Document:

Exhibit
10.2

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement dated as of June
     , 2004, but effective as of and contingent upon the
consummation of the initial public offering by Cendant Corporation of all of
the stock of Jackson Hewitt Tax Service Inc. (the “Transaction”), is hereby
made by and among Cendant Corporation (“Cendant”), Jackson Hewitt Tax Service
Inc. (“JTAX”) and Mark Heimbouch (the “Executive”).

 

WHEREAS, JTAX desires to employ the Executive as its
Senior Vice President and Chief Financial Officer, and the Executive desires to
serve JTAX in such capacity.

 

NOW THEREFORE, in consideration of the foregoing and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:

 

SECTION I

EMPLOYMENT

 

Subject to the
consummation of the Transaction, JTAX agrees to employ the Executive and the
Executive agrees to be employed by JTAX for the Period of Employment as
provided in Section III below and upon the terms and conditions provided in
this Agreement.  Subject to and
effective upon the consummation of the Transaction, the Executive will no
longer be an employee, officer or director of Cendant or any of its
subsidiaries or affiliates, and agrees to provide Cendant, upon request, with
written resignations from such positions.

 

SECTION II

POSITION AND
RESPONSIBILITIES

 

During the Period of
Employment, the Executive will serve as Senior Vice President and Chief
Financial Officer of JTAX and, subject to the direction of the Chief Executive
Officer of JTAX (the “Supervising Officer”), will perform such duties and
exercise such supervision with regard to the business of JTAX as are associated
with such position, as well as such additional duties as may be prescribed from
time to time by the Supervising Officer. 
Further, effective upon the consummation of the Transaction, the
Executive will serve as a member of the Board of Directors of JTAX (the
“Board”); provided, however, that nothing contained in this
Agreement shall require JTAX to maintain the Executive’s status as a

 

 

member of the
Board or to re-nominate him for election for additional terms of service on the
Board.

 

The Executive will,
during the Period of Employment, devote substantially all of his time and
attention during normal business hours to the performance of services for
JTAX.  The Executive will maintain a
primary office and conduct his business in Parsippany, New Jersey, except for
normal and reasonable business travel in connection with his duties
hereunder.  Nothing contained in this
Agreement will prevent the Executive from serving on civic and charitable
boards or from conducting his personal affairs.

 

The Executive will, in
accordance with JTAX policy and procedures and applicable law, certify to the
accuracy of JTAX’s publicly filed financial statements.

 

SECTION III

PERIOD OF EMPLOYMENT

 

The period of the Executive’s employment under this
Agreement (the “Period of Employment”) will begin contingent upon and effective
as of the consummation of the Transaction, and end on the third anniversary of
such date, subject to earlier termination as provided in this Agreement.

 

SECTION IV

COMPENSATION AND BENEFITS

 

Compensation.  For all services rendered by the Executive
pursuant to this Agreement during the Period of Employment, including services
as an executive, officer, director or committee member of JTAX or any
subsidiary or affiliate of thereof, the Executive will be compensated as
follows:

 

i.              Base
Salary.

 

JTAX will pay the Executive a fixed base salary (“Base
Salary”) of not less than $250,000, per year. 
From time to time, the Executive may be eligible to receive annual
increases as JTAX deems appropriate, in accordance with JTAX’s customary
policies and procedures regarding the salaries of senior officers, including
pursuant to annual compensation reviews to occur no less than once per year,
and with due consideration given to the published Consumer Price Index
applicable to

 

 

the New York/New Jersey
greater metropolitan area.  Base Salary
will be payable according to the customary payroll practices of JTAX, but in no
event less frequently than once each month.

 

ii.             Annual
Incentive Awards.

 

The Executive will be eligible for discretionary
annual incentive compensation awards; provided, that the Executive will
be eligible to receive an annual bonus opportunity in respect of each fiscal
year of JTAX during the Period of Employment based upon a target bonus equal to
no less than 60% of his earned Base Salary during such fiscal year; provided,
however, that such bonus will be subject to the attainment by JTAX of
applicable performance targets reasonably established and certified by the
Board or the Compensation Committee of the Board (the “Committee”).  The parties acknowledge that it is currently
contemplated that such performance targets will be stated in terms of “earnings
before interest and taxes” of JTAX, however such targets may relate to such
other financial and/or business criteria of JTAX, or any of their respective
subsidiaries or business units, as determined by the Board and/or the Committee
in its sole discretion (each such annual bonus, an “Incentive Compensation
Award”).

 

iii.            Long-Term
Incentive Awards

 

(a) Cendant Awards.  The Executive holds previously granted
Cendant stock options and Cendant restricted stock units, all of which will be
subject to that certain Exchange Offer, dated as of April 22, 2004, on the same
terms and conditions as applicable to other active employees of JTAX.

 

(b) Annual Incentive
Awards.  At such times as the Board
or the Committee determines to conduct annual or periodic grants of long term
incentive awards to employees and officers of JTAX, the Executive will be
eligible to receive such grants, subject to the sole and complete discretion of
the Board or the Committee, and upon such terms and conditions as determined by
the Board or the Committee, but with due consideration given to the Executive’s
position with JTAX and the Executive’s historical performance and anticipated
future contributions to JTAX.

 

(c) Founder’s Grant.  Within 30 days following the Transaction,
subject to the approval of the Board or the Committee, the Executive will be
granted a number of options to purchase JTAX common stock on such terms and
conditions determined by the Board or the Committee in its sole discretion.

 

 

iv.                                   Additional
Benefits

 

The Executive will be entitled to participate in all
other compensation and employee benefit plans or programs offered generally to
employees of JTAX, and will receive all perquisites offered to senior executive
officers of JTAX, in either case pursuant to any plan or program now in effect,
or later established by JTAX.  The
Executive will participate to the extent permissible under the terms and
provisions of such plans or programs, and in accordance with the terms of such
plans and programs.

 

Effective upon the consummation of the Transaction,
the Executive will no longer be eligible to participate (as an active employee)
in any employee benefit plans, officer perquisite programs, or other benefit or
perquisite policies or programs of Cendant and its subsidiaries and affiliates.

 

SECTION V

BUSINESS EXPENSES

 

JTAX will reimburse the Executive for all reasonable
travel and other expenses incurred by the Executive in connection with the
performance of his duties and obligations under this Agreement.  The Executive will comply with such
limitations and reporting requirements with respect to expenses as may be
established by JTAX from time to time and will promptly provide all appropriate
and requested documentation in connection with such expenses.

 

SECTION VI

DISABILITY

 

If the Executive becomes Disabled, as defined below,
during the Period of Employment, the Period of Employment may be terminated at
the option of the Executive upon notice of resignation to JTAX, or at the
option of JTAX upon 30 days’ advance notice of termination to the
Executive.  JTAX’s obligation to make
payments to the Executive under this Agreement will cease as of such date of
termination, except for Base Salary and Incentive Compensation Awards earned
but unpaid as of the date of such termination, and except for payment of a pro
rata portion of his Incentive Compensation Award in respect of the year in
which such Disability occurs (paid at target level).   For purposes of this Agreement, “Disabled” means the Executive’s
inability to perform his duties hereunder as a result of serious physical or

 

 

mental illness or injury for a period of no less than 180 days,
together with a determination by an independent medical authority that the Executive
is currently unable to perform such duties. 
Such medical authority shall be mutually and reasonably agreed upon by
JTAX and the Executive and such opinion shall be binding on JTAX and the
Executive.

 

SECTION VII

DEATH

 

In the event of the death
of the Executive during the Period of Employment, the Period of Employment will
end and JTAX’s obligation to make payments under this Agreement will cease as
of the date of death, except for Base Salary and Incentive Compensation Awards
earned but unpaid through the date of death, and except for payment of a pro
rata portion of his Incentive Compensation Award in respect of the year in
which his death occurs (paid at target level), which will be paid to the
Executive’s surviving spouse, estate or personal representative, as applicable.

 

SECTION VIII

EFFECT OF TERMINATION OF
EMPLOYMENT

 

A.            Without
Cause Termination and Constructive Discharge.  If the Executive’s employment terminates due to either a Without
Cause Termination or a Constructive Discharge, as defined below, JTAX will pay
the Executive (or his surviving spouse, estate or personal representative, as
applicable) upon such Without Cause Termination or Constructive Discharge (i) a
lump sum cash payment equal to the sum of the Executive’s then current Base
Salary plus his then current target Incentive Compensation Award, multiplied by
the Severance Multiplier (as defined below) and (ii) any and all Base Salary
and Incentive Compensation Awards earned but unpaid through the date of such
termination.  In addition, upon such
event, all of the Executive’s outstanding and unvested JTAX stock options and
restricted stock units will become immediately vested.  In addition, in the event that the Executive
elects to continue medical and dental benefits pursuant to COBRA, for the first
12 months of such coverage, the Executive’s cost will be no greater than the
cost applicable to active full time employees of JTAX.

 

B.            Termination
for Cause; Resignation.  If the
Executive’s employment terminates due to a Termination for Cause or a
Resignation, Base Salary and any Incentive Compensation Awards earned but
unpaid as of the date of such

 

 

termination will be paid
to the Executive in a lump sum. Except as provided in this paragraph, JTAX will
have no further obligations to the Executive hereunder.

 

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

 

i.              “Termination
for Cause” means (i) the Executive’s willful failure to substantially perform
his duties as an employee of JTAX or any subsidiary thereof (other than any
such failure resulting from incapacity due to physical or mental illness), (ii)
any act of fraud, misappropriation, embezzlement, material dishonesty or
similar conduct, in each case against JTAX or any subsidiary, (iii) the Executive’s
conviction of a felony or any crime involving moral turpitude (which
conviction, due to the passage of time or otherwise, is not subject to further
appeal), (iv) the Executive’s gross negligence in the performance of his duties
or (v) the Executives makes (or has been found to have made) a false
certification to JTAX pertaining to its financial statements. JTAX will provide
the Executive a written notice which describes the circumstances being relied
on for the termination with respect to this paragraph. The Executive will have
thirty (30) days after receipt of such notice to remedy the situation prior to
the effectiveness of the Termination for Cause, unless JTAX reasonably and in
good faith determines that such situation is incurable.  A Termination for Cause shall not be
effective hereunder unless the Executive is first given an opportunity to
address the Board, with his counsel present if he so elects, upon reasonable
notice in advance of any action taken by the Board.

 

ii.             “Constructive Discharge” means (i)
any material failure of JTAX to fulfill its obligations under this Agreement
(including without limitation any reduction of the Base Salary, as the same may
be increased during the Period of Employment, or other element of
compensation), (ii) a material and adverse change to the Executive’s titles,
positions, duties and responsibilities to JTAX (but specifically excluding the
Executive no longer serving as a member of the Board for any reason or JTAX
failing to re-nominate to election, or re-appoint the Executive, to the Board),
(iii) the relocation of the Executive’s primary business office to a location
more than 50 miles from Parsippany, New Jersey or (iv) JTAX fails to cause this
Agreement to be assumed by any successor to the business of JTAX.  The Executive will provide JTAX a written
notice which describes the circumstances being relied on for the termination
with respect to this Agreement within sixty (60) days after the event giving
rise to the notice.  JTAX will have
sixty (60) days after receipt of such notice to remedy the situation prior to
the termination for Constructive Discharge.

 

 

iii.            “Without
Cause Termination” or “Terminated Without Cause” means termination of the
Executive’s employment by JTAX other than due to death, disability, or
Termination for Cause.

 

iv.            “Resignation”
means a termination of the Executive’s employment by the Executive, other than
in connection with a Constructive Discharge.

 

v.             “Severance
Multiplier” means 200%; provided, however, that Severance Multiplier
means 299% solely in the event that the applicable Without Cause Termination or
Constructive Discharge occurs within one year of a Change in Control (as
defined from time to time in the JTAX 2004 Equity and Incentive Plan).

 

D.            Conditions
to Payment and Acceleration.  All
payments due to the Executive under this Section VIII shall be made as soon as
practicable; provided, however, that such payments, shall be
subject to, and contingent upon, the execution by the Executive (or his
beneficiary or estate) of a release of any and all claims against JTAX and its
affiliates in such reasonable form agreed to by JTAX and the Executive (which
release will also require JTAX to execute a release of claims against the
Executive for any and all claims, but only including claims which JTAX is then
aware of, and specifically excluding claims relating to fraud, criminal
matters, and accounting irregularities). 
The payments due to the Executive under this Section VIII shall be in
lieu of any other severance benefits otherwise payable to the Executive under
any severance plan of JTAX or its affiliates and/or any other agreement or
arrangement.  Nothing herein shall be
construed as limiting the Executive’s entitlement to any other vested accrued
benefits to which he (or his estate if applicable) is then entitled under
JTAX’s (and Cendant’s) applicable employee benefit plans, including without
limitation any disability or death benefits which may become payable.

 

SECTION IX

OTHER DUTIES OF THE
EXECUTIVE

DURING AND AFTER THE PERIOD OF EMPLOYMENT

 

A.            The
Executive will, with reasonable notice during or after the Period of
Employment, furnish information as may be in his possession and fully cooperate
with JTAX and its affiliates as may be requested in connection with any claims
or legal action in which JTAX or any of its affiliates is or may become a
party.  The foregoing shall not
unreasonably interfere with the Executive’s duties to any successor employer.

