Document:

Exhibit 10.16

 

CompleteTax® Program License Agreement

 

This CompleteTax® Program License Agreement (“Agreement”) is entered into by and between the individual or legal entity identified in the order form or renewal document which expressly incorporates this Agreement by reference (the “Licensee”) and CCH INCORPORATED (“CCH”) with offices at 2700 Lake Cook Road, Riverwoods, IL 60015-3867.

 

WHEREAS:

 

A.  CCH is the creator of CompleteTax®, an online, ASP-model “do-it-yourself” tax preparation program and the documentation related thereto (the “CCH Content”), including copyrighted materials from the CCH Tax Guide consisting of explanations, examples, worksheets, forms, tax-related news and highlights of tax law changes;

 

B.  CCH desires Licensee to market access to a Private Label version (under the “Private Label Option”) of CompleteTax® to be used online via CCH’s ASP infrastructure (the “Licensed Product”), and Licensee desires to so market and distribute the Licensed Product subject to and in accordance with the terms and conditions of this Agreement;

 

C.  CCH is willing to create, operate and control a Licensee-specific Web site (the “Portal Web Site”) through which End-Users can access the Licensed Product;

 

D.  CCH is willing to license to Licensee a software utility program (the “Toolkit”) that, along with a user ID and password specific to the Licensee’s Portal Web Site, enables Licensee to perform various design, administrative and communication functions with reference to the Licensee’s Portal Web Site;

 

F.  CCH is willing under the Private Label Option to place Licensee’s Marks on the pages of the Portal Web Site without, to the extent reasonably possible, any of the CCH Marks appearing on the Portal Web Site;

 

G.  CCH desires Licensee to place a link to the Portal Web Site on any Web sites owned or controlled by Licensee, Licensee’s Affiliates and Licensee’s Corporate Accounts, and to market and promote to prospective End-Users the Portal Web Site and the Licensed Product;

 

H.  CCH is willing to license the CCH Marks to Licensee for use solely in connection with the marketing, distribution or use of the Portal Web Site and the Licensed Product, in accordance with the terms and conditions of this Agreement;

 

I.  CCH is willing to withdraw from membership in the Free File Alliance (“FFA”) and is willing to allow Licensee to gain membership in the FFA using the Licensed Product.

 

J.  Licensee is willing to license the Licensee Marks to CCH for use solely in connection with the creation and operation of the Portal Web Site;

 

K.  CCH is willing to provide Licensee a portion of the Net Revenue collected from all End-Users who access the Licensed Product through the Portal Web Site;

 

L.  The Licensee’s right to provide access to the Licensed Product shall not be exclusive, and CCH may continue to promote to the general public and provide direct access to the Licensed Product;

 

M.  The prices charged to End-Users of the Private Label Option version of the Licensed Product may be varied by Licensee;

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the parties agree as follows:

 

1.              Definitions

 

1.1. “Affiliate” means, as to either party, any other person or entity that controls, is controlled by or is under common control with that party, whether by virtue of ownership, voting power, management or otherwise. A party shall be responsible and liable for the exercise by any of its Affiliates of any rights granted under this Agreement or the performance by any of its Affiliates of any obligations of such party hereunder.

 

1.2. “Bank Products” means vehicles (commonly referred to as Electronic Refund Checks, Refund Anticipation Checks, Refund Transfers, but may have other common names) that allow a taxpayer to pay the tax preparation fee(s) from their federal and/ or state tax refunds or similar products.

 

1.3. “CCH Marks” means the trade names, trademarks, service marks, company or product names, slogans, URLs and other intellectual property rights of CCH and its Affiliates which CCH in its discretion uses in connection with the marketing, distribution or use of the Portal Web Site and the Licensed Product, including without limitation CompleteTax® and “Powered by CCH”.

 

1.4. “Corporate Account” means, as to Licensee, any person or entity that has entered into an agreement with Licensee for the marketing and distribution of the Portal Web Site and the Licensed Product, including the placement of a link to the Portal Web Site on any Web sites owned or controlled by such person or entity. Licensee shall notify CCH of any Corporate Account and provide CCH such information as CCH may reasonably request regarding the marketing and distribution by such Corporate Account of the Portal Web Site and the Licensed Product. Licensee shall be responsible and liable for the exercise by any of its Corporate Accounts of any rights granted under this Agreement or the performance by any of its Corporate Accounts of any obligations of Licensee hereunder.

 

1.5. “Free File Alliance” or “FFA” means the Free File program established in November of 2001 by the Office of Management and Budget’s (OMB) Quicksilver Task Force instructing the IRS to provide free and secure online tax return preparation and filing services to taxpayers now offered via the IRS website (www.irs.gov).

 

        1.6. “Licensee Marks” means such trade names, trademarks, service marks, copyrights and other intellectual property rights connected to any data or materials that are uploaded by Licensee to the Portal Web Site through the Toolkit or otherwise delivered to CCH for use on the Portal Web Site;

 

1.7.  “Licensed Product” means the right for an End-User to access and use the private-labeled edition of the then-current version of CCH’s CompleteTax® online tax preparation software for U.S. federal and state income tax returns for the most recent completed tax year, via CCH’s online application service provider (“ASP”) infrastructure. The Licensed Product for the most recent completed tax year is typically available from mid-December to mid-December of the succeeding year. For clarity, under this Agreement actual copies of the CompleteTax® software are not delivered to Licensee or distributed in any form.

 

1.8. “Net Revenues” means the gross revenues received by CCH for the use of the Licensed Product to prepare and complete paid tax returns, which are then electronically filed and/or printed via the Portal Web Site, with payment received via either (a) credit or debit card transactions effected through the Portal Web Site, or (b) the Deduct Fee From Refund feature of the Portal Web Site, in each case net of (x) any credits or refunds given as a result of License Product malfunctions, transaction-processing errors or other End-User problems or otherwise, and (y) any

 

	
CCH Confidential
    	
 
    	
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credit/debit card charge backs implemented by the card issuers, and (z) any applicable governmental sales or use taxes, fees or charges. For clarity, CCH service charges other than for use of the Licensed Product for preparation of federal and/or state tax returns, and third party services made available through CCH or its partners on the Portal Web site, are excluded from Net Revenue. All revenues generated by these services belong exclusively to CCH and its partner service providers, and Licensee will not participate in the revenue generated by such ancillary services. At this time, these ancillary services consist of, but are not limited to tax return extensions, online chat support and credit card payment of taxes due. Ancillary services shall not include bank products. If Licensee facilitates any Bank Products to customers who have completed a tax return using CompleteTax, all revenues from the facilitation of Bank Products shall belong exclusively to Licensee. CCH will not have the right to charge any fees on Bank Products or similar products. Licensee shall have sole discretion to set pricing for Bank Products and may change pricing at any time during the term of the Agreement, providing such change does not require any work on the part of CCH. Licensee has the sole right to choose the issuing financial institution for Bank Products and may change issuing banks at any time during the term of this Agreement providing such change does not require any work on the part of CCH. In the event that the Licensee collects tax return filing fees directly from a third party (not via CCH or its affiliates) as part of Licensee’s facilitation of Bank Products, Licensee shall provide to CCH its portion of the tax return filing fees in such amount as described in the Revenue Share portion of Exhibit A of this Agreement.

 

1.9. “Portal Web Site” means a standardized Web site operated by CCH, which may have Licensee branding, through which End-Users may purchase the Licensed Product and access other tax-related resources maintained by CCH. All sales of the Licensed Product hereunder are to be routed through the Portal Web Site, including its payment function. CCH collects the revenues through this site and will owe Licensee the revenue share shown in Exhibit A.

 

1.10. “User” or “End-User” means an individual who purchases and uses the Licensed Product. For the mutual protection of CCH and Licensee, all access by end-users to the Licensed Product functionality online shall he preceded by a “click-through” End User agreement with terms, including warranty disclaimers and limitations of liability and remedies and prescribed by CCH. Licensee shall have no authority to waive or modify any terms of the End User agreement.

 

2.              Limited License. CCH hereby grants to Licensee a revocable, non-exclusive, non-transferable (without right to sub-license) worldwide and limited license to, in accordance with the terms and conditions of this Agreement, (i) market the Licensed Product itself, or through Affiliates and Corporate Accounts, to End-Users for sales on-line effected through the Portal Web Site, (ii) place a link to the Portal Web Site on any Web sites owned or controlled by Licensee, Licensee’s Affiliates and Licensee’s Corporate Accounts, (iii) use the Toolkit to perform various design, administrative and communication functions with reference to the Portal Web Site, and (iv) use the CCH Marks solely in connection with the marketing, distribution or use of the Portal Web Site and the Licensed Product.

 

3.              Exclusivity. The right to sell the Licensed Product on the Internet by online access via the Portal Web Site shall be non-exclusive. Licensee acknowledges that CCH currently contracts with numerous other parties for co-branded and private-label website access to the Licensed Product, and that CCH promotes to the general public and provides access to the Licensed Product directly to End-Users.

 

4.              Pricing and Revenue Sharing

 

4.1. Exhibit A. Exhibit A hereto sets forth the pricing and revenue sharing which apply under the Private Label Option during the Term. In the event CCH proposes any modifications to Exhibit A with respect to any renewal term of this Agreement, CCH shall provide Licensee notice of any such changes no less than thirty (30) days prior to the commencement of the renewal term to which such revised Exhibit A is intended to apply.

 

4.2. General:

 

a.                    CCH will not pay minimum guaranteed revenues to Licensee. As such, CCH also does not require Licensee to guarantee minimum Portal Web site traffic.

 

b.                   Free, discounted or premium-priced use of the Licensed Product may be provided by Licensee to select Users by using the Promotion Code feature within CompleteTax Toolkit.(see also Section 5.6(e)).

 

c.                    If Licensee’s Web  site includes third-party advertising, CCH will not participate in the revenue generated by such advertising.

 

d.                   Tax returns must be completed to be included in Net Revenue, as CCH charges the tax return processing fee only when the tax return is completed and the User requests that the tax return be e-filed and/or printed. No remuneration to Licensee is provided for traffic from the Licensee’s Web site that does not result in a successfully completed and paid tax return which is then electronically filed and/or printed via the Portal Web Site (a “Completed Return”). In the event that the Licensee offers the Deduct Fee from Refund (DFFR) payment feature to the User, and the User uses this payment feature, and if the User’s tax preparation payment, along with the refund is withheld by the IRS, that return will not be considered to have been successfully e-filed and/or successfully completed and paid. In this event, since CCH will not receive a payment, the Licensee will not receive a share of revenue.

 

e.                    Licensees establishing sub-accounts with their own Affiliates or Corporate Accounts must negotiate the revenue share terms with those sub-accounts themselves. CCH will only remit payment under this Agreement to Licensee; any portion of Net Revenue that is to be received by the sub-accounts will be paid from Licensee’s share of the revenue and by Licensee. CCH will be entitled to the remuneration set forth in Exhibit A regardless of the involvement of a Licensee sub-account.

 

f.                      In the event that a User contests a tax preparation fee charge, the Licensee’s revenue share portion will be debited to the Licensee’s account. Credit card or other transaction fees associated with this contested charge will be assumed solely by CCH.

 

g.                   CCH will submit to Licensee, by mail or email, a revenue share report listing the Completed Returns. The revenue share report and the corresponding revenue share payment will be sent to Licensee within 30 days of each CCH monthly billing close, which occurs on or about the 25th of each month. Monthly revenue share payments will be made January through May, and then one additional payment will be made December 31.

 

h.                   In the case of Licensee collecting the tax preparation fees for any reason, Licensee will submit to CCH, by mail or email, a revenue share report listing the Completed Returns. The revenue share report and the corresponding revenue share payment will be sent to CCH within 30 days of each Licensee monthly billing close, which occurs on or about the 25th of each month. Monthly revenue share payments will be made January through May, and then one additional payment will be made December 31.

 

i.                       Payment will be made after the annual minimum commitment of paid Federal tax returns set forth in Exhibit A is reached. Revenue share by Licensee does not apply to this annual minimum commitment of paid Federal tax returns until after such required annual minimum commitment is reached.

 

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j.                       Revenue share amounts, alternative price points and other fees set forth in Exhibit A are fixed for the Term of this Agreement.

 

5.              CCH Responsibility

 

5.1.      CCH, in its discretion, is responsible for developing, maintaining and providing the Licensed Product application, CCH Content and web sites, other than that portion of the content of the Portal Web Site which is customizable by Licensee using the Toolkit. The Software, updated for tax season 2011, including the enhancements described herein, shall be available for testing no later than November 15, 2010 with the production software being available for End User use the first week of January of each tax season.

 

5.2.      CCH is responsible for the costs of handling and processing the Licensed Product returns including technical support, electronic filing transmission, credit card payment processing, data storage, server requirements, program updates and User communications. CCH shall be acting, for purposes of Internal Revenue Code Section 7216, as an auxiliary service provider of Licensee in performing the services described in this Agreement (more particularly as a contractor under Treas. Reg. § 301.7216-2(d)(2)).

 

5.3.      Data for all the Licensed Product returns, both completed and work in process, will reside on secure servers. Data security, integrity, backup and maintenance are the sole responsibility of CCH. CCH uses appropriate industry standard measures designed to protect the integrity and security of all confidential Licensed Product client data, but CCH does not warrant that these measures are impossible to compromise or circumvent or incapable of failure.

 

5.4.      As between CCH and Licensee, CCH owns and shall retain all right, title and interest in the Licensed Product, its web sites www.completetax.com and www.internet-taxprep.com and its Portal Web sites. CCH will communicate directly with prospects and Users — whether they accessed the program directly from www.completetax.com or Portal Web sites. The Licensee’s web address and company name, if entered by Licensee in the CompleteTax Toolkit, will be used by CCH in all correspondence with the Users relating to the Licensed Product accessed via the Portal Web Site during the term of this Agreement. Notwithstanding the foregoing, upon termination or expiration of this Agreement, CCH shall not retain the right to communicate with and promote the Licensed Product and third party services directly to the Users referred by Licensee. Users are deemed to be clients of Licensee.

 

5.5.      CCH shall provide via email to a Licensee that has not previously customized a Portal Web Site a username and password to access the CompleteTax Toolkit within seven (7) business days after CCH accepts this signed Agreement. CCH shall provide Licensee any generally released update of the Toolkit. In the event of any inconsistency between the terms of this Agreement and the content in the CompleteTax Toolkit site, the terms and conditions of this Agreement shall control.

 

5.6.      CCH shall provide Licensee access to and use of the CompleteTax Toolkit. This online utility allows Licensee to control and perform some or all of the following:

 

a.                    Brand the Portal Web site and Licensed Product with Licensee’s name and logo.

 

b.                   Activate the “Deduct Fee from Refund” (DFFR) feature within the Licensed Product which allows Users an alternative method of payment of their tax return processing fee whereby they do not need a credit card or bank card. In conjunction with this feature, CCH will provide the interface to Licensee’s Bank Processing System.

 

c.                    Subject to applicable laws and regulations, monitor and track all tax return activity of Users who access the Licensed Product through a link from the Portal Web site through the use of the status system; provided, however, in no event shall any provision of this Agreement be construed or applied in a manner to require CCH to violate any laws or regulations, whether promulgated by the IRS, U.S. Treasury or otherwise, including, without limitation, with respect to the confidentiality or disclosure of taxpayer information. CCH shall have the right to appropriately alter the functionality of the Licensed Product, and the parties’ sharing of End-User information will likewise be adjusted as appropriate, in order to comply with applicable privacy or other laws and regulations as determined in the discretion of CCH.

 

d.                   Designate Licensee’s URL and company name for identification on communication e-mails sent by CCH to Users if Licensee enters these in the Toolkit.

 

e.                    Generate “Promotion Codes” that can be selectively distributed by Licensee to prospects and Users to allow free, discounted or premium return filing. Licensee is responsible for the CCH portion of revenue (40% of the collected revenue, but not less than $5 per Promotion Code) for these discounted or premium returns, irrespective of the price it decides to charge to the User and will be billed, or debited against the payments due from CCH to Licensee, accordingly, except for “free” returns processed under the FFA program that have no associated revenue of any nature of which CCH shall not be entitled to any revenue share.

 

f.                      Establish links, co-branding logos and other preferences for sub-accounts subject to any guidelines established by CCH from time to time.

 

g.                   Choose from multiple discounted or premium price options as described in Exhibit A. Choose from several essential links available in the Toolkit for direct linking to the Licensed Product, thereby bypassing the Portal Web Site.

 

h.                   The ability to choose which combination of Federal tax versions of the Licensed Product are offered on the Portal Web site (see Exhibit A). Available only when the essential links are used.

 

5.7.      CCH shall maintain the CCH Content throughout the term of this Agreement on a reasonably timely basis.

 

5.8.      CCH shall maintain the Licensed Program and the Licensed Program’s operating systems in such a manner as to make the Licensed Program available for use by End Users adhering to the same standards of availability as CCH maintains the CompleteTax program (i.e. 24 hours per day, 7 days per week, with exceptions for scheduled or emergency maintenance).

 

5.9.      CCH shall, to the extent feasible, allow Licensee to provide support for the Licensed Product using tools currently available for providing such support and Licensee shall be responsible for providing e-mail technical support, chat, and tax support specific to the use of the Licensed Product to End-Users at Licensee’s sole expense, provided, that CCH is permitted to charge separately for any support not provided by Licensee and these charges are not includable within Net Revenue and not subject to revenue sharing with Licensee. If modifications to the currently available support tools are required in order for Licensee to provide such support, the cost of said modifications will be defined as customer development and billed to Licensee at the rates provided herein.

 

a.  All revenue collected by CCH from the use of chat services or any other support services provided by Licensee shall be remitted to Licensee and not subject to any revenue share.

 

5.10.   CCH shall establish a protocol and a management escalation process for support of Licensee’s support of the Licensed Program. Hours for such support will generally coincide with CCH’s normal hours of support of the CompleteTax product. Ownership and Use of End-User Data. As between CCH and Licensee, Licensee will own the personal data and tax return information provided by its End-Users and thus will own the End User relationships. Except as expressly set forth otherwise under this Agreement, as between Licensee and CCH, Licensee is responsible for all such data and information and complying with all laws and regulations related thereto, including without limitation for purposes of Internal Revenue Code Section 7216 and other privacy laws and regulations.

 

a.  CCH shall provide Licensee with customer and return data as are reasonably requested by Licensee on a daily basis.

 

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5.11.   Free File Alliance Membership. As a condition of this Agreement, CCH will withdraw from membership in the FFA during the term of this Agreement and allow Licensee to gain membership in Licensee’s name using the Licensed Product. Such Licensed Product as delivered by CCH shall conform to FFA policies and regulations to the extent not modified by Licensee. Upon Termination of this Agreement, CCH may reclaim membership in the FFA using the CompleteTax program and Licensee will immediately cease offering the Licensed Program on the FFA site. However, all then current End Users of the Licensee FFA site will belong to Licensee.

 

6.     Licensee Responsibility

 

6.1.                Licensee shall receive certain software (the “Software”) to enable Licensee’s use of the on-line Toolkit. Licensee may make a reasonable number of copies of the Software for internal backup and for installation purposes, and as many as are necessary for its lawful use. Licensee shall not remove, overprint or deface any notice of copyright, trademark, logo, legend or other notice of ownership from any originals or copies of the Software. Licensee shall not (and shall not allow any third party to) otherwise copy, or modify, decompile, disassemble or otherwise reverse-engineer all or any part of the Software or merge the Software into any other software, except to the extent expressly authorized by law.

