Document:

EX 10.3 Side Letter

Exhibit 10.3

August 14, 2014
Blackhawk Network Holdings, Inc.
6220 Stoneridge Mall Road
Pleasanton, CA 94588    

		
	Re:
	Section 338(g) Elections

Ladies and Gentlemen:

Reference is made to the Amended and Restated Tax Sharing Agreement by and among Safeway Inc. (“Safeway”) and its Affiliates, and Blackhawk Network Holdings, Inc. (“Blackhawk” or “you”) and its Affiliates dated April 11, 2014 (the “Tax Sharing Agreement”). Unless otherwise indicated, capitalized terms used in this letter agreement and not otherwise defined have the respective meanings set forth in the Tax Sharing Agreement.  
You have requested that Safeway file or prepare to be filed an election under Section 338(g) of the Code with respect to the acquisition of Retailo AG and its subsidiaries in November 2013 (the “Retailo Election”). You have advised that you may also request certain Section 338(g) Elections with respect to the distribution by Safeway of shares of Class B Common Stock of Blackhawk on April 14, 2014 (the “Requested 338(g) Elections”).
Notwithstanding any limitations in any other agreements heretofore entered into between the parties hereto including the Tax Sharing Agreement, Blackhawk hereby agrees to indemnify and hold harmless Safeway and its Affiliates against:
		
	(a)
	any and all Taxes or other incremental costs and expenses, including any reduction in or loss of any Tax Asset, arising from the Retailo Election (calculated on a “with” and “without” basis), and 

		
	(b)
	any and all Taxes or other incremental costs and expenses, including any reduction in or loss of any Tax Asset, arising from the Requested 338(g) Elections (calculated on a “with” and “without” basis) (the amounts described in (a) and (b), the “Section 338(g) Costs”).

Safeway shall provide Blackhawk with a written statement (which may be delivered by email) setting forth any amounts owed by Blackhawk pursuant to this letter agreement and Blackhawk shall have a ten-day period to review and provide comments to Safeway (which comments Safeway may accept or reject) on such statement prior to such statement becoming final. Such statement, once final, shall be deemed conclusive of the amount due absent manifest error. Blackhawk hereby waives any rights it may have under Section 2.04 or Section 5.03(e) or any other section of the Tax Sharing Agreement and any other rights it may 

have to contest the calculation of such amounts. Any amount shown on a final statement shall be paid by Blackhawk to Safeway in cash two business days prior to the due date for the payment of the related Taxes (including any estimated Taxes). If there is no such due date for payment, payment of any amount due hereunder shall be made within thirty days after the statement relating to such amount becomes final pursuant to this paragraph.
The parties hereto intend that any payment in respect of the Section 338(g) Costs shall be treated as nontaxable distributions made prior to the Distribution, provided, however, that if Safeway determines in its reasonable discretion that such treatment is not appropriate, Blackhawk shall be liable for (a) the After Tax Amount with respect to any payments under this letter agreement and (b) interest at the rate described in Section 7.05(e) of the Tax Sharing Agreement on the amount of such Tax from the date such Tax accrues through the date of payment of such After Tax Amount. Safeway shall separately specify and compute any such After Tax Amount. However, Safeway may choose not to specify an After Tax Amount in a demand for payment pursuant to this letter agreement without thereby being deemed to have waived its right to subsequently demand an After Tax Amount with respect to such payment.  
The terms herein may not be amended, waived, modified, discharged or terminated orally, and may only be amended, waived, modified or discharged by an instrument in writing signed by the parties hereto. This letter agreement and the rights and obligations of the parties hereunder shall be binding upon the parties hereto and their respective successors, transferees and assigns. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to laws that may be applicable under conflicts of laws principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. Each of the parties hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Court of Chancery in the State of Delaware and any appellate court from any thereof, in any action or proceeding arising out of or relating to this letter agreement or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each of the parties hereby irrevocably and unconditionally (i) agrees not to commence any such action or proceeding except in such court, (ii) agrees that any claim in respect of any such action or proceeding may be heard and determined in such Delaware court, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding in such Delaware court, and (iv) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in such Delaware court.  Each of the parties agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.  Each party to this letter agreement irrevocably consents to service of process in the manner provided for notices in Section 10.04 of the Tax Sharing Agreement.  Nothing in this letter agreement will affect the right of any party to this letter agreement to serve process in any other manner permitted by law.
[Signature page follows]

Please execute this letter agreement in the space indicated below and return a copy to us at the address above to acknowledge your acceptance.

	
			
	SAFEWAY, INC.

	 
	 
	 

	By:
	 
	/s/ Gary Schmidt

	Name:
	 
	Gary Schmidt

	Title:
	 
	Vice President

	 
	 
	 

	 
	 
	 

	ACKNOWLEDGED, ACCEPTED AND AGREED:

	 
	 
	 

	BLACKHAWK NETWORK HOLDINGS, INC.

	 
	 
	 

	By:
	 
	/s/ Jerry Ulrich

	Name:
	 
	Jerry Ulrich

	Title:
	 
	CFO & CAO

	 
	 
	 

	 
	 
	 

	 
	 
	 

Cc:    Robert A. Gordon, Senior Vice President, Safeway Inc.
Gary Schmidt, Vice President, Safeway Inc.
David Durant, General Counsel, Blackhawk Network Holdings, Inc.
Joan Lockie, Vice President & Corporate Controller, Blackhawk Network Holdings, Inc.
Seema Jain, Senior Director, Tax, Blackhawk Network Holdings, Inc.

