AMENDED AND RESTATED MARKETING AND SERVICING AGREEMENT

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

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

In consideration of the mutual promises set forth herein, the parties intending to be legally bound, agree as indicated above and as follows:

(a)           "Applicable Law" shall mean all laws, rules, regulations and published regulatory guidance that are applicable to the provision of Financial Products, privacy of consumer information and tax preparation.

(b)           "Application" shall mean the Bank Product Application and Agreement in a form developed by Republic and reviewed by Liberty prior to each Tax Season.

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

(d)           “Customer” shall mean a customer of an ERO that applies for a Financial Product.  For purposes of this definition, joint borrowers or joint recipients of a Financial Product shall constitute one “Customer.”

(e)           "Disclosure Documents" shall mean a Republic-required disclosure document(s) or form(s) meeting the requirements of applicable federal laws and regulations as determined by Republic.

(f)           “Electronic Refund Check” or “ERC” shall mean a non-loan financial product through which a Customer’s federal and/or state income tax refund (as identified in IRS Form 8879 and any applicable state tax form, respectively) is deposited into an account established by Republic and disbursed, net of authorized fees and charges, to the Customer by ERC check.

(g)           “Electronic Refund Deposit” or “ERD” shall mean a non-loan financial product through which a Customer’s federal and/or state income tax refund (as identified in IRS Form 8879 and any applicable state tax form, respectively) is deposited into an account established by Republic and disbursed, net of authorized fees and charges, to the Customer (i) by debit card or (ii) via an automated clearing house credit (“ACH“) deposit to the Customer’s designated bank account.

(h)           “Financial Product(s)” shall mean the products offered by Republic under the Financial Product Program, specifically, a RAL, federal and state ERC and federal and state ERD (each as defined herein).

(i)           "Financial Product Program" shall mean the process described in this Agreement pursuant to which Republic will utilize Liberty's software to enable EROs to provide Financial Products to Customers.

 

 

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(k)           “Refund Anticipation Loan” or “RAL” shall mean a loan to a customer secured by the customer’s anticipated federal income tax return refund (as identified in IRS Form 8879 or similar form).

(l)           "State Disclosure Documents" shall mean disclosures required to be provided to a Customer pursuant to applicable State or local law in connection with an Application.

(m)           “Tax Season” shall mean the period beginning on January 2 of a calendar year and ending on the last day an individual is permitted to file a federal income tax return with the Internal Revenue Service (“IRS”), typically on or about October 15th of such calendar year.

2.           License/Marks. Republic hereby grants Liberty a non-exclusive, non-transferable, non-assignable license to grant a non-exclusive, non-transferable, non-assignable sublicense to any of Liberty's EROs to use the Financial Product Program and offer the Financial Products. Liberty agrees that the Financial Product Program is the sole property of Republic and that it may not be duplicated or used for any purpose whatsoever without the express written consent of Republic. Republic hereby grants Liberty a nonexclusive and nontransferable license, during the term of this Agreement, to use Republic's name, trade names, trademarks, service marks, and logos (whether or not registered or protected or protectable) to market Financial Products to EROs. All uses of the Republic marks must be approved in advance in writing by Republic, such approval not to be unreasonably withheld or delayed. Republic does not grant to Liberty any ownership in its marks. Liberty shall discontinue, and shall require its EROs to discontinue, all use of the Republic marks upon the expiration or termination of this Agreement and, upon request by Republic, will return all materials provided by Republic.

3.           Duties of Liberty.

 

 

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c. Liberty agrees that the incorporation of the Financial Product Program into Liberty's tax preparation software, including any check writing software, must be tested and approved in writing by Republic, before being made available to EROs. The testing shall include, but is not limited to, communications, electronic record formats, Truth-in-Lending disclosure calculations and the printing of consumer disclosures such as the Application, Disclosure Documents, State Disclosure Documents, checks and any other documentation that is contained in Republic's Record Layouts and Processing Specifications.