 

6.2.                Licensee is responsible for placing and maintaining the link to the Portal Web Site on any of Licensee’s Web site(s) which Licensee desires to link to the Portal Web Site. The placement location of the link is at the sole discretion of Licensee.

 

6.3.                Licensee is solely responsible for promoting the Portal Web site and Licensed Product link to its clients, employees, Web site visitors, and otherwise. Licensee will use its best efforts to promote the Portal Web site and Licensed Product link. CCH is not responsible for participating in any joint promotional campaigns with Licensee unless otherwise agreed to in writing. Licensee shall avoid deceptive, misleading, or unethical practices that are or might be detrimental to the Licensed Product, CCH, customers, or the public, including any disparagement of the Licensed Product or CCH, shall knowingly make no false or misleading representations with regard to Licensed Product or CCH, and shall refrain from publishing or employing any misleading or deceptive advertising or promotional material.

 

6.4.                If employing essential links (see subsection 5.6(h)) into the Licensed Product, Licensee shall add CCH-provided tracking pixels at the point of entry to the Portal Web Site.

 

6.5.                As required by the IRS, CCH will report on Form 1099 all revenue share payments made to Licensee. Licensee is responsible for providing to CCH the Licensee’s Federal Taxpayer Identification Number upon request from CCH and per IRS guidelines and requirements.

 

6.6.                Licensee will comply with all the terms of CCH’s Privacy Policy, as in effect from time to time, with respect to any information it receives about End Users of the Licensed Product.

 

6.7.                Licensee shall be responsible for supporting, at Licensee’s sole expense, users of Licensee’s own web page(s), and for implementing the design, administrative and other functions with regard to the Portal Web Site that are enabled by the Toolkit.

 

6.8.                Licensee shall provide all prior year tax return data from Licensee’s eSmart Tax program to CCH in the format prescribed by CCH and shall provide this data to CCH no later than the earlier of 30 days after signing of contract, or September 17, 2010, and CCH will load said prior year data into the Licensed Program’s database so that returning End Users will have their prior year data available for use in the Licensed Program.

 

6.9.                Licensee agrees that the Licensed Product will be the only online tax preparation software offered by Licensee to the public during the Term of this Agreement, except that Licensee may “pilot test” their own internally developed, or developed for them under a “work for hire” agreement by a third party, in calendar year 2012.

 

7.      Title to the Licensed Product and Intellectual Property Rights

 

7.1.                Title to the Licensed Product. CCH retains all right, title and ownership interest to the Licensed Product and no such rights shall pass to Licensee under this Agreement. Licensee shall not remove or alter any copyright statement of ownership that is displayed on the Portal Web site or the Licensed Product.

 

7.2.     Title to and Use of CCH Marks.

 

a.                         Licensee hereby acknowledges and agrees that (i) the CCH Marks are owned solely and exclusively by CCH, (ii) except for the limited license granted herein, the Licensee has no rights, title or interest in or to the CCH Marks, and (iii) all use of the CCH Marks by Licensee shall inure to the benefit of CCH. Licensee shall not apply for registration of the CCH Marks (or any mark confusingly similar thereto) anywhere in the world, and shall not engage, participate or otherwise become involved in any activity or course of action that diminishes and/or tarnishes the image and/or reputation of CCH Marks. Upon the expiration or termination of this Agreement, Licensee will promptly cease using the CCH Marks, and shall remove such CCH Marks from its Web sites, and the Web sites of its Affiliates and Corporate Accounts, except as the parties may agree in writing.

 

b.                        Licensee’s use of the CCH Marks shall be in accordance with CCH’s reasonable policies regarding advertising and trademark usage, as shall be established or changed from time to time at CCH’s sole discretion upon written notice to Licensee. All usage by Licensee of CCH’s Marks shall include the appropriate registered or unregistered trademark symbol and, where space reasonably permits, a legend stating that the “[CCH trademark] is a registered trademark of CCH, a Wolters Kluwer business” or a reference to the effect that third party marks are owned by their respective owners or as may otherwise be specified by CCH from time to time. Licensee shall not contract with any third party for rights regarding the use or results of use, as a search term on the Internet, of any CCH Mark, whether to trigger advertising, to obtain preferred listing of search results, or for any other purpose, nor will Licensee use any CCH Mark in the foregoing manner within any search facility on any Licensee web site. The URL of any Web site of Licensee, or its Affiliates or Corporate Accounts, which contains a link to the Portal Web Site, shall not contain any CCH Marks or the word “complete”, unless approved by CCH.

 

             c.                         If the Licensee fails to comply with the terms and conditions of this section, CCH may provide notice thereof to the Licensee and may terminate this Agreement, including without limitation, the License granted the Licensee, if the Licensee does not cure the failure within ten (10) days from the date of said notice.

 

7.3.  Title to and Use of Licensee Marks

 

a.                         Licensee hereby grants to CCH and its Affiliates a revocable, non-exclusive, non-transferable, worldwide and limited license to use the Licensee Marks solely in connection with the creation and operation of the Portal Web Site.

 

b.                        All right, title and interest in any Licensee Marks will be the exclusive property of Licensee. Except in connection with establishing, enforcing, defending or exercising CCH’s intellectual property rights or contractual rights hereunder, CCH shall not challenge in any manner the Licensee Marks.

 

c.                         Under the Private Label Option, Licensee shall offer the Licensed Product only in a “private label” manner, using a name that does not include the words “CompleteTax®” or “Complete” and “Tax” immediately next to each other, and can make no reference to CCH, CCH

 

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Incorporated, Wolters Kluwer or any of their affiliates. Licensee shall not create or use any Licensee Mark that is confusingly similar to any CCH Marks, or which violates another person’s trademark rights, or is unprofessional or offensive. In addition, Licensee’s “private label” brand name for the Licensed Product must have a different look and feel than CCH’s CompleteTax® trademark, in particular using different fonts and color scheme from that of CCH’s CompleteTax® brand. CCH shall have the right of prior review and approval of the Licensee’s name for the Licensed Product, which approval shall not be unreasonably withheld or delayed.

 

8.              Term; Automatic Renewal; Termination

 

8.1.      Term; Automatic Renewal. This Agreement shall commence upon Licensee’s execution of the order form or renewal document which expressly incorporates this Agreement by reference, and shall terminate on ***.This Agreement shall not renew without a new Agreement or an Addendum executed between the parties. The initial term and any subsequent renewal terms are referred to collectively as the “Term”.

 

8.2.      Termination for Breach. Notwithstanding, this Agreement may be immediately terminated by either party upon written notice to the other party if the other party is in material breach of this Agreement and has failed to cure such breach within thirty (30) days after its receipt of written notice of such breach from the first party. In the case of a breach of the confidentiality provisions of this Agreement, the non-breaching party will have the right to immediately terminate this Agreement upon written notice to the other without giving the breaching party the right to cure.

 

8.3.      Automatic Termination. This Agreement will terminate automatically, without notice,

 

a.                    upon the institution by or against either party of insolvency, receivership or bankruptcy proceedings, or any other proceedings for the settlement of its debts and such proceeding is not dismissed within sixty (60) days of its being filed,

b.                   upon either party’s making an assignment for the benefit of creditors,

c.                    upon either party’s dissolution or liquidation,

d.                   upon either party’s attempt to assign this Agreement in contravention hereof, or

e.                    upon CCH’s decision to discontinue the Licensed Product.

 

8.4.      Rights and Obligations upon Termination. In the event of any termination of this Agreement, the parties shall promptly discontinue all use of links, the other party’s names, content, marks and other trademarks and within thirty (30) days account and pay for all compensation/fees due under this Agreement.

 

8.5.      Sunset of Licensed Product. After the initial Term of this Agreement, CCH may in its discretion sunset and cease providing the Licensed Product as a commercial product at any time (“Licensed Product Sunset”). Prior to the effective date of any such Licensed Product Sunset, CCH will provide Licensee with 90 days notice of such intent to effectuate a Licensed Product Sunset; such notice obligation shall not apply to CCH’s decision at any time to simply sell or dispose of the Licensed Product or any portion of the Licensed Product, or any business, product or entity which owns, operates or is affiliated or associated with CCH or the Licensed Product (or any portion thereof), to any third party.

 

8.6.      Survival. Sections 1, 9, 10, 11, 12  and 15 shall survive the termination or expiration of this Agreement

 

9.              Representations

 

9.1.      Each party, to the best of its knowledge, represents to the other that: (a) it has the authority to enter into this Agreement and sufficient rights to grant any licenses granted hereby, and (b) all material on a party’s site and any material which is provided to the other party and displayed on the other party’s site will not (i) infringe on any third party’s copyright, patent, trademark, trade secret or other proprietary rights or right of publicity or privacy; (ii) violate any applicable law, statute, ordinance or regulation; (iii) be defamatory or libelous; or (iv) be lewd, pornographic or obscene; (v) violate any laws regarding unfair competition, antidiscrimination or false advertising; (vi) promote violence or contain hate speech.

 

9.2.      EXCEPT FOR THE ABOVE REPRESENTATIONS NEITHER PARTY, NOR ANY OF THEIR AFFILIATES, AGENTS, SUBCONTRACTORS AND SUPPLIERS, MAKES ANY REPRESENTATIONS OR WARRANTIES TO THE OTHER PARTY, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED  WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

9.3.      Internet. THE  PORTAL WEB SITE AND THE LICENSED PRODUCT ARE ACCESSED OVER THE INTERNET. LICENSEE ACKNOWLEDGES AND AGREES THAT CCH AND ITS AFFILIATES, AGENTS, SUBCONTRACTORS AND SUPPLIERS DO NOT OPERATE OR CONTROL THE INTERNET AND THAT (1) VIRUSES, WORMS, TROJAN HORSES, OR OTHER UNDESIRABLE DATA OR SOFTWARE, OR (11) UNAUTHORIZED USERS (E.G. HACKERS), MAY ATTEMPT TO OBTAIN ACCESS TO AND DAMAGE LICENSEE’S DATA, WEBSITES, COMPUTERS OR NETWORKS. CCH SHALL NOT BE RESPONSIBLE FOR PREVENTION OR EFFECTS OF SUCH ACTIVITIES.

 

9.4.      Professional Advice. CCH AND ITS AFFILIATES, AGENTS, SUBCONTRACTORS AND SUPPLIERS ARE NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, TAX OR OTHER PROFESSIONAL ADVICE OR SERVICES. IF LEGAL, ACCOUNTING, TAX OR OTHER EXPERT ASSISTANCE IS REQUIRED THE SERVICES OF A COMPETENT PROFESSIONAL SHOULD BE SOUGHT.

 

9.5.      In addition, Licensee represents, warrants and covenants to CCH that Licensee and its Affiliates and Franchisees shall comply with Internal Revenue Code Section 7216 and the regulations promulgated thereunder, and any equivalent and applicable state or local laws and regulations governing the use and disclosure of tax return information, including, without limitation, obtaining all consents required under Internal Revenue Code Section 7216 from End Users for the purpose of use and disclosure of End User tax return information in connection with the Licensee Licensed Product. CCH represents to Licensee, that CCH, consistent with its role as an auxiliary service provider as set forth under Section 6.1, shall comply with Internal Revenue Code Section 7216 and the regulations promulgated thereunder, and any equivalent and applicable state or local laws and regulations governing the use and disclosure of tax return information.

 

10.       Indemnification

 

10.1. Breach of Representations and Obligations. Each party hereby agrees to indemnify and defend the other party, from and against any and all liability, claims, losses, damages, injuries or expenses (including reasonable attorney’s fees) arising from a claim by a third party, arising out of the indemnifying party’s (i) breach, or alleged breach, of such party’s representations herein, (ii) violation of any applicable law, and (iii) material breach of the provisions of this Agreement relating to Confidential Information.

 

10.2. Computations. CCH hereby agrees to indemnify Licensee from and against a claim by a third party User for the amount of any IRS or state penalty and/or interest paid by User solely as a result of a computational inaccuracy in the processing of such User’s data by the Licensed Product for such Federal or state return, provided that CCH shall not be liable for the amount of any additional tax liability User may owe and

 

5

 

CCH’s aggregate liability hereunder with respect to any and all claims related to a User shall not exceed the amount of the fee paid by such User for the use of the Licensed Product. TO THE FULL EXTENT PERMITTED BY LAW, THE FOREGOING SETS FORTH LICENSEE’S SOLE AND EXCLUSIVE REMEDY AND THE ENTIRE OBLIGATION OF CCH AND ITS AFFILIATES, AGENTS, SUBCONTRACTORS AND SUPPLIERS WITH RESPECT TO ANY CLAIMS WITH RESPECT TO ALLEGED COMPUTATIONAL ERRORS IN THE PERFORMANCE OF THE LICENSED PRODUCT.

 

10.3. Intellectual Property. Should the Licensed Product, CCH Content or Software be determined to have infringed any third party’s copyright, patent, trademark, trade secret or other proprietary rights or right of publicity or privacy, or if, in CCH’s judgment, is likely to infringe, CCH may, at its option: (i) procure for Licensee the right to continue using the Licensed Product or Software; or (ii) replace or modify it to make its use non-infringing. If neither of the foregoing alternatives are available on a basis that CCH finds commercially reasonable, then, CCH may terminate this Agreement, and Licensee shall discontinue providing links to the Licensed Product. TO THE FULL EXTENT PERMITTED BY LAW, THE FOREGOING SETS FORTH LICENSEE’S SOLE AND EXCLUSIVE REMEDY AND THE ENTIRE OBLIGATION OF CCH AND ITS AFFILIATES, AGENTS, SUBCONTRACTORS AND SUPPLIERS WITH RESPECT TO ANY INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADEMARKS OR TRADE SECRETS OR CLAIMS WITH RESPECT TO THE USE OF THE LICENSED PRODUCT, CCH CONTENT OR SOFTWARE.

 

10.4. Licensee Acts. Licensee hereby agrees to indemnify and defend CCH and its affiliates, directors, officers, employees and agents, from and against any and all liability, claims, losses, damages, injuries or expenses (including reasonable attorney’s fees) that CCH may incur as a result of (i) any warranty, condition, representation, indemnity or guarantee granted by Licensee with respect to the Licensed Product in addition to or in lieu of the limited representations and warranties specified in this Agreement, (ii) any omission or inaccuracy in Licensee’s advertisements and promotional materials that relate to the Licensed Product, and (iii) any damages arising from claims with respect to the provision by Licensee of any advice, guidance or services other than the Licensed Product.

 

10.5. Process. The indemnity in this Section is contingent upon: (1) the indemnified party promptly notifying the indemnifying party in writing of any claim which may give rise to a claim for indemnification (provided, however that failure to provide such prompt notice to the indemnifying party shall not affect indemnification obligations hereunder in the absence of actual prejudice to the indemnifying party); (2) the indemnifying party being allowed to control the defense and settlement of such claim; and (3) the indemnified party cooperating with all reasonable requests of the indemnifying party (at the indemnifying party’s expense) in defending or settling a claim. The indemnified party shall have the right, at its option and expense, to participate in the defense of any suit or proceeding through a counsel of its own choosing. The indemnifying party may settle any such claim; provided, however, that no compromise or settlement of any claim admitting liability of, or imposing duties or restrictions upon the indemnified party may, other than the cessation of Licensee’s use of the Licensed Product, be effected without the prior written consent of the indemnified party, which shall not be unreasonably withheld or delayed.

 

11.       Limitation of Liability

 

11.1. IN NO EVENT, EXCEPT AS EXPRESSLY PROVIDED FOR IN SECTION 10 OF THIS AGREEMENT, SHALL EITHER PARTY, AND ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, SUBCONTRACTORS, AGENTS, SUCCESSORS, ASSIGNS, AFFILIATES OR SUBSIDIARIES BE LIABLE TO THE OTHER PARTY OR OBLIGATED UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY, OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY DIRECT, INDIRECT, SPECIAL, EXEMPLARY, CONSEQUENTIAL OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE LICENSED PRODUCT, THE PORTAL WEB SITE, THE TOOLKIT AND/OR THE SOFTWARE EVEN IF INFORMED OF THE POSSIBILITY OF SUCH DAMAGES. FURTHER, EXCEPT AS EXPRESSLY PROVIDED FOR IN SECTION 10 OF THIS AGREEMENT, THE AGGREGATE LIABILITY OF EITHER PARTY ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE LICENSED PRODUCT, THE PORTAL WEB SITE, THE TOOLKIT AND/OR THE SOFTWARE SHALL NOT EXCEED THE TOTAL COMPENSATION PAID OR PAYABLE TO THE PARTIES UNDER THIS AGREEMENT.

 

12.       Confidentiality

 

12.1. In the performance of this Agreement each party may disclose to the other party certain confidential business information orally or in writing (“Confidential Information”). Written Confidential Information shall be marked “Confidential” and, in order for orally disclosed information to be deemed “Confidential Information” hereunder, the disclosing party must notify the receiving party in writing within ten (10) days of disclosure of oral information that such information is confidential. Neither party will disclose or use the other party’s Confidential Information except for the sole purpose of performing this Agreement, and each party will keep confidential and safeguard such information against unauthorized disclosure to others with at least the same degree of care as it exercises with its own information of a similar nature, but in no event less than reasonable care.

 

12.2. Confidential Information will not include information that: (i) the receiving party can demonstrate by written records was already rightfully known to that party prior to its receipt from the disclosing party; (ii) is now, or becomes in the future, public knowledge through no fault, act or omission of the receiving party; (iii) is independently developed by the receiving party without any use of or reliance on the disclosing party’s Confidential Information; (iv) is lawfully acquired by the receiving party from a third party without restriction. In addition, the receiving party may disclose Confidential Information of the disclosing party that is required to be revealed by law, provided that written notice is given in advance to the disclosing party (if not prohibited by law) so that it can seek a protective order.

 

13.       Security and Privacy

 

13.1. Security. Each party shall employ commercially reasonable security safeguards to protect User information from loss, misuse and unauthorized alteration during its storage, processing and transmission, including the use of commercially available computer security products, as well as industry standard security procedures and practices.

 

13.2. Privacy. CCH will make available to Licensee the names and e-mail addresses of Users that enter the Licensed Product through links from the Licensee’s Web site, including Web sites of the Licensee’s own Affiliates, Corporate Accounts and sub accounts. Subject to applicable laws and regulations, this information will only be made available in the CompleteTax Toolkit and is intended solely to allow the Licensee to track tax return status, to provide professional tax services as is clearly indicated on Licensee’s Web site, and to conduct normal communication and business processes with the Users or prospects. CCH does not sell or make available confidential client information to any third parties and will limit the use of personal User information, as needed, to transact the filing of tax returns, payment of necessary fees or as required by law. Licensee must also comply with applicable laws and regulations, this Agreement, Licensee’s privacy policy, and its other published statements in handling, using and disclosing any User information.

 

6

 

14.       Publicity

 

14.1. Publicity. Except as provided in Section 7 herein, neither party shall use the other party’s name in any public statements, advertisements, promotional or marketing materials, press releases and other announcements (collectively, “publicity”) relating to this Agreement without the prior written approval of the other party (except for any disclosures required by applicable law, e.g., securities laws). Each party shall cooperate with the other to provide prompt review of all proposed publicity material.

