Exhibit 10.1
Kiosk License
Agreement
Wal-Mart Stores
East, LP, individually and only as to Stores (as defined below)
owned, leased, or operated in AL, CT, DE, FL, GA, IN, KY, ME, MD,
MA, MI, MS, MO, NH, NJ, NM, NY, NC, OH, OK, PA, RI, SC, TN, VT, VA,
WI, WV; Wal-Mart Stores, Inc., individually and only as to Stores
owned or leased in AK, AZ, CA, CO, HI, ID, IL, IA, KS, MN, MT, NE,
NV, ND, OR, SD, UT, WA, WY; Wal-Mart Louisiana, LLC, individually
and only as to Stores owned or leased in Louisiana; and Wal-Mart
Stores Arkansas, LLC, individually and only as to Stores owned or
leased in Arkansas, and Wal-Mart Stores Texas, LLC, individually
and only as to Stores owned or leased in Texas (each referred to as
“Retailer” for purposes of this Kiosk License Agreement
as it applies to the Store) and Jackson Hewitt Inc., a Virginia
corporation, operating certain Jackson Hewitt offices through its
sole wholly owned subsidiary, Tax Services of America, Inc., a
Delaware corporation (collectively and separately,
“Licensee”) enter into this Kiosk License Agreement
effective the 11 th day of March, 2009 (this
“Agreement”) and agree as follows:
1. Definitions.
For purposes of this Agreement, the
following definitions apply:
A. “Extension Term”
means the 1 year renewal term beginning at the expiration of the
initial term of this Agreement, or at the end of a subsequent
renewal term.
B.
“Franchisee” or “Franchisees” means any
franchisee operating Jackson Hewitt Tax Service
® offices.
C. “Kiosk” or
“Kiosks” means an area of space in which Licensee
conducts the Promotion (as defined below), which space shall be
sufficient for the Promotion as reasonably determined by
Retailer.
D. “Promotion” means the
tax preparation services, and the ancillary products as designated
in Exhibit A , offered and provided by Licensee and
Licensee’s Franchisees (as defined above) at the Kiosk or by
Remote Tax Preparation Service (as hereinafter defined) in
accordance with this Agreement.
E. “Tax
Season” means the period beginning on or about
January 2 nd of a given year through
April 15 th of the same year or such later
date as the United State Internal Revenue Service permits the
filing of federal income tax returns without an extension of the
applicable Tax Season.
F. “Tax Returns” means a
federal income tax return(s) that Licensee receives a fee for
preparing.
G. “Store” or
“Stores” means the “Wal-Mart” retail store
operated by Retailer .
H. “Remote Tax Preparation
Service” means preparation of Tax Returns for customers that
drop off their tax information at a Kiosk (if any) which Retailer
and Licensee have agreed will be available only for drop off of tax
information for remote preparation of Tax Returns prepared at a
location other than within the Kiosk in that Store (but finalized
at the Kiosk in that Store), and for no other purpose.
2. Granting Language, Final List
and Approved Locations.
A. Retailer
grants to Licensee, subject to the terms and conditions of this
Agreement, the exclusive right to conduct the Promotion in each of
the Stores on the Final List (as hereinafter defined) during the
applicable Tax Season under this Agreement. Retailer shall make
each Store on the Final List available to Licensee no later than
January 2 nd
of the applicable
Tax Season. Licensee may begin construction of the Kiosk at any
time after the Store is made available to Licensee and Licensee has
obtained Retailer’s approval for construction and location of
the Kiosk as required in this Agreement, provided that no
construction is conducted on a Saturday or Sunday.
(1) Retailer makes no guaranties
that Licensee or Licensee’s Franchisees will be allowed to
conduct the Promotion in any particular Store each Tax Season of
this Agreement, subject to the other terms and conditions of this
Agreement.
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B. Retailer shall provide Licensee, on or before
November 1 (or the first business day thereafter if
November 1 is a holiday or weekend) of each year of the Term
hereof, a final list of Stores in which Licensee is granted a
license to conduct the Promotion for the applicable Tax Season (the
“Final List”). The Final List for each Tax Season shall
be incorporated into this Agreement as a part hereof, and upon
final completion (subject to deletion of Stores from the Final List
under Section 2B(3) hereof), the parties shall initial the
Final List to confirm same.
(1) Retailer’s obligation to
provide Licensee with Stores to conduct the Promotion under this
Agreement shall extend only to those Stores in which Retailer
licensed the Promotion throughout the previous Tax Season;
provided, further, however, that Retailer shall have the right to
exclude from the Final List Stores due to Store renovations, Store
closings, applicable law or public health and/or safety
requirements, or special projects in or planned for a Store as a
result of which Retailer reasonably determines that there is or
will be no available location for a Kiosk during and/or after the
special project. Subject to the foregoing, Retailer shall have no
obligation to include on the Final List for any Tax Season, and no
obligation to grant the license to Licensee, as to any particular
Store or for any specified number of Stores.