[Signature Page to August [14], 2014 Side Letter Relating to Section 338(g) Elections]Ex 10.4 Meta Addendum

Exhibit 10.4

FIRST ADDENDUM TO SERVICING AGREEMENT

THIS FIRST ADDENDUM (this “Addendum”), effective  May 30, 2014 (the “Addendum Effective Date”) is to that certain Servicing Agreement dated March 30, 2012, between Blackhawk Network, Inc. (“Servicer”) and MetaBank, dba Meta Payment Systems (“Bank”), as amended by Amendment No. 1 to Servicing Agreement, dated November 5, 2012 (“Amendment No.1), and Amendment No. 2 to Servicing Agreement, dated October 31, 2013 (collectively, the “Agreement”).

Whereas, the Parties wish to amend the Agreement, and as such this Addendum is being entered into for the purpose of modifying the Agreement in the manner and to the extent set forth herein, and

Whereas, Servicer wishes to run a program that would provide a feature to Cardholders whereby they can access funds as early as on the ACH Origination Date instead of the ACH Settlement Date.

Now, therefore, in consideration of the mutual covenants and conditions hereinafter set forth, the Parties hereto, intending to be legally bound, agree as follows:

		
	I.
	Definitions.

“ACH” means a credit entry made through the Automated Clearing House to a Card in the Early Access Feature.
“ACH Settlement Date” means the date the ACH would normally be loaded to a Card.
“ACH Origination Date” means the date the ACH is received by the Bank.
“Early Access” means access by a Cardholder to Early Access Loads on or after the ACH Origination Date.
“Early Access Card” means a Card in a Program approved by Bank to offer the Early Access Feature.
“Early Access Feature” means the Program feature that will provide Cardholders Early Access to Early Access Loads.
“Early Access Loads” means ACH credits to Cards, excluding (i) any debit ACH entries, and (ii) other elements as defined by the Bank from time to time.

II.    Duties of Servicer.
1.    Servicer must obtain Bank’s prior written approval in order to offer the Early Access Feature on any Program.
2.    Servicer shall comply with all marketing guidelines provided by Bank related to the Early Access Feature.  Any marketing materials relating to the Early Access Feature shall be considered Marketing Materials as such term is defined in the Agreement.  Servicer may not charge a fee to any Cardholder for Early Access.
3.    Upon approval by Bank, Servicer may load Early Access Loads to Early Access Cards and provide Cardholders Early Access to Early Access Loads on or after the ACH Origination Date.
4.    Servicer shall provide a daily automated report to Bank setting forth the Early Access Loads loaded on such day and such other details as directed by Bank.  Servicer shall comply, and shall be responsible to ensure that Processor complies, with all directives of Bank related to the Early Access Feature, including but not limited to (i) providing all data required by Bank related to Early Access, (ii) building functionality to ensure that all Early Access complies with Bank directives and the NACHA Rules, (iii) ensuring that all ACH’s are settled in a timely manner.
5.    Servicer shall ensure that funding equal to all Early Access Loads loaded to Early Access Cards is received by Bank no later than the ACH Settlement Date, and Servicer shall wire an amount equal to any shortfall by the end of the next business day following receipt of written notice from Bank or Servicer’s discovery at the management level of such shortfall.
6.    Except to the extent caused by the gross negligence, willful misconduct or bad faith of Bank, Servicer shall be liable for any and all losses related to Early Access, including but not limited to (i) the unavailability of funding between the ACH Origination Date and the ACH Settlement Date (i.e. due to ACH reversals or returns, fraud, reclamation or payroll for a failed company) and (ii) duplicate entries that could have been reversed prior to the ACH Settlement Date.

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

1

7.    Servicer shall provide a monthly report to Bank containing such details as are required by Bank regarding any Early Access Loads loaded in the preceding month.
8.    Servicer shall pay to Bank on a monthly basis [***] on the total amount of all loads to Cards via ACH.  Such amount will be added to Servicer’s monthly statement.

III.    Term.  This Addendum shall be coterminous with the Agreement, provided, however, that either Party may elect to terminate this Addendum on thirty (30) days advance written notice for any or no reason.  In the event of termination both parties will use commercially reasonable efforts to wind down the Early Access Feature in the smallest timeframe possible.

IV.    Legal.  Except as expressly set forth in this Addendum, the Agreement shall remain in full force and effect, and is hereby ratified by each Party.  Unless otherwise defined in this Addendum, the capitalized terms used herein shall have the same meanings that are ascribed to such terms in the Agreement.  If there is a conflict between a provision of this Addendum and a provision of the Agreement, the provision of this Addendum shall prevail, and all other terms of the Agreement shall remain fully enforceable. For the avoidance of doubt, except as specifically provided in this Addendum, the provisions of the Agreement, including Amendment No. 1, shall apply to the provision of Early Access under this Addendum.

IN WITNESS WHEREOF, as of the Addendum Effective Date, Bank and Servicer have caused this Addendum to be entered into.

	
				
	Servicer
	Bank

	 
	 

	By
	/s/ Talbott Roche
	By
	/s/ Brad Hanson

	Name
	Talbott Roche
	Name
	Brad Hanson

	Title
	President 
	Title
	President

*****Confidential portions of the material have been omitted and filed separately with the Securities and Exchange Commission.

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