 

15.       General

 

15.1. No Third Party Beneficiaries. Except for any indemnified parties set forth in Section 10 or permitted assigns, no provisions of this Agreement, express or implied, create, and shall not be construed as creating, any rights enforceable by any person or entity not a party to this Agreement, provided, however, that the provisions of this Agreement shall operate for the benefit of, and may be enforced by, any person that has licensed to CCH any of the materials in the Licensed Product. The parties acknowledge and agree that each party has entered into this Agreement as an independent contractor, and nothing herein will be construed as creating an agency, partnership or any other form of legal association (other than as expressly set forth herein) between the parties. Nothing in this Agreement will be construed to make Licensee an employee, franchisee, joint venturer or partner of CCH. Except as otherwise provided in this Agreement, Licensee will neither have nor represent itself to have any authority to act on CCH’s behalf, or incur any expense or obligation in the name of CCH except as expressly authorized herein.

 

15.2. Applicable Law; Severability; Attorneys’ Fees; Waiver of Jury Trial. This Agreement and the performance of the parties under this Agreement shall be governed by and construed in accordance with the laws of the State of Illinois without regard to the conflict of laws provisions thereof. If for any reason a court of competent jurisdiction finds any provision or portion of this Agreement to be unenforceable, that provision of this Agreement will be enforced to the maximum extent permissible so as to affect the intent of the parties, and the remainder of this Agreement will continue in full force and effect. No term or provision hereof shall be deemed waived or any breach excused, unless such waiver or consent shall be in writing and signed by the party claimed by the other to have waived or consented. Any consent by any party to, or waiver of, a breach by the other, whether express or implied, shall not constitute a consent to, waiver of, or excuse for any other different or subsequent breach. EACH PARTY, TO THE EXTENT PERMITTED BY LAW, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS IT CONTEMPLATES.

 

15.3. No Assignment. Except as expressly provided herein, neither party shall have any right or ability to assign, transfer, or sublicense any obligations or benefit under this Agreement without the written consent of the other party and any such attempt shall be void, except that a party may assign and transfer this Agreement and its right and obligations hereunder to any third party who succeeds to substantially all of its business or assets, or in the case of CCH, succeeds to substantially all of its CompleteTax program business or assets.

 

15.4. Entire Agreement. This Agreement constitutes the entire Agreement between the parties with respect to the subject matter hereof, and supersedes and replaces all prior or contemporaneous understandings, letters of intent or other Agreements, written or oral, regarding such subject matter. No failure of either party to exercise or enforce any of its rights under this Agreement will act as a waiver of such rights. Any waiver, amendment or other modification of any provision of this Agreement will be effective only if in writing and signed by both parties, other than an amendment by CCH of Exhibit A applicable to a forthcoming renewal term.

 

15.5. Force Majeure. Neither party hereto shall be deemed to be in default of any provision of this Agreement or for failure in performance, resulting from acts or events beyond the reasonable control of such party and arising without its fault or negligence, provided that prompt written notice of any such act or event is given to the other party. Such acts shall include, but not be limited to, acts of God, civil or military authority, interruption of electric or telecommunication services, civil disturbances, acts of war or terrorists, strikes, fires, floods or other catastrophes.

 

15.6. Notices. All notices, requests, demands or other communications hereunder shall be in writing, and shall be deemed to have been adequately given and delivered: (a) upon personal delivery (including personal delivery by overnight messenger) to the party to be notified; or (b) five (5) business days after deposit with registered or certified mail, return receipt requested, prepaid and addressed to the party to be notified at the address set forth below (or such other address as shall be given in writing by either party to the other) ); or (c) the first business day after sending by e-mail to the party to be notified (but only if actually received by such party) at the e-mail address set forth below (or such other email address as shall be given in writing by either party to the other); or (d) the first business day after sending by facsimile (with confirmation) to the party to be notified at the facsimile number set forth below (or such other number as shall be given in writing by either party to the other). To CCH: CCH Incorporated, 20101 Hamilton Avenue, Suite 200, Torrance, CA 90502, Attn: CompleteTax Online Tax Prep. Facsimile number: 1-888-960-7772; E-mail address: info@completetax.com. To Licensee: at the address (including e-mail address and facsimile number) provided in the order form or renewal document which expressly incorporates this Agreement by reference.

 

7

 

EXHIBIT A: 2010-2011 PRICING AND REVENUE SHARING

 

The following terms apply for the processing of *** and *** tax year returns, which pricing terms terminate on ***.

 

Private Label Option:

 

a.           Licensee will pay CCH an initial, one time nonrefundable license fee of *** for the set-up, maintenance, and support of the CompleteTax Private Label Option. Set-up and maintenance includes, and is limited to, assessing Licensee’s End User License Agreement and the License’s Privacy Policy (both of which shall be in substantially the same form as the then current CCH End User License Agreement and Privacy Policy); and the development of a custom interface to Licensee’s Bank Processing System (in accordance with Licensee specifications).

 

b.          Any additional customization of the License Product must be completed by CCH and is subject to its approval, such approval not to be unreasonably withheld. Custom work will be done at a rate of *** per man hour and on a schedule subject to CCH’s resource availability.

 

c.           Licensee’s Revenue share will not apply until *** Federal tax returns are completed for each tax year. Once the minimum threshold of *** completed federal returns is satisfied, Licensee is entitled to the balance of Net Revenue for all returns completed (including first ***) through the Portal Web Site.

 

d.          If Licensee facilitates any Bank Products to customers who have completed a tax return using the License Product, all revenues from the facilitation of Bank Products shall belong exclusively to Licensee.

 

e.          The table below reflects the expected CCH CompleteTax list prices for the periods indicated. Licensee shall have the right to raise the prices for the Licensed Program without any approval from CCH. However, if Licensee decides to lower the prices for the Licensed Program by an amount greater than *** from the then current CCH price, Licensee must notify CCH of such proposed reduction and shall be subject to CCH’s agreement as to the lower prices, such agreement to not be unreasonably withheld.

 

	
Dates
    	
 
    	
Basic/Free
    	
 
    	
Deluxe
    	
 
    	
Premium
    	
 
    	
Premium + State
    	
 
    	
State
    	
 
    
	
Launch - ***
    	
 
    	
 
    	
 
    	
$
    	
***
    	
 
    	
$
    	
***
    	
 
    	
$
    	
***
    	
 
    	
$
    	
***
    	
 
    
	
***
    	
 
    	
 
    	
 
    	
$
    	
***
    	
 
    	
$
    	
***
    	
 
    	
$
    	
***
    	
 
    	
$
    	
***
    	
 
    
	
***
    	
 
    	
 
    	
 
    	
$
    	
***
    	
 
    	
$
    	
***
    	
 
    	
$
    	
***
    	
 
    	
$
    	
***
    	
 
    

 

Please note that the above prices are still tentative at this time and that the actual CCH prices as of the date the CCH CompleteTax product goes live shall be substituted for the above as though included in the Agreement when signed.

 

f.             Licensee can set the price for the Basic, Deluxe and Premium and State Products at any level Licensee so chooses, subject CCH’s acceptance as to the minimum prices charged, such acceptance to not be unreasonably withheld and may change the pricing at any time, again subject to CCH’s acceptance as to the minimum as stated above.

 

Net Revenue is shared between CCH and Licensee as follows:

 

i.                  CCH is entitled to retain *** of each tax return filing fee. In the event of a totally free return (i.e., no license fee is collected for a Federal or a state return, except as to the use of a Promotion Code as described below) License shall have not obligation to pay CCH any money for such returns.

ii.               Licensee’s use of the Promotion Codes, described in subsection 5.6.e. is solely at Licensee’s discretion. CCH shall keep *** of the share in the revenue (but not less than *** per return) from returns processed using Promotion Codes.

iii.            After deducting the CCH share, CCH will pay the remaining Net Revenue balance to Licensee.

 

 

	
SUBMIT VIA FAX: 888. 878.4445
    	

    

 

COMPLETETAX® PROGRAM ORDER FORM
 (*** Tax Year Returns)

 

The CompleteTax Software described herein is provided pursuant to the attached CompleteTax® Program License Agreement (“Agreement”), which is incorporated herein by reference. A complete copy of the Agreement accompanies this Order Form and by executing this Order Form you are hereby agreeing to be bound by all of the terms and conditions set forth in the Agreement.

 

PLEASE PRINT CLEARLY - ALL FIELDS REQUIRED

 

	
Company Name:
    	
JTH Tax, Inc. d/b/a Liberty Tax Service
    	
 
    
	
Contact Name:
    	
Ray Shively
    	
 
    
	
Shipping Address: 
    	
1719 Corporate Landing Parkway
    	
 
    
	
Billing Address (if different):
    	
 
    	
 
    
	
City:
    	
 Virginia Beach
    	
 State: 
    	
VA
    	
 Zip:
    	
23454
    	
 
    
	
Phone Number:
    	
 
    	
 Fax Number:
    	
 
    	
 
    
	
Email Address:
    	
 
    	
 
    
	
Website URL:
    	
 
    	
 
    
																				

 

 

CompleteTax Software – Standalone

 

	
370600
    	
x
    	
Private Label
    	
 
    	
License Fee: $ ***
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CompleteTax Software Order Total
    	
$
    
	
(Plus Applicable State and   local tax when your order is billed.)
    	
 
    

 

* By signing below, you indicate your agreement with the terms and, conditions of the CompleteTax® Program License Agreement and this Order Form.

 

	
Signature:
    	
/s/ Raymond S. Shiveley
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
8/24/10
    	
 
    
				

 

Payment Information

 

	
o Bill my   account     Charge By: o VISA o MC o AMEX
    	
 
    	
Authorized Charge Amount ***
    

 

	
Credit Card Number:
    	
 
    	
 Exp Date:
    	
 
    	
 
    

 

	
Cardholder Name:
    	
 
    	
 Signature:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Cardholder Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CCH USE ONLY: SPECIAL INSTRUCTIONS:
    	
 
    	
 
    
							

 

CCH REVENUE SHARE: *** to CCH / *** to Liberty

 

	
TAX RETURN PRICE:
    	
Free: $0
    	
Basic: *
    	
Premium: *
    	
 
    	
Deluxe: *
    	
State: *
    

 

	
·                       Pricing to be   set by Licensee, subject to the provisions for minimum pricing.
    

 

	
PM APPROVAL:
    	
/s/ [ILLEGIBLE]
    	
 DATE:
    	
8/25/10
    	
 
    

 

MAILING ADDRESS: 20101 HAMILTON AVENUE, ONLINE TAX PREP, SUITE 200, TORRANCE, CA 90502Exhibit 10.17

 

 

AMENDED AND RESTATED DISTRIBUTOR AGREEMENT

 

THIS AMENDED AND RESTATED DISTRIBUTOR AGREEMENT (this “Agreement”) is entered into as of December 1, 2009 (the “Effective Date”) by and between NetSpend Corporation, a Delaware corporation (“NetSpend”), and JTH Tax, Inc., a Delaware corporation, d/b/a “Liberty Tax Service” (“Liberty Tax”),  Liberty Tax and NetSpend are collectively referred to in this Agreement as the “Parties.”

 

WHEREAS, NetSpend has entered into an agreement with a national bank or federal savings association (the “Issuing Bank”) whereby the Issuing Bank has agreed to issue certain prepaid debit cards that are offered and serviced by NetSpend (the “NetSpend Cards”);

 

WHEREAS, the program by which the Issuing Bank issues the NetSpend Cards is referred to herein as the “Card Program;”

 

WHEREAS, NetSpend offers and provides its services for the Card Program using its proprietary technology, business methods, services and processes that are together used to facilitate the activation, reload, sale, use, reporting and regulatory compliance related to the NetSpend Cards (the “NetSpend Services” and, together with the NetSpend Cards, the “NetSpend System”);

 

WHEREAS, Liberty Tax, itself and through its franchisees at various retail locations, facilitate refund anticipation loans, refund transfers and tax refunds for its customers who may benefit from the Card Program (“Tax Services”);

 

WHEREAS, the Parties have entered into that certain Distributor Agreement, dated as of October 1, 2008, whereby Liberty Tax, itself and through its franchisees, acts as an independent distributor and receives for transmission and transmit to NetSpend sign-up information in the form of applications for NetSpend Cards and related card services, and whereby Liberty Tax adds or “loads” refund anticipation loans, refund transfers and tax refunds to accounts associated with NetSpend Cards by facilitating the delivery of such funds via a third party bank or federal or state governmental authorities (as applicable) to the Issuing Bank (the “Existing Distributor Agreement”);

 

WHEREAS, the Parties have entered into that certain Third Party Agency Agreement, dated as of October 1, 2008, with the Issuing Bank (the “Bank Agreement”); and

 

WHEREAS, the Parties desire to amend and restate the Existing Distributor Agreement as set forth herein:

 

NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.     Appointment.  Acting upon authority granted to it by the Issuing Bank, on behalf of the Issuing Bank as well as on its own behalf, NetSpend hereby appoints (i) Liberty Tax to provide retail distribution services as set forth in Section 2 of this Agreement and (ii) each franchisee of Liberty Tax that elects to participate in the Card Program (each, a “Franchisee”)  by entering into an agreement with Liberty Tax in the form attached hereto as Exhibit A (the “Franchisee Card Program Agreement”) to provide retail distribution services as set forth in the applicable Franchisee Card Program Agreement.  Liberty Tax shall offer each of its franchisees the ability to participate in the Card Program and shall cause each of its own retail locations to participate in the Card Program.  Liberty Tax shall be responsible for the performance of all of the Franchisees under the Franchisee Card Program Agreements, and NetSpend may, in its sole discretion, look solely to Liberty Tax with respect to any failure by any Franchisee to comply with the applicable Franchisee Card Program Agreement.  The Parties acknowledge that the Bank Agreement provides that certain terms of Franchisee’s and Liberty Tax’s appointment as agents for the Issuing Bank and as agents for NetSpend shall be governed and administered pursuant to the terms of this Agreement and the Franchisee Card Program Agreements and that any rights and obligations imposed upon either of the Parties or Franchisee under the Bank Agreement shall be supplemental to and not in lieu of (and shall not supersede) those imposed under this Agreement and the Franchisee Card Program Agreements.  It is also acknowledged that, as referenced in the Bank Agreement, the Issuing Bank is a third-party beneficiary of certain rights granted under this Agreement to NetSpend in certain circumstances.  Except as otherwise expressly provided in the Bank Agreement, the foregoing limited grant of third party rights to the Issuing Bank under the Bank Agreement shall not be deemed to impose upon the Issuing Bank any of the obligations of NetSpend under this Agreement, and Liberty Tax agrees that, except as otherwise provided in the Bank Agreement, its exclusive remedy upon any breach of this Agreement by NetSpend shall be to seek redress from NetSpend or its successors in the manner provided by law and this Agreement.  To the extent that Liberty Tax provides Tax Services through its own retail locations or “company-owned stores”, the obligations of a Franchisee under this Agreement shall be deemed to apply to Liberty Tax as if Liberty Tax were a “Franchisee” hereunder.  The obligations of all other Franchisees shall be governed exclusively by their respective Franchisee Card Program Agreements.  Each retail location of  a Franchisee shall be referred to herein as a “Franchisee Location.”

 

2.     Distributor Services.  To the extent and where permitted by applicable law, the following services (the “Distributor Services”) shall be provided by Liberty Tax and Franchisee, as applicable, at each of its Franchisee Locations, during the Franchisee Locations’ normal business hours:

 

(a)   Franchisee will offer to each of its customers that electronically files his or her tax return with such Franchisee and his or her refund with respect to such return is greater than one dollar ($1.00) a temporary non-personalized NetSpend Card (a “Temporary Card”) onto which (i) a refund anticipation loan or refund transfer from a third party bank or (ii) a tax refund from a state or federal government shall be added or “loaded.”  NetSpend Cards issued directly from a Franchisee Location shall be referred to herein as a “Liberty Tax/NetSpend Card.”

 

(b)   Franchisee will also cause its Franchisee Locations to accept requests to add or “load” refund anticipation loans, refund transfers and tax refunds to NetSpend Card accounts, whether such NetSpend Card was purchased at a Franchisee Location or not and whether such NetSpend Card was issued by the Issuing Bank or not (“Card Payments”).

 

(c)   Liberty Tax shall record the full amount of the payment of each Card Payment (collectively, “Customer Payments”) and transmit such information by secure electronic means from Liberty Tax’s corporate office

 

Ó2007 NetSpend Corporation

CONFIDENTIAL

 

 

to NetSpend.

 

(d)   Customer Payments shall be delivered to the Issuing Bank in accordance with Schedule 1 hereto.  With respect to the receipt and delivery of Card Payments and other items to the Issuing Bank, Liberty Tax shall act as the agent of the Customer in the capacity of a “messenger service” as defined in 12 CFR § 7.1012, as amended from time to time.  With respect to each transaction involving the Distributor Services at a Franchisee Location, Distributor will accurately, completely, properly and promptly record and transmit to NetSpend by secure electronic means (i) the PAN and other Track 2 data encoded on the magnetic stripe of the NetSpend Card, (ii) the full amount of the Card Payment, (iii) the Franchisee Location identifier and (iv) the unique transaction identifier, together with all other Customer Data obtained from the Customers at the Franchisee Locations or otherwise in connection with the Distributor Services, which shall include each Customer’s name, address, telephone number, social security number and date of birth.  For purposes of this Agreement, “Customer Data” means any information or data regarding a Customer that constitutes “Nonpublic Personal Information” of a “Consumer” as the terms “Nonpublic Personal Information” and “Consumer” are defined under Title V of the Gramm-Leach-Bliley Act of 1999 or any successor federal statute, and the rules and regulations thereunder, as it or they may be amended or supplemented from time to time (“GLBA”); provided, however, that “Customer Data” shall not include information directly associated with the Tax Services provided by Liberty Tax and the Franchisee to Customers in their capacity as purchasers of the Tax Services.

 

(e)   Each Party hereby grants to the other Party, during the term of this Agreement, a non-exclusive, non-transferable, non-sublicensable (other than sublicenses to Franchisees under the Franchisee Card Program Agreements) right to use the names, trademarks, trade names, service marks, drawings, logos, symbols and other indicia of origin designated by the granting Party in a schedule (“Marks Schedule”) delivered from time to time to the other Party, for the sole purposes of marketing and promoting the sale, load and reload of NetSpend Cards pursuant to this Agreement (“Marks”).  If expressly so agreed in a Marks Schedule, each Party may extend the scope of such limited license to allow the use of its Marks by the other Party in approved advertising, promotional literature, documentation and other marketing materials related to the Liberty/Tax NetSpend Cards and marketing efforts under this Agreement.  To the extent such use is expressly contemplated in a Marks Schedule, a Party’s use of the other Party’s Marks in any such advertisement, promotional literature, documentation and other marketing materials will be subject to the granting Party’s prior review and approval, such approval not to be unreasonably withheld or delayed. Liberty Tax and NetSpend each own all right, title and interest in and to their respective Marks, along with all related intellectual property rights and associated goodwill.  A Party will comply with the written guidelines and procedures established by the other party with respect to its use of such Party’s Marks and will otherwise cooperate and agree upon the details of such identification.  A Party will not modify or alter the other Party’s Marks and will include an appropriate trademark notice (e.g., ® or TM, as the case may be) with each use of any of such Marks.  Neither Party will adopt brands, logos, trademarks, trade name or other marks which are the same as or confusingly similar to the Marks of the other Party.  In no event and under no circumstances shall a Party use the other Party’s Marks in any manner that is derogatory, negative, likely to confuse a third party as to source of goods or services, or otherwise injurious to the other Party, as determined by the other Party in its sole discretion.  Upon expiration or earlier termination of this Agreement, each Party will immediately cease all display, advertising and use of all Marks of the other Party.  No right, title or interest in, to or under any existing copyright, patent, trademark or, trade secret (collectively, the “Existing Proprietary Rights”) of any Party are created or assigned or otherwise transferred to the other Party pursuant to this Agreement.  Nothing in this Agreement constitutes a work for hire agreement, and nothing in this Agreement constitutes an agreement by a Party to assign or otherwise convey title to any Existing Proprietary Rights to the other Party.  Each Party will retain full ownership of and title to all equipment, materials, hardware and other items provided by such Party in connection with this Agreement.  As among Liberty Tax, Franchisee and NetSpend, NetSpend will own the Liberty Tax/NetSpend Cards, any information and data associated with account activity of Customers, the NetSpend System and any intellectual property rights related thereto.