(2) If Retailer elects to close a
Store included on the Final List prior to or during the applicable
Tax Season (whether due to store renovations, casualty,
condemnation or otherwise), the Licensee shall no longer have the
right to operate the Promotion during such Tax Season with regard
to any such closed Store. Retailer will not be liable under any
circumstances for any loss (including, but not limited to, lost
profits) sustained by Licensee, Licensee’s Franchisee, or
both, as a result of the Store closing and/or Licensee no longer
having the right to operate the Promotion therein.
(a) Both Retailer and Licensee will
be released from any further obligation under this Agreement with
regard to a Store which Retailer has elected to close, and Retailer
will return to Licensee the pro rata share of any License Fee for
the closed Store paid to Retailer in advance of Licensee’s
use of the license for that Store as granted under this
Agreement.
(3) Licensee shall have the right to
elect to decline to operate the Promotion in any Store included on
the Final List upon notice to Retailer on or before
November 15 of each year of the Term with respect to no more
than five percent (5%) of the Stores on the Final
List.
C. Licensee shall construct the
Kiosk at its own expense and in accordance with plans and
specifications approved in writing or provided by
Retailer.
(1) Licensee shall obtain
Retailer’s approval of the floor plan, specifications,
location and layouts of the Kiosk, including dimensions, signs,
intended colors, and trade fixtures, prior to beginning
construction of the Kiosk, and the Kiosk shall be completed by
Licensee in accordance with such approvals. Retailer’s
approvals and/or provision of the plans and specifications does not
represent government approval or suitability of the plans and
specifications for the intended purposes. A
(2) All construction by Licensee, as
required by the preceding sentence, must comply with applicable
codes, regulations, and laws and must be of high quality materials
and workmanship. Licensee shall be responsible to obtain all
necessary licenses, permits and approvals for the construction of
the Kiosk and conducting of the Promotion. Licensee’s
contractors must be licensed, carry worker’s compensation
coverage as required by law, and comply with all applicable
laws.
(3) Licensee’s obligations to
construct the Kiosk, as required by this Section 2C, includes,
but is not limited to, carpentry and utilities.
(4) Licensee shall install and
maintain, at no cost to Retailer, any telephone equipment required
in the Kiosk and is responsible for the equipment, installation,
and service charges.
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(5) Licensee may use existing
electrical utility service at the Store in which a Kiosk is located
for the basic operation of the Kiosk at no additional charge over
the amount set forth in Section 7, below.
(6) No construction may take place
in a Store on the weekends. The construction may not unreasonably
interfere with Retailer’s business in the Store or with the
Retailer’s customers.
(7) Licensee shall within two
(2) business days of receipt thereof provide Retailer with a
copy of the certificate of occupancy for the Kiosk, if one is
required by applicable law to be obtained.
(8) Licensee shall repair any damage
to the Store caused by the construction.
D. Subject to the terms and
conditions of this Agreement, Licensee and Licensee’s
Franchisees shall conduct the Promotion and offer ancillary
products designated in Exhibit A (which is attached to and
incorporated into this Agreement), within any Store on the Final
List for the applicable Tax Season from a Kiosk located in the
location in the Store as approved by Retailer (the “Approved
Location”).
(1) Retailer may, in its discretion,
in connection with any Store renovations, special projects,
pursuant to applicable law or public health and/or safety
requirements, or otherwise, either temporarily or permanently
relocate Licensee to a location within the Store other than the
Approved Location, or may terminate the license as to a particular
Store(s) if Retailer determines that there is or will be no
available location during and/or after renovation, special
projects, or pursuant to applicable law or public health and/or
safety requirements. In the event of a termination pursuant to the
preceding sentence, it will be treated as if it were pursuant to a
Store closing under Section 2B(2) of this Agreement. Retailer
will bear the cost of moving the Kiosk and Licensee’s trade
fixtures and equipment (including telecommunications installation)
in the event of a relocation, but Retailer is not responsible for
any other expense in connection with the relocation, whether the
relocation is temporary or permanent. If the relocation is of a
permanent nature and Licensee reasonably determines that the new
location will materially impair its ability to conduct the
Promotion in the Store, Licensee may decline to operate the
Promotion for such Tax Season as to the applicable Store by
providing written notice to Retailer within five (5) days of
its receipt of notice of the relocation and Retailer will return to
Licensee the pro rata share of any License Fee for the Store paid
to Retailer in advance of Licensee’s use of the license for
that Store as granted under this Agreement. If the relocation is
temporary and Licensee reasonably determines that the new location
of the Kiosk will materially impair its ability to conduct the
Promotion in the Store or that the Store renovations are materially
impairing its ability to conduct the Promotion in the Store,
Licensee may upon notice to Retailer within five (5) days of
its receipt of notice of the relocation and with Retailer’s
written consent, not to be unreasonably withheld, close the Kiosk
until Retailer and Licensee agree that the Store renovations no
longer impair the Licensee’s ability to conduct the Promotion
in the Store. Retailer will not close the Kiosk in the existing
location until the utilities are installed for the new location,
unless the Kiosk is required to be closed in order to comply with
applicable law or for public health and/or safety requirements.
