regulatory agencies.  We will provide filing services asappropriate beyond the transition date to meet those requirements.

 

**Fees and Payment Terms:**

 

A.  Fees are as follows through12/31/04:

 

• Payrollprocessing fee - $3.00 per employee per pay

• Manualcheck fee - $25 per manual check

 

B.  Cendant will charge a$25,000 Management Services Fee to cover management services and overhead inthe transition of the payroll process. Payroll, with Systems support team, will be responsible for executingthe transition to an outside vendor and will provide basic employee data inCendant’s system format to the transitioning vendor.  In addition, any onetime costs incurred associated with thechange in ownership will be billed separately.

 

C.  Any additional items notaddressed above will be billed at time and materials at $50 per hour forpayroll support and $150 hour for Systems support.

 

Payment is due to Cendant for the gross payroll, employer taxes andemployer benefits less imputed income, if any, via wire transfer on the datepayroll is distributed to the employees of Jackson Hewitt.  The processing fees will be billed monthlyby Cendant Corporate.

 

**Notifications:**

 

•                  Cendant Payrollwill notify Federal and State agencies of change in ownership for garnishmentprocessing.

•                  Cendant Payrollwill notify Federal, State, Local and Unemployment authorities of change inownership.

 

2

----

 

**Term:**

 

Term of services will be through December 31, 2004 commencing withthe effective date. If services are required beyond this date, this agreementwill need to be renegotiated.

 

**Early Termination Rights:**

 

Jackson Hewitt may terminate the service with 30 days written notice.

 

**Service Level Standards:**

 

Each party shall: (i) conduct itself in accordance with servicestandards of no lower quality than (A) the standards applied as of the date ofthis Agreement with respect to the specific matters in question, and (B) thosestandards such party hereafter applies in its own business; and (ii) comply inall material respects with all laws, regulations and orders applicable to the conductof the Services in question.

 

3

----

 

**ExhibitA-11**

 

**Information Technology and Telecommunications**

 

**Mainframe Processing Fees**

 

**Parties Involved:**

 

Cendant Operations, Inc – IT, IBM (as serviceprovider) and Jackson Hewitt Tax Services Inc.

 

**Services to beprovided:**

 

Jackson Hewitt Tax Services Inc. (“Jackson Hewitt” or “JH”) mainframeapplications consist of GEAC, accounts receivable (“A/R”) and general ledger(“G/L”) (G/L used only for maintenance of chart of accounts), and JH’sproprietary JAX System (Franchise billing system).  These applications run on mainframes located in Cendant’s Denverdata center and are primarily supported by Cendant’s third party outsourcer anddata center manager, IBM, under an Information Technology Services Agreement,dated November 1, 2001, (“ITSA”). Operations support services are provided to Cendant and various Cendantaffiliates and business units (including JH) on a 24 X 7 basis by IBM inaccordance with the terms and conditions of the ITSA between IBM andCendant.  In addition to these services,the corporate applications group within Cendant IT provides support of theseapplications.  These services includeproduction, security, user and other applications support as required.   The application support services aredescribed below under Application Support Services.

 

In the event that these services will continue to be provided byCendant and/or IBM to Jackson Hewitt, Jackson Hewitt will be responsible forabiding by (a) Cendant’s policies and procedures relating to information andtechnology services, (b) the confidentiality agreements, information protectionand security requirements, and other applicable provisions contained in theITSA and in other applicable agreements between Cendant and its third partylicensors and/or service providers, and (c) any separate information technologyservices agreements entered into between Jackson Hewitt and Cendant relating tosuch services.

 

**Fees and PaymentTerms:**

 

The mainframe that these applications reside on is shared by a varietyof Cendant affiliates and business units (including JH) and, as such, the costsassociated with its operation are shared among the participating affiliates andunits.  These costs include mainframeusage fees, software and other direct charges. The cost sharing mechanism is based on the actual utilization ofmainframe resources and, as such, will vary from time to time based on theusage by the participating affiliates and units.  The current mainframe cost that has been budgeted for JacksonHewitt based on previous usage is approximately $200,867 per annum.

 

1

----

 

These charges will be adjusted by Cendant going forward based on JH’sactual usage or other appropriate allocation of mainframe resources.  Invoices will be provided by Cendant to JHon a monthly basis and payments will be due from JH within 30 days net.

 

**General Service LevelStandards:**

 

Service levels will be provided to JH by Cendant and/or IBM inaccordance with the terms and conditions of the ITSA and the associatedprevailing suite of services (including any applicable service levels to theextent reasonable and practicable (“SLA’s”)). During JH’s critical operational periods (January 20ththrough February 28th, and April 1st throughApril 15th of each contract year), the parties acknowledge thatincreases to the applicable services set forth in the existing ITSA andassociated SLA’s may be necessary to process JH’s additional volume. Cendant and/orIBM will use reasonable efforts to provide the following services during theaforementioned critical periods, provided that these items can be validated andconfirmed by Cendant’s ETOS group (“ETOS”):

 

1.               Issues affecting JH production andstaging environments in the Denver data center will be classified as “severityone” tickets (a defined in the ITSA) at time of receipt.

2.               JH severity one tickets will beprocessed on an expedited basis and given the highest level of prioritypossible by the IBM Operations Center group in Denver, without troubleshootingby members of IBM’s Toronto Help Desk.

3.               IBM will troubleshoot problematicservers offline.

4.               Daily calls (or as otherwise agreed toby the parties) will be held to review problems and critical issues. Thesecalls will include: JH and IBM Service Delivery Manager (SDM) and RelationshipManager (RM).

5.               When multiple or simultaneous servicedisruptions occur so as to adversely affect more than one Cendant affiliate orbusiness unit (including JH), Cendant will provide JH with high priority (inparallel with other high-priority Cendant affiliates or business units) onrestoration of services, timing of outages and change management. JH will begiven the highest level of consideration to accommodate timing of outages andchange management so as to minimize or eliminate impacts during theaforementioned critical periods. When possible, reasonable efforts will be madeby the parties to conduct the aforementioned activities during non-peakhours/season.

6.               IBM, ETOS and Cendant Telecom effortswill be conducted concurrently, when possible.

 

Cendant will identify any unamortized hardware, and remaining hardwareservice charges (“HSC”), to JH, that may exist as of 6/30/04. Thereafter,Cendant must notify JH (in advance to the extent reasonably possible) of anyand all purchase and acquisition of additional hardware or software associatedwith the aforementioned mainframe systems. Relative to any and all consent oradditional license fees that may be required by Cendant’s third partyvendors/licensors to allow Cendant/IBM to process data on behalf of JH, suchfees will be payable by JH. Nevertheless, Cendant will use reasonable effortsto minimize this liability.

 

Disaster recovery will be provided by Cendant and/or IBM (or by anyother third party disaster services provider engaged by Cendant), to the extentsubscribed to in writing by JH, and in accordance with Cendant’s final disasterrecovery services agreement(s) with IBM

 

2

----

 

and/or such other third party service provider.  Such subscription will be paid for by JH inaccordance with rates associated with the appropriate service, including allIBM, CD Telecom and Cendant direct costs.

 

**Term:**

 

JH will be supported in a manner consistent with the levels of supportthat it currently receives from Cendant for 2 (two) calendar years (or anyother period agreed to by the parties) from date of divestiture, subject to anyrestrictions, consents, or other provisions set forth in applicable agreementsbetween Cendant and its third party licensors and/or service providers. Thissupport arrangement and the other agreements set forth herein will be confirmedin a written information technology services agreement by and between JH andCendant.  Notwithstanding any othertermination rights that may exist (and unless otherwise agreed to in writingbetween the parties), at JH’s discretion, this arrangement and the agreementsset forth herein can be terminated upon a 90-day notification to Cendant. Atthis time, JH will be responsible for the repayment of any unamortized hardwareservice charges specific to JH’s mainframe environment, as well as for anyunpaid actual costs incurred by Cendant with respect to the services describedherein and any associated transition services.