 

(f)    (i)            During the period commencing on January 1 and ending on April 30 of each year (the “Marketing Period”), Liberty Tax shall use commercially reasonable efforts to cause each Franchisee Location to prominently display Liberty Tax/NetSpend Card program marketing information consisting of a menu strip, window cling and any other marketing or informational materials bearing the Marks of Liberty Tax and NetSpend supplied to Franchisee by NetSpend (“Marketing Materials”).  In connection with any audit Liberty Tax conducts of Franchisee Locations, Liberty Tax shall confirm whether such Franchisee Locations are displaying the Marketing Materials in accordance with the immediately preceding sentence.  Liberty Tax shall promptly provide a copy of the results of such audits to NetSpend upon NetSpend’s request.

 

(ii)   In addition, Franchisee will use reasonable efforts to cause employees of Franchisee designated by NetSpend, upon consultation with Franchisee, to attend information and training seminars or sessions regarding the NetSpend Cards and the NetSpend Services provided by NetSpend and/or Liberty Tax from time to time. If such a seminar or session is scheduled and conducted, Franchisee will be responsible for ensuring that all designated personnel attend such seminar or session, provided NetSpend will be responsible for the cost of the facilities employed for seminars or sessions provided solely by NetSpend, which shall be selected upon consultation with Liberty Tax.

 

(iii)  At NetSpend’s request, Franchisee will make certain Franchisee Locations available from time to time for purposes of market testing improved NetSpend Cards and NetSpend Services or for purposes of objectively testing consumer response to pricing or other changes to existing NetSpend Cards and NetSpend Services.

 

(g)   Any reversal or adjustment by Liberty Tax with respect to any receipt of funds by Liberty Tax for delivery to the Issuing Bank (in this paragraph, an “Adjustment”) will be effective only when both of the following have occurred:

 

(ii)   the terms of such Adjustment has been transmitted electronically to NetSpend; and

 

(iii)  NetSpend has confirmed electronically its receipt of such information and its approval of such Adjustment.  Upon receipt by NetSpend of an electronic transmission by Liberty Tax of information pertaining to an Adjustment, NetSpend will acknowledge receipt electronically and approve or disapprove such Adjustment as soon as reasonably possible.  Liberty Tax acknowledges that it shall remain responsible for any mistake requiring an Adjustment with respect to any financial data or funds delivered by Liberty Tax to the Issuing Bank or any financial data transmitted to NetSpend pursuant to this Agreement until such time as NetSpend acknowledges receipt of and approves the Adjustment in question.  After Liberty Tax electronically transmits any Adjustment to NetSpend and NetSpend acknowledges and approves the Adjustment, Liberty Tax will have no further obligation relating to any payment made on that NetSpend Card in a mistaken amount or otherwise for any liability or cost of NetSpend or  the Issuing Bank relating to the data or funds subsequently adjusted.  If NetSpend disapproves an Adjustment in accordance with this Section 2(i), then Liberty Tax will be responsible for the consequences of such proposed Adjustment as to any funds delivered or due to be delivered by Liberty Tax to the Issuing Bank or any financial data transmitted or due to be transmitted to NetSpend pursuant to this Agreement for which such Adjustment was disapproved. Notwithstanding any of the

 

2

 

above provisions, Liberty Tax shall act as the agent for the Customer while funds are in transit, and Liberty Tax shall be responsible for such funds until such are actually delivered to the Issuing Bank.

 

3.     Fees.

 

(a)   ***

 

(b)   NetSpend agrees to pay to Liberty Tax fees (the “NetSpend Fees”) with respect to Distributor Services provided by Franchisee on the terms and conditions set forth in Schedule 2 hereto.  The NetSpend Fees shall be transmitted to Liberty Tax in the manner set forth in Schedule 1 hereto.

 

(c)   NetSpend shall be entitled, in its sole discretion, at any time and from time to time, to modify the fees paid by Customers with respect to the NetSpend Services (other than the Cash Advance Fee (as defined in Schedule 2 hereto) which may only be modified by the mutual consent of both Parties); provided, however, that NetSpend shall provide Liberty Tax with at least sixty (60) days notice of any modification of the fees paid by Customers with respect to the NetSpend Services.  If any such fees are modified at the request of Liberty Tax, NetSpend may propose that certain equitable adjustments be made to the NetSpend Fees and, in such case, Liberty Tax shall make good faith efforts to re-negotiate the NetSpend Fees with NetSpend.

 

(d)   The parties acknowledge that NetSpend has paid to Liberty Tax a cash bonus in the amount of ***. NetSpend will pay Liberty Tax an additional cash bonus in the amount of *** on or prior to ***.

 

4.     The Parties’ Additional Rights and Responsibilities.

 

(a)   Issuance of NetSpend Cards.  As between NetSpend and the Issuing Bank, on the one hand, and Liberty Tax and Franchisee, on the other hand, NetSpend will be solely responsible, alone or through contracts with third parties, for the determination of the Customers to whom or for whom Liberty Tax/NetSpend Cards are issued, for the manufacture and delivery of the Liberty Tax/NetSpend Cards, for the provision of all NetSpend Services it provides to the Customers and for the production and delivery of numbered accounts, reports, invoices and statements to, and its relationship with, the Customers.  This responsibility includes (without limitation) responding to and satisfying any Customers’ complaints regarding the availability and quality of the Liberty Tax/NetSpend Cards and the NetSpend Services.

 

(b)   Marketing Materials, Temporary Cards and Training.  NetSpend will, at its own expense, deliver to Franchisee a sufficient quantity of Marketing Materials and Temporary Cards as may be necessary for Franchisee to perform the Distributor Services at each of its Franchisee Locations. Franchisee shall have no responsibility to NetSpend or to the Issuing Bank for any lost or stolen Temporary Cards, Marketing Materials or procedural and other documentation necessary for Franchisee otherwise to perform the Distributor Services, except to the extent such loss is due to Franchisee’s negligence or intentional misconduct.  Franchisee may order additional Temporary Cards from NetSpend to adequately fill requests from Customers.  Orders shall be sent to the address of NetSpend set forth below.  Orders placed by Franchisee may be refused or canceled by NetSpend at any time, provided that Franchisee will be excused from performance under this Agreement to the extent such nonperformance is due to NetSpend’s failure to deliver cards following a reasonable and timely order for such cards placed by the Franchisee with NetSpend.  NetSpend will at its own discretion and expense deliver the ordered Cards to Franchisee by (i) personal delivery, (ii) mail, or (iii) prepaid overnight express delivery service or same-day local courier service. NetSpend will assist Franchisee with reasonable instruction of Franchisee’s employees in marketing and processing applications for the NetSpend Cards, the Temporary Cards, the NetSpend Services, Customer Data and Customer Payments.  NetSpend will also provide a toll-free telephone number by which Franchisee’s employees may pose questions directly to NetSpend and will take such other actions as are reasonably necessary to keep Franchisee’s employees informed of news and developments related to the NetSpend Services.

 

(c)   Card Branding.   The Parties shall cooperate in the design and production of Liberty Tax/NetSpend Cards, including the card skin design, designation and brand, which shall be mutually agreed upon by the Parties and subject to approval of the respective Issuing Bank and card association.  Each Liberty Tax/NetSpend Card shall identify the Issuing Bank, as well bear NetSpend’s name, address, toll-free telephone number and logo and Liberty Tax’s name and logo.  Liberty Tax and Franchisee each acknowledges and agrees that NetSpend shall retain the ownership rights in any card skin design created in connection with the development of any Liberty Tax/NetSpend Card and that NetSpend retains the right and discretion to use for any purpose any such card skin design.

 

(d)   Estimated Amounts.  On or prior to October 15 of each calendar year, the Parties shall mutually agree upon an estimate of the number of Temporary Cards that will be manufactured for the following year (with respect to any year, the “Estimated Amounts”).  Notwithstanding anything to the contrary contained herein, in the event that the number of Temporary Cards issued from Franchisee Locations exceeds the Estimated Amount for such year, NetSpend shall be entitled to deliver to the Franchisees, on and after such date for the remaining portion of such year, Temporary Cards that do not bear the Liberty Tax name or logo and that have not been designed and produced in accordance with Section 4(c).  Franchisee shall not dispose of any Temporary Cards not used in any calendar year, but shall maintain such Temporary Cards in safekeeping for use in the subsequent calendar year.  In the event that at any time the parties agree to a new card skin design for Liberty Tax/NetSpend Cards (“New Liberty Tax/NetSpend Cards”), NetSpend shall be entitled to deplete its inventory of Liberty Tax/NetSpend Cards bearing the prior card skin design prior to distributing the New Liberty Tax/NetSpend Cards.

 

(e)   Liberty Tax Branded Website and IVR System.  NetSpend will develop and host a Liberty Tax branded customer support website and IVR system with substantially similar services and functionality as NetSpend’s standard customer service website and IVR system.  Liberty Tax hereby grants to NetSpend a right and license to use the Liberty Tax domain name in order to develop and host the Liberty Tax branded website. Liberty Tax shall have the opportunity to have input on the final “look and feel” of the website and the messaging used with the IVR, subject to NetSpend’s information technology policies, procedures and requirements.  The IVR system will have a unique toll-free IVR call in number and will utilize NetSpend’s existing call flow with NetSpend-provided voicing and scripting.

 

(f)    Distributor Authorizations.  Liberty Tax represents, warrants and covenants to each of NetSpend and the Issuing Bank that, to the extent related to the Distributor Services, (i) any and all licenses, permits, and other authorizations of Liberty Tax and Franchisee required by federal or state laws (collectively, the “Distributor Authorizations”) have been obtained, are valid and in full force and effect, (ii) the continuation, validity, and effectiveness of all of the Distributor Authorizations shall not be impaired or adversely affected by the terms hereof, (iii) it will maintain in effect the Distributor Authorizations, or obtain new or additional Distributor Authorizations, as necessary to permit it to perform its obligations under this Agreement and the Franchisee Card Program Agreement, as applicable and (iv) the NetSpend Authorized Payment Processer Application submitted to NetSpend by Liberty Tax, together with such documentation and materials provided by Liberty Tax to NetSpend in connection therewith (collectively, the “Application”), is true, correct and complete in all material respects, and Liberty Tax will update the Application from time to time as necessary to cause the Application to remain true, correct and complete in all material

 

3

 

respects.  Liberty Tax represents, warrants and covenants that the information contained in the ACH Authorization Form submitted to NetSpend with the Application is true, correct and complete and that NetSpend and the Issuing Bank shall be entitled to rely on such information with respect to any transmission of funds in accordance with Schedule 1 hereto.  In the event of any change to the information contained in the ACH Authorization Form, Liberty Tax shall promptly submit to NetSpend a new ACH Authorization Form, in which case NetSpend shall be entitled to rely on the information contained in the new ACH Authorization Form with respect to any future transmission of funds in accordance with Schedule 1 hereto.

 

(g)   Taxes. NetSpend will pay when due all federal excise taxes and all state and local use or sales taxes imposed in connection with the provision of the NetSpend Services. Liberty Tax will pay when due all federal excise taxes and all state and local use or sales taxes imposed in connection with funds collected by it and Franchisee for the Distributor Services to the extent such taxes can be collected from the Customer.  Each Party and Franchisee will also file when due all required tax returns required to be filed in connection with its business and with the collection and remittance of any applicable excise, use or sales taxes for which it bears responsibility under this Section 4(g).

 

(h)   Successor Bank.  Any other provision of this Agreement or the Bank Agreement to the contrary notwithstanding, as between Liberty Tax and NetSpend, NetSpend shall have the right at any time to cause another national bank, federal savings bank or federal savings association other than the initial Issuing Bank to become the issuer of the Liberty Tax/NetSpend Cards, and, upon NetSpend’s request, Liberty Tax agrees to exert its commercially reasonable efforts to facilitate substituting another bank or savings association (the or a “Successor Bank”) for the initial Issuing Bank for all purposes of this Agreement, including such amendments hereto as reasonably required by the Successor Bank, it being understood that the Parties intend that the material terms of this Agreement shall be unaffected by any such substitution of a Successor Bank for the initial Issuing Bank.  For purposes of the foregoing provision, Liberty Tax agrees that it will enter into an agreement (the “Successor Bank Agreement”) comparable in terms and effect to the Bank Agreement with NetSpend and any such Successor Bank, provided (i) the terms of the Successor Agreement shall be no more burdensome upon Liberty Tax in any material respect than is the Bank Agreement and (ii) except with respect to Liberty Tax/NetSpend Cards issued by the initial Issuing Bank prior to the effective date of the Successor Bank Agreement, Liberty Tax shall be fully released from continuing liabilities to the initial Issuing Bank under the Bank Agreement.

 

(i)    Fraud.  Each Party agrees that it will be fully liable for all damages resulting from the fraud, willful misconduct or gross negligence of its respective employees, agents, contractors or representatives.   Liberty Tax agrees that it will be fully liable for all damages resulting from the fraud, willful misconduct or gross negligence of Franchisee and its respective employees, agents, contractors or representatives. Notwithstanding the foregoing, Liberty Tax shall not be responsible for any unauthorized or erroneous transactions related to the NetSpend Cards for which either NetSpend or the Issuing Bank has liability in accordance with the Electronic Funds Transfer Act (“EFTA”), or any other applicable law, including without limitation liability arising under EFTA for any fraudulent or unauthorized NetSpend Card activations.  Franchisee will shall promptly notify Liberty Tax and NetSpend via facsimile, telephone or e-mail with information of which it has actual knowledge about any unauthorized activation of any NetSpend Card or about any counterfeit or fraudulent NetSpend Card sales.  NetSpend and the Issuing Bank will timely comply with their own obligations under this Agreement and applicable law to investigate and respond to such allegations under the EFTA and any other applicable law, and, if appropriate, attempt to close the account associated with the affected NetSpend Card(s), and recover funds Loaded onto such account.  NetSpend and Issuing Bank will cooperate with Franchisee and Franchisee Locations, and Franchisee will cause Franchisee Locations to cooperate fully with NetSpend and the Issuing Bank as applicable, in an effort to locate and prosecute the perpetrator of such unauthorized activity or fraud. NetSpend and Issuing Bank acknowledge and agree that Franchisee or the responsible Franchisee Location(s) will have no liability or obligation to make restitution payments to Issuing Bank for the benefit of NetSpend as applicable under this Agreement or otherwise, whether in the nature of Card Payments or fees charged in connection therewith, in connection with any NetSpend Cards that are the subject of such unauthorized or erroneous activity, except to the extent that such unauthorized activity constitutes the error, negligence, fraud, or willful misconduct of the employees, agents, contractors or representatives of Franchisee or any Franchisee Location, respectively.

 

(j)    Press Release.  Liberty Tax agrees to participate with NetSpend, at NetSpend’s request, in a joint press release concerning the subject matter of this Agreement. Both NetSpend and Liberty Tax must approve the substance of the press release in advance, provided that neither Party may unreasonably withhold or delay granting its approval. Liberty Tax agrees that NetSpend may disclose Liberty Tax by name as an agent of NetSpend.

 

(k)   Rights to Market to Customers.  Liberty Tax acknowledges and agrees that during and after the term of this Agreement NetSpend shall be entitled to use Customer Data to market to Customers complementary NetSpend products, features and services, including, without limitation, direct deposit features, overdraft protection and line of credit products.

 

5.     Term; Termination.

 

(a)   The term of this Agreement begins on October 1, 2008 and shall continue for an initial term of *** years (the “Initial Term”). AFTER THE INITIAL TERM, THIS AGREEMENT SHALL AUTOMATICALLY RENEW EACH YEAR, ON THE ANNIVERSARY THEREOF (the “Annual Expiration Date”), FOR SUCCESSIVE ADDITIONAL TERMS OF TWELVE (12) MONTHS. EITHER PARTY MAY TERMINATE THE AGREEMENT BY GIVING WRITTEN NOTICE TO THE OTHER PARTY OF THE NOTIFYING PARTY’S INTENT TO TERMINATE THIS AGREEMENT AT LEAST NINETY (90) DAYS BEFORE THE ANNUAL EXPIRATION DATE; IF THAT NOTICE IS TIMELY GIVEN, THE TERM OF THIS AGREEMENT SHALL EXPIRE ON THE ANNUAL EXPIRATION DATE IMMEDIATELY FOLLOWING THE DATE ON WHICH THAT NOTICE WAS GIVEN.  Any other reference in this Agreement to the “termination” of this Agreement shall include, without limitation, the expiration of the term set forth in this Section 5(a).

 

(b)   Liberty Tax may terminate this Agreement before the expiration of the term set forth in Section 5(a), by giving NetSpend written notice of termination, upon any of the following events of default by the other Party: (i) NetSpend fails to pay any amount when due under this Agreement and that payment failure continues for ten (10) Business Days after written notice of that payment failure is given by Liberty Tax; (ii) NetSpend continues its failure to perform, or fails to cure or correct any nonperformance of, any of its obligations under this Agreement (other than a payment or other obligation addressed in clause (i) above) for thirty (30) days after written notice of that failure (which describes the failure with reasonable specificity) is given by Liberty Tax; (iii) any bankruptcy, insolvency, liquidation, dissolution, or similar action or proceeding is instituted, commenced, or acquiesced in by the other Party or, if instituted or commenced involuntarily against NetSpend, is not stayed or dismissed within sixty (60) days after that involuntary institution or commencement; or (iv) NetSpend otherwise becomes insolvent, admits in writing its inability to pay its debts as they mature, makes a general assignment for the benefits of its creditors, or enters into any workout or similar arrangement with its creditors..

 

(c)   NetSpend may terminate this Agreement before the expiration of

 

4

 

the term set forth in Section 5(a), by giving Liberty Tax written notice of termination, upon any of the following events of default by Liberty Tax: (i) Liberty Tax fails to pay any amount when due under this Agreement and that payment failure continues for ten (10) Business Days after written notice of that payment failure is given by NetSpend; (ii) Liberty Tax fails to comply with Section 7; (iii) Liberty Tax continues its failure to perform, or fails to cure or correct any nonperformance of, any of its obligations under this Agreement (other than a payment or other obligation addressed in clause (i) or (ii) above), including, without limitation, its obligation to cause Franchisee to comply with the terms and conditions of the applicable Franchisee Card Program Agreement,  for thirty (30) days after written notice of that failure (which describes the failure with reasonable specificity); (iv) any bankruptcy, insolvency, liquidation, dissolution, or similar action or proceeding is instituted, commenced, or acquiesced in by Liberty Tax or, if instituted or commenced involuntarily against Liberty Tax, is not stayed or dismissed within sixty (60) days after that involuntary institution or commencement; or (v) Liberty Tax otherwise becomes insolvent, admits in writing its inability to pay its debts as they mature, makes a general assignment for the benefits of its creditors, or enters into any workout or similar arrangement with its creditors.