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4.           Duties of Republic.

a. Republic shall develop reasonable program guidelines for the offering, marketing, receipt and processing of Applications, the making of RALs and the delivery of Financial

Product proceeds (“Program Guidelines”) and shall create and distribute to Liberty for its prior review forms to be used by Designated ERO Locations of each of the following: the Application, Disclosure Document(s), State Disclosure Documents, and disbursement checks.  For the avoidance of doubt, the term "Program Guidelines" shall not include guidelines or other materials that are developed by Liberty, including, without limitation, materials that are developed by Liberty and reviewed by Republic pursuant to Section 3.a. hereof or otherwise.  Republic may create solicitation, marketing and promotional materials relating to the Financial Products Program, each of which shall be subject to Liberty’s prior review.  Republic shall provide such assistance as Liberty reasonably may request in connection with the preparation and dissemination to customers of State Disclosure Documents.  Republic covenants and agrees that the Program Guidelines and all documents and materials provided by it hereunder (including, without limitation, the Application, Disclosure Document(s), State Disclosure Documents, disbursement checks, solicitation materials and marketing and promotional materials) shall comply with Applicable Law.

b. Republic shall provide Record Layouts and Processing Specifications to Liberty that shall contain the procedures and requirements for Liberty to offer the Financial Product Program.

d. The pricing, fees, and terms for the Financial Product Program shall be developed for each Tax Season by Republic in consultation with Liberty, provided, however, that if Republic and Liberty cannot agree on the pricing and fees for the Financial Products, Republic’s decision will control, subject to the parameters set forth in this Section 4.d.. The underwriting criteria for the Financial Products will be developed by Republic and may be modified from time to time at Republic’s sole discretion.  The pricing, fees, terms and underwriting criteria must be commercially reasonable, substantially similar to the pricing, fees and terms of financial product programs offered in other Liberty offices through other providers that are not corporate affiliates of Liberty, be established on a basis no less favorable than made available by Republic to any party other than Liberty, and within published regulatory guidelines, based on the best information available that tax season, including IRS prior-year funding trends, competitive product offerings and customer and ERO behavior.  The Financial Product Program pricing, fees and terms shall be set forth in writing by Republic no later than October 1 preceding each Tax Season.

 

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e. Republic shall provide ERC and ERD services to all Customers requesting the same, if approved, with respect to all states whose taxing authority accepts state income tax returns electronically and disburses refund amounts via direct deposit.

f. Republic shall utilize substantially the same care, criteria, diligence and procedures in accepting or rejecting RAL Applications from, and in collecting RALs made to, Customers of Liberty and its EROs as it utilizes in accepting, rejecting and collecting similar Applications and obligations from customers of other tax preparers to which it makes available similar Financial Product programs.

g. [*] Regardless, Liberty must ensure access to signed copies of such documents in accordance with Section 11 below.

5.           Liberty Procedures.

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d. Liberty shall require each participating ERO to timely provide to each applicant a signed copy of the Application, applicable Disclosure Document(s), and applicable State Disclosure Documents (which may be combined into one or more forms), signed IRS Form 8453

or similar form, together with any other agreements or documents that Republic reasonably may require; provided that Republic shall be solely responsible for the form and content of the Application, Disclosure Document(s), and State Disclosure Documents , subject to Liberty review prior to each Tax Season, and their compliance with Applicable Law.

                      (i)           Liberty shall require each participating ERO to retain, a copy, electronic or otherwise, of the signed Application and signed Disclosure Document(s) in the Customer’s file, maintained by them for a period of three (3) years following the preparation and execution thereof, after which time such documents shall be properly destroyed by commercially reasonable methods in accordance with the Program Guidelines.  At the reasonable request of Republic, Liberty shall cause EROs to deliver to Republic a copy of any Application or other documentation within three (3) Business Days.

                      (ii)           For fraud detection, underwriting and collection purposes, subject to Liberty’s receipt of the Customer’s consent as provided in Section 7216, Liberty shall provide to Republic electronic copies of each such Customer’s electronically filed federal income tax return, in the format prescribed by the IRS, simultaneously with or promptly after the Application information is transmitted to Republic.