 

**Notes:**

 

Any costs associated with obtaining consents from Cendant’s third partyvendors/licensors will be borne by Jackson Hewitt. In the event that, afterJH’s divestiture, JH wishes to negotiate an independent agreement with any ofCendant’s third party vendors/licensors with respect to any of the productsprovided by Cendant to JH as part of the services described herein, Cendantwill use reasonable efforts, on a case-by-case basis, to assist JH in its negotiationswith such vendors/licensors so as to allow JH, to the extent possible, andreasonable to participate in Cendant’s pre-existing agreements and/or discountswith such vendors/licensors.

 

For information purposes, the discounts on the vendors that are currentlyutilized by Jackson Hewitt under Cendant’s aegis are:

 
| Oracle:   |   | 50% on all products; can ramp up as high as 80% for large initiatives |
|-----------|--------|-----------------------------------------------------------------------|
| Hyperion: |   | 45% on all products                                                   |
| GEAC:     |   | Information not available at this time                                |

 

Many of Cendant’s agreements with its third party vendors/licensorsallow Cendant to process work and data on behalf of its affiliated entities,franchisees, and businesses and, in some limited circumstances, on behalf ofCendant’s divested entities. Many of Cendant’s agreements also allow Cendant’sthird party service providers (such as IBM) to use software licensed by Cendantto process work or data on Cendant’s behalf (such as in the case of theITSA).  None of Cendant’s third partyarrangements allow Cendant to act in the capacity of or similar to a ServiceBureau for any unaffiliated third parties or divested entities.  Therefore, the parties hereby acknowledgeand agree that Cendant may encounter certain problems or obstacles that arebeyond Cendant’s reasonable control with respect to any third party

 

3

----

 

vendor/licensor agreements related to Cendant’s or IBM’s provision ofthe services described herein, which problems or obstacles could prevent orminimize Cendant’s ability to perform such services. Notwithstanding, Cendantwill use reasonable efforts to mitigate such problems or obstacles.

 

JH will be required to obtain all necessary licenses and consents fromits third party software providers (i.e. Marimba and Cognos Report Net) relatingto any software licensed by JH and provided to Cendant in order for Cendant toprocess JH’s business/operations.

 

**Client ServerServices**

 

**Parties Involved:**

 

Cendant Operations, Inc. - IT, IBM (as service provider) and JacksonHewitt Tax Services Inc.

 

**Services:**

 

Support of various servers located in Cendant’s Denver Data Center andused to process JH’s business.  Servicesinclude server operating system management and monitoring; hardware/softwareconfiguration & deployment; web services management & reporting;network connectivity administration and monitoring; performance management;capacity management; production control services; third-party softwaredistribution and management; security administration; problem and changeadministration; backup & recovery services.  IBM currently provides these services in accordance with theterms and conditions of the ITSA between IBM and Cendant.

 

In the event that these services will continue to be provided to beprovided by Cendant and/or IBM to Jackson Hewitt, Jackson Hewitt will beresponsible for abiding by (a) Cendant’s policies and procedures relating toinformation and technology services, (b) the confidentiality agreements,information protection and security requirements, and other applicableprovisions contained in the ITSA and in other applicable agreements betweenCendant and its third party licensors and/or service providers, and (c) anyseparate information technology services agreements entered into betweenJackson Hewitt and Cendant relating to such services.

 

**Fees and PaymentTerms:**

 

The following is a summary of JH’s current and budgeted service fees ona monthly and annual basis with respect to the aforementioned services:

 

4

----

 
|                            |   | **January 2004  Actual** |   |               |   |
|---------------------------------|--------|-------------------------------|--------|--------------------|--------|
|                            |   | **Units**                     |   | **Cost per  Unit** |   | **Cost per  Month** |   | **Annual  Units** |   | **Annual Fee** |   | **Budget** |   |
| **Units**                       |   | **Annual Fee**                |
| **Service Fees**                |   |                          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| High System Availability-Type I |   | 9.3                           |   | 1,989.01           |   | $ | 18,498 |   | 112 |   | $ | 221,974 |   | 152 |   | $ | 302,330 |   |
| High Data Availability-Type II  |   | 4                             |   | 1,261.14           |   | 5,045 |   | 48 |   | 60,535 |   | 36 |   | 45,401 |   |
| General Availability-Type III   |   | 1                             |   | 1,188.87           |   | 1,189 |   | 12 |   | 14,266 |   | 12 |   | 14,266 |   |
| Allocated Disk Storage-GB       |   | 1,191                         |   | 2.60               |   | 3,097 |   | 14,292 |   | 37,159 |   | 5,508 |   | 14,321 |   |
| SRM Software                    |   | 14.3                          |   | 30.00              |   | 429 |   | 172 |   | 5,148 |   | 181 |   | 5,430 |   |
| # of GB of allocated Bandwidth  |   | 2.2                           |   | 1,100.00           |   | 2,431 |   | 27 |   | 29,172 |   | 28 |   | 30,631 |   |
| Mapquest                        |   |                          |   |               |   | 826 |   |   |   | 9,912 |   |   |   | 4,200 |   |
| **Total Service fees**          |   |                          |   |               |   | 31,514 |   |   |   | 378,166 |   |   |   | 416,579 |   |
| **Other charges**               |   |                          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Hardware Leases                 |   |                          |   |               |   | 2,709 |   |   |   | 32,505 |   | — |   | 32,525 |   |
| Software Maintenance            |   |                          |   |               |   | 3,993 |   |   |   | 47,914 |   | — |   | 33,600 |   |
| Hardware Service Charges        |   |                          |   |               |   | 5,871 |   |   |   | 70,448 |   | — |   | 13,695 |   |
| Software License Depreciation   |   |                          |   |               |   | 3,246 |   |   |   | 38,954 |   | — |   | 21,000 |   |
| Other Direct Charges            |   |                          |   |               |   | 452 |   |   |   | 5,425 |   | — |   | 11,400 |   |
| **Total Other Charges**         |   |                          |   |               |   | 16,271 |   |   |   | 195,246 |   |   |   | 112,220 |   |
|                            |   |                          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| **Total Client Server  Costs**  |   |                          |   |               |   | 47,784 |   |   |   | 573,412 |   |   |   | 528,799 |   |
|                                 |        |                               |        |                    |        |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

These fees include the IBM-associated services fees under the ITSA, aswell as any shared infrastructure costs. Additional services can be added at JH’s reasonable request and will bebilled based on the usage fees noted above as well as any incremental costs,including software license fees, maintenance, hardware service fees and time& material charges.  Additional feesmay also include maintenance fees associated with servers that are notrefreshed at the end of 36 months of applicable server life.  Cendant is the licensor of record for allsoftware licenses associated with the aforementioned services, with theexception of the Marimba and Cognos Report Net product(s).  The costs to transfer or assign thoselicenses to (or to use the software to process work and data on behalf of)Jackson Hewitt will need to be negotiated between the parties, provided thatthere are no third party restrictions or limitations on such transfers,assignments or use.  In addition, adetermination will need to be made if any third party software consent feeswill apply in order to transfer, assign and/or use such licenses/software to oron behalf of Jackson Hewitt.  Invoiceswill be provided by Cendant to JH on a monthly basis and payments will be duefrom JH within 30 days net.

 

JH will be required to obtain all necessary licenses and consents fromits third party software providers (i.e. Marimba and Cognos Report Net)relating to any software licensed by JH and provided to Cendant in order forCendant to process JH’s business/operations.

 

**Service LevelStandards:**

 

Service levels will be provided to JH by Cendant and/or IBM inaccordance with the terms and conditions of the ITSA and the associatedprevailing suite of services (including any applicable service levels to theextent reasonable and practicable (“SLA’s”). During JH’s critical operational periods (January 20ththrough February 28th, and April 1st throughApril 15th of each contract year), the parties acknowledge thatincreases to the applicable services set forth in the existing ITSA andassociated SLA’s may be necessary to process JH’s additional volume.  Cendant and/or IBM will use reasonableefforts to provide the following services during the aforementioned criticalperiods, provided that these items can be validated and confirmed by ETOS:

 

5

----

 

1.               Issues affecting JH production andstaging environments in the Denver data center will be classified as “severityone” tickets (as defined in the ITSA) at time of receipt.