 

(d)   A Party’s termination of this Agreement under Section 5(b) or 5(c) shall not be its exclusive remedy for any default by the other Party or affect such other Party’s responsibility for performing its obligations under this Agreement.

 

(e)   Upon termination of this Agreement, each Party shall cease all theretofore permitted use of the other Party’s name, tradenames, trademarks, servicemarks and logos.

 

(f)    Upon termination of this Agreement, NetSpend will cease disbursement of all NetSpend Fees to Liberty Tax, provided that Liberty Tax shall be entitled to all NetSpend Fees that have accrued as of the date of termination.

 

6.     No Control of Liberty Tax’s Operations; Independent Parties.  Notwithstanding anything to the contrary contained herein, this Agreement shall not be construed to provide that NetSpend or the Issuing Bank in any manner control the operations of Liberty Tax or Franchisee or the manner in which Liberty Tax or Franchisee complies with its obligations hereunder or under the applicable Franchisee Card Program Agreement.  Each Party is responsible for its own business expenses generally, including (without limitation) expenses of performing its obligations under this Agreement, and for the payment of all taxes relating to its own business activities.  The Issuing Bank, NetSpend and Liberty Tax agree they are independent contractors to each other in performing their respective obligations to each other, including those set forth herein.  Nothing in this Agreement or in the working relationship being established and developed hereunder shall be deemed, nor shall it cause, the Issuing Bank, NetSpend, Liberty Tax and Franchisee to be treated as partners, joint ventures or otherwise as joint associates for profit.  Notwithstanding the foregoing, to the extent required by applicable law, the Issuing Bank’s appointment of NetSpend and NetSpend’s appointment of  Liberty Tax and Franchisee as the Issuing Bank’s authorized representatives will establish an agency relationship, limited strictly to the rights, duties and obligations as set forth herein, in the applicable Franchisee Card Program Agreement and in the Bank Agreement.  Accordingly:

 

(a)   NetSpend, Liberty Tax and Franchisee shall serve as the Issuing Bank’s representatives and agents for purposes of rendering the marketing, solicitation, sales and distribution services and other related services as set forth herein;

 

(b)   NetSpend and Liberty Tax acknowledge the Issuing Bank’s right to monitor and review the activities NetSpend, Liberty Tax and Franchisee perform for or on behalf of the Issuing Bank hereunder;

 

(c)   NetSpend and Liberty Tax acknowledge the statutory authority of the Issuing Bank’s regulators (“Federal Regulator”) to regulate and examine and take an enforcement action pursuant to the federal law against NetSpend, Liberty Tax or Franchisee with respect to the activities performed by NetSpend, Liberty Tax or Franchisee as agents or representatives of the Issuing Bank;

 

(d)   Issuing Bank shall provide NetSpend, Liberty Tax and Franchisee with information and training that Liberty Tax understands are designed to ensure that NetSpend, Liberty Tax and Franchisee will be adequately informed about the Issuing Bank’s products and services offered hereunder, including the distinctions between insured and non-insured products, and relevant law that may apply to the marketing, solicitation and customer service activities instituted on behalf of the Issuing Bank hereunder, and it is understood that in determining the scope of its obligations with respect to the Issuing Bank’s products or services covered in this Agreement, Franchisee and Liberty Tax may rely on the information provided by the Issuing Bank;

 

(e)   NetSpend agrees to ensure that training material and regulatory compliance materials furnished to Franchisee or Liberty Tax are updated from time to time as NetSpend determines to be reasonably necessary;

 

(f)    NetSpend and Liberty Tax acknowledge that the Issuing Bank is required to adopt a detailed compliance program to ensure adequate monitoring, supervision and control over NetSpend, Liberty Tax and Franchisee and the activities that NetSpend, Liberty Tax and Franchisee perform on behalf of the Issuing Bank.  Such oversight includes ensuring NetSpend’s and Liberty Tax’s own anti-money laundering compliance programs are detailed, thorough and implemented accurately and fully in compliance with applicable law;

 

(g)   NetSpend and Liberty Tax acknowledge that the Issuing Bank may  undertake an annual review conducted under the auspices of the Issuing Bank’s compliance officer to determine if NetSpend, Liberty Tax and Franchisee are operating in compliance with the Issuing Bank’s established policies and procedures regarding the marketing, solicitation, customer service or other activities related to the Issuing Bank’s authorized bank products or services;

 

(h)   NetSpend and Liberty Tax acknowledge that the Issuing Bank may institute a system for tracking and resolving consumer complaints involving NetSpend Cards and the Card Program in a timely manner and each agrees to provide an annual report regarding consumer complaints and their resolution to the Issuing Bank’s board of directors;

 

(i)    NetSpend and Liberty Tax acknowledge that a review and approval process will be undertaken by the Issuing Bank for all NetSpend Card and Card Program disclosures, advertising and other promotional material and that such process will be timely communicated to Liberty Tax;

 

(j)    NetSpend and Liberty Tax acknowledge that NetSpend, Liberty Tax and Franchisee, in their capacity as the Issuing Bank’s authorized delegates and representatives, and the Issuing Bank are all subject to control and supervision by the appropriate office of the Federal Regulator. This control and supervision includes, but is not limited to, the ability to require that the Issuing Bank obtain Federal Regulator’s approval (or non-objection) before entering into any contractual arrangement with NetSpend, Liberty Tax and Franchisee and the right of the Federal Regulator to approve specific contractual language;

 

(k)   NetSpend and Liberty Tax acknowledge that the Federal Regulator may require Liberty Tax, in its capacity as the Issuing Bank’s authorized delegate and representative, to submit periodic reports to the Federal Regulator regarding its and Franchisee’s performance under this Agreement and the applicable Franchisee Card Program Agreement. If any such reports are required, NetSpend will ensure that the Issuing Bank

 

5

 

informs Liberty Tax of the required content of any such report and shall provide reasonable assistance to Liberty Tax in preparing such report;

 

(l)    NetSpend and Liberty Tax acknowledge that the Federal Regulator may require the Issuing Bank to modify or terminate its relationship with NetSpend, Liberty Tax and Franchisee at any time.  NetSpend agrees to employ its best efforts to ensure that the Issuing Bank will use commercially reasonable efforts to avoid any required termination or material modification of its relationship with Liberty Tax or Franchisee, and to the extent that Federal Regulator requires modification or termination in spite of the Issuing Bank’s reasonable efforts, NetSpend will employ it as best efforts to ensure that the Issuing Bank provides as much advance written notice thereof as possible to Liberty Tax; and

 

(m)  The Federal Regulator may institute any other requirements or conditions that the Federal Regulator deems appropriate for the particular purpose of reviewing the Issuing Bank’s compliance program, which may include an examination of Liberty Tax’s and Franchisee’s programs and their records relating to the performance of this Agreement and the applicable Franchisee Card Program Agreement.

 

7.     Noncompetition.

 

(a)   ***

 

(b)   In the event that NetSpend at any time (i) enters into a Prohibited Distribution Arrangement (as hereinafter defined) other than in connection with a Combination (as hereinafter defined) or (ii) terminates the Exclusivity Period pursuant to Section 8(c), the restrictions set forth in Section 7(a) shall immediately terminate and be of no further force or effect.

 

8.     Non-Exclusive Rights.

 

(a)   Liberty Tax acknowledges and agrees that its and Franchisee’s rights under this Agreement and the applicable Franchisee Card Program Agreement, respectively, to market and distribute NetSpend Cards shall be non-exclusive in nature and that NetSpend shall be permitted to enter into similar arrangements with other potential distributors, except as otherwise provided in Section 8(b).

 

(b)   Subject to the provisions of Sections 8(c) and 8(d), which may result in the early termination of the Exclusivity Period, NetSpend agrees that it will not enter into an agreement with *** for the distribution of NetSpend Cards in the United States (“Prohibited Distribution Arrangement”) during the *** period commencing on *** (the “Exclusivity Period”).

 

(c)   In the event that the number of Liberty Tax/NetSpend Card accounts that are activated during each period specified on Schedule 3 hereto is less than the number set forth opposite such period on Schedule 3 hereto, the Exclusivity Period shall terminate, if NetSpend so elects, and be of no further effect.

 

(d)   Notwithstanding anything to the contrary contained in this Agreement, NetSpend may, in its sole discretion, terminate the Exclusivity Period by providing written notice to Liberty Tax of NetSpend’s intent to terminate the Exclusivity Period and delivering to Liberty Tax a cash payment of *** in consideration therefore (the “Cash Consideration”), upon which the Exclusivity Period shall automatically terminate and the restrictions set forth in Section 8(b) will be of no further force or effect.  Notwithstanding anything to the contrary contained in this Agreement, if *** enter into a Combination, the Exclusivity Period shall automatically terminate upon the consummation of such Combination without any payment by NetSpend of the Cash Consideration described above.  For purposes of this Agreement, a “Combination” shall mean a transaction or series or combination of transactions whereby, directly or indirectly, (i) more than 50% of the voting power of Liberty Tax’s outstanding equity securities or all or substantially all of Liberty Tax’s assets are transferred to ***, including, without limitation, by means of a sale or exchange of capital stock or assets, a merger or consolidation, a tender or exchange offer, a leveraged buy-out, the formation of a joint venture or partnership, or any similar transaction, or (ii) more than 50% of the voting power of *** outstanding equity securities or all or substantially all of *** assets are transferred to Liberty Tax, including, without limitation, by means of a sale or exchange of capital stock or assets, a merger or consolidation, a tender or exchange offer, a leveraged buy-out, the formation of a joint venture or partnership, or any similar transaction

 

9.     Indemnification and Insurance.

 

(a)   NetSpend shall, at its expense, indemnify, defend and hold harmless Liberty Tax and its shareholders, directors, officers, employees, agents, successors and permitted assigns (each a “Liberty Tax Indemnified Party”) from and against any and all third party claims, actions, demands, suits (“Liberty Tax Claims”) and all related losses, liabilities, damages, penalties, costs and expenses (including, without limitation, reasonable attorneys’ fees) incurred by a Liberty Tax Indemnified Party arising out of or related to any actual or alleged infringement or misappropriation of the intellectual property rights of any third party by (i) the NetSpend Cards, to the extent, and only to the extent, that such actual or alleged infringement or misappropriation relates directly to the NetSpend Cards and the standard processes associated therewith, (ii) NetSpend’s or the Issuing Bank’s Marks or (iii) the Marketing Material.  For purposes of clarity, the indemnification obligations set forth in this paragraph shall not apply to the extent such infringement or misappropriation is based upon Liberty Tax’s and/or Franchisee’s use and/or distribution of NetSpend Cards in connection with the tax preparation and related services provided by Liberty Tax or Franchisee.

 

(b)   Liberty Tax shall, at its expense, indemnify, defend and hold harmless NetSpend and its shareholders, directors, officers, employees, agents, successors and assigns (each, a “NetSpend Indemnified Party”) from and against any and all losses, claims or expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by a NetSpend Indemnified Party in any way arising from or in connection with (i) the inaccuracy of any representation or warranty of Liberty Tax hereunder or the performance or nonperformance of Liberty Tax’s obligations hereunder, (ii) the inaccuracy of any representation or warranty of Franchisee under the applicable Franchisee Card Program Agreement or the performance or

 

6

 

nonperformance of Franchisee’s obligations under the applicable Franchisee Card Program Agreement or (iii) any actual or alleged infringement or misappropriation of the intellectual property rights of any third party by Liberty Tax’s or Franchisee’s use and/or distribution of the NetSpend Cards in connection with the tax preparation and related services provided by Liberty Tax or Franchisee.

 

(c)   In no event shall either Party be liable for any consequential, punitive, special, or exemplary damages relating to this Agreement.

 

(d)   The Parties’ respective indemnification obligations under this Section 9 shall survive the expiration or termination of this Agreement.

 

(e)   Liberty Tax shall obtain and maintain for the term of this Agreement, at its expense, insurance policies of the type and amounts specified in Schedule 4 hereto covering Liberty Tax, or such other insurance coverage in form and substance acceptable to NetSpend.  Upon request, Liberty Tax shall furnish to NetSpend a certificate of insurance or other evidence satisfactory to NetSpend that such insurance coverage is in effect.  A failure to comply with this provision shall be deemed a breach of this Agreement.

 

10.   Confidentiality.  Except as to the Issuing Bank, each of the Parties shall hold in confidence all documents and information furnished to it by or on behalf of the other Party in connection with this Agreement pursuant to the terms of the Mutual Nondisclosure Agreement entered into by the Parties in connection herewith and attached hereto as Exhibit B (the “NDA”), including, without limitation, the terms of this Agreement, provided that each Party’s confidentiality obligations as set forth in the NDA shall remain in effect through the term of this Agreement and shall survive the termination of this Agreement for a period of three (3) years thereafter.

 

11.   Compliance with Laws.

 

(a)   Franchisee, Liberty Tax and NetSpend will perform their respective obligations under this Agreement and the applicable Franchisee Card Program Agreement in compliance, in all material respects, with all applicable federal and state laws, orders or regulations.  Liberty Tax and NetSpend acknowledge and agree that all Customer Data is subject to all terms and conditions governing information that is considered cardholder data under the Payment Card Industry Data Security Standard (the “PCI Standard”), and with respect to the Issuing Bank, may include “Customer Information” as defined under GLBA, 15 U.S.C. § 6801.  Liberty Tax acknowledges its and Franchisee’s responsibility to safeguard Customer Data in its and Franchisee’s possession or control, both during and after the termination of this Agreement, and agrees that, as between Franchisee and Liberty Tax, on one hand, and NetSpend, on the other hand, all right, title and interest in Customer Data is owned by NetSpend, together with the Issuing Bank, and the respective card association. Each of Franchisee and Liberty Tax shall perform its obligations under this Agreement and the applicable Franchisee Card Program Agreement in compliance with all applicable requirements of the PCI Standard and Franchisee shall cause all its Franchisee Locations to comply with all applicable provisions of the PCI Standard in its performance of any obligations concerning NetSpend Cards or Customer Data. As part of these obligations, each of Franchisee  and Liberty Tax shall use and shall cause all Franchisee Locations to use, Customer Data only for the purposes of conducting transactions pursuant to this Agreement and the applicable Franchisee Card Program Agreement and assisting NetSpend or other owners of such data with supporting a loyalty program, providing fraud control services or for uses specifically required by law.  In addition, each of Franchisee and Liberty Tax shall notify NetSpend in writing prior to disposing of any Customer Data, and shall only dispose of Customer Data in a manner reasonably acceptable to NetSpend and the Issuing Bank.  Each of Franchisee and Liberty Tax shall comply (and cause all Franchisee Locations to comply) with all reasonable requests for information from NetSpend, including, without limitation, all requests for information arising from third-party or internal audits regarding security incidents, on behalf of NetSpend, any Issuing Bank, PCI representatives, PCI approved third parties and any governmental authority or regulator exercising jurisdiction (“Approved Persons”). Each of Franchisee and Liberty Tax shall make available (and each Franchisee will cause all Franchisee Locations to make available) to Approved Persons upon reasonable request all books and records regarding security processes and procedures, use of Customer Data, disaster recovery planning, this Agreement the applicable Franchisee Card Program Agreement and the services rendered hereunder and thereunder.  Each of Franchisee and Liberty Tax will (and each Franchisee will cause all Franchisee Locations to) provide full cooperation with and access for Approved Persons to conduct a thorough security review after any security intrusion, any loss or unauthorized release of Customer Data or otherwise in connection with Liberty Tax’s breach of any obligation under this Agreement concerning Customer Data. Liberty Tax and NetSpend acknowledge that the law applicable to the protection of personally identifiable information of consumers and to the products and services provided pursuant to this Agreement is evolving, and each of Franchisee and Liberty Tax shall cooperate in good faith with NetSpend and the Issuing Bank to implement such procedures and enter into such addenda to this Agreement and the applicable Franchisee Card Program Agreement as may be reasonably necessary or appropriate to maintain compliance with new or different laws, regulations and industry requirements that come into effect, to the extent they are applicable to Franchisee, Liberty Tax and NetSpend in the performance of their respective obligations under this Agreement and the  applicable Franchisee Card Program Agreement.  The Parties understand that the Card Program does not require approval by the Federal Regulator of the Issuing Bank, and that NetSpend, after due investigation, believes that the Issuing Bank’s services as issuer of the Liberty Tax/NetSpend Cards will comply with any applicable policies, procedures and examination guidelines of such Federal Regulator.

 

(b)   Each of Franchisee and Liberty Tax, and each person owning or otherwise controlling at least 25% of the equity or voting power of Franchisee or Liberty Tax, respectively (a “Principal”), is not a person either listed on the specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Asset Control, U.S. Department of the Treasury  (the “OFAC List”) or otherwise with whom NetSpend or the Issuing Bank is prohibited by laws, regulations or executive orders, including Executive Order No. 13224, administered by the Office of Foreign Asset Control, U.S. Department of the Treasury (collectively the “OFAC Rules”) from conducting transactions and/or dealings (a “Prohibited Person”).  Neither Liberty Tax nor any Principal thereof will become a Prohibited Person at any time during the term of this Agreement.   In the event that, at any time after the date hereof, the Principals of Liberty Tax shall change, Liberty Tax shall provide NetSpend at least thirty (30) days prior written notice thereof and shall cooperate with NetSpend with respect to any diligence it may require in connection therewith.

 

(c)   To Liberty Tax’s knowledge, neither Liberty Tax nor Franchisee is “otherwise associated with” a Prohibited Person within the meaning of 31 CFR §594.316.  Franchisee and Liberty Tax shall provide information (to the extent in Franchisee’s or Liberty Tax’s possession or under Franchisee’s or Liberty Tax’s control or otherwise available to Franchisee or Liberty Tax without material expense or extraordinary efforts) as NetSpend or the Issuing Bank may require from time to time to permit NetSpend or the Issuing Bank to satisfy applicable obligations under laws, including, without limitation, the OFAC Rules and/or anti-money laundering laws. Liberty Tax hereby consents to NetSpend conducting such searches and checks, including a criminal background check, of each Principal, and each of Liberty Tax and Franchisee shall immediately notify NetSpend if Liberty Tax or Franchisee has knowledge that Principal or any member or beneficial owner of Liberty Tax or Franchisee or Principal is or becomes a Prohibited Person or (i) is convicted of, (ii) pleads nolo contendere to, (iii) is indicted on or (iv) is arraigned and held over on charges under anti-money laundering laws or involving money laundering or predicate crimes to money laundering.

 

7

 

12.   Access to Records.

 

(a)   During the term of this Agreement, Franchisee, Liberty Tax and NetSpend shall maintain accurate records with respect to its respective obligations hereunder, including sales and issuances of the Liberty Tax/NetSpend Cards, the receipt of all payments and other amounts from Customers, all transactions of Customers using the Liberty Tax/NetSpend Cards and other matters related thereto. Within thirty (30) days of Liberty Tax’s written request to NetSpend, but not more than once in any twelve-month period, Liberty Tax, by its duly authorized agents and representatives, shall have the right to inspect such records, documents and materials from time to time during ordinary business hours, subject to (i) such security procedures as NetSpend may reasonably impose and (ii) such limitations as may be required under applicable governmental or regulatory rules, regulations or statutes governing the conduct of NetSpend’s business.