 

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

6.           Republic Procedures.

8.           Representations and Warranties.

 

a. Republic and Liberty each represent and warrant to the other as follows: (i) it is duly organized and validly existing in good standing under the laws of the jurisdiction in which it is organized and has the full corporate power to own its property and to carry on its business as now being conducted; (ii) the execution and delivery of this Agreement does not conflict with or result in a breach of the terms, conditions or provisions of, give rise to a right of termination under, constitute a default under, or result in any violation of, the organizational documents of it or any mortgage, agreement, contract, order, judgment, decree, statute, law, rule or regulation to which it or any of its respective properties is subject; (iii) no authorizations or other consents, approvals or notices of or to any person or entity are required in connection with (a) the performance by it of its obligations under this Agreement, (b) the validity and enforceability of

 

 

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9.           Term of Agreement.

 

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10.           Confidentiality.

The parties acknowledge that as a result of the matters provided for in this Agreement, trade secrets and information of a proprietary or confidential nature relating to the business of the parties and their affiliates may be disclosed to and/or developed by the parties including, without limitation, information about trade secrets, agreements, products, services, licenses, costs, sales and pricing information, and any other information that may not be known generally or publicly

(collectively "Confidential Information"). The parties acknowledge that such Confidential Information is generally not known in the trade and is of considerable importance to the parties and their affiliates and agree that this relationship to each other with respect to such information shall be fiduciary in nature. Each party expressly agrees that during the term of this Agreement and thereafter it will hold in confidence and not disclose and not make use of any such Confidential Information, except (i) as required pursuant to this Agreement;  (ii) for disclosure to its directors, officers, employees, attorneys, advisors or agents who need to review the Confidential Information in connection with the conduct of its business (it being understood that such directors, officers, employees, advisors and agents will be informed of the confidential nature of such information); (iii) in the course of any litigation or court proceeding involving Republic and Liberty concerning this Agreement; (iv) as required by legal process or operation of applicable law, provided, however, that unless prohibited prompt notice of such requirement shall be provided to the party which owns the Confidential Information to allow such party a reasonable amount of time to seek a protective or similar order prior to any such disclosure; and (v) for disclosure of information that (a) was or becomes generally available to the public other than as a result of a disclosure by its directors, officers, employees, advisors or agents in breach of this provision, (b) was available to it on a non­-confidential basis prior to disclosure to it pursuant to this Agreement or prior to any similar agreement between Republic and Liberty, (c) is obtained by it on a non-confidential basis from a source other than such persons or their agents, which source is not prohibited from transmitting the information by a confidentiality agreement or other legal or fiduciary obligation, or (d) has been authorized by the other party to be disseminated to persons on a non-­confidential basis.

 

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the corrective action taken by the breached party. The breached party shall assess the nature and scope of any incident and specifically identify the Confidential Information that has or may have been improperly accessed or misused. The breached party shall take appropriate steps to contain and control any incident of breach of security relating to the Confidential Information, assist the other party with all reasonably requested steps needed to notify customers of any such breach and prevent harm or inconvenience from such breach and agrees upon request to indemnify the injured party for any loss or costs associated with any breach of security or unauthorized disclosure.

11.           Audit. Liberty agrees to provide to the internal and external auditors and personnel of Republic, and any examiners or agents from any regulatory body asserting jurisdiction over the business of Republic, all third party audit and examination reports prepared by regulatory examiners, subject to the prior approval of such examiners, or independent public accountants of Liberty, and shall grant such auditors, personnel, examiners and agents reasonable access to Liberty (including, without limitation, to its records). It shall fully cooperate and provide to such auditors, personnel, examiners and agents, in a timely manner, all such assistance as they may reasonably require in monitoring and/or verifying compliance with Applicable Law and this Agreement, including providing information concerning EROs or Customers and will assist Republic in obtaining any such information from EROs. Specifically, Liberty shall, and shall require an ERO to, provide to Republic upon its written request within three (3) days of such request Financial Product documentation and information about a Customer or Customers or one or more EROs. Additionally, Liberty agrees to implement additional criteria related to the Financial Product Program that will be mutually agreed to by Liberty and Republic, into Liberty's onsite evaluations of EROs and provide all results of said onsite evaluations to Republic upon request.