2.               JH severity one tickets will beprocessed on an expedited basis and given the highest level of prioritypossible by the IBM Operations Center group in Denver, without troubleshootingby members of IBM’s Toronto Help Desk.

3.               IBM will troubleshoot problematicservers offline.

4.               Daily calls (or as otherwise agreed toby the parties) will be held to review problems and critical issues. Thesecalls will include: JH and IBM Service Delivery Manager (SDM) and RelationshipManager (RM).

5.               When multiple or simultaneous servicedisruptions occur so as to adversely affect more than one Cendant affiliate orbusiness unit (including JH), Cendant will provide JH with high priority (inparallel with other high-priority Cendant affiliates or business units) onrestoration of services, timing of outages and change management.  JH will be given the highest level ofconsideration to accommodate timing of outages and change management so as tominimize or eliminate impacts during the aforementioned critical periods.  When possible, reasonable efforts will bemade by the parties to conduct the aforementioned activities during non-peakhours/season.

6.               IBM, ETOS and Cendant Telecom effortswill be conducted concurrently, when possible.

7.               Cendant will continue to provide JH withroot access and administrator rights to the servers and systems used in theDenver data center by Cendant and/or IBM to process JH’s work and data, whichroot access and rights will be consistent with those currently being providedto JH, provided that JH complies with Cendant’s policies and proceduresregarding information protection, systems/data security, access, privacy andconfidential information.

 

Cendant will identify any unamortized hardware, and remaining hardwareservice charges (“HSC”), to JH, that may exist as of 6/30/04.  Thereafter, Cendant must notify JH (inadvance to the extent reasonably possible) of any and all purchase andacquisition of additional hardware or software associated with theaforementioned client server systems. Relative to any and all consent oradditional license fees that may be required by Cendant’s third partyvendors/licensors to allow Cendant/IBM to process data on behalf of JH, suchfees will be payable by JH. Nevertheless, Cendant will use reasonable efforts to minimize thisliability.

 

Disaster recovery will be provided by Cendant and/or IBM (or by anyother third party disaster services provider engaged by Cendant), as subscribedto in writing by JH, and in accordance with Cendant’s final disaster recoveryservices agreement(s) with IBM and/or such other third party serviceprovider.  Such subscription will bepaid for by JH in accordance with rates associated with the appropriateservice, including all IBM, CD Telecom and Cendant direct costs.

 

**Term:**

 

JH will be supported in a manner consistent with the levels of supportthat it currently receives from Cendant for 2 (two) calendar years (or anyother period agreed to by the parties)

 

6

----

 

from date of divestiture, subject to any restrictions, consents, orother provisions set forth in applicable agreements between Cendant and itsthird party licensors and/or service providers.  This support arrangement and the other agreements set forthherein will be confirmed in a written information technology services agreementby and between JH and Cendant. Notwithstanding any other termination rights that may exist (and unlessotherwise agreed to in writing between the parties), at JH’s discretion, thisarrangement and the agreements set forth herein can be terminated upon a 90-daynotification to Cendant.  At this time,JH will be responsible for the repayment of any unamortized hardware servicecharges specific to JH’s client server environment, as well as for any unpaidactual costs incurred by Cendant with respect to the services described hereinand any associated transition services. 

 

**Notes**:

 

1.               Cendant will provide to JH a currentlist of servers and web sites currently used to process JH’s work and data.

2.               JH currently uses and/or has access toOracle G/L financial systems software. Currently Oracle financial systems costs are being borne byCendant.  The costs/fees associated withJH’s continued use of or access to Oracle will need to be negotiated betweenthe parties (subject to any restrictions or limitations in Cendant’s licenseagreement(s) with Oracle) and are not included in the above fees/charges.

3.               The costs associated with JH’s continueduse of or access Oracle A/P software (subject to any restrictions orlimitations in Cendant’s license agreement(s) with Oracle) are included in thecorporate shared services fees.

 

**Desktop****Support**

 

**Parties Involved:**

 

Cendant Operations, Inc. - IT, IBM (as service provider) and JacksonHewitt Tax Services Inc.

 

**Services:**

 

Support for the desktop, laptop and printer systems utilized by JacksonHewitt end user personnel.  Servicesinclude desktop/laptop/printer system build and deployment, hardware assetmanagement, software license administration, install/move/add/change supportfor hardware and software components, software patch management, virusprotection services, local area network connectivity and printerhardware/software support.

 

In the event that these services will continue to be provided byCendant and/or IBM to Jackson Hewitt, Jackson Hewitt will be responsible forabiding by (a) Cendant’s policies and procedures relating to information andtechnology services, (b) the confidentiality agreements, information protectionand security requirements, and other applicable provisions contained in theITSA and in other applicable agreements between Cendant and its third partylicensors and/or service providers, and (c) any separate information technology

 

7

----

 

services agreements entered into between Jackson Hewitt and Cendantrelating to such services.

 

**Fees and PaymentTerms:**

 

The following is a summary of JH’s current and budgeted service fees ona monthly and annual basis for the aforementioned services:

 
|                      |   | **January 2004  Actual** |   | **Budget**         |   |
|---------------------------|--------|-------------------------------|--------|--------------------|--------|
|                      |   | **Units**                     |   | **Cost per  Unit** |   | **Cost per  Month** |   | **Annual  Units** |   | **Annual Fee** |   | **Annual  Units** |   | **Annual Fee** |   |
| **Service Fees**          |   |                          |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                      |   |                          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Desktops                  |   | 65                            |   | 64                 |   | $ | 4,178 |   | 780 |   | $ | 50,138 |   | 840 |   | $ | 54,018 |   |
| Laptops                   |   | 34                            |   | 57                 |   | 1,927 |   | 408 |   | 23,130 |   | 396 |   | 22,424 |   |
| Printers                  |   | 48                            |   | 17                 |   | 839 |   | 576 |   | 10,068 |   | 588 |   | 10,278 |   |
| IMACS                     |   | 7                             |   | 104                |   | 728 |   | 84 |   | 8,736 |   | 113 |   | 11,731 |   |
| Microsoft License Charges |   | 99                            |   | 22                 |   | 2,138 |   | 1,188 |   | 25,661 |   | 1,236 |   | 26,698 |   |
| **Total Service Fees**    |   |                          |   |               |   | 9,811 |   |   |   | 117,733 |   |   |   | 125,148 |   |
|                           |        |                               |        |                    |        |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

Invoices will be provided by Cendant to JH on a monthly basis andpayments will be due from JH within 30 days net.

 

**Service LevelStandards:**

 

Service levels will be provided to JH by Cendant and/or IBM inaccordance with the terms and conditions of the ITSA and the associatedprevailing suite of services (including any applicable service levels to theextent reasonable and practicable (“SLA’s”)). During JH’s critical operational periods (January 20ththrough February 28th, and April 1st throughApril 15th of each contract year), the parties acknowledge thatincreases to the applicable services set forth in the existing ITSA andassociated SLA’s may be necessary to process JH’s additional volume.  Cendant and/or IBM will use reasonableefforts to provide the following services during the aforementioned criticalperiods, provided that these items can be validated and confirmed by ETOS:

 

1.               Issues affecting JH production andstaging environments in the Denver data center will be classified as “severityone” tickets (as defined in the ITSA) at time of receipt.

2.               JH severity one tickets will beprocessed on an expedited basis and given the highest level of prioritypossible by the IBM Operations Center group in Denver, without troubleshootingby members of IBM’s Toronto Help Desk.

3.               IBM will troubleshoot problematicservers offline.

4.               Daily calls (or as otherwise agreed toby the parties) will be held to review problems and critical issues. Thesecalls will include: JH and IBM Service Delivery Manager (SDM) and RelationshipManager (RM).