 

(b)   Within thirty (30) days of a written request to the other Party, but not more than once in any twelve-month period, a Party, by its duly authorized agents and representatives, shall have the right to inspect the records, documents and materials maintained by the other Party or Franchisee relating to this Agreement or the Franchisee Card Program Agreement, during ordinary business hours, subject to (i) such security procedures as the other Party or Franchisee may reasonably impose and (ii) such limitations as may be required under applicable governmental or regulatory rules, regulations or statutes governing the conduct of the inspected Party’s  or Franchisee’s business. Notwithstanding the foregoing, the Parties nor Franchisee shall have any obligation to disclose to each other, and no right to inspect or copy, nor any other right of access to, any other corporate financial information, or Customer financial information, or to obtain photocopies of such records, documents, and materials. Each Party agrees that any records, documents, and materials made available for inspection under this Section 12 shall be deemed “Confidential Information” of the disclosing Party and subject to the disclosing Party’s corporate privacy policy, except with respect to any disclosure required by any regulatory agency with jurisdiction over a Party, or Section 10 of this Agreement.

 

13.   Notice.  Any notice, consent, or other communication to be given under this Agreement by any Party to the other Party shall be in writing and shall be either (a) personally delivered, (b) mailed by registered or certified mail, postage prepaid with return receipt requested, (c) delivered by prepaid overnight express delivery service or same-day local courier service, or (d) delivered by prepaid facsimile transmission, in any case to the address or number set forth below or at such other address or number as may have previously been designated by a Party for it by notice to the other Party in accordance with this Section 13.  Notices delivered personally, by overnight express delivery service, or by local courier service shall be deemed given as of actual receipt.  Mailed notices shall be deemed given three Business Days after mailing.  For purposes of this Agreement, a “Business Day” is any Monday through Friday, other than a day on which banks are authorized to be closed in the State of Texas.  Notices delivered by facsimile transmission shall be deemed given upon receipt by the sender of the transmission confirmation.

 

	
If   to Liberty Tax:
    	
JTH   Tax, Inc., dba Liberty Tax Service
    
	
Address:
    	
1716   Corporate Landing Pkwy
    
	
 
    	
Va   Beach, VA 23454
    
	
Facsimile   No.:
    	
(757)   493-0169
    
	
Attn:
    	
Mark   Baumgartner
    
	
Title:
    	
Vice   President, CFO
    
	
 
    	
 
    
	
If   to NetSpend:
    	
NetSpend   Corporation
    
	
 
    	
701   Brazos Street
    
	
 
    	
Suite 1200
    
	
 
    	
Austin,   Texas 78701
    
	
 
    	
Facsimile   No.: 512-469-9951
    
	
 
    	
Attn: General Counsel
    

 

14.   Assignment.  Except as provided in this Agreement, the rights and obligations under this Agreement may not be assigned or delegated by either Party without the prior written consent of the other Party, and any such purported assignment or delegation without such consent shall be void.  NetSpend may assign its rights and obligations under this Agreement to any entity that controls, is controlled by, or is under common control with NetSpend.  Any requested consent to assignment will not be unreasonably withheld by a Party, unless the entity to which the assignment is to be made is a direct competitor of the non-assigning Party (in which case, consent shall be in the sole discretion of the non-assigning Party).

 

15.   Governing Law.  This Agreement shall be governed by, construed in accordance with, and enforced under the laws of the State of Texas.

 

16.   Force Majeure.  Except as otherwise expressly set forth herein, in the event a Party shall be delayed or hindered in, or prevented from, the performance of any act required of it hereunder by reason of strike, inability to procure materials, failure of power, telecommunications or connectivity failure, restrictive governmental laws or regulations, inability to obtain or maintain (for any reason outside of a Party’s reasonable control) any governmental or regulatory license or authorization, riot, insurrection, war, terrorism and/or any act in furtherance of terrorism, act of God, or other event outside that Party’s reasonable control (each such cause or event being hereinafter referred to as a “Force Majeure”), then performance of such acts will be excused for the period of the delay and the period for performance of any such act shall be extended for a period equivalent to the period of such delay.  Any time a Party is experiencing a Force Majeure that is expected to result in a significant failure or delay, that Party will give notice to the other Party describing the Force Majeure and the nature of the failure or delay and giving an estimate as to how long the delay will be.  A Party claiming an excusable delay or failure under this Section 16 shall use reasonable efforts to alleviate or overcome the Force Majeure as soon as practicable.

 

17.   Offset.  A Party shall be entitled to credit or offset an amount equal to any or all amounts due to it by the other Party under this Agreement.

 

18.   Dispute Resolution.  Any dispute or controversy arising out of or relating to this Agreement or the Bank Agreement, or both, or the interpretation or termination of this Agreement or the Bank Agreement, or both (“Dispute”), shall be resolved or settled by arbitration before a single arbitrator pursuant to the Rules for Commercial Arbitration of the American Arbitration Association (the “Rules”).  Arbitration may be commenced at any time by a Party’s giving written notice to the other Party and to the Issuing Bank that a Dispute has been referred to arbitration under this Section 18.  The location and arbitrator shall be selected by agreement of the Parties, but if they do not so agree within twenty (20) days after the date of the notice referred to in the second preceding sentence, the selection shall be made by the American Arbitration Association pursuant to the Rules.  Any award rendered by the arbitrator shall be conclusive and binding upon the Parties.  This provision for arbitration shall be specifically enforceable by either of the Parties, and judgment upon the arbitration award may be entered and enforced in any court having jurisdiction over the Parties or their respective assets, it being the intent of the Parties that these arbitration provisions be enforced to the fullest extent permitted by applicable law.  Each of the Parties shall pay its own expenses of arbitration (including, without limitation, those of its own counsel and witnesses), and the expenses of the arbitrator shall be shared equally by the Parties (and, if the dispute involves Issuing Bank, also shared equally by the Issuing Bank under the Bank Agreement); except that if, in the opinion of the arbitrator, any claim or any defense or objection thereto was unreasonable, the arbitrator may assess, as part of his or her award, all or part of the arbitration expenses of the other Party (including, without limitation, its reasonable attorneys’ fees) and of the arbitrator against the Party asserting that unreasonable claim, defense, or objection.  Nothing in this Section 18 precludes a Party from applying to a court having jurisdiction to (a) seek provisional or temporary injunctive relief, in response to an actual or threatened breach of this Agreement or otherwise to avoid irrevocable damage or maintain the status

 

8

 

quo, until a final arbitration decision or award is rendered or a Dispute is otherwise resolved or (b) enforce the provisions of this Section 18.  Nothing in this Section 18 precludes the Parties from resolving a Dispute by agreement at any time.

 

19.   Amendment; Waiver.  This Agreement may only be amended by the written consent of both Parties, and any provision hereof may be waived only by a document signed by the Party against which the waiver is sought to be enforced.  A Party’s failure or delay in enforcing the other Party’s performance of any of such other Party’s obligations under this Agreement shall not be a waiver of any of those obligations.

 

20.   Invalid Provisions.  If any provision of this Agreement is ever held to be invalid or unenforceable, that provision will be severed from the rest of this Agreement, and all of the other provisions of this Agreement will remain in effect, but will be amended by the Parties to the extent possible to result in this Agreement having the same relative economic benefits and detriments to the Parties as existed before the severance of the invalid or unenforceable provision.

 

21.   Entire Agreement.  This Agreement and the Franchisee Card Program Agreements contain the entire agreement of the Parties as to the subject matter hereof and supersedes all prior agreements and understandings, whether oral or written, between the Parties with respect to the subject matter hereof.

 

22.   Binding Effect; No Third-Party Beneficiaries.  This Agreement and the rights and obligations hereunder shall be binding upon and shall inure to the benefit of the Parties and their legal successors and permitted assigns.  Except as otherwise provided in Sections 1 and 2 above and in Sections 4(f), 28 and 29, nothing in this Agreement, expressed or implied, is intended to confer upon any person or entity, other than the Parties and their legal successors and permitted assigns, any rights, benefits or obligations.

 

23.   Compliance with Gramm-Leach-Bliley Act.  Notwithstanding the foregoing, nothing herein shall require either Party to violate Title V of GLBA or any regulation promulgated thereunder with respect to the privacy of the customers of any financial institution.

 

24.   Organization and Qualification.  The Parties represent and warrant to each other that, as of the date of this Agreement, each Party is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized, is duly qualified and in good standing as a foreign corporation in every state in which the character of its business requires such qualification (except where the failure to obtain such foreign qualification would not have a material adverse effect on Franchisee’s business) and has the power to own its property and carry on its business as now conducted.

 

25.   Due Authorization.  The execution and delivery by the Parties of this Agreement, the performance by the Parties of the transactions contemplated hereby and compliance by the Parties with the terms of this Agreement, (a) are within the Parties’ power and authority and (b) have been duly authorized by all necessary action.  This Agreement has been duly executed and delivered by the Parties and constitutes a valid and binding agreement of each Party, enforceable in accordance with its terms.

 

26.   Consents.  Neither the execution and delivery of this Agreement by the Parties nor the performance by the Parties of their obligations hereunder requires any consent, authorization, approval, notice to or other action by or in respect of, or filing with, any third party or any governmental body or agency.

 

27.   Counterparts; Facsimile Signatures.  This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one, and the same, document. Signatures of the Parties may be exchanged by facsimile, and such facsimile signature pages shall be deemed originals in all respects.

 

28.   Application; Annual Review.  Liberty Tax shall promptly update the Application, including the documentation and materials provided in connection therewith, as NetSpend or the Issuing Bank may request from time to time.  NetSpend may conduct an annual review of Liberty Tax and its owners for the purpose of updating the Application, which may include, at NetSpend’s sole discretion, credit checks, and Liberty Tax shall cooperate with NetSpend’s efforts with respect thereto.

 

29.   Franchisee Information.  At NetSpend’s request, Liberty Tax will provide NetSpend and the Issuing Bank with accurate and complete information regarding the Franchisees that have elected to participate in the Card Program as of a given date, including, without limitation, the name of each Franchisee, the effective date of the applicable Franchisee Card Program Agreement and the Applicable Tax Season (as defined in such Franchisee Card Program Agreement) with respect thereto, together with copies of the Franchisee Card Program Agreements in effect as of such date.

 

9

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be effective as of the Effective Date.

 

	
 
    	
LIBERTY   TAX:
    
	
 
    	
 
    
	
 
    	
JTH TAX, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark Baumgartner
    
	
 
    	
Name:
    	
Mark F. Baumgartner
    
	
 
    	
Title:
    	
Vice   President, Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
NETSPEND:
    
	
 
    	
 
    
	
 
    	
NETSPEND   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Frank Kaplan
    
	
 
    	
Name:
    	
Frank   Kaplan
    
	
 
    	
Title:
    	
Senior   Vice President, Sales
    

 

 

Schedule 1

 

DEPOSIT AND TRANSMISSION PROCEDURES

 

On each Business Day that Card Payments(s) are processed by Franchisee, Liberty Tax shall cause the funds constituting such Card Payments to be remitted by wire transfer to a custodial customer bank account designated by NetSpend at the Issuing Bank.

 

On or before the tenth (10th) Business Day of each month, NetSpend shall provide Liberty Tax with a calculation of the NetSpend Fees (which shall include an aggregate list of all relevant data necessary to calculate the NetSpend Fees with respect to each Franchisee Location (the “NetSpend Fee Calculation”)), in each case during the immediately preceding month. Payment of the NetSpend Fees corresponding to the NetSpend Fee Calculation will be made by NetSpend initiating a credit, through the Automatic Clearing House system, to a bank account designated by Liberty Tax no later than ten (10) days after the due date of the NetSpend Fee Calculation.

 

If Liberty Tax objects to any NetSpend Fee Calculation, Liberty Tax shall deliver to NetSpend a dispute notice within ten (10) days of receipt by Franchisee of such NetSpend Fee Calculation. If a dispute notice is delivered to NetSpend, the Parties shall negotiate in good faith to resolve any differences related to the NetSpend Fee Calculation. Any dispute not resolved by the Parties’ negotiations within thirty (30) Business Days after Liberty Tax’s dispute notice shall be a Dispute subject to Section 18.

 

Liberty Tax shall be solely responsible for forwarding payments of the relevant portion of any NetSpend Fees received by Liberty Tax to the Franchisees.

 

The terms of this Schedule 1 shall survive termination of this Agreement.

 

 

Schedule 2

 

NETSPEND FEES

 

NetSpend Load Fees

 

NetSpend shall pay to Liberty Tax a fee with respect to each month (the “NetSpend Load Fee”) equal to *** of (i) all Card Payments initiated at Franchisee Locations in respect of Liberty Tax/NetSpend Cards for such month, (ii) with respect to any Customer holding a Liberty Tax/NetSpend Card that is enrolled in a direct deposit program with respect to such Liberty Tax/NetSpend Card, all dollars loaded onto such Customer’s Liberty Tax/NetSpend Card account via direct deposit for such month, and (iii) with respect to any Customer holding a Liberty Tax/NetSpend Card that elects to file his or her tax return electronically, all dollars loaded onto such Customer’s Liberty Tax/NetSpend Card account from the United States federal government via direct deposit for such month.

 

Monthly Subscription Fees

 

NetSpend shall pay to Liberty Tax a fee with respect to each month (the “NetSpend Monthly Subscription Fee”) for each Customer holding a Liberty Tax/NetSpend Card that is enrolled in a monthly service plan with respect to such Liberty Tax/NetSpend Card for which NetSpend collects a monthly fee for such month (the “Customer Monthly Subscription Fee”) from the accountholder (a “Monthly Subscription Account”).  The NetSpend Monthly Subscription Fee with respect to any month shall be equal to *** of the Customer Monthly Subscription Fees collected by NetSpend for such month.  The Customer Monthly Subscription Fee shall initially be *** (subject to modification by NetSpend at any time and from time to time in its sole discretion).

 

Annual Subscription Fees

 

NetSpend shall pay to Liberty Tax a fee with respect to each month (the “NetSpend Annual Subscription Fee”) for each Customer holding a Liberty Tax/NetSpend Card that is enrolled in an annual service plan with respect to such Liberty Tax/NetSpend Card for which NetSpend collects an annual fee for such month (the “Customer Annual  Subscription Fee”) from the accountholder (an “Annual Subscription Account”).  The NetSpend Annual Subscription Fee with respect to any month shall be equal to *** of the Customer Annual Subscription Fees collected by NetSpend for such month.  The Customer Annual Subscription Fee shall initially be *** (subject to modification by NetSpend at any time and from time to time in its sole discretion).

 

Transaction Fees

 

NetSpend shall pay to Liberty Tax a fee with respect to each month (the “Transaction Fee”) of *** for each signature or PIN purchase (each, a “Transaction”) effected by a Customer in respect of a Liberty Tax/NetSpend Card for such month, provided that such Customer is not enrolled in a Monthly Subscription Account or Annual Subscription Account for such month.   For purposes of clarification, an ATM transaction shall not constitute a Transaction.

 

Cash Advance Fee

 

NetSpend shall charge the Customer a fee (the “Cash Advance Fee”) for each cash withdrawal made at a bank from the account(s) associated with such Customer’s Liberty Tax/NetSpend Card.  The Cash Advance Fee shall initially be *** Card Payment (subject to modification as agreed upon by the Parties), irrespective of the amount of the Card Payment.  Liberty Tax shall be entitled to *** of the Cash Advance Fee.

 

Direct Deposit Fee

 

NetSpend shall pay Liberty Tax a cash amount of *** (the “Direct Deposit Fee”) with respect to each Liberty Tax/NetSpend Card that becomes a Direct Deposit Funded Liberty Tax/NetSpend Card (as hereinafter defined).  For purposes of this Agreement, a “Direct Deposit Funded Liberty Tax/NetSpend Card” is a Liberty Tax/NetSpend Card with respect to which at least two (2) ACH loads (other than loan proceeds or tax refunds), each of at least ***, have been made from the same source during any two (2) calendar month period. A Direct Deposit Funded Liberty Tax/NetSpend Card will be deemed to have been established hereunder during the month in which the second (2nd) ACH load was made (the “Qualifying Load”).  For purposes of clarity, it is understood and agreed that the Direct Deposit Fee with respect to any Direct Deposit Funded Liberty Tax/NetSpend Card is not a recurring fee, but is payable only once and only in

 

 

connection with the first Qualifying Load.   It is further understood and agreed that with respect to a customer holding multiple Liberty Tax/NetSpend Cards, the Direct Deposit Fee will only be payable once and only in connection with the first Liberty Tax/NetSpend Card account that becomes a Direct Deposit Funded Liberty Tax/NetSpend Card as a result of the Program.

 

Card Fee

 

NetSpend shall pay Liberty Tax a cash amount of *** (the “Card Fee”) with respect to each Liberty Tax/NetSpend Card that is issued from a Franchisee Location and loaded with funds from (i) a refund anticipation loan or refund transfer from a third party bank or (ii) a tax refund from a state or federal government originated at such Franchisee Location.  Upon receiving the Card Fee, Liberty Tax will immediately distribute a portion of the Card Fee to the applicable Franchisee.  Liberty Tax will distribute the remaining portion of the Card Fee to the applicable Franchisee during the summer following the receipt by Liberty Tax of such Card Fee.

 

 

Schedule 3

 

LIBERTY TAX/NETSPEND CARD ACCOUNT TARGETS

 

	
Measurement Period
    	
 
    	
Target Number of Activated
   Liberty Tax/NetSpend Card Accounts
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
***
    	
 
    	
***
    	
 
    
	
***
    	
 
    	
***
    	
 
    
	
***
    	
 
    	
***
    	
 
    

 

 

Schedule 4

 

INSURANCE SCHEDULE

 

I.                                         Liberty Tax shall maintain, during the term of this Agreement, at least the following insurance coverages:

 

A.                                   Worker’s Compensation Insurance and other similar social insurance in accordance with the laws of the country, state or territory exercising jurisdiction over the employee with minimum limits required by law.

 

B.                                     Employer’s Liability Insurance, including coverage for occupational injury, illness and disease, with minimum limits per employee and per event of $1,000,000 or the minimum limits required by law, whichever limits are greater.

 

C.                                     Commercial General Liability Insurance, including Products Liability, Completed Operations, Premises Operations, Personal Injury, and Contractual and Broad Form Property Damage Liability coverages, on an occurrence basis, with a minimum per occurrence combined single limit of $1,000,000.00.

 

D.                                    Property Insurance providing coverage for all risks of loss or damage to equipment, data, media and valuable papers that are in the possession, care, custody or control of Liberty Tax pursuant to this Agreement.  Such insurance shall include Extra Expense and Business Income coverage and have a minimum limit adequate to cover such risks on a replacement costs basis.

 

E.                                      Property Insurance, including Extra Expense and Business Income coverage, for all risks of physical loss of or damage to buildings, business personal property or other property that is in the possession, care, custody or control of Liberty Tax pursuant to this Agreement.  Such insurance shall have a minimum limit adequate to cover risks on a replacement costs basis.

 

F.                                      Excess or Umbrella Liability Insurance with a minimum limit of $5,000,000.00.

 

II.            Insurance Provisions.

 

A.                                   Except for insurance coverage required under paragraphs A and E, Liberty Tax shall cause its insurers to waive all rights of subrogation against NetSpend, and its officers, directors and employees and any insured-versus-insured exclusion regarding NetSpend.