 

 

B.            The
Executive recognizes and acknowledges that all information pertaining to this
Agreement or to the affairs; business; results of operations; accounting
methods, practices and procedures; members; acquisition candidates; financial
condition; clients; customers or other relationships of JTAX or any of its affiliates
(“Information”) is confidential and is a unique and valuable asset of JTAX or
any of its affiliates.  Access to and
knowledge of certain of the Information is essential to the performance of the
Executive’s duties under this Agreement. 
The Executive will not during the Period of Employment or thereafter,
except to the extent reasonably necessary in performance of his duties under
this Agreement, give to any person, firm, association, corporation, or
governmental agency any Information, except as may be required by law.  The Executive will not make use of the
Information for his own purposes or for the benefit of any person or
organization other than JTAX or any of its affiliates.  The Executive will also use his best efforts
to prevent the disclosure of this Information by others.  All records, memoranda, etc. relating to the
business of JTAX or its affiliates, whether made by the Executive or otherwise
coming into his possession, are confidential and will remain the property of
JTAX or its affiliates.

 

C.            i.              During
the Period of Employment and for the Post Termination Period thereafter
(collectively, the “Restricted Period”), the Executive will not use his status
with JTAX or any of its affiliates to obtain loans, goods or services from
another organization on terms that would not be available to him in the absence
of his relationship to JTAX or any of its affiliates. The Post Termination
Period means a period of two (2) years following the Executive’s termination of
employment if, in connection with such termination, the Executive receives
severance under Section VIII.A. of this Agreement and the Severance Multiplier
equals 299%, and the Post Termination Period means a period of one (1) year
following the Executive’s termination in all other cases, irrespective of the
cause, manner or time of such termination.

 

ii.             During
the Restricted Period, the Executive will not make any statements or perform
any acts intended to or which may have the effect of advancing the interest of
any existing or prospective competitors of JTAX or any of its affiliates or in
any way injuring the interests of JTAX or any of its affiliates.  During the Restricted Period, the Executive,
without prior express written approval by the Board, will not engage in, or
directly or indirectly (whether for compensation or otherwise) own or hold
proprietary interest in, manage, operate, or control, or join or participate in
the ownership, management, operation or control of, or furnish any capital to
or be

 

 

connected in any manner
with, any party which competes in any way or manner with the business of JTAX
or any of its affiliates, as such business or businesses may be conducted from
time to time, either as a general or limited partner, proprietor, common or
preferred shareholder, officer, director, agent, employee, consultant, trustee,
affiliate, or otherwise.  The Executive
acknowledges that JTAX’s and its affiliates’ businesses are conducted
nationally and internationally and agrees that the provisions in the foregoing
sentence will operate throughout the United States and the world.

 

iii.            During
the Restricted Period, the Executive, without express prior written approval
from the Board, will not solicit any then-current clients of JTAX or any of its
affiliates for any existing business of JTAX or any of its affiliates or
discuss with any employee of JTAX or any of its affiliates information or
operation of any business intended to compete with JTAX or any of its
affiliates.

 

iv.            During
the Restricted Period, the Executive will not interfere with the employees or
affairs of JTAX or any of its affiliates or solicit or induce any person who is
an employee of JTAX or any of its affiliates to terminate any relationship such
person may have with JTAX or any of its affiliates, nor will the Executive during
such period directly or indirectly engage, employ or compensate, or cause or
permit any person with which the Executive may be affiliated, to engage, employ
or compensate, any employee of JTAX or any of its affiliates.  The Executive hereby represents and warrants
that the Executive has not entered into any agreement, understanding or
arrangement with any employee of JTAX or any of its affiliates pertaining to
any business in which the Executive has participated or plans to participate,
or to the employment, engagement or compensation of any such employee.

 

v.             For
the purposes of this Agreement, proprietary interest means legal or equitable
ownership, whether through stock holding or otherwise, of an equity interest in
a business, firm or entity or ownership of more than 5% of any class of equity
interest in a publicly-held company and the term “affiliate” will include
without limitation all subsidiaries and licensees of JTAX.

 

D.            The Executive hereby acknowledges that damages at law may
be an insufficient remedy to JTAX if the Executive violates the terms of this
Agreement and that JTAX will be entitled, upon making the requisite showing, to
preliminary and/or permanent injunctive relief in any court of competent
jurisdiction to restrain the breach of or otherwise to specifically enforce any
of the covenants contained in this Section IX without the necessity of showing
any actual damage or that

 

 

monetary damages would not provide an adequate remedy.  Such right to an injunction will be in
addition to, and not in limitation of, any other rights or remedies JTAX may
have.  Without limiting the generality
of the foregoing, neither party will oppose any motion the other party may make
for any expedited discovery or hearing in connection with any alleged breach of
this Section IX.

 

E.             The period of time during which the provisions of this
Section IX will be in effect will be extended by the length of time during
which the Executive is in breach of the terms hereof as determined by any court
of competent jurisdiction on JTAX’s application for injunctive relief.

 

F.             The Executive agrees that the restrictions contained in
this Section IX are an essential element of the compensation the Executive is
granted hereunder and but for the Executive’s agreement to comply with such
restrictions, JTAX would not have entered into this Agreement.

 

SECTION X

INDEMNIFICATION; CENDANT
RELEASE

 

JTAX will indemnify the Executive to the fullest
extent permitted by the laws of the state of JTAX’s incorporation in effect at
that time, or the certificate of incorporation and by-laws of JTAX, whichever
affords the greater protection to the Executive.  If applicable, JTAX will maintain D&O insurance for the
Executive on a basis no less favorable than it maintains for other officers of JTAX.

 

Following the consummation of the Transaction, Cendant
will indemnify the Executive with respect to events occurring prior to the
Transaction, in accordance with Cendant’s current policies relating to
indemnification of former officers.

 

The Executive hereby represents and agrees that, as of
the effective date of the Transaction, all financial and monetary obligations
owing to the Executive from Cendant and its subsidiaries and affiliates
(including without limitation any and all bonus and potential bonus
entitlements under each and every bonus, incentive, retention and similar
compensation schemes sponsored by Cendant and each of its subsidiaries and
affiliates, and under each and every other actual or purported compensation
entitlement pursuant to any agreement or otherwise) have been paid to the
Executive in full, and that the Executive has no further financial claims
against Cendant or its subsidiaries and affiliates (other than accrued benefits
under any tax

 

 

qualified employee
pension plan and other than equity awards to the extent described in this
Agreement).  The Executive agrees that
he has no legal claim or cause of action against Cendant and its subsidiaries
and affiliates, and hereby releases Cendant and its subsidiaries, affiliates,
officers, directors, agents and employee benefit, equity and compensation plans
(and the administrators and fiduciaries of such plans) from and against any
such actual or purported claims and causes of action.  The Executive acknowledges that Cendant entered into this
Agreement in reliance of the accuracy of the foregoing representation.

 

SECTION XI

MITIGATION

 

The Executive will not be required to mitigate the
amount of any payment provided for hereunder by seeking other employment or
otherwise, nor will the amount of any such payment be reduced by any
compensation earned by the Executive as the result of employment by another
employer after the date the Executive’s employment hereunder terminates or by
offset against any amount claimed to be owed by the Executive to JTAX, or
otherwise.

 

SECTION XII

WITHHOLDING TAXES; EXCISE
TAXES

 

The Executive acknowledges and agrees that JTAX may
directly or indirectly withhold from any payments under this Agreement all
federal, state, city or other taxes that will be required pursuant to any law
or governmental regulation.

 

If the Executive
becomes entitled to the severance payments described in Section VIII.A. above,
and if any of the payments or benefits received or to be received by the
Executive with respect to equity or equity-type awards of the Company
(including but not limited to options to acquire common stock of the Company)
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company, any person whose actions result in a Change in
Control or any person affiliated with the Company or such person) (all such
payments and benefits, excluding the Gross-Up Payment (as defined below), being
hereinafter referred to as the “Relevant Payments”) will be subject to the
excise tax (the “Excise Tax”) imposed under section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), the Company shall pay to the
Executive an additional amount (the “Gross-Up Payment”) such that the net
amount retained by the Executive, after

 

 

deduction of any Excise Tax on the Relevant Payments and any federal,
state and local income and employment taxes and Excise Tax upon the Gross-Up
Payment, shall be equal to the Relevant Payments.

 

A.            For
purposes of determining whether any of the Relevant Payments will be subject to
the Excise Tax and the amount of such Excise Tax, (i) all payments or benefits
received or to be received by the Executive in connection with a Change in
Control or the Executive’s termination of employment (whether pursuant to the terms
of this Agreement or any other plan, arrangement or agreement with the Company,
any person whose actions result in a Change in Control or any person affiliated
with the Company or such person) (all such payments and benefits, excluding the
Gross-Up Payment, being hereinafter referred to as the “Total Payments”) shall
be treated as “parachute payments” (within the meaning of section 280G(b)(2) of
the Code) unless, in the opinion of tax counsel (“Tax Counsel”) reasonably
acceptable to the Executive and selected by the accounting firm which was,
immediately prior to the Change in Control, the Company’s independent auditor
(the “Auditor”), such payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of section 280G(b)(4)(A) of
the Code, (ii) all “excess parachute payments” within the meaning of section
280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless, in
the opinion of Tax Counsel, such excess parachute payments (in whole or in
part) represent reasonable compensation for services actually rendered (within
the meaning of section 280G(b)(4)(B) of the Code) in excess of the Base Amount
(within the meaning of section 280G(b)(3) of the Code) allocable to such
reasonable compensation, or are otherwise not subject to the Excise Tax, and
(iii) the value of any noncash benefits or any deferred payment or benefit
shall be determined by the Auditor in accordance with the principles of
sections 280G(d)(3) and (4) of the Code. 
For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income tax at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the Executive’s residence on the
date of termination of his employment, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local taxes.

 

B.            In
the event that the Excise Tax is finally determined to be less than the amount
taken into account hereunder in calculating the Gross-Up Payment, the Executive
shall repay to the Company, within five (5) business days following the time
that the amount of such reduction in the Excise Tax is finally determined, the
portion

 

 

of the Gross-Up Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income and employment taxes imposed on the Gross-Up Payment
being repaid by the Executive), to the extent that such repayment results in a
reduction in the Excise Tax and a dollar-for-dollar reduction in the
Executive’s taxable income and wages for purposes of federal, state and local
income and employment taxes, plus interest on the amount of such repayment at
120% of the rate provided in section 1274(b)(2)(B) of the Code.  In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder in calculating the
Gross-Up Payment (including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment), the Company
shall make an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by the Executive with respect to such
excess) within five (5) business days following the time that the amount of
such excess is finally determined.  The
Executive and the Company shall each reasonably cooperate with the other in
connection with any administrative or judicial proceedings concerning the
existence or amount of liability for Excise Tax with respect to the Total
Payments.

 

SECTION XIII

EFFECT OF PRIOR
AGREEMENTS

 

This Agreement will supersede any prior employment
agreement between the Executive on the one hand, and JTAX on the other hand,
and any such prior employment agreement will be deemed terminated without any
remaining obligations of either party thereunder.

 

SECTION XIV

CONSOLIDATION, MERGER OR
SALE OF ASSETS

 

Nothing in this Agreement will preclude JTAX from
consolidating or merging into or with, or transferring all or substantially all
of its assets to, another corporation which assumes this Agreement and all
obligations and undertakings of JTAX hereunder.  Upon such a consolidation, merger or sale of assets the term
“JTAX” will mean the other corporation and this Agreement will continue in full
force and effect.  In addition to the
obligations imposed by law upon any successor to JTAX will require any
successor (by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of JTAX, by agreement in form
and substance reasonably satisfactory to the Executive, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
JTAX would be required to perform it if no such succession had taken
place.  Failure

 

 

of JTAX to obtain such
agreement prior to the effectiveness of such succession shall be a breach of
this Agreement and shall entitle the Executive to compensation from JTAX in the
same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive’s employment were to terminate in a Without Cause
Termination provided in Section VIII.A. hereof, except that the date on which
any such succession becomes effective shall be deemed the date of the
Executive’s termination of employment.

 

SECTION XV

MODIFICATION; WAIVER

 

This Agreement may not be modified or amended except
in writing signed by the parties.  No
term or condition of this Agreement will be deemed to have been waived except
in writing by the party charged with waiver. 
A waiver will operate only as to the specific term or condition waived
and will not constitute a waiver for the future or act on anything other than
that which is specifically waived.

 

SECTION XVI

GOVERNING LAW

 

This Agreement has been executed and delivered in the
State of New Jersey and its validity, interpretation, performance and
enforcement will be governed by the internal laws of that state.

 

SECTION XVII

ARBITRATION

 

A.            Any
controversy, dispute or claim arising out of or relating to this Agreement or
the breach hereof which cannot be settled by mutual agreement (other than with
respect to the matters covered by Section IX for which JTAX may, but will not
be required to, seek injunctive relief) will be finally settled by binding
arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the applicable state arbitration law) as follows:  Any party who is aggrieved will deliver a
notice to the other party setting forth the specific points in dispute.  Any points remaining in dispute twenty (20)
days after the giving of such notice may be submitted to arbitration in
Parsippany, New Jersey, to the American Arbitration Association, before a
single arbitrator appointed in accordance with the arbitration rules of the
American Arbitration Association, modified only as herein expressly
provided.  After the aforesaid twenty
(20) days, either party, upon ten (10) days notice to the

 

 

other, may so submit the
points in dispute to arbitration.  The
arbitrator may enter a default decision against any party who fails to
participate in the arbitration proceedings.