5.               When multiple or simultaneous servicedisruptions occur so as to adversely affect more than one Cendant affiliate orbusiness unit (including JH), Cendant will provide JH with

 

8

----

 

high priority (in parallel with other high-priority Cendant affiliatesor business units) on restoration of services, timing of outages and changemanagement.  JH will be given thehighest level of consideration to accommodate timing of outages and changemanagement so as to minimize or eliminate impacts during the aforementionedcritical periods.  When possible,reasonable efforts will be made by the parties to conduct the aforementionedactivitiesduring non-peak hours/season.

6.               IBM, ETOS and Cendant Telecom effortswill be conducted concurrently, when possible.

 

Cendant will identify any unamortized hardware, and remaining hardwareservice charges (“HSC”), to JH, that may exist as of 6/30/04.  Thereafter, Cendant must notify JH (inadvance to the extent reasonably possible) of any and all purchase andacquisition of additional hardware or software associated with theaforementioned desktop support. Relative to any and all consent or additional license fees that may berequired by Cendant’s third party vendors/licensors to allow Cendant/IBM toprocess data on behalf of JH, such fees will be payable by JH. Nevertheless,Cendant will use reasonable efforts to minimize this liability.

 

**Term:**

 

JH will be supported in a manner consistent with the levels of supportthat it currently received from Cendant for 2 (two) calendar years (or anyother period agreed to by the parties) from date of divestiture subject to anyrestrictions, consents, or other provisions set forth in applicable agreementsbetween Cendant and its third party licensors and/or service providers.  This support arrangement and the otheragreements set forth herein will be confirmed in a written informationtechnology services agreement by and between JH and Cendant.  Notwithstanding any other termination rightsthat may exist (and unless otherwise agreed to in writing between the parties),at JH’s discretion, this arrangement and the agreements set forth herein can beterminated upon a 90-day notification to Cendant.  At this time, JH will be responsible for the repayment of anyunamortized hardware service charges specific to JH’s desktop support, as wellas for any unpaid actual costs incurred by Cendant with respect to the servicesdescribed herein and any associated transition services.

 

**Help Desk**

 

**Parties Involved:**

 

Cendant Operations, Inc. – IT, IBM (as service provider) and JacksonHewitt Tax Services Inc.

 

**Services:**

 

Support for calls to the help desk from users of the desktop and serverenvironments that support the Jackson Hewitt environment.  Help Desk services include opening ofincident tickets for all calls, password reset services, problem resolution ofdesktop issues where possible, documentation of incident information, transferof tickets to responsible support

 

9

----

 

organizations, administration of self-help tools and knowledgemanagement database, call trend reporting and call automation tool support.

 

In the event that these services will continue to be provided byCendant and/or IBM to Jackson Hewitt, Jackson Hewitt will be responsible forabiding by (a) Cendant’s policies and procedures relating to information andtechnology services, (b) the confidentiality agreements, information protectionand security requirements, and other applicable provisions contained in theITSA and in other applicable agreements between Cendant and its third partylicensors and/or service providers, and (c) any separate information technologyservices agreements entered into between Jackson Hewitt and Cendant relating tosuch services.

 

10

----

 

**Fees and PaymentTerms:**

 

The following is a summary of JH’s actual and budgeted service fees ona monthly and annual basis with respect to the aforementioned services:

 
|               |   | **January 2004  Actual** |   | **Budget**         |   |
|--------------------|--------|-------------------------------|--------|--------------------|--------|
|               |   | **Units**                     |   | **Cost per  Unit** |   | **Cost per  Month** |   | **Annual  Units** |   | **Annual Fee** |   | **Annual  Units** |   | **Annual Fee** |   |
| **Service Fees**   |   |                          |   |               |   |   |   |   |   |   |   |   |   |   |   |
|               |   |                          |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Help Desk Contacts |   | 9                             |   | 18.18              |   | $ | 164 |   | 108 |   | $ | 1,963 |   | 95 |   | $ | 1,727 |   |
|                    |        |                               |        |                    |        |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

Invoices will be provided by Cendant to JH on a monthly basis andpayments will be due from JH within 30 days net.

 

**Service LevelStandards:**

 

Service levels will be provided to JH by Cendant and/or IBM inaccordance with the terms and conditions of the ITSA and the associatedprevailing suite of services (including any applicable service levels to theextent reasonable and practicable (“SLA’s”)). During JH’s critical operational periods (January 20ththrough February 28th, and April 1st throughApril 15th of each contract year), the parties acknowledge thatincreases to the applicable services set forth in the existing ITSA andassociated SLA’s, may be necessary to process JH’s additional volume. Cendantand/or IBM will use reasonable efforts to provide the following services duringthe aforementioned critical periods, provided that these items can be validatedand confirmed by ETOS:

 

1.               Issues affecting JH production andstaging environments in the Denver data center will be classified as “severityone” tickets (as defined in the ITSA) at time of receipt.

2.               JH severity one tickets will beprocessed on an expedited basis and given the highest level of prioritypossible by the Net Ops group in Denver, without troubleshooting by members ofIBM’s Toronto Help Desk.

3.               IBM will troubleshoot problematicservers offline.

4.               Daily calls (or as otherwise agreed toby the parties) will be held to review problems and critical issues. Thesecalls will include: JH and IBM****Service Delivery Manager (SDM) andRelationship Manager (RM).

5.               When multiple or simultaneous servicedisruptions occur so as to adversely affect more than one Cendant affiliate orbusiness unit (including JH), Cendant will provide JH with high priority (inparallel with other high-priority Cendant affiliates or business units) onrestoration of services, timing of outages and change management.  JH will be given the highest level ofconsideration to accommodate timing of outages and change management so as tominimize or eliminate impacts during the aforementioned critical periods.  When possible, reasonable efforts will bemade by the parties to conduct the aforementioned activities****duringnon-peak hours/season.

6.               IBM, ETOS and Cendant Telecom effortswill be conducted concurrently, when possible.

 

11

----

 

Cendant will identify any unamortized hardware, and remaining hardwareservice charges (“HSC”), to JH, that may exist as of 6/30/04.  Thereafter, Cendant must notify JH (inadvance to the extent reasonably possible) of any and all purchase andacquisition of additional hardware or software associated with theaforementioned help desk support. Relative to any and all consent or additional license fees that may berequired by Cendant’s third party vendors/licensors to allow Cendant/IBM toprocess data on behalf of JH, such fees will be payable by JH.  Nevertheless, Cendant will use reasonableefforts to minimize this liability.

 

**Term:**

 

JH will be supported in a manner consistent with the levels of supportthat it currently receives from Cendant for 2 (two) calendar years (or anyother period agreed to by the parties) from date of divestiture, subject to anyrestrictions, consents, or other provisions set forth in applicable agreementsbetween Cendant and its third party licensors and/or service providers.  This support arrangement and the otheragreements set forth herein will be confirmed in a written informationtechnology services agreement by and between JH and Cendant.  Notwithstanding any other termination rightsthat may exist (and unless otherwise agreed to in writing between the parties),at JH’s discretion, this arrangement and the agreements set forth herein can beterminated upon a 90-day notification to Cendant.  At this time, JH will be responsible for the repayment of anyunamortized hardware service charges specific to JH’s help desk support, aswell as for any unpaid actual costs incurred by Cendant with respect to theservices described herein and any associated transition services.

 

**Executive Help Desk**

 

**Parties Involved**:

 

Cendant Operations, Inc. – IT and Jackson Hewitt Tax Services Inc.

 

**Services:**

 

Support for the desktop, laptop and printer systems utilized by JacksonHewitt senior executives (SVP and above). Services include desktop/laptop/printer system build and deployment,hardware asset management, software license administration,install/move/add/change support for hardware and software components, softwarepatch management, virus protection services, local area network connectivity andprinter hardware/software support.

 

In the event that these services will continue to be provided byCendant to Jackson Hewitt, Jackson Hewitt will be responsible for abiding by(a) Cendant’s policies and procedures relating to information and technologyservices, (b) the confidentiality agreements, information protection andsecurity requirements, and other applicable provisions contained in the ITSAand in other applicable agreements between Cendant and its third partylicensors and/or service providers, and (c) any separate information technologyservices agreements entered into between Jackson Hewitt and Cendant relating tosuch services.