 

B.                                     The insurance coverages shall be primary, and all coverage shall be non-contributing with respect to any other insurance or self-insurance that may be maintained by NetSpend.

 

C.                                     The insurance coverage under paragraphs A, B, C and F shall be written on an occurrence form basis.  If any other coverage is written on a claims-made basis, it shall have a retroactive date no earlier than October 1, 2008 and, notwithstanding the termination of this Agreement, either directly or through ‘tail’ coverage shall be maintained for a period of at least one (1) year following the expiration or termination of this Agreement, or it shall allow for reporting of claims until the later of one (1) year after the expiration or termination of this Agreement or the period of the applicable limitations of actions has expired.

 

D.                                    Liberty Tax shall cause its insurers to issue certificates of insurance evidencing that the coverages required under this Agreement are maintained in force. The insurers selected by Liberty Tax shall be of good standing and authorized to conduct business in the jurisdictions in which Distributor Services are to be performed.  Each such insurer shall have at least an A.M. Best rating of A- IX.

 

E.                                      In the case of loss or damage or other event that requires notice or other action under the terms of any insurance coverage, Liberty Tax shall be solely responsible to take such action.  Liberty Tax shall provide NetSpend with contemporaneous notice and with such other information as NetSpend may request regarding the event.

 

F.                                      Liberty Tax’s obligation to maintain insurance coverage shall be in addition to, and not in substitution for, Liberty Tax’s other obligations under this Agreement and Liberty’s Tax’s liability to NetSpend for any breach of an obligation under this Agreement which is subject to insurance under this Agreement shall not be limited to the amount of coverage required under this Agreement.

 

 

EXHIBIT A

 

FRANCHISEE CARD PROGRAM AGREEMENT

 

THIS FRANCHISEE CARD PROGRAM AGREEMENT (this “Agreement”) is entered into as of                                       , 200     (the “Effective Date”), by and between JTH Tax, Inc., a Delaware corporation, d/b/a “Liberty Tax Service” (“Liberty Tax”), and the franchisee of Liberty Tax set forth on the signature page hereto (“Franchisee”).  Liberty Tax and Franchisee are collectively referred to in this Agreement as the “Parties.”  This Agreement is applicable to the tax season commencing on January 1, 200     through October 15, 200       (the “Applicable Tax Season”).

 

WHEREAS, NetSpend Corporation, a Delaware corporation (“NetSpend”), has entered into an agreement with a national bank or federal savings association (the “Issuing Bank”) whereby the Issuing Bank has agreed to issue certain prepaid debit cards that are offered and serviced by NetSpend (the “NetSpend Cards”);

 

WHEREAS, the program by which the Issuing Bank issues the NetSpend Cards is referred to herein as the “Card Program;”

 

WHEREAS, NetSpend offers and provides its services for the Card Program using its proprietary technology, business methods, services and processes that are together used to facilitate the activation, reload, sale, use, reporting and regulatory compliance related to the NetSpend Cards (the “NetSpend Services” and, together with the NetSpend Cards, the “NetSpend System”);

 

WHEREAS, Liberty Tax, itself and through its franchisees at various retail locations, facilitate refund anticipation loans, refund transfers and tax refunds for its customers who may benefit from the Card Program (“Tax Services”);

 

WHEREAS, Liberty Tax has entered into an Amended and Restatated Distributor Agreement, dated as of                         , 2009 (the “Distributor Agreement”), with NetSpend pursuant to which NetSpend, upon authority granted to it by the Issuing Bank, has appointed Liberty Tax, and each franchisee of Liberty Tax that elects to participate in the Card Program, to provide certain distributor services as set forth therein and in this Agreement; and

 

WHERAS, Franchisee desires to participate in the Card Program upon the terms and conditions set forth herein;

 

NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

30.   Franchisee Services.  To the extent and where permitted by applicable law, the following services (the “Franchisee Services”) shall be provided by Franchisee, at each of its locations (each, a “Franchisee Location”), during the normal business hours of such Franchisee Locations:

 

(a)   Franchisee will offer to each of its customers that electronically files his or her tax return with such Franchisee and his or her refund with respect to such return is greater than one dollar ($1.00) a temporary non-personalized NetSpend Card (a “Temporary Card”) onto which a refund anticipation loan, refund transfer or other bank product shall be added or “loaded.”  NetSpend Cards issued directly from a Franchisee Location shall be referred to herein as a “Liberty Tax/NetSpend Card.”

 

(b)   Franchisee will also cause its Franchisee Locations to accept requests to add or “load” refund anticipation loans, refund transfers and tax refunds to NetSpend Card accounts, whether such NetSpend Card was purchased at a Franchisee Location or not and whether such NetSpend Card was issued by the Issuing Bank or not (“Card Payments”).

 

(c)   Franchisee will provide each Customer with a temporary blank NetSpend Card (supplied to Franchisee by NetSpend) (a “Temporary Card”).

 

(d)   With respect to each transaction involving the Franchisee Services at a Franchisee Location, Franchisee will accurately, completely, properly and promptly record and transmit to Liberty Tax by secure electronic means (i) the PAN and other Track 2 data encoded on the magnetic stripe of the NetSpend Card, (ii) the full amount of the Card Payment, (iii) the Franchisee Location identifier and (iv) the unique transaction identifier, together with the Customer’s name, address, telephone number, social security number and date of birth.  For purposes of this Agreement, “Customer Data” means any information or data regarding a Customer that constitutes “Nonpublic Personal Information” of a “Consumer” as the terms “Nonpublic Personal Information” and “Consumer” are defined under Title V of the Gramm-Leach-Bliley Act of 1999 or any successor federal statute, and the rules and regulations thereunder, as it or they may be amended or supplemented from time to time (“GLBA”); provided, however, that “Customer Data” shall not include information directly associated with the Tax Services provided by Liberty Tax and the Franchisee to Customers in their capacity as purchasers of the Tax Services.  Franchisee acknowledges the requirements of federal law in implementing security measures to safeguard Customer Data.  Further, Franchisee represents and warrants to the Issuing Bank that it has a commercially reasonable written information security program that includes administrative, technical and physical safeguards appropriate to the Franchisee Services.  Franchisee represents and warrants that it has in place commercially reasonable appropriate measures to (i) ensure the security and confidentiality of Customer Data, (ii) protect against any anticipated threats or hazards to the security and integrity of Customer Data and (iii) protect against unauthorized access to or use of Customer Data that could result in substantial harm or inconvenience to any Customer.  Franchisee shall promptly notify Liberty Tax, NetSpend and the Issuing Bank if it receives any complaint or notice concerning a violation of privacy rights or becomes aware of a material breach of Customer Data security.

 

(e)   Liberty Tax hereby grants to Franchisee, during the term of this Agreement, a sub-license to use the names, trademarks, trade names, service marks, drawings, logos, symbols and other indicia of origin designated by NetSpend (“Marks Schedule”) delivered from time to time to Franchisee, for the sole purposes of marketing and promoting the sale, load and reload of NetSpend Cards pursuant to this Agreement (the “NetSpend Marks”).  If expressly so agreed in a Marks Schedule, the scope of such limited license shall be extended to allow the use of the NetSpend Marks by Franchisee in approved advertising, promotional literature, documentation and other marketing materials related to the Liberty/Tax NetSpend Cards and marketing efforts under this Agreement.  To the extent such use is expressly contemplated in a Marks Schedule, Franchisee’s of the NetSpend Marks in any such advertisement, promotional literature, documentation and other marketing materials will be subject to Liberty Tax’s and NetSpend’s prior review and approval. NetSpend owns all right, title and interest in and to the NetSpend Marks, along with all related intellectual property rights and associated goodwill.  Franchisee will comply with the written guidelines and procedures established by NetSpend with respect to its use of the NetSpend Marks and will otherwise cooperate and agree upon the details of such identification.  Franchisee will not modify or alter the NetSpend Marks and

 

 

will include an appropriate trademark notice (e.g., ® or TM, as the case may be) with each use of any of the NetSpend Marks.  Franchisee will not adopt brands, logos, trademarks, trade name or other marks which are the same as or confusingly similar to the NetSpend Marks.  In no event and under no circumstances shall Franchisee use the NetSpend Marks in any manner that is derogatory, negative, likely to confuse a third party as to source of goods or services, or otherwise injurious to the other Party, as determined by NetSpend in its sole discretion.  Upon expiration or earlier termination of this Agreement, Franchisee will immediately cease all display, advertising and use of the NetSpend Marks.  No right, title or interest in, to or under any existing copyright, patent, trademark or, trade secret (collectively, the “Existing Proprietary Rights”) of NetSpend or Liberty Tax are created or assigned or otherwise transferred to Franchisee pursuant to this Agreement.  Nothing in this Agreement constitutes a work for hire agreement, and nothing in this Agreement constitutes an agreement by NetSpend or Liberty Tax to assign or otherwise convey title to any Existing Proprietary Rights to Franchisee.  NetSpend will retain full ownership of and title to all equipment, materials, hardware and other items provided by NetSpend in connection with this Agreement.  As among Liberty Tax, Franchisee and NetSpend, NetSpend will own the Liberty Tax/NetSpend Cards, any information and data associated with account activity of Customers, the NetSpend System and any intellectual property rights related thereto.

 

(f)    (i)            During the period commencing on January 1 and ending on April 30 of each year (the “Marketing Period”), Franchisee shall cause its Franchisee Locations to prominently display Liberty Tax/NetSpend Card program marketing information consisting of a menu strip, window cling and any other marketing or informational materials bearing the Marks of Liberty Tax and NetSpend supplied to Franchisee by NetSpend (“Marketing Materials”).  Liberty Tax shall be authorized to conduct audit reviews of all of the Franchisee Locations during each Marketing Period to confirm whether the Franchisee Locations are displaying the Marketing Materials in accordance with the immediately preceding sentence.

 

(ii)   In addition, Franchisee will use reasonable efforts to cause its employees designated by NetSpend, upon consultation with Liberty Tax, to attend information and training seminars or sessions regarding the NetSpend Cards and the NetSpend Services provided by NetSpend and/or Liberty Tax from time to time. If such a seminar or session is scheduled and conducted, Franchisee will be responsible for ensuring that all designated personnel attend such seminar or session, provided NetSpend will be responsible for the cost of the facilities employed for seminars or sessions provided solely by NetSpend, which shall be selected upon consultation with Liberty Tax.

 

(iii)  At NetSpend’s request, Franchisee will make certain Franchisee Locations available from time to time for purposes of market testing improved NetSpend Cards and NetSpend Services or for purposes of objectively testing consumer response to pricing or other changes to existing NetSpend Cards and NetSpend Services.

 

31.   No Control of Liberty Tax’s or Franchisee’s Operations; Independent Parties.  Notwithstanding anything to the contrary contained herein, this Agreement shall not be construed to provide that NetSpend or the Issuing Bank in any manner control the operations of Liberty Tax or Franchisee or the manner in which Liberty Tax or Franchisee complies with its obligations hereunder.  Liberty Tax and Franchisee is responsible for its own business expenses generally, including (without limitation) expenses of performing its obligations under this Agreement, and for the payment of all taxes relating to its own business activities.  The Issuing Bank, NetSpend, Liberty Tax and Franchisee are independent contractors to each other in performing their respective obligations to each other, including those set forth herein.  Nothing in this Agreement or in the working relationship being established and developed hereunder shall be deemed, nor shall it cause, the Issuing Bank, NetSpend, Liberty Tax and Franchisee to be treated as partners, joint ventures or otherwise as joint associates for profit.  Notwithstanding the foregoing, to the extent required by applicable law, the Issuing Bank’s appointment of NetSpend and NetSpend’s appointment of  Liberty Tax and Franchisee as the Issuing Bank’s authorized representatives will establish an agency relationship, limited strictly to the rights, duties and obligations as set forth herein, in this Agreement and in the Distributor Agreement.  Accordingly:

 

(a)   Franchisee shall serve as the Issuing Bank’s representative and agent for purposes of rendering the marketing, solicitation, sales and distribution services and other related services as set forth herein;

 

(b)   Franchisee acknowledges the Issuing Bank’s right to monitor and review the activities Franchisee performs for or on behalf of the Issuing Bank hereunder;

 

(c)   Franchisee acknowledges the statutory authority of the Issuing Bank’s regulators (“Federal Regulator”) to regulate and examine and take an enforcement action pursuant to the federal law against Franchisee with respect to the activities performed by Franchisee as agent or representative of the Issuing Bank;

 

(d)   Franchisee acknowledges that the Issuing Bank is required to adopt a detailed compliance program to ensure adequate monitoring, supervision and control over Franchisee and the activities that Franchisee performs on behalf of the Issuing Bank.  Such oversight includes ensuring Franchisee is fully in compliance with Liberty Tax’s anti-money laundering compliance program.

 

(e)   Franchisee acknowledges that the Issuing Bank may undertake an annual review conducted under the auspices of the Issuing Bank’s compliance officer to determine if Franchisee is operating in compliance with the Issuing Bank’s established policies and procedures regarding the marketing, solicitation, customer service or other activities related to the Issuing Bank’s authorized bank products or services;

 

(f)    Franchisee acknowledges that the Issuing Bank may institute a system for tracking and resolving consumer complaints involving NetSpend Cards and the Card Program in a timely manner and each agrees to provide an annual report regarding consumer complaints and their resolution to the Issuing Bank’s board of directors;

 

(g)   Franchisee acknowledges that a review and approval process will be undertaken by the Issuing Bank for all NetSpend Card and Card Program disclosures, advertising and other promotional material and that such process will be timely communicated to Franchisee;

 

(h)   Franchisee acknowledges that Franchisee, in its capacity as the Issuing Bank’s authorized delegate and representative, and the Issuing Bank are all subject to control and supervision by the appropriate office of the Federal Regulator. This control and supervision includes, but is not limited to, the ability to require that the Issuing Bank obtain Federal Regulator’s approval (or non-objection) before entering into any contractual arrangement with Liberty Tax and Franchisee and the right of the Federal Regulator to approve specific contractual language;

 

(i)    Franchisee acknowledges that the Federal Regulator may require Liberty Tax, in its capacity as the Issuing Bank’s authorized delegate and representative, to submit periodic reports to the Federal Regulator regarding Franchisee’s performance under this Agreement and Franchisee shall fully cooperate with Liberty Tax with respect to any such report;

 

(j)    Franchisee acknowledges that the Federal Regulator may require the Issuing Bank to modify or terminate its relationship with Liberty Tax and Franchisee at any time; and

 

(k)   The Federal Regulator may institute any other requirements or conditions that the Federal Regulator deems appropriate for the particular purpose of reviewing the Issuing Bank’s compliance program, which may include an examination of Liberty Tax’s and Franchisee’s programs and their records relating to the performance of this

 

 

Agreement.

 

32.   The Parties’ Additional Rights and Responsibilities.

 

(a)   Marketing Materials, Temporary Cards and Training.  Franchisee may order additional Temporary Cards from NetSpend to adequately fill requests from Customers.  Orders shall be sent to the address of NetSpend set forth below.  Orders placed by Franchisee may be refused or canceled by NetSpend at any time, provided that Franchisee will be excused from performance under this Agreement to the extent such nonperformance is due to NetSpend’s failure to deliver cards following a reasonable and timely order for such cards placed by the Franchisee with NetSpend.

 

(b)   Card Branding.  Franchisee acknowledges and agrees that NetSpend shall retain the ownership rights in any card skin design created in connection with the development of any Liberty Tax/NetSpend Card and that NetSpend retains the right and discretion to use for any purpose any such card skin design.

 

(c)   Estimated Number of Liberty Tax/NetSpend Cards.  On or prior to October 1 of each calendar year, Liberty Tax and Franchisee shall mutually agree upon an estimate of the number of Liberty Tax/NetSpend Cards, including Temporary Cards, to be manufactured by NetSpend for the following year with respect to such Franchisee.  Franchisee shall not dispose of any Temporary Cards not used in any calendar year, but shall maintain such Temporary Cards in safekeeping for use in the subsequent calendar year.

 

(d)   Franchisee Authorizations.  Franchisee represents, warrants and covenants that, to the extent related to the Franchisee Services, (i) any and all licenses, permits, and other authorizations of Franchisee required by federal or state laws (collectively, the “Franchisee Authorizations”) have been obtained, are valid and in full force and effect, (ii) the continuation, validity, and effectiveness of all of the Franchisee Authorizations shall not be impaired or adversely affected by the terms hereof and (iii) Franchisee will maintain in effect the Franchisee Authorizations, or obtain new or additional Franchisee Authorizations, as necessary to permit it to perform its obligations under this Agreement.

 

(e)   Taxes. Franchisee will pay when due all federal excise taxes and all state and local use or sales taxes imposed in connection with funds collected by it for the Franchisee Services to the extent such taxes can be collected from the Customer.  Liberty Tax and Franchisee will also file when due all required tax returns required to be filed in connection with its business and with the collection and remittance of any applicable excise, use or sales taxes for which it bears responsibility under this Section 3(e).

 

(f)    Successor Bank.  NetSpend shall have the right at any time to cause another national bank, federal savings bank or federal savings association other than the initial Issuing Bank to become the issuer of the Liberty Tax/NetSpend Cards, and, upon NetSpend’s, Franchisee agrees to exert its commercially reasonable efforts to facilitate substituting another bank or savings association (the or a “Successor Bank”) for the initial Issuing Bank for all purposes of this Agreement, including such amendments hereto as reasonably required by the Successor Bank.

 

(g)   Fraud.  Franchisee agrees that it will be fully liable for all damages resulting from the fraud, willful misconduct or gross negligence of its respective employees, agents, contractors or representatives.  Franchisee shall promptly notify Liberty Tax and NetSpend via facsimile, telephone or e-mail with information of which it has actual knowledge about any unauthorized activation of any NetSpend Card or about any counterfeit or fraudulent NetSpend Card sales.  Franchisee will cause Franchisee Locations to cooperate fully with NetSpend and the Issuing Bank, as applicable, in an effort to locate and prosecute the perpetrator of such unauthorized activity or fraud.

 

33.   Term; Termination.

 

(a)   The term of this Agreement shall commence on the Effective Date and shall continue until December 31 following the Applicable Tax Season; provided, however, that this Agreement shall automatically terminate upon any termination of the Distributor Agreement.

 

(b)   Either Party may terminate this Agreement by giving the other Party written notice of termination upon any of the following events of default by the other Party: (i) the other Party fails to pay any amount when due under this Agreement and that payment failure continues for ten  (10) Business Days after written notice of that payment failure is given by the Party entitled to payment; (ii) the other Party continues its failure to perform, or fails to cure or correct any nonperformance of, any of its obligations under this Agreement (other than a payment or other obligation addressed in the immediately preceding clause) for thirty (30) days after written notice of that failure (which describes the failure with reasonable specificity) is given by the Party entitled to performance; (iii) any bankruptcy, insolvency, liquidation, dissolution, or similar action or proceeding is instituted, commenced, or acquiesced in by the other Party or, if instituted or commenced involuntarily against the other Party, is not stayed or dismissed within sixty (60) days after that involuntary institution or commencement; or (iv) the other Party otherwise becomes insolvent, admits in writing its inability to pay its debts as they mature, makes a general assignment for the benefits of its creditors, or enters into any workout or similar arrangement with its creditors.