 

B.            The
decision of the arbitrator on the points in dispute will be final, unappealable
and binding, and judgment on the award may be entered in any court having
jurisdiction thereof.

 

C.            Except
as otherwise provided in this Agreement, the arbitrator will be authorized to
apportion its fees and expenses and the reasonable attorneys’ fees and expenses
of any such party as the arbitrator deems appropriate.  In the absence of any such apportionment,
the fees and expenses of the arbitrator will be borne equally by each party,
and each party will bear the fees and expenses of its own attorney.

 

D.            The
parties agree that this Section XVII has been included to rapidly and
inexpensively resolve any disputes between them with respect to this Agreement,
and that this Section XVII will be grounds for dismissal of any court action
commenced by either party with respect to this Agreement, other than
post-arbitration actions seeking to enforce an arbitration award.  In the event that any court determines that
this arbitration procedure is not binding, or otherwise allows any litigation
regarding a dispute, claim, or controversy covered by this Agreement to
proceed, the parties hereto hereby waive any and all right to a trial by jury
in or with respect to such litigation.

 

E.             The
parties will keep confidential, and will not disclose to any person, except as
may be required by law, the existence of any controversy hereunder, the
referral of any such controversy to arbitration or the status or resolution
thereof.

 

SECTION XVIII

SURVIVAL

 

Sections IX, X, XI, XII, XIV and XVII will continue in
full force in accordance with their respective terms notwithstanding any
termination of the Period of Employment.

 

 

SECTION XIX

SEPARABILITY

 

All provisions of this Agreement are intended to be
severable.  In the event any provision or
restriction contained herein is held to be invalid or unenforceable in any
respect, in whole or in part, such finding will in no way affect the validity
or enforceability of any other provision of this Agreement.  The parties hereto further agree that any
such invalid or unenforceable provision will be deemed modified so that it will
be enforced to the greatest extent permissible under law, and to the extent
that any court of competent jurisdiction determines any restriction herein to
be unreasonable in any respect, such court may limit this Agreement to render
it reasonable in the light of the circumstances in which it was entered into
and specifically enforce this Agreement as limited.

 

IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.

 

	
   

  	
  JACKSON HEWITT TAX SERVICES INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Peter Karpiak

  	
   

  
	
   

  	
  By:

  	
  Peter Karpiak

  
	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CENDANT CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Terry Connelly

  	
   

  
	
   

  	
  By:

  	
  Terry Connelly

  
	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MARK HEIMBOUCH

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Mark HeimbouchExhibit 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 of
June 25, 2004 (the “Effective Date”), by and among Cendant
Operations, Inc., a Delaware corporation (“Cendant Operations”), Cendant
Corporation, 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 Jackson
Hewitt is sometimes referred to herein as a “Party” and collectively, as
the “Parties.”

 

W  I  T  N
E  S  S  E  T  H:

 

WHEREAS, Cendant is the indirect owner of all of the issued and
outstanding 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 determined
that it is desirable to enter into this Agreement, which sets forth the terms
of certain relationships and other agreements among Cendant Operations, Cendant
and 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 so
wholly owned by Cendant and in consideration of the foregoing and the covenants
and agreements set forth herein, the Parties, intending to be legally bound
hereby, agree as follows:

 

ARTICLE I

 

SERVICES

 

Section 1.1                                      Provision
of Services.  Upon the terms and
subject to the conditions set forth in this Agreement, Cendant Operations
agrees to provide to Jackson Hewitt those services described in Exhibit A
attached 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                                      Additional
Services.  From time to time during
the Term (as defined in Section 1.4), Jackson Hewitt may find it desirable
to request, in addition to the Services described in Exhibit A, additional
services to be made available to Jackson Hewitt by Cendant Operations (“Additional
Services”).  In the event that
Jackson Hewitt makes a written request that Cendant Operations provide
Additional Services and Cendant Operations agrees to provide such Additional
Services, the Parties shall negotiate in good faith and execute amendments to
Exhibit A for such Additional Services that shall set forth, among other
things, (a) the time period during which the Additional Services shall be
provided, (b) a description of the Additional Services, and (c)

 

1

 

and the estimated charge for the Additional Services.  Cendant Operations’s obligations with
respect to providing any such Additional Services shall become effective only
upon an amendment to Exhibit A being duly executed and delivered by each
Party.  It is understood that Cendant
Operations has no obligation to provide Additional Services and may reject any
request by Jackson Hewitt for Additional Services for any reason or for no
reason.

 

Section 1.3                                      Obligations
as to Additional Services.  Cendant
Operations agrees to enter into discussions with Jackson Hewitt to provide any
Additional Services that (i) Jackson Hewitt is unable to obtain from a third
party provider, (ii) are directly dependent upon or inextricably intertwined
with the Services and (iii) were inadvertently and unintentionally omitted from
the list of Services; provided, however, that Cendant Operations shall not be
obligated to provide such Additional Services if, following good-faith
negotiation, the Parties are unable to reach agreement on such terms.

 

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

 

Section 1.5                                      Subcontracting
of Services.  Jackson Hewitt
acknowledges that prior to the Effective Date, Cendant Operations may have
subcontracted with unaffiliated third parties to provide services in connection
with all or any portion of the Services to be provided hereunder.  Cendant Operations reserves the right to
subcontract with unaffiliated third parties to provide the Services or to enter
into new subcontract relationships for any Service provided that the level of
service remains consistent with the level of service previously provided to
Jackson Hewitt.

 

Section 1.6                                      Standard
of Service.  Cendant Operations
agrees that in providing (or causing others to provide) the Services under this
Agreement, it shall (and shall cause each affiliate or advisor and, to the
extent practicable, any or other third-party service provider to): (i) conduct
itself in accordance with (A) standards of quality consistent with the
standards applied by Cendant Operations as of the Effective Date with respect
to the specific matters in question, and (B) standards of quality consistent
with those applied by Cendant Operations hereafter with respect to the specific
matters in question in its own business; (ii) comply with all laws, regulations
and orders applicable to the conduct of the activities contemplated hereby in
all material respects; (iii) comply in all material respects with any
applicable standards, procedures, policies, operating guidelines, practices and
instructions 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 imposed
by third-parties in connection with the Services.  Notwithstanding the foregoing, it shall not be deemed to be a
breach of this Agreement if Cendant Operations fails to meet the standards
required under this Section 1.6 because of the failure of Jackson Hewitt
to cooperate with or provide information or services to Cendant Operations as
required under this Agreement.

 

2

 

(a)                                  In
addition to the provisions of Section 1.6, if Jackson Hewitt desires a
higher quality of the Services than Cendant Operations is otherwise obligated
to provide pursuant to Section 1.6 or any of the other provisions of this
Agreement, including Exhibit A, Jackson Hewitt will be entitled to
receive such higher level of quality after giving no less than 30 days’ prior
written notice to Cendant Operations if (i) Jackson Hewitt agrees to pay for
all additional Actual Costs associated with such increased level and (ii) in
the sole judgment of Cendant Operations, such increased level does not impose
an additional burden on Cendant Operations.

 

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

 

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

 

Section 1.8                                      Compensation
and Other Payments. Jackson Hewitt agrees to pay Cendant Operations, in
accordance with Section 1.9, an amount equal to the sum of the following
items (collectively, the “Jackson Hewitt Payables”):

 

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

 

(b)                                 If
applicable, the Actual Cost of any Additional Services provided by Cendant
Operations pursuant to Section 1.2; and

 

(c)                                  If
applicable, incremental increases in the Actual Cost of Services for increased
levels of Services provided by Cendant Operations pursuant to
Section 1.6(a).

 

Section 1.9                                      Billing
and Payment Terms. 

 

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

 

3

 

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

 

(b)                                 In
the event Jackson Hewitt does not pay any sum, or any part thereof, in
accordance with this Section 1.9, Cendant Operations shall, effective 30
days following the delivery of written notice to Jackson Hewitt of such payment
default, have no further obligation pursuant to this Agreement to provide
Services to Jackson Hewitt until such unpaid balance plus all accrued interest
at the applicable Interest Rate shall have been paid; provided that
Cendant Operations shall not be relieved of any of its obligations to provide
Services pursuant to this Agreement if, following the delivery of such written
notice but prior to 30 days following such delivery, Jackson Hewitt delivers
written notice to Cendant Operations written notice setting forth in detail the
reasons that such charges are not due and payable.  If Cendant Operations determines in good faith that such amounts
are still due and payable and Jackson Hewitt has not paid such amounts within
five (5) Business Days of such notice, Cendant Operations may suspend all
Services under this Agreement and the disputed invoices shall be referred to
resolution under Section 11.7 hereunder.

 

(c)                                  Jackson
Hewitt shall promptly notify Cendant Operations in writing of any amounts
billed to it that are in dispute.  Upon
receipt of such notice, Cendant Operations will research the items in question
in a reasonably prompt manner and cooperate to resolve any differences with
Jackson Hewitt.  In the event that the
Parties mutually agree that any amount that was paid by Jackson Hewitt was not
properly owed, Cendant Operations will refund that amount to Jackson Hewitt
within 20 days of the delivery of such notice (or, alternatively, Cendant
Operations may deduct the dollar amount from the next invoice submitted to
Jackson Hewitt).  In the event agreement
is not reached by the Parties within 30 days of delivery of the notice referred
to above, the matter shall be referred to resolution in accordance with Section 11.7.

 

Section 1.10                                Interruption
of Services.  Except as otherwise
provided herein, Cendant Operations will use its commercially reasonable
efforts to provide uninterrupted Services through the Term.  In the event, however, that Cendant
Operations or its respective suppliers or subcontractors are wholly or
partially prevented from providing a Service or Services to Jackson Hewitt or
if a Service or Services are interrupted or suspended, in either case by reason
of any force majeure event set forth in Section 11.1, or Cendant
Operations shall deem it reasonably necessary to suspend delivery of a Service
hereunder for purposes of maintenance, repair or replacement of equipment parts
or structures, Cendant Operations shall not be obligated to deliver such
Service during such periods provided that Cendant Operations: (a) has given,
whenever possible, reasonable written notice of the interruption in accordance
with Section 11.6 within a reasonable period of time, explaining the
reason, purpose and likely duration thereof; and (b) use commercially reasonable
efforts to minimize the duration and impact of the interruption.  If such interruption of Services has a
significant negative impact on Jackson Hewitt’s business and Cendant Operations
cannot readily reinstate the Service involved, Cendant Operations will use its
commercially reasonable efforts to assist Jackson Hewitt in securing
alternative services to minimize such negative impact on Jackson Hewitt.

 

4

 

Section 1.11                                Supervision
and Compensation. Cendant Operations shall select, employ, pay, supervise,
direct and discharge all the personnel providing Services hereunder.  Subject to Section 1.7, Cendant
Operations shall be solely responsible for the payment of all benefits and any
other direct and indirect compensation for Cendant Operations personnel
assigned to perform services under this Agreement, as well as such personnel’s
worker’s compensation insurance, employment taxes, and other employer
liabilities relating to such personnel as required by law.  Cendant Operations shall be an independent
contractor in connection with the performance of Services hereunder and the
employees performing Services in connection herewith shall not be deemed to be
employees of Jackson Hewitt.

 

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

 

ARTICLE II

 

COSTS AND EXPENSES RELATED TO THE INITIAL PUBLIC OFFERING

 

Section 2.1                                      Allocation
of Costs and Expenses.  Cendant
shall pay for all fees, costs and expenses incurred by Jackson Hewitt directly
related to the Initial Public Offering, including, but not limited to, any and
all fees, costs and expenses related to (a) the preparation and negotiation of
this Agreement and of all of the documentation related to the Initial Public
Offering, (b) the preparation and execution or filing of any and all further
documents, agreements, forms, applications, contracts or consents associated
with the Initial Public Offering, (c) Jackson Hewitt’s organizational
documents, (d) the preparation, printing and filing of the IPO S-1, including
all fees and expenses of complying with applicable federal, state or foreign
securities laws and domestic or foreign securities exchange rules and
regulations, together with fees and expenses of counsel retained to effect such
compliance, (e) the preparation, printing and distribution of each of the
prospectuses for the Initial Public Offering, (f) the initial listing of the
Common Stock on the New York Stock Exchange and (g) the preparation, prior to
the Closing Date, of the documentation related to implementing Jackson Hewitt’s
employee benefit plans, retirement plans and equity-based plans as a result of
the Initial Public Offering. 
Notwithstanding the foregoing, Cendant shall not be responsible for the
payment of any costs and expenses (including, without limitation, legal fees)
incurred by Jackson Hewitt in connection with any exercise by the underwriters
in the Initial Public Offering of their option to purchase additional shares of
Common 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 Barbara
Bank & Trust.

 

5

 

ARTICLE III

 

MUTUAL OBLIGATIONS; COVENANTS

 

Section 3.1                                      Legal
Actions.

 

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

 

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

 

(c)                        This Section 3.1 shall not
apply to the extent provided otherwise by the provisions of Article IV or
Article VIII.

 

Section 3.2                                      Providing
Periodic Reports.  Cendant
Operations will provide, upon reasonable written notice, such periodic reports
with respect to the Services it provides hereunder as are reasonably requested
by Jackson Hewitt, including such reports as are specified in Exhibit A.