Retailer will not be liable under any circumstances for any loss
(including, but not limited to, lost profits) sustained by
Licensee, Licensee’s Franchisee, or both, as a result of
either Store renovations, special projects, Store closings, or
termination of a license as to a particular Store(s) as allowed in
this Section 2D, or as a result of a substitute location
(permanent or temporary) for the Kiosk within the Store.
3. Term and
Renewal.
A. This Agreement commences on the
effective date first noted above and continues until 11:59 pm
central time on May 30, 2011 (the “Initial Term”),
unless terminated earlier in accordance with Section 14,
below, or unless renewed in accordance the terms of this Agreement
in which event this Agreement terminates at 11:59 pm central time
on May 30 of the year of the last renewal term. The first Tax
Season of the Initial Term shall be the 2010 Tax Season.
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B. Subject to Section 7C below, this
Agreement will renew for a one (1) year Extension Term at the
expiration of the Initial Term, and at the expiration of a
subsequent renewal term. The Initial Term and each agreed Extension
Term under Section 7C is referred to herein as the
“Term,” and the Term shall terminate upon expiration or
earlier termination thereof in accordance with the terms of this
Agreement.
4. Hours of
Operation.
A. Licensee and Licensee’s
Franchisees shall conduct the Promotion at each Kiosk during the
following hours, unless prohibited by law:
(1) During the
period from January 2 nd (or such later date as Licensee
begins operating in a particular Store) through
January 21 st , at least eight (8) hours
per day Monday through Friday, and at least five (5) hours per
day each Saturday and each Sunday;
(2) During the
period from January 22 nd through February 29
th
, at least ten
(10) hours per day Monday through Saturday, and at least five
(5) hours per day each Sunday;
(3) During the
period from March 1 st through April 7
th
, at least seven
and one-half (7 1 / 2 ) hours per day Monday
through Friday, at least ten (10) hours per day each Saturday,
and at least five (5) hours per day each Sunday;
and
(4) During the
period from April 8 th through the end of the
applicable Tax Season, at least ten (10) hours per day Monday
through Saturday and at least five (5) hours per day each
Sunday.
B. Licensee shall staff, and shall
cause Licensee’s Franchisees to staff, each Kiosk with at
least one (1) person at all times required by the preceding
paragraph.
5. Signage and
Advertisements
A. Licensee and Licensee’s
Franchisees shall, at Licensee’s sole expense, post in a
conspicuous location on the Kiosk, signs informing prospective
customers:
(1) That Licensee provides to
customers, without charge to the customer, an estimate of cost for
Licensee preparing the customer’s Tax Returns;
(2) Listing in a clear and
understandable manner the specified prices to be charged for tax
preparation services to Retailer’s average customer (such
services to be based on the services provided in the prior Tax
Season by Licensee);
(3) Listing a toll free telephone
number that customers may contact Licensee to address any problems;
and
(4) Listing the Hours of Operation
required in Section 4, above.
B. Retailer shall not, beginning on
the commencement of the 2010 Tax Season, permit advertising at any
Store by any third party relating to the operation of an individual
face-to-face tax preparation service or relating to the offering of
the ancillary products designated in Exhibit A . The
foregoing shall not prohibit or limit advertising (including
packaging) at any Store by any third party of tax return
preparation software, books, and related items.
C. Licensee shall
not advertise through signs, posters, or other marketing materials
its Jackson Hewitt ipower
®
Card
in, upon or outside
of the Kiosk, or any Store.
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D. Except as expressly allowed in this Agreement
or with the prior approval of Retailer in its discretion, Licensee
and Licensee’s Franchisees shall not be allowed to post any
signs, banners, posters and other signage within, outside or around
the Store.
6. Maintenance.
A. Licensee and Licensee’s
Franchisees shall maintain the Kiosk and keep the Kiosk clean,
hazard free, and safe for customers and associates. Licensee shall
repair any damage to the Store caused by Licensee, Licensee’s
Franchisees, and/or Licensee’s customers.
B. Retailer shall maintain all areas
of the Store other than the Kiosk in their usual condition.
Retailer shall have the right to make repairs to the Store.