 

12

----

 

**Fees and PaymentTerms:**

 

These services will be based on a per-executive charge developed bydividing the total cost center expenses incurred by the group delivering thisservice by the number of executives serviced. Currently, this is estimated at $300 per executive, per month for JH;aggregating $3,600 per executive per year. These charges will be adjusted by Cendant going forward based on JH’sactual usage of executive help desk resources. Invoices will be provided by Cendant to JH on a monthly basis andpayments will be due from JH within 30 days net.

 

**Service LevelStandards:**

 

Service levels will be provided to JH by Cendant in accordance withCendant standard terms and conditions for these types of services andassociated prevailing suite of services currently offered to JH.  During JH’s critical operational periods(January 20th through February 28th, andApril 1st through April 15th of each contractyear), the parties acknowledge that increases to applicable services set forthin the existing ITSA and associated SLA’s may be necessary to process JH’sadditional volume. Cendant will use reasonable efforts to provide the followingservices during the aforementioned critical periods, provided that these itemscan be validated and confirmed by ETOS:

 

1.               Issues affecting JH production andstaging environments in the Denver data center will be classified as severityone tickets at time of receipt.

2.               Calls will be held as reasonablenecessary to review problems and critical issues.

3.               When multiple or simultaneous servicedisruptions occur so as to adversely affect more than one Cendant affiliate orbusiness unit (including JH), Cendant will provide JH with high priority (inparallel with other high-priority Cendant affiliates or business units) onrestoration of services.

 

Cendant will identify any unamortized hardware, and remaining hardwareservice charges (“HSC”), to JH, that may exist as of 6/30/04.  Thereafter, Cendant must notify JH (inadvance to the extent reasonably possible) of any and all purchase andacquisition of additional hardware or software associated with theaforementioned executive help desk support. Relative to any and all consent oradditional license fees that may be required by Cendant’s third partyvendors/licensors to allow Cendant to process data on behalf of JH, such feeswill be payable by JH.  Nevertheless,Cendant will use reasonable efforts to minimize this liability.

 

13

----

 

**Term: **

 

JH will be supported in a manner consistent with the levels of supportthat it currently receives from Cendant for 2 (two) calendar years (or anyother period agreed to by the parties) from date of divestiture, subject to anyrestrictions, consents, or other provisions set forth in applicable agreementsbetween Cendant and its third party licensors and/or service providers.  This support arrangement and the otheragreements set forth herein will be confirmed in a written informationtechnology services agreement by and between JH and Cendant.  Notwithstanding any other termination rightsthat may exist (and unless otherwise agreed to in writing between the parties),at JH’s discretion, this agreement can be terminated upon a 90-day notificationto Cendant.  At this time, JH will beresponsible for the repayment of any unamortized hardware service chargesspecific to JH’s executive help desk support, as well as for any unpaid actualcosts incurred by Cendant with respect to the services described herein and anyassociated transition services. Notwithstanding the term mentioned herein, the services will be providedonly for period that JH is physically located at the 7 Sylvan facility.

 

**Application SupportServices**

 

**Parties Involved:**

 

Cendant Operations, Inc. – IT, IBM (as service provider) and JacksonHewitt Tax Services Inc.

 

**Services:**

 

Jackson Hewitt mainframe applications consist of GEAC, A/R and G/Lsoftware products/licenses (G/L used only for maintenance of chart of accounts,and the JAX System (Franchise billing system)).  These applications run on mainframes located in Cendant’s Denverdata center and are supported primarily by IBM pursuant to the ITSA.  Operations support services are provided toCendant and various Cendant affiliates and business units (including JH) on a7x24 basis by IBM in accordance with the ITSA.

 

14

----

 

**Fees and PaymentTerms:**

 

The actual and budgeted corporate applications charges to JH for 2004in support of the mainframe applications noted above are as follows:

 
|                                |   | **January 2004  Actual** |   | **Budget**         |   |
|-------------------------------------|--------|-------------------------------|--------|--------------------|--------|
| **2004 Projects**                   |   | **Units**                     |   | **Cost per  Unit** |   | **Cost per  Month** |   | **Annual  Fee** |   | **Annual  Fee** |   |
| 2004 Reserve for Unplanned Projects |   | 16.00                         |   | 80.00              |   | $ | 1,280 |   | $ | 15,360 |   | $ | 33,600 |   |
| GEAC New Corporation Set up         |   |                          |   |               |   | — |   | $ | 0 |   | $ | 8,000 |   |
| JAX New Corporation Set up          |   |                          |   |               |   | — |   | $ | 0 |   | $ | 10,500 |   |
| Security Support GEAC               |   | 3.00                          |   | 80.00              |   | 240.00 |   | $ | 2,880 |   | $ | 1,600 |   |
| TSA Oracle Analysis                 |   |                          |   |               |   | — |   | $ | 0 |   | $ | 7,875 |   |
| AR - Production Support             |   | 36.25                         |   | 80.00              |   | 2,900.00 |   | $ | 34,800 |   | $ | 24,000 |   |
| AR - User Support                   |   | 25.75                         |   | 80.00              |   | 2,060.00 |   | $ | 24,720 |   | $ | 16,000 |   |
| JAX - Production Support            |   | 19.00                         |   | 105.00             |   | 1,995.00 |   | $ | 23,940 |   | $ | 42,000 |   |
| JAX - User Support                  |   | 10.50                         |   | 105.00             |   | 1,102.50 |   | $ | 13,230 |   | $ | 21,000 |   |
| Mapquest Production Support         |   |                          |   |               |   | — |   | $ | 0 |   | $ | 4,200 |   |
| Grand Total                         |   |                          |   |               |   | 9,578 |   | 114,930 |   | 168,775 |   |
|                                     |        |                               |        |                    |        |  |  |  |  |  |  |  |  |  |

 

Corporate applications charges are based on the actual amount of hoursused to provide these services.  Assuch, they vary and may be adjusted accordingly by Cendant going forward basedon actual use of these services by Jackson Hewitt.  Invoices will be provided by Cendant to JH on a monthly basis andpayments will be due from JH within 30 days net.

 

**Service LevelStandards:**

 

Service levels will be provided to JH by Cendant and/or IBM inaccordance with the terms and conditions of the ITSA and the associatedprevailing suite of services (including any applicable service levels to theextent reasonable and practicable (“SLA’s”)). During JH’s critical operational periods (January 20ththrough February 28th, and April 1st throughApril 15th of each contract year), the parties acknowledge thatincreases to applicable services set forth in the existing ITSA and associatedSLA’s may be necessary to process JH’s additional volume. Cendant and/or IBMwill use reasonable efforts to provide the following services during theaforementioned critical periods, provided that these items can be validated andconfirmed by ETOS:

 

1.               Issues affecting JH production andstaging environments in the Denver data center will be classified as “severityone” tickets (as defined in the ITSA) at time of receipt.

2.               JH severity one tickets will beprocessed on an expedited basis and given the highest level of prioritypossible by the Net Ops group in Denver, without troubleshooting by members ofIBM’s Toronto Help Desk.

3.               IBM will troubleshoot problematicservers offline.

 

15

----

 

4.               Daily calls (or as otherwise agreed toby the parties) will be held to review problems and critical issues. Thesecalls will include: JH and IBM, ** **ServiceDelivery Manager (SDM) and Relationship Manager (RM).

5.               When multiple or simultaneous servicedisruptions occur so as to adversely affect more than one Cendant affiliate orbusiness unit (including JH), Cendant will provide JH with high priority (inparallel with other high-priority Cendant affiliates or business units) onrestoration of services, timing of outage sand change management.  JH will be given the highest level ofconsideration to accommodate timing of outages and change management so as tominimize or eliminate impacts during the aforementioned critical periods. Whenpossible, reasonable efforts will be made by the parties to conduct activities,including but not limited to systems administration, software patches/updates,hardware maintenance/upgrades that may be required during non-peakhours/season.