 

Section 3.3                                      Public
Announcements.  Neither Cendant Operations
nor Jackson Hewitt shall issue a press release or other public announcement
making reference to the other Party, the other Party’s products or the Services
provided hereunder, other than in the Registration Statement or Prospectus or
otherwise required by law, unless such Party has received the written approval
of the other Party with respect to the proposed text of such press release or
announcement, which approval shall not be unreasonably withheld or delayed, and
neither Party shall make or publish any statement that is, or may be reasonably
considered to be, disparaging of the other Party or its affiliates, directors,
employees, products or services.

 

Section 3.4                                      Means
of Providing Services.  With respect
to any particular Service(s) to be provided hereunder, Cendant Operations
shall, unless otherwise specified in Exhibit A, determine the means and
resources used to provide such Service(s) in accordance with its prudent
business judgment; provided that Cendant Operations shall not take any action
with respect to its provision of such Service(s) that materially increase the
cost to Jackson Hewitt, except as required to provide such Services, or that
significantly disrupt Jackson Hewitt operations or materially increase the

 

6

 

scope of its responsibility under this Agreement.

 

Section 3.5                                      Further
Assurances.  Each of Cendant
Operations and Jackson Hewitt shall execute and deliver such further documents
and shall take such other actions as each of them may reasonably request of the
other as may be necessary to effect or enable the provision of the Services
contemplated hereunder.

 

ARTICLE IV

 

TAX MATTERS

 

Section 4.1                                      Preparation
and Filing of Returns; Payment of Taxes. 
Jackson Hewitt shall prepare and timely file (or cause to be prepared
and timely filed) all Tax Returns that are required to be filed by Jackson
Hewitt or any of its Subsidiaries for all taxable years.  Jackson Hewitt shall timely pay (or cause to
be 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 this
Section 4.1.

 

Section 4.2                                      Indemnification.

 

(a)                        Cendant shall indemnify and
hold Jackson Hewitt and each of its Subsidiaries harmless from and against:
(i)  all Taxes imposed on Jackson Hewitt
or any of its Subsidiaries under section 1.1502-6 of the Treasury
Regulations (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 a
Cendant Income Tax Group, and (ii) all Losses relating or attributable to a
breach of any covenant or obligation of Cendant or any of its Subsidiaries
contained in this Article IV.

 

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

 

Section 4.3                                      Amendments
of Tax Returns; Refunds and Credits. Jackson Hewitt shall be entitled to
amend any Tax Return required to be filed by Jackson Hewitt or any of its
Subsidiaries pursuant to Section 4.1 of this Agreement.  Jackson Hewitt shall be entitled to all
refunds or credits relating to any Tax Return required to be filed by Jackson
Hewitt or any of its Subsidiaries pursuant to Section 4.1 of this
Agreement.

 

Section 4.4                                      Notice;
Control of Contests. Each party shall promptly notify the other in writing
of any notice of deficiency, proposed adjustment, adjustment, assessment,
audit, examination or other administrative or court proceeding, suit, dispute
or other Tax claim (“Tax Claim”) that may reasonably be likely to result
in 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 such
notice shall not relieve the first party from its obligations under this
Article IV in whole or in part except to the extent the other party is
materially and adversely prejudiced as a consequence of such failure.  Jackson Hewitt shall control all contests
relating to Tax Returns required to be filed by Jackson Hewitt pursuant to
Section 4.1 hereof or Taxes for which Jackson Hewitt is required to indemnify
Cendant pursuant to Section 4.2(b) hereof.

 

Section 4.5                                      Cooperation.
Each Party and its Subsidiaries shall provide such cooperation and information
as the other party shall reasonably request, on a timely basis, in connection
with the preparation or filing of any Tax Return or claim for Tax Refund or in
conducting any Tax audit, Tax examination, or Tax dispute.  Notwithstanding anything to the contrary
contained in this Agreement or otherwise, neither Jackson Hewitt nor any of its
Subsidiaries shall have the right to receive or obtain any information relating
to Taxes of Cendant, any of its Affiliates or any of its predecessors, in each
case, other than information relating solely to Jackson Hewitt or any of its
Subsidiaries.

 

Section 4.6                                      Tax
Sharing Agreements.  As of the
Closing Date, all Tax Sharing Agreements (including the Cendant Tax Sharing
Agreement) between Jackson Hewitt and/or any of its Subsidiaries, on the one
hand, and Cendant and/or any of its Subsidiaries other than Jackson Hewitt
and/or any of its Subsidiaries, on the other hand, shall be terminated as of
the Closing Date and, after the Closing Date, none of such parties to any such
Tax Sharing Agreement shall have any further rights or obligations under any
such agreement.  Notwithstanding anything
to the contrary contained this Agreement, this Section 4.6 shall not
operate to terminate any Tax Sharing Agreement (including the Cendant Tax
Sharing Agreement) between or as its relates to Cendant, on the one hand, and
any of its Subsidiaries (other than Jackson Hewitt and/or its Subsidiaries), on
the other hand.

 

Section 4.7                                      Tax
Treatment.  The parties hereto agree
that any payment made pursuant to this Article IV shall be treated as
either (i) in the case of any payment made by Cendant to Jackson Hewitt, a
capital contribution by Cendant to Jackson Hewitt made immediately prior to the
Closing Date and (ii) in the case of any payment made by Jackson Hewitt to
Cendant, a distribution by Jackson Hewitt to Cendant made immediately prior to
the Closing Date.

 

Section 4.8                                      Survival;
Conflicts.  Notwithstanding any
other provision of this Agreement to the contrary, all indemnities, covenants
and obligations of the parties pursuant to this Article IV shall survive
indefinitely.  In the event of a conflict
between this Article IV of this Agreement and the Cendant Tax Sharing
Agreement or any other provision of this Agreement, this Article IV shall
govern and control.

 

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

 

8

 

Service (including with respect to amounts paid by Cendant to third
parties), including Additional Services, received by Jackson Hewitt or any of
its Subsidiaries from Cendant or any of its Affiliates pursuant to the terms of
this Agreement (collectively, “Service  Taxes”).  If required under applicable law (or, in the
case 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 be
paid pursuant to the terms of this Agreement, such Service Taxes to Cendant.

 

Section 4.10                                Limitation
of Damages.  Notwithstanding
anything to the contrary contained in this Agreement, Cendant shall not be
liable for any claim in respect of Services relating to Taxes or Tax Returns of
Jackson Hewitt or any of its Subsidiaries (including those Services provided by
Cendant to Jackson Hewitt set forth in Exhibit A-1 and Exhibit A-10), except to
the extent that such claim arises from the willful misconduct or gross
negligence of Cendant.

 

ARTICLE V

 

ACCESS TO INFORMATION, PERSONNEL AND HISTORICAL RECORDS

 

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

 

Section 5.2                                      Access
to Information.  Subject to the
confidentiality provisions set forth in Article VI below and any other
restrictions contained in this Agreement:

 

(a)                        Cendant and Jackson Hewitt
shall provide, upon written request, any information within such Party’s
possession that the requesting Party reasonably needs (i) to comply with
requirements 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 such
requesting Party’s obligations under this Agreement or any other agreement
executed by Cendant and Jackson Hewitt in connection with this Agreement or the
Initial Public Offering.

 

(b)                       Jackson Hewitt shall provide to
Cendant, at no expense to Cendant, all financial and other data and information
that Cendant determines is necessary and advisable in the preparation of
Cendant’s financial statements and any reports or filings with any governmental
agency.

 

9

 

Section 5.3                                      Litigation
Cooperation.  The Parties agree to
the extent reasonably necessary to cooperate and consult in the defense and
settlement of any threatened or filed third-party action, claim or dispute
which 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 Hewitt
will use their reasonable best efforts to provide assistance to the other Party
with respect to any Third Party Action, and to make available to the other
Party directors, officers, other employees and agents of such assisting Party
as witnesses in legal, administrative or other proceedings.  The Party providing information, consulting
or witness services under this Section 5.3 shall be entitled to
reimbursement from the other Party for reasonable and documented expenses.  This Section 5.3 shall not apply to the
extent provided otherwise by the provisions of Article IV or
Article VIII.

 

Section 5.4                                      Attorney
Client Privilege.  Neither Cendant
nor Jackson Hewitt will be required to provide any information pursuant to this
Agreement if the provision of such information would serve as a waiver of any
Privilege afforded such information.

 

ARTICLE VI

 

CONFIDENTIALITY

 

Section 6.1                                      Confidential
Information.  For purposes of this
Agreement, “Confidential Information” means any information disclosed by a
Party (the “Providing Party”) to the other Party (the “Receiving
Party”) pursuant to this Agreement relating to the business, finances,
technology or operations of the Providing Party.  The Receiving Party will (a) treat as confidential all
Confidential Information of the Providing Party, (b) not use such Confidential
Information except to exercise its rights and perform its obligations under
this Agreement, and (c) not disclose such Confidential Information to any third
party.  Each Party will use at least the
same degree of care (and not less than a reasonable degree of care) it uses to
prevent the disclosure of its own confidential information of like importance,
to prevent the disclosure of the Providing Party’s Confidential Information
including the execution of confidentiality agreements with its employees and
consultants having access to such Confidential Information.  Each Receiving Party will promptly notify
the Providing Party of any actual or suspected misuse or unauthorized disclosure
of the Providing Party’s Confidential Information.

 

Section 6.2                                      Exceptions.  Confidential Information excludes
information that: (a) was in the public domain at the time it was disclosed or
has 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 of
disclosure, and was acquired by such Receiving Party after the Effective Date
as demonstrated by the Receiving Party; (c) was independently developed by the
Receiving Party without any use of the Confidential Information; or (d) becomes
known to the Receiving Party, without restriction, from a source other than the
Providing Party; provided that such information was provided (i)

 

10

 

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

 

Section 6.3                                      Additional
Responsibilities.  Each Party will
inform its employees, agents and consultants having access to Confidential
Information of the other Party of the confidentiality provisions hereof, and
will diligently enforce such provisions, and will be responsible for actions of
such employees, agents and consultants in this respect

 

ARTICLE VII

 

DISCLAIMER AND LIMITATION OF LIABILITY

 

Section 7.1                                      Disclaimer
of Warranties.  CENDANT OPERATIONS
MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO THE SERVICES TO BE PROVIDED UNDER THIS AGREEMENT.

 

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

 

11

 

ARTICLE VIII

 

BUSINESS AND REGISTRATION STATEMENT
INDEMNIFICATION

 

Section 8.1                                      General
Cross Indemnification.

 

(a)                        Cendant agrees to indemnify and
hold harmless Jackson Hewitt and each of the officers, directors, employees and
agents of Jackson Hewitt against any and all costs and expenses arising out of
third 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 amounts
paid in settlement (collectively, “Losses”), in each case, based on,
arising out of, resulting from or in connection with any claim, action, cause
of action, suit, proceeding or investigation, whether civil, criminal,
administrative, investigative or other (collectively, “Actions”), based
on, arising out of, pertaining to or in connection with (i) any breach by
Cendant of this Agreement or any other agreement between Cendant and Jackson
Hewitt executed in connection with this Agreement and (ii) the operation or
conduct of the business of Cendant, whether before, on or after the date
hereof, other than the business of Jackson Hewitt, its Subsidiaries or its
predecessors.

 

(b)                       Jackson Hewitt agrees to
indemnify and hold the Cendant Group and their officers, directors, employees
and 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 this
Agreement or any other agreement between Cendant and Jackson Hewitt executed in
connection with this Agreement and the Initial Public Offering, (ii) the
ownership or the operation of the assets or properties, and the operation or
conduct of the business of, including contracts entered into and any activities
engaged in by, Jackson Hewitt, its Subsidiaries and its franchisees, whether
before, on or after the date hereof, including with respect to any pending
litigation 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 any
other agreement between the Cendant Group and Jackson Hewitt executed in
connection with this Agreement and the Initial Public Offering, whether in the
past or future and (iv) any guaranty, keepwell or financial condition
maintenance agreement of or by the Cendant Group provided to any Person with
respect to any actual or contingent obligation of Jackson Hewitt or any of its
Subsidiaries.

 

(c)                        The indemnity agreement
contained in Sections 8.1(a) and (b) shall be applicable whether or not any
Action 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                                      Registration
Statement Indemnification.

 

(a)                        Jackson Hewitt agrees to
indemnify and hold harmless Cendant and its officers, directors, employees and
agents (collectively, the “Registration  Indemnitees”) from and
against any and all Losses arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Offering Document,
or arising out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements

 

12

 

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

 

(b)                       Cendant agrees to indemnify and
hold harmless Jackson Hewitt and its officers, directors, employees and agents,
to the same extent as the foregoing indemnity from Jackson Hewitt to each
Registration Indemnitee, but only with respect to (i) information relating to
Cendant (other than the Jackson Hewitt business) furnished in writing to
Jackson Hewitt by Cendant relating to information specifically about Cendant
(other than the Jackson Hewitt business) expressly for use in any Offering
Document.  For purposes of this
Section 8.2(b), any information relating to any underwriter that is
contained in an Offering Document shall not be deemed to be information
relating to a Registration Indemnitee. 
If any Action shall be brought against Jackson Hewitt, any of its
directors, officers, employees or agents, based on any Offering Document and in
respect of which indemnity may be sought against a Registration Indemnitee
pursuant to this paragraph (b), such Registration Indemnitee shall have the
rights and duties given to Jackson Hewitt by Section 8.4 hereof (except
that if Jackson Hewitt shall have assumed the defense thereof such Registration
Indemnitee shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Registration Indemnitee’s expense), and Jackson
Hewitt, its officers, directors, employees and agents shall have the rights and
duties given to such Registration Indemnitee by Section 8.4 hereof.