12.           Indemnification. Liberty shall indemnify, hold harmless and reimburse Republic and its officers, directors, employees and agents, for all expenses and costs including, but not limited to, reasonable attorneys' fees, judgments, penalties, payments of other direct expenses and payments and settlement or other disposition of, or in connection with, any claims, disputes, controversies or litigation with respect to anything wrongfully done or not done by Liberty or for the violation of any laws, rules or regulations applicable to Liberty in connection with the Financial Product Program.

13.           Severability. If any provision of this agreement shall for any reason be held invalid, illegal, or unenforceable, same shall not affect the validity of this Agreement or any other provision hereof and this Agreement shall be interpreted and construed as if such provision to the extent invalid, had not been contained herein.

14.           Survival. Sections 1, 2 (the last sentence only), 3.l., 4.g, 5.e., 9.b., and 10 - 24 shall survive the termination or expiration of this Agreement.

 

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If to Liberty:		JTH Tax, Inc.
		Attn: Mr. Mark F. Baumgartner, CFO
		1716 Corporate Landing Parkway
		Virginia Beach, Virginia 23454
If to Republic:		Republic Bank & Trust Company
		Tax Refund Solutions
		Attn: William R Nelson
		200 South 7th Street
		Louisville, Kentucky 40202

 

 

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

22.           Waiver of Jury Trial. Both parties to this Agreement hereby knowingly, voluntarily, and intentionally waive any right to a trial by jury in any action, suit, proceeding, or counterclaim concerning any rights under this agreement, any related document or under any other document or agreement delivered in connection herewith or therewith, or arising from any relationship existing in connection with this agreement, and agree that any such action, suit, proceeding or counterclaim shall be tried before a court and not before a jury. This provision is a material inducement for the parties entering into this Agreement.

23.           Applicable Law - Arbitration. Any dispute arising out of or relating to this Agreement, or the relationship or dealings between the practice hereto, shall be settled by mediation, or, if the parties cannot agree on an acceptable mediator or fail to reach a solution through the mediation process, then by binding arbitration, conducted on a confidential basis, under the then current Commercial Arbitration Rules of the American Arbitration Association (including the Optional Rules for Emergency Relief) strictly in accordance with the terms of this Agreement and the substantive law of the State of Kentucky. The arbitration shall be held at a mutually agreeable location in Jefferson County, Kentucky and conducted by one (1) arbitrator chosen from a list of attorneys or judges. If the parties cannot within thirty (30) days agree on the selection of the arbitrator, the arbitrator will be appointed by the Circuit Court of Jefferson County, Kentucky in an action commenced to enforce this Section. The costs of the arbitration, including the fees to be paid to the arbitrator, shall be shared equally by the parties. Judgment upon the award rendered by the arbitrator may be entered and enforced in any court of competent jurisdiction. The arbitrator shall not award any consequential, incidental punitive or exemplary damages. The parties acknowledge that they have voluntarily agreed to arbitrate their disputes in accordance with the foregoing and each party hereby irrevocably waives any damages in excess of compensatory damages.

24.           Governing Law. The Agreement shall be constructed in accordance with the laws of the Commonwealth of Kentucky and any action commenced hereunder to construe or enforce this Agreement shall be commenced in a court of competent jurisdiction located in the Commonwealth of Kentucky.

IN WITNESS WHEREOF, Liberty and Republic have executed this Agreement on the date indicated below.

Republic Bank & Trust Company			JTH Tax, Inc.
By:	/s/ William R. Nelson		By:	/s/ James J. Wheaton
Name:	William R. Nelson		Name:	James J. Wheaton
Title:	President – TRS		Title:	Vice President
Date:	November 29, 2011		Date:	November 29, 2011