6.               IBM, ETOS and Cendant Telecom effortswill be conducted concurrently, when possible.

 

Cendant will identify any unamortized hardware, and remaining hardwareservice charges (“HSC”), to JH, that may exist as of 6/30/04.   Thereafter, Cendant must notify JH (inadvance to the extent reasonably possible) of any and all purchase andacquisition of additional hardware or software associated with theaforementioned application support. Relative to any and all consent or additional license fees that may berequired by Cendant’s third party vendors/licensors to allow Cendant/IBM toprocess data on behalf of JH, such fees will be payable by JH. Nevertheless,Cendant will use reasonable efforts to minimize this liability.

 

**Term:**

 

JH will be supported in a manner consistent with the levels of supportthat it currently received from Cendant for 2 (two) calendar years (or anyother period agreed to by the parties) from date of divestiture, subject to anyrestrictions, consents, or other provisions set forth in applicable agreementsbetween Cendant and its third party licensors and/or service providers.  This support arrangement and the otheragreements set forth herein will be confirmed in a written informationtechnology services agreement by and between JH and Cendant.  Notwithstanding any other termination rightsthat may exist (and unless otherwise agreed to in writing between the parties),at JH’s discretion, this arrangement and the agreements set forth herein can beterminated upon a 90-day notification to Cendant.  At this time, JH will be responsible for the repayment of anyunamortized hardware service charges specific to JH’s application support, aswell as for any unpaid actual costs incurred by Cendant with respect to theservices described herein and any associated transition services.

 

**Telecommunications -Data Services**

 

**Parties Involved:**

 

Cendant Operations, Inc. - Telecom and Jackson Hewitt Tax Services Inc.

 

16

----

 

**Services:**

 

Wide Area Network (“WAN”) and Internet Access services, includingnetwork design, implementation, network moves, adds, changes, and completepro-active 7x24 management.  Additionalmanagement support includes network performance analysis & reporting,capacity planning, change management, network security, operational reporting,domain name registration, financial management of all network services, vendormanagement, and contract management.

 

The current baseline of managed WAN connections is as follows:

 

•                  8 T1.5 Circuits,Private Line

•                  2 56k FrameRelay Circuits

•                  4 POTS Lines /Out of Band Management

•                  Internet Accessto Denver Data Center via dual OC-3s

 

**Fees and PaymentTerms:**

 

The fees/charges associated with the aforementioned services arenegotiated between Cendant and third party providers annually based uponprevailing market rates for both time and equipment.  JH will be charged by the third party vendors the actual costsincurred by JH directly and by CD Telecom on an as incurred basis, using thecost methodology consistent with past calculations.  Invoices will be provided by Cendant to JH on a monthly basis andpayments will be due from JH within 30 days net.

 

The applicable Project Management Rate related to the aforementionedservices, which will be charged by Cendant to JH, shall be as follows:  $78 per hour of service (unless otherwise agreed to by the parties).

 

**Service LevelStandards:**

 

Service levels will be provided to JH by Cendant in accordance withCendant’s “priority one” standard terms and conditions for these types ofservices and associated prevailing suite of services currently offered to JH.Currently, the “priority one” Service Levels supported by Cendant are asfollows:

 
| Mean Time to Respond: |   | 2 Hours |
|-----------------------|--------|---------|
| Mean Time to Repair:  |   | 4 Hours |
| New Services:         |   | 45 days |

 

During JH’s critical operational periods (January 20ththrough February 28th, and April 1st throughApril 15th of each contract year), the parties acknowledge thatincreases to the applicable services may be necessary to process JH’s additionalvolume.  Cendant will use reasonableefforts to provide the following services during the aforementioned criticalperiods, provided that these items can be validated and confirmed by CDTelecom:

 

17

----

 

1.               Telecom issues affecting JH productionand staging environments in the Denver data center will be classified as“priority one” tickets at time of receipt.

2.               JH priority one tickets will beprocessed on an expedited basis in accordance with the above service levels.

3.               Daily calls (or as otherwise agreed toby the parties) will be held to review problems and critical issues.  These calls will include:  JH and Cendant Telecom.

3.               When multiple or simultaneous servicedisruptions occur so as to adversely affect more than one Cendant affiliate orbusiness unit (including JH), Cendant will provide JH with high priority (inparallel with other high-priority Cendant affiliates or business units) onrestoration of services, timing of outages and change management.  JH will be given the highest level ofconsideration to accommodate timing of outages and change management so as tominimize or eliminate impacts during the aforementioned critical periods.  When possible, reasonable efforts will bemade to conduct change activities during non-peak hours/season.

4.               ETOS and CD Telecom efforts will beconducted concurrently, when possible.

 

Cendant will identify any unamortized hardware, and remaining hardwareservice charges (“HSC”), to JH, that may exist as of 6/30/04.  Thereafter, Cendant must notify JH (inadvance to the extent reasonably possible) of any and all purchase andacquisition of additional hardware or software associated with theaforementioned telecommunications – data support.  Relative to any and all consent or additional license fees thatmay be required by Cendant’s third party vendors/licensors to allow Cendant toprocess data on behalf of JH, such fees will be payable by JH.  Nevertheless, Cendant will use reasonableefforts to minimize this liability.

 

**Term:**

 

CD Telecom will provide the aforementioned services for a period of 36months (or any other period agreed to by the parties) from date of divestiture,with JH maintaining a right to terminate such services without cause upon 180days prior notice of cancellation.  Uponsuch termination, JH will be responsible for the repayment of any unamortizedhardware service charges specific to JH’s telecommunications and WANenvironment, as well as for any unpaid actual costs incurred by Cendant withrespect to the services described herein and any associated transitionservices.  These services and anyassociated agreements set forth herein will be confirmed in a writteninformation technology services agreement by and between JH and Cendant.

 

**Note:-**

 

The parties shall use good faith efforts to negotiate mutuallyacceptable terms and conditions that would also allow JH to utilize the telecommanagement services described herein upon relocation of the JH data center fromDenver to another location, subject to any restrictions, consents, or otherprovisions set forth in applicable agreements between Cendant and its thirdparty licensors, service providers and/or telecommunications providers.

 

18

----

 

**Telecommunications -Voice Services**

 

**Parties Involved:**

 

Cendant Operations, Inc. - Telecom and Jackson Hewitt Tax Services Inc.

 

**Services:**

 

Voice telecom management services, including installation, moves, adds,changes and deletions of telephone handsets, and voicemail.  This includes support for voice applicationssuch as call vectoring, call accounting, and Call Management Software for theCall Center Agents located at 7 Sylvan Way.

 

The current baseline of telecom handsets are 204, with 12 of thosehandsets being used in the Call Center environment described above.  These handsets and the associated PBX andvoicemail resources shall be included in the fees/costs to be negotiatedbetween the parties, as described below. Any additional handsets or deletion of handsets beyond a 5% variance inthe above numbers would result in a change in the costs referenced below.

 

In addition, JH will continue to purchase voice services from Cendant’sexisting third party telecommunications arrangements.

 

**Fees and PaymentTerms:**

 

The fees/charges associated with the aforementioned services arenegotiated between Cendant and third party providers annually based uponprevailing market rates for both time and equipment.  JH will be charged by the third party vendors the actual costsincurred by JH directly and by CD Telecom on an as incurred basis, using thecost methodology consistent with past calculations.  Invoices will be provided by Cendant to JH on a monthly basis andpayments will be due from JH within 30 days net.

 

The applicable Project Management Rate related to the aforementionedservices, which will be charged by Cendant to JH, shall be as follows:  $78 per hour of service (unless otherwiseagreed to by the parties).