 

Section 8.3                                      Contribution.

 

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

 

13

 

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

 

Section 8.4                                      Procedure.  If any Action shall be brought against a
Registration Indemnitee or any other person entitled to indemnification
pursuant to this Article VIII (collectively with the Registration
Indemnitees, the “Indemnitees”) in respect of which indemnity may be sought
against Jackson Hewitt, such Indemnitee shall promptly notify Jackson Hewitt,
and Jackson Hewitt shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses.  Such Indemnitee shall have the right to employ separate counsel
in any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such person unless (i) Jackson Hewitt has agreed in writing to pay such fees
and expenses, (ii) Jackson Hewitt has failed to assume the defense and employ
counsel, or (iii) the named parties to an Action (including any impleaded
parties) include both an Indemnitee and Jackson Hewitt and such Indemnitee
shall have been advised by its counsel that representation of such indemnified
party and Jackson Hewitt by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case Jackson Hewitt shall
not have the right to assume the defense of such Action on behalf of such
Indemnitee).  It is understood, however,
that Jackson Hewitt shall, in connection with any one such Action or separate
but substantially similar or related Actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of only one separate firm of attorneys (in
addition to any local counsel) at any time for all such indemnified persons not
having actual or potential differing interests among themselves, and that all
such fees and expenses shall be reimbursed as they are incurred.  Jackson Hewitt shall not be liable for any
settlement of any such Action effected without its written consent, but if
settled with such written consent, or if there be a final judgment for the
plaintiff in any such Action, Jackson Hewitt agrees to indemnify and hold
harmless 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                                      Other
Matters.

 

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

 

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

 

14

 

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

 

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

 

ARTICLE IX

 

OTHER PROVISIONS

 

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

 

Section 9.2                                      Inspection
Rights.  During the Term and for 60
days thereafter, Cendant Operations shall, upon 20 days’ prior written notice
from Jackson Hewitt, permit Jackson Hewitt or its authorized representatives to
inspect and audit Cendant Operations records relating to the Services during
regular business hours; provided that Jackson Hewitt shall comply with Cendant
Operations reasonable security and safety procedures as such procedures are
communicated to Jackson Hewitt and that any expenses (including relating to
copying) in connection the inspection or audit shall be the sole obligation of
Jackson Hewitt.

 

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

 

15

 

ARTICLE X

 

TERMINATION

 

Section 10.1                                Termination.

 

(a)                        Any Service provided hereunder
may be terminated (x) by mutual written agreement of the Parties, (y) as set
forth in Exhibit A or (z) by either Party upon written notice to the other
Party if:

 

(i)                                     the other Party
fails to adequately perform in any material respect any of its obligations
under this Agreement or otherwise breaches a material obligation under this
Agreement (the “Defaulting Party”) and such failure to perform or breach
of an obligation is not cured within 30 days of the date on which written
notice is received by the Defaulting Party setting forth in reasonable detail
the manner in which the Defaulting Party failed to perform its obligations
hereunder; or

 

(ii)                                  the other Party makes
a general assignment for the benefit of creditors, becomes insolvent, a
receiver is appointed, or a court approves reorganization or arrangement
proceedings.

 

(b)                       Any Service or Services provided
hereunder may be terminated by Cendant Operations upon written notice to
Jackson Hewitt if performance of any such Service or Services has been rendered
impossible or impracticable by reason of the occurrence of any of the events
described in Section 11.1.

 

Section 10.2                                Termination
Notices.  Any termination notice
delivered 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                                Consequences
of Termination.  In the event any
Service is terminated for any reason (other than the expiration of the Term):

 

(a)                        Upon request, each Party shall
return to the other Party all tangible personal property, books and records
owned by the other Party in their possession (including all Confidential
Information) as of the termination date; and

 

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

 

16

 

Section 10.4                                Survival.  Expiration or termination of all or a
portion of the Services for any reason shall not terminate the other
obligations of the Parties hereunder, which shall survive any such termination.  Subject to the foregoing, expiration or
termination of the Services for any reason shall not terminate either Party’s
obligations and rights arising out of any willful misconduct or gross
negligence of the other Party occurring prior to such termination or
expiration, including the obligation to pay any money owed hereunder up to or
as a result of the termination of such Services.

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.1                                Force
Majeure.  Neither Party shall be
responsible for the delay in the performance of any obligation hereunder due to
labor disturbances, accidents, fires, storms, floods, earthquake, explosion,
wars, acts of terrorism, riots, rebellions, insurrections, blockages, strike or
labor disruption acts of governments, governmental requirements and
regulations, restrictions imposed by law or any other similar conditions,
beyond the reasonable control and without the fault or negligence of such
Party, and the time for performance by such Party shall be extended by the
period of such delay.  Notwithstanding
the foregoing, in no event shall Jackson Hewitt be relieved of its payment
obligations to Cendant Operations for Services delivered.

 

Section 11.2                                Assignment.  Except as otherwise provided in this
Agreement, neither this Agreement nor any of the rights, interests or
obligations of any Party hereto under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by either of the Parties
without the prior written consent of the other Party; provided, however,
that Cendant may assign any of the foregoing to one or more of its
Subsidiaries.  Any assignment in
violation of the preceding sentence shall be void.  Subject to the preceding two sentences, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the Parties and
their respective successors and assigns. 
Other than the indemnitees under Articles IV and VIII, nothing in this
Agreement shall be construed to grant any person or entity not a Party any
rights or powers whatsoever, and no person or entity shall be a third party
beneficiary of this Agreement.  Nothing
in this Section 11.2 affects the ability of either Party to terminate any
of the Services in accordance with the provisions of this Agreement.

 

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

 

Section 11.4                                Governing
Law and Submission to Jurisdiction. 
This Agreement shall be governed by, enforced under and construed in
accordance with the

 

17

 

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

 

Section 11.5                                Entire
Agreement.  This Agreement and the
Exhibits referred to in this Agreement, which Exhibits as such Exhibits may be
amended from time to time, are incorporated and made a part of this Agreement
by reference, constitute the entire agreement between Cendant Operations,
Cendant and Jackson Hewitt relating to the Services and obligations to be
provided 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 and
shall be deemed given if delivered personally, by facsimile (that is confirmed)
or sent by overnight courier (providing proof of delivery) to the Parties at
the following addresses (or at such other address for a Party as shall be
specified 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 deemed
received on the date of receipt by the recipient thereof if received prior to
5:00 p.m., New York City time, and such day is a Business Day in the place of
receipt.  Otherwise, any such notice,
request or communication shall be deemed not to have been received until the
next succeeding Business Day in the place of receipt.

 

Section 11.7                                Negotiation
and Mediation.

 

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

 

(b)                       Mediation.  Any Dispute not resolved pursuant to
Section 11.7(a) hereof shall, at the request (the “Mediation Request”)
of either Party (the “Disputing Party”), be submitted to mediation in
accordance with the then-prevailing Commercial Mediation Rules of the American
Arbitration Association, as modified herein (the “Rules”).  The mediation shall be held in New York, New
York.  The Parties shall have twenty
(20) days from receipt by a party of a Mediation Request to agree on a
mediator.  If no mediator has been
agreed upon by the Parties within twenty (20) days of receipt by a Disputing
Party (or Parties) of a Mediation Request, then any Party may request (on
written notice to the other Party), that the American Arbitration Association
appoint a mediator in accordance with the Rules.  All mediation pursuant to this Section 11.7(b) shall be
confidential and shall be treated as compromise and settlement negotiations,
and no oral or documentary representations made by the Parties during such
mediation shall be admissible for any purpose in any subsequent
proceedings.  Neither Party shall
disclose or permit the disclosure of any information about the evidence adduced
or the documents produced by the other Party in the mediation proceedings or
about the existence, contents or results of the mediation award without the
prior written consent of such other Party except in the course of a judicial or
regulatory proceeding or as may be required by law, rule or regulation or
requested by a governmental authority or securities exchange.  Before making any disclosure permitted by
the preceding sentence, the Party intending to make such disclosure shall give
the other Party a reasonable

 

19

 

opportunity to protect its interests. 
If the Dispute has not been resolved within sixty (60) days of the
appointment of a Mediator, or within ninety (90) days of receipt by a Disputing
Party 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 any
Party may file an action on the Dispute in any court having jurisdiction in
accordance with Section 11.4 herein.

 

Section 11.8                                Conflicting
Provisions.  In the event any
provision of Exhibit A conflicts with the provisions of this Agreement, the
provisions of this Agreement shall be controlling.

 

Section 11.9                                Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby are not affected in any
manner 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 good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in a mutually acceptable manner in order that
the transactions be consummated as originally contemplated to the fullest
extent possible.

 

Section 11.10                          Interpretation.

 

(a)                        When a reference is made in
this Agreement to an Article, Section or Exhibit, such reference shall be
to an Article or Section of, or an Exhibit to, this Agreement unless
otherwise indicated.  Whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be
deemed 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 this
Agreement as a whole and not to any particular provision of this
Agreement.  All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined
therein.  The definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter genders
of such term.  Any agreement, instrument
or statute defined or referred to herein or in any agreement or instrument that
is referred to herein means such agreement, instrument or statute as from time
to time amended, modified or supplemented, including (in the case of agreements
or instruments) by waiver or consent and (in the case of statutes) by
succession of comparable successor statutes and references to all attachments
thereto and instruments incorporated therein.

 

(b)                       The Parties have participated
jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any
provisions of this Agreement.

 

20

 

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

 

Section 11.12                          Further
Cooperation.  Each Party agrees to
cooperate with the other, at any other Party’s request, to execute any and all
documents or instruments, or to obtain any consents, in order to assign,
transfer, perfect, record, maintain, enforce or otherwise carry out the intent
of the terms of this Agreement.

 

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

 

Section 11.14                          Duly
Authorized Signatories.  Each Party
represents and warrants that its signatory whose signature appears below has
been and is on the date of this Agreement duly authorized by all necessary
corporate or other appropriate action to execute this Agreement.

 

Section 11.15                          Waiver
of Trial By Jury.  TO THE EXTENT
PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO IRREVOCABLE WAIVES ALL RIGHT OF
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER.

 

Section 11.16                          Descriptive
Headings.  The descriptive headings
of the several articles and sections of this Agreement are inserted for
reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 11.17                          No
Third Party Beneficiaries.  Other
than the indemnitees under Articles IV and VIII, nothing in this Agreement
shall convey any rights upon any person or entity, which is not a party or a
permitted assignee of a party to this Agreement.

 

Section 11.18                          Binding
Nature of Agreement.  This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto or their successors in interest, except as expressly otherwise
provided herein.

 

Section 11.19                          Certain
Definitions.  For purposes of this
Agreement:

 

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

 

21

 

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

 

(b)                       “Actions” has the meaning
set 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 or
more intermediaries, controls, is controlled by, or is under common control
with, such first person, where “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of voting securities, by
contract, as trustee or executor, or otherwise.

 

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

 

(f)                          “Business Day” or “business
day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in New York City are authorized or
obligated by law or executive order to close.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(y)                       “IRS” means the Internal
Revenue Service.

 

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

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(ss)                  “Subsidiary” or “subsidiary”
of shall include all corporations, partnerships, joint ventures, limited
liability companies, associations and other entities (a) in which Cendant
Operations, Jackson Hewitt or Cendant, as applicable, owns (directly or
indirectly) 50% or more of the outstanding voting stock, voting power,
partnership interests or similar ownership interests, (b) of which Cendant
Operations, Jackson Hewitt or Cendant, as applicable, otherwise directly or
indirectly controls or directs the policies or operations and (c) which would
be considered subsidiaries of Cendant Operations, Jackson Hewitt or Cendant, as
applicable, within the meaning of Regulation S-K or Regulation S-X of the
General 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 or
added minimum, add valorem, transfer or excise tax, or any other tax, custom,
duty, governmental fee or other like assessment or charge or any kind
whatsoever, together with any interest or penalty or addition thereto, whether
disputed or not, imposed by any governmental entity.

 

(uu)                “Tax Claim” has the meaning set
forth 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 for
refund, amended return or declaration of estimated Tax.

 

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

 

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

 

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

 

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

 

25

 

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed 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

 

EXHIBIT
A

 

 

Exhibit
A-1

 

Tax Administration

 

Parties Involved:

 

Cendant Operations, Inc. (CD)

Jackson Hewitt Tax Service Inc. (JH)

 

Services and Term:

 

•                  CD shall provide
Federal, State and local income tax preparation services to JH for purposes of
preparing the 2003 tax return and the stub period tax return from
January 1, 2004 to the date of the planned initial public offering of
JH.  CD shall provide sales and use tax
report filing for JH through 6/30/05.

 

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

 

•                  CD shall prepare
FAS 109 tax calculations for preparation of JH quarterly and annual financial
statements through 6/30/05.

 

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

 

•                  CD cannot
terminate 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 Services
provided to JH.