 

(c)   NetSpend may terminate this Agreement by giving the Parties written notice of termination upon any of the following events of default by the Franchisee: (i) Franchisee fails to comply with Section 5; (ii) Franchisee continues its failure to perform, or fails to cure or correct any nonperformance of, any of its obligations under this Agreement (other an obligation addressed in the immediately preceding clause) for thirty (30) days after written notice of that failure (which describes the failure with reasonable specificity) is given by Liberty Tax or NetSpend; (iii) any bankruptcy, insolvency, liquidation, dissolution, or similar action or proceeding is instituted, commenced, or acquiesced in by Franchisee or, if instituted or commenced involuntarily against Franchisee, is not stayed or dismissed within sixty (60) days after that involuntary institution or commencement; or (iv) Franchisee otherwise becomes insolvent, admits in writing its inability to pay its debts as they mature, makes a general assignment for the benefits of its creditors, or enters into any workout or similar arrangement with its creditors.

 

(d)   NetSpend’s termination of this Agreement under this Section 4 shall not be its exclusive remedy for any default by either Party or affect either Party’s responsibility for performing its obligations under this Agreement.

 

(e)   Upon termination of this Agreement, Franchisee shall cease all theretofore permitted use of the NetSpend Marks.

 

34.   Non-Competition.

 

(a)   Franchisee shall not by itself or in conjunction with others, directly or indirectly, during the term of this Agreement, market, offer or develop a prepaid debit card, or related product, in the United States, other than through the NetSpend System, nor will Franchisee at any Franchisee Location or otherwise accept any commission, royalty or any other consideration from the sale, load or reload of any prepaid debit or gift card provider other than NetSpend. In addition, during the term of this Agreement, Franchisee shall not be permitted to enter into a similar agreement with any debit card retailer, independent marketing organization or third party processor in direct or indirect competition with or providing services similar to NetSpend in the United States.

 

(b)   In the event that Liberty Tax shall at any time have the right under the Distributor Agreement to (i) market, offer or develop a

 

 

prepaid debit card, or related product, in the United States other than through the NetSpend System, or (ii) accept any commission, royalty or any other consideration from the sale, load or reload of any prepaid debit or gift card provider other than NetSpend, the restrictions set forth in Section 5(a) shall immediately terminate and be of no further force or effect.

 

35.   Non-Exclusive Rights. Franchisee acknowledges and agrees that its rights under this Agreement to market and distribute NetSpend Cards shall be non-exclusive in nature and that NetSpend shall be permitted to enter into similar arrangements with other potential distributors.

 

36.   Indemnification and Insurance.

 

(a)   Liberty Tax shall, at its expense, indemnify, defend and hold harmless Franchisee and its shareholders, directors, officers, employees, agents, successors and assigns (each, a “Franchisee Indemnified Party”) from and against any and all losses, claims or expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by a Franchisee Indemnified Party in any way arising from or in connection with the inaccuracy of any representation or warranty of Liberty Tax hereunder or the performance or nonperformance of Liberty Tax’s obligations hereunder by Liberty Tax.

 

(b)   Franchisee shall, at its expense, indemnify, defend and hold harmless each of Liberty Tax and NetSpend and their respective shareholders, directors, officers, employees, agents, successors and assigns (each, a “Liberty Tax/NetSpend Indemnified Party”) from and against any and all losses, claims or expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by a Liberty Tax/NetSpend Indemnified Party in any way arising from or in connection with the inaccuracy of any representation or warranty of Franchisee hereunder or the performance or nonperformance of Franchisee’s obligations hereunder.

 

(c)   The Parties’ respective indemnification obligations under this Section 7 shall survive the expiration or termination of this Agreement.

 

(d)   Franchisee shall obtain and maintain for the term of this Agreement, at its expense, insurance policies of such type and amounts necessary to cover all material insurable risks in respect of the business and assets of Franchisee and its performance under this Agreement, each of which name NetSpend as an additional insured. Upon request, Franchisee shall furnish to NetSpend a certificate of insurance or other evidence satisfactory to NetSpend that such insurance coverage is in effect.  A failure to comply with this provision shall be deemed a breach of this Agreement.

 

37.   Confidentiality.  Except as to Issuing Bank, the Parties shall keep this Agreement and its terms confidential, and each Party shall keep the Confidential Information (as hereinafter defined) of the other Party and NetSpend confidential and shall not use any of that Confidential Information for any purpose other than in connection with this Agreement.  The “Confidential Information” of a Party or NetSpend is any trade secret or other confidential or proprietary information relating to such Party’s or NetSpend’s services, business or customers; except such information that is generally known to the public or in the industry (other than by a breach of this Section 8), is in the possession of the receiving Party before disclosure by the other Party or is or becomes available to the receiving Party from a source that (to the receiving Party’s knowledge) is not bound by any nondisclosure obligation to the other Party. A Party may, without violating this Section 8, make such disclosures (a) to its directors, officers, employees ,attorneys and other agents as may be necessary to permit such Party to perform its obligations and to exercise its rights hereunder, provided that such Party ensures that each such director, officer, employee, attorney or other agent is obligated to maintain the confidentiality provided in this Section 8 and remains responsible for violations of this Section 8 by such director, officer, employee, attorney or other agent, and (b) as is required by law, though a Party will use its reasonable efforts to notify the other Party or NetSpend, as applicable, in advance of any such disclosure required by law.  The Parties’ respective obligations under this Section 8 shall survive the termination of this Agreement for an indefinite period.

 

38.   Compliance with Laws.

 

(a)   Franchisee and Liberty Tax will perform their respective obligations under this Agreement in compliance, in all material respects, with all applicable federal and state laws, orders and regulations.  Liberty Tax and Franchisee acknowledge and agree that all Customer Data is subject to all terms and conditions governing information that is considered cardholder data under the Payment Card Industry Data Security Standard (the “PCI Standard”), and with respect to the Issuing Bank, may include “Customer Information” as defined under GLBA, 15 U.S.C. § 6801.  Each of Liberty Tax and Franchisee acknowledges its responsibility to safeguard Customer Data in its possession or control, both during and after the termination of this Agreement, and agrees that, as between Franchisee and Liberty Tax, on one hand, and NetSpend, on the other hand, all right, title and interest in Customer Data is owned by NetSpend, together with the Issuing Bank, and the respective card association. Each of Franchisee and Liberty Tax shall perform its obligations under this Agreement in compliance with all applicable requirements of the PCI Standard and Franchisee shall cause all its Franchisee Locations to comply with all applicable provisions of the PCI Standard in its performance of any obligations concerning NetSpend Cards or Customer Data. As part of these obligations, each of Franchisee  and Liberty Tax shall use, and shall cause all Franchisee Locations to use, Customer Data only for the purposes of conducting transactions pursuant to this Agreement and assisting NetSpend or other owners of such data with supporting a loyalty program, providing fraud control services or for uses specifically required by law.  In addition, each of Franchisee and Liberty Tax shall notify NetSpend in writing prior to disposing of any Customer Data, and shall only dispose of Customer Data in a manner reasonably acceptable to NetSpend and the Issuing Bank.  Each of Franchisee and Liberty Tax shall comply (and cause all Franchisee Locations to comply) with all reasonable requests for information from NetSpend, including, without limitation, all requests for information arising from third-party or internal audits regarding security incidents, on behalf of NetSpend, any Issuing Bank, PCI representatives, PCI approved third parties and any governmental authority or regulator exercising jurisdiction (“Approved Persons”). Each of Franchisee and Liberty Tax shall make available (and will cause all Franchisee Locations to make available) to Approved Persons upon reasonable request all books and records regarding security processes and procedures, use of Customer Data, disaster recovery planning, this Agreement and the services rendered hereunder.  Each of Franchisee and Liberty Tax will (and will cause all Franchisee Locations to) provide full cooperation with and access for Approved Persons to conduct a thorough security review after any security intrusion, any loss or unauthorized release of Customer Data or otherwise in connection with Liberty Tax’s or Franchisee’s breach of any obligation under this Agreement concerning Customer Data. Each of Liberty Tax and Franchisee acknowledges that the law applicable to the protection of personally identifiable information of consumers and to the products and services provided pursuant to this Agreement is evolving, and each of Liberty Tax and Franchisee shall cooperate in good faith with NetSpend and the Issuing Bank to implement such procedures and enter into such addenda to this Agreement as may be reasonably necessary or appropriate to maintain compliance with new or different laws, regulations and industry requirements that come into effect, to the extent they are applicable to Franchisee and Liberty Tax in the performance of their respective obligations under this Agreement.

 

(b)   Franchisee, and each person owning or otherwise controlling at least 25% of the equity or voting power of Franchisee, respectively (a “Principal”), is not, and will not become, a person (a “Prohibited Person”) either listed on the specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Asset Control, U.S. Department of the Treasury  (the “OFAC List”) or otherwise with whom NetSpend or the Issuing Bank is prohibited by laws, regulations or executive orders,

 

 

including Executive Order No. 13224, administered by the Office of Foreign Asset Control, U.S. Department of the Treasury (collectively the “OFAC Rules”) from conducting transactions and/or dealings.  In the event that, at any time after the date hereof, the Principals of Franchisee shall change, Franchisee shall provide NetSpend and Liberty Tax at least thirty (30) days prior written notice thereof and shall cooperate with NetSpend with respect to any diligence it may require in connection therewith.  To Franchisee’s knowledge, Franchisee is not “otherwise associated with” a Prohibited Person within the meaning of 31 CFR §594.316.  Franchisee shall provide information (to the extent in Franchisee’s possession or under Franchisee’s control or otherwise available to Franchisee without material expense or extraordinary efforts) as NetSpend or the Issuing Bank may require from time to time to permit NetSpend or the Issuing Bank to satisfy applicable obligations under laws, including, without limitation, the OFAC Rules and/or anti-money laundering laws. Franchisee hereby consents to NetSpend conducting such searches and checks, including a criminal background check, of each Principal, and Franchisee shall immediately notify NetSpend if Franchisee has knowledge that Principal or any member or beneficial owner of Franchisee or Principal is or becomes a Prohibited Person or (i) is convicted of, (ii) pleads nolo contendere to, (iii) is indicted on or (iv) is arraigned and held over on charges under anti-money laundering laws or involving money laundering or predicate crimes to money laundering.

 

39.   Access to Records.

 

(a)   During the term of this Agreement, Franchisee shall maintain accurate records with respect to its obligations hereunder, including sales and issuances of the Liberty Tax/NetSpend Cards, requests for Card Payments to be added or “loaded” to NetSpend Card accounts and other matters related thereto.

 

(b)   Within thirty (30) days of a written request to Franchisee, each of NetSpend, Liberty Tax and the Issuing Bank shall have the right to inspect the records, documents and materials maintained by Franchisee relating to this Agreement during ordinary business hours, subject to (i) such security procedures as Franchisee may reasonably impose and (ii) such limitations as may be required under applicable governmental or regulatory rules, regulations or statutes governing the conduct of Franchisee’s business.

 

40.   Notice.  Any notice, consent, or other communication to be given under this Agreement by any Party to the other Party shall be in writing and shall be either (a) personally delivered, (b) mailed by registered or certified mail, postage prepaid with return receipt requested, (c) delivered by prepaid overnight express delivery service or same-day local courier service, or (d) delivered by prepaid facsimile transmission, in any case to the address or number set forth below or at such other address or number as may have previously been designated by a Party for it by notice to the other Party in accordance with this Section 11.  Notices delivered personally, by overnight express delivery service, or by local courier service shall be deemed given as of actual receipt.  Mailed notices shall be deemed given three Business Days after mailing.  For purposes of this Agreement, a “Business Day” is any Monday through Friday, other than a day on which banks are authorized to be closed in the State of Texas.  Notices delivered by facsimile transmission shall be deemed given upon receipt by the sender of the transmission confirmation.

 

	
If   to Liberty Tax:
    	
JTH   Tax, Inc., dba Liberty Tax Service
    
	
Address:
    	
1716   Corporate Landing Pkwy
    
	
 
    	
Va   Beach, VA 23454
    
	
Facsimile   No.:
    	
(757)   493-0169
    
	
Attn:
    	
Mark   Baumgartner
    
	
Title:
    	
Vice   President, CFO
    
	
 
    	
 
    
	
If   to Franchisee:
    	
 
    
	
 
    	
 
    
	
Franchisee:
    	
 
    
	
Address:
    	
 
    
	
Facsimile   No.:
    	
(             )
    
	
Attn:
    	
 
    
	
Title:
    	
 
    

 

41.   Assignment.  Except as provided in this Agreement, the rights and obligations under this Agreement may not be assigned or delegated by either Party without the prior written consent of the other Party and NetSpend, and any such purported assignment or delegation without such consent shall be void.

 

42.   Governing Law.  This Agreement shall be governed by, construed in accordance with, and enforced under the laws of the State of Texas.

 

43.   Force Majeure.  Except as otherwise expressly set forth herein, in the event a Party shall be delayed or hindered in, or prevented from, the performance of any act required of it hereunder by reason of strike, inability to procure materials, failure of power, telecommunications or connectivity failure, restrictive governmental laws or regulations, inability to obtain or maintain (for any reason outside of a Party’s reasonable control) any governmental or regulatory license or authorization, riot, insurrection, war, terrorism and/or any act in furtherance of terrorism, act of God, or other event outside that Party’s reasonable control (each such cause or event being hereinafter referred to as a “Force Majeure”), then performance of such acts will be excused for the period of the delay and the period for performance of any such act shall be extended for a period equivalent to the period of such delay.  Any time a Party is experiencing a Force Majeure that is expected to result in a significant failure or delay, that Party will give notice to the other Party describing the Force Majeure and the nature of the failure or delay and giving an estimate as to how long the delay will be.  A Party claiming an excusable delay or failure under this Section 16 shall use reasonable efforts to alleviate or overcome the Force Majeure as soon as practicable.

 

44.   Offset.  A Party shall be entitled to credit or offset an amount equal to any or all amounts due to it by the other Party under this Agreement.

 

45.   Amendment; Waiver.  This Agreement may only be amended by the written consent of both Parties, NetSpend and the Issuing Bank.  A Party’s or NetSpend’s or the Issuing Bank’s failure or delay in enforcing another Party’s performance of any of such Party’s obligations under this Agreement shall not be a waiver of any of those obligations.

 

46.   Invalid Provisions.  If any provision of this Agreement is ever held to be invalid or unenforceable, that provision will be severed from the rest of this Agreement, and all of the other provisions of this Agreement will remain in effect, but will be amended by the Parties to the extent possible to result in this Agreement having the same relative economic benefits and detriments to the Parties as existed before the severance of the invalid or unenforceable provision.

 

47.   Entire Agreement.  This Agreement contains the entire agreement of the Parties as to the subject matter hereof and supersedes all prior agreements and understandings, whether oral or written, between the Parties with respect to the subject matter hereof.

 

48.   Binding Effect; Third-Party Beneficiaries.  This Agreement and the rights and obligations hereunder shall be binding upon and shall inure to the benefit of the Parties and their legal successors and permitted assigns; provided, however, that NetSpend and the Issuing Bank shall each be a third party beneficiary of the obligations of Franchisee hereunder and may enforce such obligations directly, to the same extent as if it were a direct party hereto.

 

49.   Compliance with Gramm-Leach-Bliley Act.  Notwithstanding the foregoing, nothing herein shall require either Party to violate Title V of GLBA or any regulation promulgated thereunder with respect to the privacy of the customers of any financial institution.

 

 

50.   Payday or Short Term Lending.  Franchisee represents warrants and covenants that it will not represent in any manner that NetSpend or the Issuing Bank participates in, endorses or is in any way connected with any payday or short term lending activities of Franchisee.  Furthermore, Franchisee represents, warrants and covenants that it will not package, connect, promote or market as being packaged or connected, the Franchisee Services with any payday lending activities of Franchisee; provided, however, that Franchisee may market and promote its payday and short term lending activities in the same stores and at the same times as it promotes the Franchisee Services so long as the marketing and promotion of such payday and short term lending activities is clearly separate from its promotion of the Franchisee Services.  Franchisee agrees that its training and internal procedures for administering the distribution of NetSpend Cards shall not include instructions or authorizations to employees and managers which are inconsistent with this Section 21.

 

51.   Organization and Qualification.  The Parties represent and warrant to each other that, as of the date of this Agreement, each Party is a corporation,  limited liability company or partnership, as applicable, duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized, is duly qualified and in good standing as a foreign corporation, limited liability company or partnership, as applicable, in every state in which the character of its business requires such qualification (except  with respect to Franchisee where the failure to obtain such foreign qualification would not have a material adverse effect on Franchisee’s business) and has the power to own its property and carry on its business as now conducted.

 

52.   Due Authorization.  The execution and delivery by the Parties of this Agreement, the performance by the Parties of the transactions contemplated hereby and compliance by the Parties with the terms of this Agreement, (a) are within the Parties’ power and authority and (b) have been duly authorized by all necessary action.  This Agreement has been duly executed and delivered by the Parties and constitutes a valid and binding agreement of each Party, enforceable in accordance with its terms.

 

53.   Consents.  Neither the execution and delivery of this Agreement by the Parties nor the performance by the Parties of their obligations hereunder requires any consent, authorization, approval, notice to or other action by or in respect of, or filing with, any third party or any governmental body or agency.

 

54.   Counterparts; Facsimile Signatures.  This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one, and the same, document. Signatures of the Parties may be exchanged by facsimile, and such facsimile signature pages shall be deemed originals in all respects.

 

55.   Dispute Resolution.  Any dispute or controversy arising out of or relating to this Agreement or the Bank Agreement, or both, or the interpretation or termination of this Agreement or the Bank Agreement, or both (“Dispute”), shall be resolved or settled by arbitration before a single arbitrator pursuant to the Rules for Commercial Arbitration of the American Arbitration Association (the “Rules”).  Arbitration may be commenced at any time by a Party’s giving written notice to the other Party and to the Issuing Bank that a Dispute has been referred to arbitration under this Section 26.  The location and arbitrator shall be selected by agreement of the Parties, but if they do not so agree within twenty (20) days after the date of the notice referred to in the second preceding sentence, the selection shall be made by the American Arbitration Association pursuant to the Rules.  Any award rendered by the arbitrator shall be conclusive and binding upon the Parties.  This provision for arbitration shall be specifically enforceable by either of the Parties, and judgment upon the arbitration award may be entered and enforced in any court having jurisdiction over the Parties or their respective assets, it being the intent of the Parties that these arbitration provisions be enforced to the fullest extent permitted by applicable law.  Each of the Parties shall pay its own expenses of arbitration (including, without limitation, those of its own counsel and witnesses), and the expenses of the arbitrator shall be shared equally by the Parties (and, if the dispute involves Issuing Bank, also shared equally by the Issuing Bank under the Bank Agreement); except that if, in the opinion of the arbitrator, any claim or any defense or objection thereto was unreasonable, the arbitrator may assess, as part of his or her award, all or part of the arbitration expenses of the other Party (including, without limitation, its reasonable attorneys’ fees) and of the arbitrator against the Party asserting that unreasonable claim, defense, or objection.  Nothing in this Section 26 precludes a Party from applying to a court having jurisdiction to (a) seek provisional or temporary injunctive relief, in response to an actual or threatened breach of this Agreement or otherwise to avoid irrevocable damage or maintain the status quo, until a final arbitration decision or award is rendered or a Dispute is otherwise resolved or (b) enforce the provisions of this Section 26.  Nothing in this Section 26 precludes the Parties from resolving a Dispute by agreement at any time.

 

 

EXHIBIT B

 

NDA

 

[ATTACHED]

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