 

**Service LevelStandards:**

 

Service levelswill be provided to JH by Cendant in accordance with Cendant standard terms andconditions for these types of services and associated prevailing suite ofservices currently offered to JH. During JH’s critical operational periods (January 20ththrough February 28th, and April 1st through April 15thof each contract year), the parties acknowledge that increases to theapplicable services may be necessary to process JH’s additional volume.  Cendant will use reasonable efforts toprovide the following services during the aforementioned critical periods,provided that these items can be validated and confirmed by CD Telecom:

 

19

----

 

1.               Daily calls (or as otherwise agreed toby the parties) will be held to review problems and critical issues.  These calls will include JH and CD Telecom.

2.               When multiple or simultaneous servicedisruptions occur so as to adversely affect more than one Cendant affiliate orbusiness unit (including JH), Cendant will provide JH with high priority (inparallel with other high-priority Cendant affiliates or business units) onrestoration of services, timing of outages and change management.  JH will be given the highest level ofconsideration to accommodate timing of outages and change management so as tominimize or eliminate impacts during the aforementioned critical periods.  When possible, reasonable efforts will bemade to conduct change activities****during non-peak hours/season.

 

Cendant will identify any unamortized hardware, and remaining hardwareservice charges (“HSC”), to JH, that may exist as of 6/30/04.  Thereafter, Cendant must notify JH (inadvance to the extent reasonably possible) of any and all purchase andacquisition of additional hardware or software associated with theaforementioned telecommunications-voice support.  Relative to any and all consent or additional license fees thatmay be required by Cendant’s third party vendors/licensors to allow Cendant toprocess data on behalf of JH, such fees will be payable by JH.  Nevertheless, Cendant will use reasonableefforts to minimize this liability.

 

**Term:**

 

CD Telecom will provide the aforementioned services for a period of 36months (or any other period agreed to by the parties) from date of divestiture,with JH maintaining a right to terminate such services without cause upon 180days’ prior notice of cancellation. Upon such termination, JH will be responsible for the repayment of anyunamortized hardware service charges specific to JH’s telecommunicationsenvironment, as well as for any unpaid actual costs incurred by Cendant withrespect to the services described herein and any associated transitionservices.  These services and anyassociated agreements set forth herein will be confirmed in a written informationtechnology services agreement by and between JH and Cendant.  Notwithstanding the term mentioned herein,the telecommunications voice management services will be provided only forperiod that JH is physically located at the 7 Sylvan facility.

 

**Transition Fees**

 

**Parties Involved:**

 

Cendant Operations,Inc. – IT and Telecom, IBM (as service provider) and Jackson Hewitt TaxServices Inc.

 

**Services:**

 

Should Jackson Hewitt decide to terminate without cause any of theservices being provided, as described above, then Cendant and (to the extent possibleunder the terms of the ITSA) IBM will provide reasonable assistance to JH inthe relocation and transition of the services

 

20

----

 

to another JH facility, subject to any restrictions, consents, or otherprovisions set forth in applicable agreements between Cendant and its thirdparty licensors, service providers and/or telecommunications providers.  These services would need to be negotiatedbetween the parties and would be dependant on the nature and scope of theservices being transitioned.

 

**Fees and PaymentTerms:**

 

The costs associated with the transition services we need to benegotiated between the parties and would be dependant on the nature and scopeof the services being rendered.  The IBMportion of the transition costs would be governed by the terms and conditionsof the ITSA.  Invoices will be providedby Cendant to JH on a monthly basis and payments will be due from JH within 30days net.

 

**Service LevelStandards:**

 

Service levels will need to be negotiated between the parties.  The parties will use reasonable efforts toavoid transitions during JH’s critical operational periods (January 20ththrough February 28th, and April 1st throughApril 15th of each contract year).  In the event that a transition during such critical periods isunavoidable, the parties acknowledge that Cendant will use reasonable effortsduring such periods to provide the transition services in such a manner so asto reasonably accommodate any increases to the applicable service levels thatmay be necessary as a result of JH’s additional volume.  Cendant and/or IBM will use reasonableefforts to provide these services during the aforementioned critical periods,provided that these items can be validated and confirmed by ETOS

 

**Term:**

 

To be negotiated by the parties on a case-by-case basis depending uponthe applicable scope and circumstances.

 

**Miscellaneous**

 

**Parties Involved:**

 

Cendant Operations Inc. – IT and Telecom, IBM (as service provider) andJackson Hewitt Tax Services Inc.

 

**Website Services tobe provided:**

 

Until all of Jackson Hewitt’s HR services are fully transitionedpursuant to the divestiture documents, Jackson Hewitt needs access to thefollowing internal Cendant websites:

 

Employee self help (ernie.cendant.com)Cendant worldwide directory (directory.cendant.com)P Card management (procard.com/pvs)Internal Cendant site (cendantintranet.com)

 

21

----

 

The Answer Place (theanswerplace.cendant.com)InfoTech (corporate.cendant.com/infotech)IBM ManageNow(http://167.210.242.72/managenow/common/bin/files/wcls_co_login.asp)IBM OrderNow (http://167.210.242.81/ordernow/login/mainLogin.asp)Cendant University (mylearning.cendant.com) CD-Telecom Dashboard (jacksonhewitt.cd-telecom.com)WAN realtime performance reports (http://161.178.118.10/bin/welcome.sh)Cendant virtual warehouse (http://support.galileo.com/cvw/default.asp)CyberArc safe (http://www.cendant.com/cyber-ark/)HR CRD system (https://webcrbms.cendant.com/)My Time (https://mytime.cendant.com/wfc/logon)TravelPort (travelport.net)

 

Subject to (a) JH obtaining any and all necessary approvals from theappropriate Cendant Intellectual Property Legal group(s) and the GiSEC group,and (b) negotiation of mutually acceptable terms and conditions regarding usagerights, restrictions, system/data security, information protection and privacy,Cendant will provide JH with the necessary access to or use of such websites asreasonably necessary for JH to continue to process its business operations inaccordance with the terms of the divestiture documents.

 

Cendant and JH acknowledge and agree that, prior to the divestiture,Cendant will have transferred ownership of any Jackson Hewitt proprietarydomain names including:  Jacksonhewitt.com;JHnet.com; jtax.com etc. Notwithstanding the foregoing, the parties will need to negotiatemutually acceptable terms and conditions regarding the administration,technical controls, maintenance and renewal of these domains, as well as anyassociated fees/charges that JH will pay to Cendant.

 

**InformationTechnology Services Agreement; Additional Terms & Conditions:**

 

Cendant and JH will enter into an information technology servicesagreement pursuant to which Cendant (and its third party service providers,such as IBM) will provide JH with all the information technology andinformation systems services described above and reasonably necessary for JH toadminister and operate its business after the divestiture.  Although the final terms and conditions relatedto such agreement will need to be negotiated between the parties, the partieshereby acknowledge and agree that (to the extent reasonably possible and unlessother wise agreed) the services will be consistent with those, and shall besubject to the terms and conditions, described above.  In addition, the parties agree that, at a minimum (and unlessotherwise agreed), the following terms shall be applicable as well:

 

**InformationProtection, Systems Security/Access & Privacy:**

 

JH will be required to comply with Cendant’s policies and proceduresregarding information protection, systems and data security, and privacy, andshall comply with all applicable privacy laws and regulations.  JH will not tamper with, compromise, orattempt to circumvent any physical or electronic security or audit measuresemployed by Cendant in the

 

22

----

 

course of Cendant’s business operations, and/or compromise the securityof Cendant’s computer systems and/or networks. To the extent that Cendant will (i) perform any of the services via anyelectronic means (including, but not limited to, electronic mail, website,and/or the Internet), and/or (ii) provide JH with access to Cendant’selectronic mail systems, websites, computer systems, and/or other Internetsystems, JH shall implement industry-standard security to protect Cendant’scomputer systems, network devices and/or the data processed thereon against therisk of penetration by, or exposure to, a third party via any system or featureutilized by Cendant in performing the services and/or in providing JH withaccess to such systems.  Unlessotherwise agreed by the parties, any hardware or software accessed by JH orprovided to JH by Cendant in connection with the services shall remainCendant’s property and must be surrendered upon Cendant’s request and/or whenthe services terminate or expire.