 

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

 

Fees and Payment Terms:

 

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

 

Service Level Standards:

 

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

 

1

 

Exhibit
A-2

 

Human Resources

 

Parties Involved:

 

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

 

Services:

 

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

 

(a)                                  Employee Welfare
Benefits:

 

(i)                                     Cendant will
provide to active JH employees and JH COBRA participants administrative
services for those benefits described below in this paragraph.  JH will adopt and maintain new employee
benefit plans with the same vendors currently used by Cendant.  Cendant will continue to provide all
administrative services for these new JH plans through the remainder of
2004.  The summary plan description for
the Cendant plans will remain in place for the new JH medical, dental and
vision plans, except that JH will distribute to all participants an SPD
supplement explaining any differences between the Cendant plans and the new JH
replacement plans, and further explaining that JH is the sponsor of the new JH
replacement plans.  JH will distribute
new summary plan descriptions for all other plans.  The benefits subject to this paragraph are medical, dental and
vision benefits, and accidental death & dismemberment, group term life
insurance, short term disability and long term disability benefits.

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

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

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

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

 

1

 

consulting services assisting JH in identifying and selecting
replacement coverage.

 

(b)                                 Retirement Plans:

 

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

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

(iii)                               Cendant will work with
Merrill Lynch and JH to develop and acceptable method to transfer existing loan
balances to new JH 401(k) plan, subject to the terms of the applicable plans
and applicable law.

 

(c)                                  ESPP

 

(i)                                     Cendant will
provide consulting assistance to JH in establishing an administration system
for the Employee Stock Purchase Plan adopted by JH.

 

(d)                                 HRTS/Payroll

 

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

 

(e)                                  Compensation:

 

(i)                                     Cendant will
provide consulting assistance to JH in establishing an administration system
for the JH 2004 Equity and Incentive Plan.

 

(f)                                    Gym Access:

 

(i)                                     Cendant will
provide to all JH employees (current and new) continued access to the company
gym at 1 Campus only.  Employees
utilizing the company gym must use the employee entrance at 1 Campus, located
on the first floor.

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

 

Cendant may also provide to JH additional services to be reasonably
agreed upon by the parties on an as-needed basis and subject to the mutual
agreement of fees to be

 

2

 

charged for such services.  Such
services may include administrative fees based on ongoing support from the
Cendant Benefits Team.

 

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

 

Term:

 

(i)                                     Cendant Enterprise
HR will be required to perform the services through 12/31/04, except as noted
above.

 

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

 

Fees and Payment Terms: 

 

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

(ii)                                  Any cost for creating
data file to new payroll/HRTS vendor, as stated in current cost structure with
Accenture.

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

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

 

Service Level Standards:

 

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

 

3

 

Exhibit
A-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 annual
franchisee convention and annual Preferred Client Group event.  The scope of support services to be provided
by CD includes financial tracking of budgeted and actual event expenses,
operational and logistics management of the events and production of the event
programs. Specific support to be provided for each event will be detailed in a
scope of support and estimated time summary document.

 

This support will require a continued collaboration with JH’s Chief
Executive Officer, his senior leadership team and staff to develop, plan and
produce the events requested.  The
process involves twelve months of integration with typically the most intense
time is spent beginning six months prior to the actual event.

 

Fees and Payment Terms:

 

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

 

The direct costs of the events planned and managed by CD are the
responsibility of JH. CD Event Marketing senior management will negotiate the
terms and conditions of necessary agreements for the events and an authorized
officer 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 of
this agreement for events to occur during the 2004 and 2005 event years are the
responsibility of JH.  Any liabilities
under such agreements will be the responsibility of JH.

 

CD will audit invoices as received and indicate approval that services
were provided and/or merchandise was received and then will forward to JH for
payment. CD expects that JH will process these invoices within the payment
terms reflected on the invoice to maintain credit worthiness with vendors
utilized to plan the events.

 

1

 

Term:

 

These services will be provided for the 2004 and 2005 event years. To
the extent that services are requested for event year 2006, notification is
required by April 1, 2005 and the fee and payment terms defined above
would be applied.

 

Cancellation of Services:

 

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

 

Service Level Standards:

 

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

 

2

 

Exhibit
A-4

 

Financial Systems Management

 

Parties Involved:

 

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

Cendant Operations, Inc. (“Cendant”)

 

Services:

 

Oracle Application Processing to include:

 

•                  Establish new
flex field value or account code combination within 24 hours of flex field
being approved value or account code combination (to the extent Cendant allows
a representative from each business unit to handle the setup of account code
combinations, Jackson Hewitt would be granted the same privileges)

•                  Maintain current
reporting environment

•                  Opening and
Closing of Periods

•                  Confirm
Interfaces processed without exceptions

 

Hyperion Application Processing to include:

 

•                  Maintain chart
of accounts; Normal monthly maintenance requests

•                  Maintain current
reporting environment

•                  Modification of
rollup structure

 

GEAC Application Processing to include:

 

•                  Maintain chart
of accounts

•                  Maintain current
reporting environment

 

Service Level
Requirements:

 

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

 

Fees and Payment Terms:

 

Jackson Hewitt will pay Cendant a fee based on a 5% portion of the
overall 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 in
the monthly service charge.  However, if
the number of man-hours involved exceeds 40 hours, then JH would be required to
pay 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 with
the Effective Date.

 

Early Termination
Rights:

 

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

 

2

 

Exhibit
A-5

 

Treasury Services

 

Parties Involved:

 

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

 

Services:

 

CD will provide to JH general treasury functions including, but not
limited to:

 

•                  Consolidation of
cash

•                  Investing of
excess cash

•                  Execution of
wire transfer requests

•                  Completion of
all requisite bank documentation

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

•                  Receipt and
review of all bank cash management charges

•                  Access to
on-line banking software (either through software installed on JH desktop
computers or via Internet connection)

•                  Receipt of
periodic files for completion of general ledger entries

•                  Generally
related matters in connection therewith.

 

CD may also provide to the JH services other than the services set
forth in the immediately foregoing paragraph of this Exhibit A-5 on an
as-needed basis and subject to the mutual agreement of fees to be charged for
such services.  Such services may
include counsel with regard to bank funding arrangements, procurement of a
revolving line of credit, access to the capital markets and implementation of
derivative 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 JH
has a revolving line of credit with provision for obtaining such obligations.

 

CD will provide support and guidance to JH for purposes of setting up
its Treasury functions including selecting the bank partner, setting up wire
transfer software, handling bank documentation, etc. in order to meet the
12/31/04 transition deadline at no additional cost to JH.

 

1

 

Term:

 

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

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

•                  CD cannot
terminate 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 provided
to JH.

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

 

Fees and Payment Terms:

 

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

 

Service Standards:

 

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

 

Special Requirements:

 

•                  JH will
designate counsel to support the completion of bank documentation by the
transaction date.  To the extent JH does
not contract with CD (Legal) for such Services, JH will provide signatures for
the completion of signature cards, incumbency certificates and treasurer
certificates as required by the bank documentation.

•                  JH distribution
accounts must be on “Positive Pay” or have a similar mechanism to prevent
external fraud.

•                  CD, in its sole
discretion, has the right to select institutions to provide the services set
for in this Exhibit A-5.  CD will not
provide JH with any desktop computers or servers that may be necessary to run
“bank software” or access “bank systems” for informational purposes.

•                  JH agrees to
safeguard any and all passwords or other authentication mechanisms or general
accessibility as provided by the bank(s).

•                  JH must provide
an investment policy and a wire transfer policy, including both signature cards
for persons designated as having signing authority and contact information for
such persons by the transaction date. 
JH must designate a Treasurer and Secretary by the transaction date for
facilitation of the bank

 

2

 

documentation.  JH must also
ensure that adequate documentation is completed to permit CD to provide the
Services set forth in this Exhibit A-5, including making necessary board
resolutions, and identifying CD as having the authority to conduct
treasury-related services on JH behalf.

 

3

Exhibit A-6

 

Revenue
Audit Services

 

Parties Involved:

 

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

 

Services:

 

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

 

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

 

Term:

 

•                  CD will provide
the services through 12/31/05.

•                  Both parties may
extend the services for 1-year increments upon mutual agreement of economic
terms.

•                  JH has the
ability to terminate the services at any time upon 30 days prior written
notice.

•                  CD cannot
terminate the services set forth in this Exhibit A-6 until 12/31/04.  Thereafter, CD must provide JH 120 days
prior written notice to terminate the services provided to JH.

 

Fees and Payment
Terms:

 

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

 

Service
Level
Standards:

 

Each party shall:  (i) conduct
itself in accordance with service standards of no lower quality than (A) the
standards applied as of the date of this Agreement with respect to the specific
matters in question, and (B) those standards such party hereafter applies in
its 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 orders
applicable to the conduct of the Services in question.

 

2

 

Exhibit A-7

 

Call
Support

 

Parties Involved:

 

Jackson Hewitt Tax Service Inc. (JH)

Cendant Operations, Inc.(“Cendant”)

 

Services to be
Provided:

 

Customer Service Contacts to include:

 

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

•                  Forward customer
concerns to the Jackson Hewitt corporate office and the Jackson Hewitt
Franchisees in accordance with procedures outlined by JH, which are attached
hereto.

 

Fees and Payment
Terms:

 

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

 

•                  Variable:

•                  Supervisor Wages

•                  Agent Wages

•                  Overtime

•                  Taxes and
Benefits

•                  Bonus

•                  Inbound Telecom

 

•                  Fixed:

•                  Outbound Telecom

•                  Aberdeen Shared
Allocation

•                  T1 Allocation

•                  Rent Allocation

 

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

 

1

 

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

 

Term:

 

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

 

Early Termination
Rights:

 

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

 

Service Level
Standards:

 

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

 

2

 

Exhibit A-8

 

Accounts
Payable

 

Parties Involved:

 

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

Cendant Operations, Inc. (“Cendant”)

 

Services:

 

Accounts Payable Processing to include:

 

•                  All manual
invoice keying in/processing

•                  Review of
vouchers for proper coding, authorized signatures, authenticity of invoices and
reasonable account distribution

•                  T&E report
review for compliance with policy, proper approval, proper coding, authenticity
of receipts

•                  Set up of new
vendors in Oracle, including obtaining tax information

•                  Weekly check
runs with mailing within 24 hours

•                  Problem
resolution

•                  Ensuring the A/P
system interfaces with the GL

•                  Issuance of
manual checks

•                  Year end
issuance of 1099 forms

•                  Gather monthly
sales and use tax figures sent weekly

•                  American Express
Corporate Card Administration

 

Fees and Payment
Terms:

 

Based on volume and actual costs incurred, Jackson Hewitt agrees to pay
the 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 weekly
check register review; therefore, funding a Cendant account is not
required.  The processing fees will be
billed monthly by Cendant Corporate.

 

1

 

Services:

 

1.                           All SGA invoices will be
paid according to vendor payment terms within 3-5 business days, from receipt
of invoice by Cendant.  Jackson Hewitt
Controller will review the check register weekly and approve release of
payment.

 

2.                           All payment requests marked
as “Priority” will be processed within 24 hours of receipt by Cendant and paid
according to vendor terms, including Gold Guarantee Payments when excel
spreadsheet is received.  Shared
Services will require Controller sign off of any Priority Payments prior to
receiving documentation for processing as these checks runs may need to be
generated more than once a week.

 

3.                           All check requests will be
processed within 3-5 business days of receipt by Cendant and paid according to
vendor terms.

 

4.                           All T&E Reports will be
coded and processed according to Cendant Travel and Entertainment policy within
3-5 business days, from receipt by Cendant.

 

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

 

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

 

7.                           Sales & Use Tax payments
will be tracked and summarized in the existing spreadsheet format by Shared
Services AP.  The summary report will be
provided to the Tax Department monthly.

 

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

 

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

 

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

 

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

 

Term:

 

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

 

2

 

Early Termination
Rights:

 

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

 

Service Level
Standards:

 

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

 

3

 

Exhibit A-9

 

Public
and Regulatory Affairs

 

Parties Involved:

 

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

Cendant Operations, Inc. (“Cendant”)

 

Services:

 

Cendant will provide Jackson Hewitt:

 

•                  Continued
support services to manage government relations activities, primarily at the
state level.

•                  Assistance in
hiring a new “person” or firm to handle government relations responsibilities
for Jackson Hewitt after the Effective Date

•                  Coordinate the
transition to a new hire or firm

•                  Assistance in
the immediate negotiation with lobbyists in critical states to represent
Jackson Hewitt in the future

 

Fees and Payment Terms:

 

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

 

Term:

 

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

 

Early Termination Rights:

 

Jackson Hewitt has the ability to terminate the service with 30 days
written notice.  Cendant shall not have
the right to terminate this service unless Jackson Hewitt has not paid the fees
set forth above or has not used its commercially reasonable efforts to
transition to a new provider.

 

Service Level Standards:

 

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

 

1

 

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

 

2

 

Exhibit
A-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 prior
to the close.  This includes using the
same Cendant benefits, Cendant Bank account, with the Cendant Treasurer’s
signature on Cendant check stock.  All
processing will continue to run on the Cendant Payroll calendar – A Cycle,
observing the same due dates for data submission.

 

Provide  payroll and HR processing
through December 31, 2004.

 

•                  Processing new
hires

•                  Employee
terminations

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

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

•                  Processing
payroll checks/direct deposits

•                  Manual checks

•                  Providing
necessary interface to GL

•                  Ensuring
benefits deductions are carried out

•                  Interfacing with
3rd party benefit providers

•                  Interfacing with
originating bank for direct deposit payments

•                  Processing check
reconciliation files

•                  **Positive pay
return resolution for check processing

•                  Payroll
distribution services – checks/advices

•                  Garnishment
processing

•                  Unclaimed wage
processing

•                  Cash transfer
processing

•                  Special Off
Cycle Payroll Runs for Quarter End Adjustments

 

**Cendant absolves itself of any liability associated with
misrepresentations of employees and fraudulent check processing at banking
institutions.

 

1

 

Tax Filing

 

•                  Periodic tax
depository requirements

•                  File Quarterly
and Annual Federal, State and local tax returns

•                  File Quarterly
and Annual Federal and State unemployment returns.

•                  Process Federal,
State, Local and Unemployment Amended Returns

•                  Provide W-2
Processing Services

•                  Provide W-2C
Processing Services

 

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

 

Fees and Payment Terms:

 

A.  Fees are as follows through
12/31/04:

 

• Payroll
processing fee - $3.00 per employee per pay

• Manual
check fee - $25 per manual check

 

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

 

C.  Any additional items not
addressed above will be billed at time and materials at $50 per hour for
payroll support and $150 hour for Systems support.

 

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

 

Notifications:

 

•                  Cendant Payroll
will notify Federal and State agencies of change in ownership for garnishment
processing.

•                  Cendant Payroll
will notify Federal, State, Local and Unemployment authorities of change in
ownership.

 

2

 

Term:

 

Term of services will be through December 31, 2004 commencing with
the effective date. If services are required beyond this date, this agreement
will 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 service
standards of no lower quality than (A) the standards applied as of the date of
this Agreement with respect to the specific matters in question, and (B) those
standards such party hereafter applies in its own business; and (ii) comply in
all material respects with all laws, regulations and orders applicable to the conduct
of the Services in question.

 

3

 

Exhibit
A-11

 

Information Technology and Telecommunications

 

Mainframe Processing Fees

 

Parties Involved:

 

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

 

Services to be
provided: 

 

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

 

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

 

Fees and Payment
Terms:

 

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

 

1

 

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

 

General Service Level
Standards:

 

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

 

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

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

3.               IBM will troubleshoot problematic
servers offline.

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

5.               When multiple or simultaneous service
disruptions occur so as to adversely affect more than one Cendant affiliate or
business unit (including JH), Cendant will provide JH with high priority (in
parallel with other high-priority Cendant affiliates or business units) on
restoration of services, timing of outages and change management. JH will be
given the highest level of consideration to accommodate timing of outages and
change management so as to minimize or eliminate impacts during the
aforementioned critical periods. When possible, reasonable efforts will be made
by the parties to conduct the aforementioned activities during non-peak
hours/season.

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

 

Cendant will identify any unamortized hardware, and remaining hardware
service 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 any
and all purchase and acquisition of additional hardware or software associated
with the aforementioned mainframe systems. Relative to any and all consent or
additional license fees that may be required by Cendant’s third party
vendors/licensors to allow Cendant/IBM to process data on behalf of JH, such
fees will be payable by JH. Nevertheless, Cendant will use reasonable efforts
to minimize this liability.

 

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

 

2

 

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

 

Term:

 

JH will be supported in a manner consistent with the levels of support
that it currently receives from Cendant for 2 (two) calendar years (or any
other period agreed to by the parties) from date of divestiture, subject to any
restrictions, consents, or other provisions set forth in applicable agreements
between Cendant and its third party licensors and/or service providers. This
support arrangement and the other agreements set forth herein will be confirmed
in a written information technology services agreement by and between JH and
Cendant.  Notwithstanding any other
termination rights that 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 be terminated upon a 90-day notification to Cendant. At
this time, JH will be responsible for the repayment of any unamortized hardware
service charges specific to JH’s mainframe environment, as well as for any
unpaid actual costs incurred by Cendant with respect to the services described
herein and any associated transition services.

 

Notes: 

 

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

 

For information purposes, the discounts on the vendors that are currently
utilized 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/licensors
allow Cendant to process work and data on behalf of its affiliated entities,
franchisees, and businesses and, in some limited circumstances, on behalf of
Cendant’s divested entities. Many of Cendant’s agreements also allow Cendant’s
third party service providers (such as IBM) to use software licensed by Cendant
to process work or data on Cendant’s behalf (such as in the case of the
ITSA).  None of Cendant’s third party
arrangements allow Cendant to act in the capacity of or similar to a Service
Bureau for any unaffiliated third parties or divested entities.  Therefore, the parties hereby acknowledge
and agree that Cendant may encounter certain problems or obstacles that are
beyond Cendant’s reasonable control with respect to any third party

 

3

 

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

 

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

 

Client Server
Services

 

Parties Involved:

 

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

 

Services:

 

Support of various servers located in Cendant’s Denver Data Center and
used to process JH’s business.  Services
include server operating system management and monitoring; hardware/software
configuration & deployment; web services management & reporting;
network connectivity administration and monitoring; performance management;
capacity management; production control services; third-party software
distribution and management; security administration; problem and change
administration; backup & recovery services.  IBM currently provides these services in accordance with the
terms and conditions of the ITSA between IBM and Cendant.

 

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

 

Fees and Payment
Terms: 

 

The following is a summary of JH’s current and budgeted service fees on
a 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, as
well as any shared infrastructure costs. 
Additional services can be added at JH’s reasonable request and will be
billed 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 fees
may also include maintenance fees associated with servers that are not
refreshed at the end of 36 months of applicable server life.  Cendant is the licensor of record for all
software licenses associated with the aforementioned services, with the
exception of the Marimba and Cognos Report Net product(s).  The costs to transfer or assign those
licenses 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 that
there are no third party restrictions or limitations on such transfers,
assignments or use.  In addition, a
determination will need to be made if any third party software consent fees
will apply in order to transfer, assign and/or use such licenses/software to or
on behalf of Jackson Hewitt.  Invoices
will be provided by Cendant to JH on a monthly basis and payments will be due
from JH within 30 days net.

 

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

 

Service Level
Standards:

 

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

 

5

 

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

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

3.               IBM will troubleshoot problematic
servers offline.

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

5.               When multiple or simultaneous service
disruptions occur so as to adversely affect more than one Cendant affiliate or
business unit (including JH), Cendant will provide JH with high priority (in
parallel with other high-priority Cendant affiliates or business units) on
restoration of services, timing of outages and change management.  JH will be given the highest level of
consideration to accommodate timing of outages and change management so as to
minimize or eliminate impacts during the aforementioned critical periods.  When possible, reasonable efforts will be
made by the parties to conduct the aforementioned activities during non-peak
hours/season.

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

7.               Cendant will continue to provide JH with
root access and administrator rights to the servers and systems used in the
Denver data center by Cendant and/or IBM to process JH’s work and data, which
root access and rights will be consistent with those currently being provided
to JH, provided that JH complies with Cendant’s policies and procedures
regarding information protection, systems/data security, access, privacy and
confidential information.

 

Cendant will identify any unamortized hardware, and remaining hardware
service 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 any and all purchase and
acquisition of additional hardware or software associated with the
aforementioned client server systems. Relative to any and all consent or
additional license fees that may be required by Cendant’s third party
vendors/licensors to allow Cendant/IBM to process data on behalf of JH, such
fees will be payable by JH. 
Nevertheless, Cendant will use reasonable efforts to minimize this
liability.

 

Disaster recovery will be provided by Cendant and/or IBM (or by any
other third party disaster services provider engaged by Cendant), as subscribed
to in writing by JH, and in accordance with Cendant’s final disaster recovery
services agreement(s) with IBM and/or such other third party service
provider.  Such subscription will be
paid for by JH in accordance with rates associated with the appropriate
service, including all IBM, CD Telecom and Cendant direct costs.

 

Term:

 

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

 

6

 

from date of divestiture, subject to any restrictions, consents, or
other provisions set forth in applicable agreements between Cendant and its
third party licensors and/or service providers.  This support arrangement and the other agreements set forth
herein will be confirmed in a written information technology services agreement
by and between JH and Cendant. 
Notwithstanding any other termination rights that 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 be terminated upon a 90-day
notification to Cendant.  At this time,
JH will be responsible for the repayment of any unamortized hardware service
charges specific to JH’s client server environment, as well as for any unpaid
actual costs incurred by Cendant with respect to the services described herein
and any associated transition services. 

 

Notes:

 

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

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

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

 

Desktop  Support

 

Parties Involved:

 

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

 

Services:

 

Support for the desktop, laptop and printer systems utilized by Jackson
Hewitt end user personnel.  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, software patch management, virus
protection services, local area network connectivity and printer
hardware/software support.

 

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

 

7

 

services agreements entered into between Jackson Hewitt and Cendant
relating to such services.

 

Fees and Payment
Terms:

 

The following is a summary of JH’s current and budgeted service fees on
a 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 and
payments will be due from JH within 30 days net.

 

Service Level
Standards:

 

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

 

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

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

3.               IBM will troubleshoot problematic
servers offline.

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

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

 

8

 

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

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

 

Cendant will identify any unamortized hardware, and remaining hardware
service 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 any and all purchase and
acquisition of additional hardware or software associated with the
aforementioned desktop support. 
Relative to any and all consent or additional license fees that may be
required by Cendant’s third party vendors/licensors to allow Cendant/IBM to
process 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 support
that it currently received from Cendant for 2 (two) calendar years (or any
other period agreed to by the parties) from date of divestiture subject to any
restrictions, consents, or other provisions set forth in applicable agreements
between Cendant and its third party licensors and/or service providers.  This support arrangement and the other
agreements set forth herein will be confirmed in a written information
technology services agreement by and between JH and Cendant.  Notwithstanding any other termination rights
that 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 be
terminated upon a 90-day notification to Cendant.  At this time, JH will be responsible for the repayment of any
unamortized hardware service charges specific to JH’s desktop support, as well
as for any unpaid actual costs incurred by Cendant with respect to the services
described herein and any associated transition services.

 

Help Desk

 

Parties Involved:

 

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

 

Services:

 

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

 

9

 

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

 

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

 

10

 

Fees and Payment
Terms:

 

The following is a summary of JH’s actual and budgeted service fees on
a 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 and
payments will be due from JH within 30 days net.

 

Service Level
Standards:

 

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

 

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

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

3.               IBM will troubleshoot problematic
servers offline.

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

5.               When multiple or simultaneous service
disruptions occur so as to adversely affect more than one Cendant affiliate or
business unit (including JH), Cendant will provide JH with high priority (in
parallel with other high-priority Cendant affiliates or business units) on
restoration of services, timing of outages and change management.  JH will be given the highest level of
consideration to accommodate timing of outages and change management so as to
minimize or eliminate impacts during the aforementioned critical periods.  When possible, reasonable efforts will be
made by the parties to conduct the aforementioned activities  during
non-peak hours/season.

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

 

11

 

Cendant will identify any unamortized hardware, and remaining hardware
service 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 any and all purchase and
acquisition of additional hardware or software associated with the
aforementioned help desk support. 
Relative to any and all consent or additional license fees that may be
required by Cendant’s third party vendors/licensors to allow Cendant/IBM to
process 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 support
that it currently receives from Cendant for 2 (two) calendar years (or any
other period agreed to by the parties) from date of divestiture, subject to any
restrictions, consents, or other provisions set forth in applicable agreements
between Cendant and its third party licensors and/or service providers.  This support arrangement and the other
agreements set forth herein will be confirmed in a written information
technology services agreement by and between JH and Cendant.  Notwithstanding any other termination rights
that 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 be
terminated upon a 90-day notification to Cendant.  At this time, JH will be responsible for the repayment of any
unamortized hardware service charges specific to JH’s help desk support, as
well as for any unpaid actual costs incurred by Cendant with respect to the
services 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 Jackson
Hewitt 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, software
patch management, virus protection services, local area network connectivity and
printer hardware/software support.

 

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

 

12

 

Fees and Payment
Terms:

 

These services will be based on a per-executive charge developed by
dividing the total cost center expenses incurred by the group delivering this
service 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’s
actual usage of executive help desk resources. 
Invoices will be provided by Cendant to JH on a monthly basis and
payments will be due from JH within 30 days net.

 

Service Level
Standards:

 

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

 

1.               Issues affecting JH production and
staging environments in the Denver data center will be classified as severity
one tickets at time of receipt.

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

3.               When multiple or simultaneous service
disruptions occur so as to adversely affect more than one Cendant affiliate or
business unit (including JH), Cendant will provide JH with high priority (in
parallel with other high-priority Cendant affiliates or business units) on
restoration of services.

 

Cendant will identify any unamortized hardware, and remaining hardware
service 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 any and all purchase and
acquisition of additional hardware or software associated with the
aforementioned executive help desk support. Relative to any and all consent or
additional license fees that may be required by Cendant’s third party
vendors/licensors to allow Cendant to process data on behalf of JH, such fees
will 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 support
that it currently receives from Cendant for 2 (two) calendar years (or any
other period agreed to by the parties) from date of divestiture, subject to any
restrictions, consents, or other provisions set forth in applicable agreements
between Cendant and its third party licensors and/or service providers.  This support arrangement and the other
agreements set forth herein will be confirmed in a written information
technology services agreement by and between JH and Cendant.  Notwithstanding any other termination rights
that 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 notification
to Cendant.  At this time, JH will be
responsible for the repayment of any unamortized hardware service charges
specific to JH’s executive help desk support, as well as for any unpaid actual
costs incurred by Cendant with respect to the services described herein and any
associated transition services. 
Notwithstanding the term mentioned herein, the services will be provided
only for period that JH is physically located at the 7 Sylvan facility.

 

Application Support
Services

 

Parties Involved:

 

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

 

Services:

 

Jackson Hewitt mainframe applications consist of GEAC, A/R and G/L
software 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 Denver
data center and are supported primarily by IBM pursuant to the ITSA.  Operations support services are provided to
Cendant and various Cendant affiliates and business units (including JH) on a
7x24 basis by IBM in accordance with the ITSA.