 

**ConfidentialInformation:**

 

Each party shall at all times keep confidential the other party’sconfidential and proprietary information to which it has access or receivesduring the course of the services (“Confidential Information”).  Neither party (without the prior writtenconsent of the other party) shall use the other party’s ConfidentialInformation for any purpose other than the performance of services, and willnot disclose any such Confidential Information to any third parties absent theother party’s prior written consent. Upon termination or expiration of the services, each party shall (at theother party’s option) destroy or return to the other party all materialscontaining any Confidential Information of the other party.

 

**Work Product;Ownership:**

 

Unless otherwise agreed to in writing, any and all reports, computerprograms, documentation, specifications, deliverables, products, work product,software, source code, algorithms, routines, graphics, files, software patches,enhancements, modifications, blueprints, diagrams, charts, functionaldescriptions, photographs, surveys, or other materials, writings, or works ofauthorship (and any drafts of the foregoing) created, developed, or prepared byCendant, its employees, agents, or subcontractors in the course of performingthe services (collectively, “Work Product”) will be owned (as between Cendantand JH) solely and exclusively by Cendant, and JH will be deemed to haveexpressly disclaimed any and all right, title, or interest therein.  Each party will retain ownership of any ofits pre-existing technology (including any modifications, enhancements,upgrades thereto) that relates to its own respective systems.

 

**Third Party Consents:**

 

Cendant’s ability to provide the hardware, software, and/or servicesdescribed herein may be contingent upon Cendant obtaining certain consents fromits third party vendors/licensors/contractors/service providers.  In the event and to the extent that Cendantobtains such consents, Cendant will pass on to JH (and/or give JH the benefitof) only those licenses, rights, grants, accesses, warranties, indemnities,& services that have been obtained by Cendant from (and authorized by) suchthird parties.  Cendant will notify JHof any

 

23

----

 

problems that Cendant may encounter in obtaining such consents.  JH will (in addition to complying with theprovisions set forth herein and in any subsequent agreement between Cendant andJH) comply with any and all applicable terms, conditions, and agreements thataccompany any such third party hardware, software or services.

 

**Outsourcing;Re-Sourcing; Use of Third Parties:**

 

Cendant shall retain the right and flexibility to outsourceresponsibility for any of the hardware, software and/or services describedherein to its third party service providers and/or outsourcers (including, butnot limited to, IBM).  In the event thatCendant replaces IBM as its Denver data center outsourcer (and/or re-sources toanother third party provider any of the services described herein), JHacknowledges and understands that there is no guarantee that support for or theservice levels relating to such hardware, software, or services will continuein the same manner as described herein, although Cendant agrees to usereasonable efforts to secure equivalent or similar support and service levelsfor JH.  The parties will need tonegotiate specific terms and conditions relating to this issue.

 

**Fees and PaymentTerms:**

 

To be determined by the parties

 

**Service LevelStandards:**

 

To be determined by the parties

 

**Term:**

 

To be determined by the parties

 

24

----

 

**ExhibitA-12**

 

**LegalDocument Management Systems**

 

**Parties Involved:**

 

Jackson Hewitt Tax Service Inc. (“Jackson Hewitt”)

Cendant Operations, Inc. - Shared Services (“Cendant”)

 

**Services:**

 

Cendant will provide Jackson Hewitt:

 

•                              Continuedand secured access to the Docs-Open and Cendant Legal Information Portal(“CLIP”) document management systems by Jackson Hewitt legal personnel topermit document creation, editing and search engine functionality consistentwith such functionalities existing on the date of this Agreement.

•                              Uponconsummation of the initial public offering of the common stock of JacksonHewitt Tax Service Inc. (the “IPO”), documents pertaining to the Jackson Hewittbrand shall be maintained on an independent server or section of CLIP andprotected against viewing and access by all other than authorized JacksonHewitt personnel using Cendant’s standard access restriction protocols andprocedures.  System administrators musthave access to documents to provide administrative and support services.  Such access will be on a confidential basis.

•                              Uponconsummation of the IPO, documents pertaining to Cendant or Cendant brandsother than Jackson Hewitt shall be protected against viewing and access byJackson Hewitt Personnel.

•                              Suchsystem support as Jackson Hewitt shall request or require consistent withCendant’s current practices and standards; provided however, that all “tickets”pertaining to issues with the systems shall be resolved to Jackson Hewitt’sreasonable satisfaction according to Cendant’s internal service standards ineffect at the time the ticket is opened.

•                              Suchassistance (and at such time and in such manner) as Jackson Hewitt reasonablyshall request in connection with the migration of JH documents to new documentmanagement systems that JH chooses, at the expense of Jackson Hewitt for anyadditional services, licenses, labor and materials. Such assistance mayinclude, but shall not be limited to, (i) providing reasonable access byJackson Hewitt vendors, consultants or other representatives of Jackson Hewittto physical premises, computer hardware, software and data maintained byCendant and (ii) creating images of Jackson Hewitt documents, data or otherinformation stored on Docs-Open or CLIP in such manner and on such media forcommunication as Jackson Hewitt reasonably shall request.

 

Cendant Legal will, at the time of the IPO, put the its standard accessrestriction security checks are in place to ensure that Jackson Hewitt andCendant do not have access to the other’s documents.  Cendant does not warrant or represent that such

 

1

----

 

checks are absolutely certain to prevent unauthorized access.  Cendant will use the same techniques it usesto protect its own data.

 

**Service LevelRequirements:**

 

Cendant will use commercially reasonable efforts to cause its help deskand systems operation vendors to respond to system issues within two hours,using existing Help Desk personnel and procedures.   

 

**Fees and PaymentTerms:**

 

There will not be any charges by Cendant for the access to theDocs-Open system.  Jackson Hewitt shallpay Cendant $1,000 per month for access to CLIP.  Such fees shall be payable by Jackson Hewitt within 30 days ofthe invoice date.   Jackson Hewitt shallpay directly or reimburse Cendant for any third party contractor fees andcharges necessary in connection with this service or a transition by JacksonHewitt to new document management systems.

 

**Term:**

 

Term of services shall commence upon the closing of the IPO and shallcontinue there after until the earliest of (i) December 31, 2004, (ii) thedate on which Cendant no longer utilizes the Docs-Open System or CLIP, asapplicable; provided however, that Cendant shall provide not less than 120 daysprior written notice of its intent to discontinue such service, or (iii) 30days after Jackson Hewitt notifies Cendant that it no longer desires access tothe Docs Open system or CLIP, as applicable.

 

**Early TerminationRights:**

 

Jackson Hewitt has the ability to terminate this service with 30 dayswritten notice.  Cendant shall not havethe right to terminate this service except as provided in clause (ii) of theimmediately preceding paragraph.

 

2

----

 

**Exhibit A-13**

 

**Executive Financial Consulting ServicesProgram**

 

**Parties Involved:**

 

Cendant Operations, Inc. (“Cendant”) and Jackson Hewitt Tax ServiceInc. (“JH”)

 

**Services:**

 

Cendant will allow JH executives to continue to participate inCendant’s Executive Financial Consulting Services Program (the “Program”).  The Program will be administered to JHexecutives through Cendant’s third party provider, The Ayco Company, L.P.(“Ayco”).  Only JH executives who areactive participants of the program as of the effective date of this agreementwill be eligible to participate in the program.  All Program rules and requirements will remain in effectthroughout the term of this Exhibit A-13.

 

**Term:**

 

Cendant will provide the services through 12/31/04.

 

**Fees and PaymentTerms:**

 

JH shall pay a fee equal to the actual amounts billed by Ayco toCendant for the JH executives participating in the Program.  Such bill shall be payable by JH within 30days of the invoice date.

 

**Service LevelStandards:**

 

Each Party shall: (i) conduct itself in accordance with service standardsof no lower quality than (A) the standards applied as of the date of thisAgreement with respect to the specific matters in question, and (B) thosestandards such Party hereafter applies in its own business; and (ii) comply inall material respects with all laws, regulations and orders applicable to theconduct of the Services in question.

 

1

----