 

14

 

Fees and Payment
Terms:

 

The actual and budgeted corporate applications charges to JH for 2004
in 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 hours
used to provide these services.  As
such, they vary and may be adjusted accordingly by Cendant going forward based
on actual use of these services by Jackson Hewitt.  Invoices will be provided by Cendant to JH on a monthly basis and
payments will be due from JH within 30 days net.

 

Service Level
Standards:

 

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

 

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

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

3.               IBM will troubleshoot problematic
servers offline.

 

15

 

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

5.               When multiple or simultaneous service
disruptions occur so as to adversely affect more than one Cendant affiliate or
business unit (including JH), Cendant will provide JH with high priority (in
parallel with other high-priority Cendant affiliates or business units) on
restoration of services, timing of outage sand change management.  JH will be given the highest level of
consideration to accommodate timing of outages and change management so as to
minimize or eliminate impacts during the aforementioned critical periods. When
possible, 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-peak
hours/season.

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

 

Cendant will identify any unamortized hardware, and remaining hardware
service 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 any and all purchase and
acquisition of additional hardware or software associated with the
aforementioned application support. 
Relative to any and all consent or additional license fees that may be
required by Cendant’s third party vendors/licensors to allow Cendant/IBM to
process 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 support
that it currently received from Cendant for 2 (two) calendar years (or any
other period agreed to by the parties) from date of divestiture, subject to any
restrictions, consents, or other provisions set forth in applicable agreements
between Cendant and its third party licensors and/or service providers.  This support arrangement and the other
agreements set forth herein will be confirmed in a written information
technology services agreement by and between JH and Cendant.  Notwithstanding any other termination rights
that 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 be
terminated upon a 90-day notification to Cendant.  At this time, JH will be responsible for the repayment of any
unamortized hardware service charges specific to JH’s application support, as
well as for any unpaid actual costs incurred by Cendant with respect to the
services 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, including
network design, implementation, network moves, adds, changes, and complete
pro-active 7x24 management.  Additional
management support includes network performance analysis & reporting,
capacity planning, change management, network security, operational reporting,
domain name registration, financial management of all network services, vendor
management, and contract management.

 

The current baseline of managed WAN connections is as follows:

 

•                  8 T1.5 Circuits,
Private Line

•                  2 56k Frame
Relay Circuits

•                  4 POTS Lines /
Out of Band Management

•                  Internet Access
to Denver Data Center via dual OC-3s

 

Fees and Payment
Terms:

 

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

 

The applicable Project Management Rate related to the aforementioned
services, 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 Level
Standards:

 

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

 

	
  Mean Time to Respond:

  	
   

  	
  2 Hours

  
	
  Mean Time to Repair:

  	
   

  	
  4 Hours

  
	
  New Services:

  	
   

  	
  45 days

  

 

During JH’s critical operational periods (January 20th
through February 28th, and April 1st through
April 15th of each contract year), the parties acknowledge that
increases to the applicable services may be necessary to process JH’s additional
volume.  Cendant will use reasonable
efforts to provide the following services during the aforementioned critical
periods, provided that these items can be validated and confirmed by CD
Telecom:

 

17

 

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

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

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

3.               When multiple or simultaneous service
disruptions occur so as to adversely affect more than one Cendant affiliate or
business unit (including JH), Cendant will provide JH with high priority (in
parallel with other high-priority Cendant affiliates or business units) on
restoration of services, timing of outages and change management.  JH will be given the highest level of
consideration to accommodate timing of outages and change management so as to
minimize or eliminate impacts during the aforementioned critical periods.  When possible, reasonable efforts will be
made to conduct change activities during non-peak hours/season.

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

 

Cendant will identify any unamortized hardware, and remaining hardware
service 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 any and all purchase and
acquisition of additional hardware or software associated with the
aforementioned telecommunications – data support.  Relative to any and all consent or additional license fees that
may be required by Cendant’s third party vendors/licensors to allow Cendant to
process data on behalf of JH, such fees will be payable by JH.  Nevertheless, Cendant will use reasonable
efforts to minimize this liability.

 

Term:

 

CD Telecom will provide the aforementioned services for a period of 36
months (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 180
days prior notice of cancellation.  Upon
such termination, JH will be responsible for the repayment of any unamortized
hardware service charges specific to JH’s telecommunications and WAN
environment, as well as for any unpaid actual costs incurred by Cendant with
respect to the services described herein and any associated transition
services.  These services and any
associated agreements set forth herein will be confirmed in a written
information technology services agreement by and between JH and Cendant.

 

Note:-

 

The parties shall use good faith efforts to negotiate mutually
acceptable terms and conditions that would also allow JH to utilize the telecom
management services described herein upon relocation of the JH data center from
Denver to another location, subject to any restrictions, consents, or other
provisions set forth in applicable agreements between Cendant and its third
party 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 applications
such as call vectoring, call accounting, and Call Management Software for the
Call Center Agents located at 7 Sylvan Way.

 

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

 

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

 

Fees and Payment
Terms:

 

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

 

The applicable Project Management Rate related to the aforementioned
services, 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 Level
Standards:

 

Service levels
will be provided to JH by Cendant in accordance with Cendant standard terms and
conditions for these types of services and associated prevailing suite of
services currently offered to JH. 
During JH’s critical operational periods (January 20th
through February 28th, and April 1st through April 15th
of each contract year), the parties acknowledge that increases to the
applicable services may be necessary to process JH’s additional volume.  Cendant will use reasonable efforts to
provide 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 to
by the parties) will be held to review problems and critical issues.  These calls will include JH and CD Telecom.

2.               When multiple or simultaneous service
disruptions occur so as to adversely affect more than one Cendant affiliate or
business unit (including JH), Cendant will provide JH with high priority (in
parallel with other high-priority Cendant affiliates or business units) on
restoration of services, timing of outages and change management.  JH will be given the highest level of
consideration to accommodate timing of outages and change management so as to
minimize or eliminate impacts during the aforementioned critical periods.  When possible, reasonable efforts will be
made to conduct change activities  during non-peak hours/season.

 

Cendant will identify any unamortized hardware, and remaining hardware
service 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 any and all purchase and
acquisition of additional hardware or software associated with the
aforementioned telecommunications-voice support.  Relative to any and all consent or additional license fees that
may be required by Cendant’s third party vendors/licensors to allow Cendant to
process data on behalf of JH, such fees will be payable by JH.  Nevertheless, Cendant will use reasonable
efforts to minimize this liability.

 

Term:

 

CD Telecom will provide the aforementioned services for a period of 36
months (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 180
days’ prior notice of cancellation. 
Upon such termination, JH will be responsible for the repayment of any
unamortized hardware service charges specific to JH’s telecommunications
environment, as well as for any unpaid actual costs incurred by Cendant with
respect to the services described herein and any associated transition
services.  These services and any
associated agreements set forth herein will be confirmed in a written information
technology services agreement by and between JH and Cendant.  Notwithstanding the term mentioned herein,
the telecommunications voice management services will be provided only for
period 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 Tax
Services Inc.

 

Services:

 

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

 

20

 

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

 

Fees and Payment
Terms:

 

The costs associated with the transition services we need to be
negotiated between the parties and would be dependant on the nature and scope
of the services being rendered.  The IBM
portion of the transition costs would be governed by the terms and conditions
of the ITSA.  Invoices will be provided
by Cendant to JH on a monthly basis and payments will be due from JH within 30
days net.

 

Service Level
Standards:

 

Service levels will need to be negotiated between the parties.  The parties will use reasonable efforts to
avoid transitions during JH’s critical operational periods (January 20th
through February 28th, and April 1st through
April 15th of each contract year).  In the event that a transition during such critical periods is
unavoidable, the parties acknowledge that Cendant will use reasonable efforts
during such periods to provide the transition services in such a manner so as
to reasonably accommodate any increases to the applicable service levels that
may be necessary as a result of JH’s additional volume.  Cendant and/or IBM will use reasonable
efforts 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 upon
the applicable scope and circumstances.

 

Miscellaneous

 

Parties Involved:

 

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

 

Website Services to
be provided:

 

Until all of Jackson Hewitt’s HR services are fully transitioned
pursuant to the divestiture documents, Jackson Hewitt needs access to the
following 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 the
appropriate Cendant Intellectual Property Legal group(s) and the GiSEC group,
and (b) negotiation of mutually acceptable terms and conditions regarding usage
rights, restrictions, system/data security, information protection and privacy,
Cendant will provide JH with the necessary access to or use of such websites as
reasonably necessary for JH to continue to process its business operations in
accordance 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 proprietary
domain names including:  Jacksonhewitt.com;
JHnet.com; jtax.com etc. 
Notwithstanding the foregoing, the parties will need to negotiate
mutually acceptable terms and conditions regarding the administration,
technical controls, maintenance and renewal of these domains, as well as any
associated fees/charges that JH will pay to Cendant.

 

Information
Technology Services Agreement; Additional Terms & Conditions:

 

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

 

Information
Protection, Systems Security/Access & Privacy:

 

JH will be required to comply with Cendant’s policies and procedures
regarding information protection, systems and data security, and privacy, and
shall comply with all applicable privacy laws and regulations.  JH will not tamper with, compromise, or
attempt to circumvent any physical or electronic security or audit measures
employed by Cendant in the

 

22

 

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

 

Confidential
Information:

 

Each party shall at all times keep confidential the other party’s
confidential and proprietary information to which it has access or receives
during the course of the services (“Confidential Information”).  Neither party (without the prior written
consent of the other party) shall use the other party’s Confidential
Information for any purpose other than the performance of services, and will
not disclose any such Confidential Information to any third parties absent the
other party’s prior written consent. 
Upon termination or expiration of the services, each party shall (at the
other party’s option) destroy or return to the other party all materials
containing any Confidential Information of the other party.

 

Work Product;
Ownership:

 

Unless otherwise agreed to in writing, any and all reports, computer
programs, documentation, specifications, deliverables, products, work product,
software, source code, algorithms, routines, graphics, files, software patches,
enhancements, modifications, blueprints, diagrams, charts, functional
descriptions, photographs, surveys, or other materials, writings, or works of
authorship (and any drafts of the foregoing) created, developed, or prepared by
Cendant, its employees, agents, or subcontractors in the course of performing
the services (collectively, “Work Product”) will be owned (as between Cendant
and JH) solely and exclusively by Cendant, and JH will be deemed to have
expressly disclaimed any and all right, title, or interest therein.  Each party will retain ownership of any of
its 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 services
described herein may be contingent upon Cendant obtaining certain consents from
its third party vendors/licensors/contractors/service providers.  In the event and to the extent that Cendant
obtains such consents, Cendant will pass on to JH (and/or give JH the benefit
of) only those licenses, rights, grants, accesses, warranties, indemnities,
& services that have been obtained by Cendant from (and authorized by) such
third parties.  Cendant will notify JH
of any

 

23

 

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

 

Outsourcing;
Re-Sourcing; Use of Third Parties:

 

Cendant shall retain the right and flexibility to outsource
responsibility for any of the hardware, software and/or services described
herein to its third party service providers and/or outsourcers (including, but
not limited to, IBM).  In the event that
Cendant replaces IBM as its Denver data center outsourcer (and/or re-sources to
another third party provider any of the services described herein), JH
acknowledges and understands that there is no guarantee that support for or the
service levels relating to such hardware, software, or services will continue
in the same manner as described herein, although Cendant agrees to use
reasonable efforts to secure equivalent or similar support and service levels
for JH.  The parties will need to
negotiate specific terms and conditions relating to this issue.

 

Fees and Payment
Terms:  

 

To be determined by the parties

 

Service Level
Standards:

 

To be determined by the parties

 

Term:

 

To be determined by the parties

 

24

 

Exhibit
A-12

 

Legal
Document Management Systems 

 

Parties Involved:

 

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

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

 

Services:

 

Cendant will provide Jackson Hewitt:

 

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

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

•                              Upon
consummation of the IPO, documents pertaining to Cendant or Cendant brands
other than Jackson Hewitt shall be protected against viewing and access by
Jackson Hewitt Personnel.

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

•                              Such
assistance (and at such time and in such manner) as Jackson Hewitt reasonably
shall request in connection with the migration of JH documents to new document
management systems that JH chooses, at the expense of Jackson Hewitt for any
additional services, licenses, labor and materials. Such assistance may
include, but shall not be limited to, (i) providing reasonable access by
Jackson Hewitt vendors, consultants or other representatives of Jackson Hewitt
to physical premises, computer hardware, software and data maintained by
Cendant and (ii) creating images of Jackson Hewitt documents, data or other
information stored on Docs-Open or CLIP in such manner and on such media for
communication as Jackson Hewitt reasonably shall request.

 

Cendant Legal will, at the time of the IPO, put the its standard access
restriction security checks are in place to ensure that Jackson Hewitt and
Cendant 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 uses
to protect its own data.

 

Service Level
Requirements:

 

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

 

Fees and Payment
Terms:

 

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

 

Term:

 

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

 

Early Termination
Rights:

 

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

 

2

 

Exhibit A-13

 

Executive Financial Consulting Services
Program

 

Parties Involved:

 

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

 

Services:

 

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

 

Term:

 

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

 

Fees and Payment
Terms:

 

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

 

Service Level
Standards:

 

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

 

1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}]]