Retailer shall not be liable to Licensee or to Licensee’s
Franchisees for the condition of or operations in or around the
Store, the making of repairs, or any interruption of utilities
provided.
7. Licensee Fee; Additional Fee;
Report; Renewal.
A. Licensee shall pay to Retailer,
without deduction or offset, the applicable annual License Fee for
each applicable Tax Season, as designated in Exhibit B ,
which is attached to and incorporated into this Agreement, in three
(3) equal installments, with the first payment on or before
the third business day prior to the end of January in the
applicable Tax Season; the second payment on or before the third
business day prior to the end of February in the applicable Tax
Season; and the third payment on or before the third business day
prior to the end of March in the applicable Tax Season.
B. During the Term,
in addition to the License Fee, Licensee also shall pay to
Retailer, without deduction or offset, on or before
April 30 th of the applicable Tax Season the
Additional Fees designated on Exhibit B for the applicable
Tax Season based on (i) the number as set forth in Exhibit
B of Tax Returns prepared for customers of a particular Store,
(ii) the percentage set forth in Exhibit B of
Licensee’s Cash Collected Revenues (as defined below) from
the preparation and filing of Tax Returns through Licensee’s
on-line tax preparation software for customers who accessed such
on-line tax preparation software via walmart.com, and
(iii) the percentage set forth in Exhibit B of
Licensee’s Cash Collected Revenues from the preparation and
filing of Tax Returns through Licensee’s Remote Tax
Preparation Service. For the purposes of this Section and Exhibit
B, “Cash Collected Revenues” means total customer fees
collected by Licensee or Licensee’s Franchisees from
customers for the preparation and filing of Tax Returns during the
Tax Season. The Cash Collected Revenues shall include cash, cash
equivalent, credit, charge account, exchange and redeemed gift
certificates (excluding coupons and promotional discounts),
received from whatever source (e.g., tax refunds) in
payment.
C. Prior to expiration of the
Initial Term and any subsequent renewal term, the parties shall
determine whether or not they agree to renew this Agreement for an
additional one (1) year Extension Term, which shall be on the
terms and conditions set forth in this Agreement. If the parties
agree, they shall confirm such agreement in writing. If the parties
are unable to agree before the end of the then-current Term to
renew for an additional one (1) year Extension Term, this
Agreement will terminate at the end of the then-current Term,
without any further extension or renewal. This Agreement may be
extended for up to but not more than 3 additional one (1) year
Extension Terms after the Initial Term.
D. Licensee shall submit to Retailer
all payments due under this Agreement via wire transfer along with
an excel spreadsheet detailing the distribution of payment for each
Store in which a Kiosk is located, and for on-line and Remote Tax
Preparation Services. Licensee guarantees all payments due Retailer
under this Agreement. Retailer shall provide account numbers for
the wire transfer.
E. Licensee shall submit to Retailer
contemporaneously with the Additional Fee a report showing the
exact number of Tax Returns Licensee and Licensee’s
Franchisees prepared at each Kiosk for customers of
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a particular Store during the applicable Tax
Season and the fees paid therefor, and the exact number of Tax
Returns Licensee and Licensee’s Franchisees prepared on-line
and via remote site preparation and the fees paid
therefor.
F. In the event that a Store is
changed from a Division 1 format or a Supercenter format to another
format during a Tax Season, the amount Licensee owes to Retailer
under this Agreement for the entire applicable Tax Season must be
prorated based on the Store designation of the Store during the
applicable Tax Season.
G. Licensee’s failure to
comply with this Section 7 or with Exhibit B is a
material breach of this Agreement.
8.
Indemnification.
A. For the purposes of this
Agreement:
(1) “Claim” means any
action, cause of action, claim, or any other assertion of a legal
right; damages including, but not limited to, consequential,
future, incidental, liquidated, special, and punitive damages;
diminution in value; fines; judgments; liabilities; losses
including, but not limited to, economic loss and lost profits;
regulatory actions, sanctions, or settlement payments; and
reasonable fees and expenses of attorneys, accountants, experts,
and investigators.
(2) “Indemnitee” means
Retailer; Retailer’s subsidiaries, affiliates, successors and
assigns, officers, managers, members, directors, stockholders,
employees, agents, and representatives; and Retailer’s lessor
or other party to an agreement with Retailer related to
Retailer’s purchase, lease, or use of the Store or the
underlying land, which Retailer has a contractual obligation to
indemnify for Claims in connection with the Store.
(3) “Indemnified Claim”
means a Claim for which one party is obligated to indemnify,
defend, and hold harmless the other party.
B. Licensee shall indemnify, defend,
and hold harmless Indemnitee against any Claim, even if the Claim
is groundless, fraudulent, or false, raised or asserted by a third
party, including a government entity, in connection with or
resulting from any actual or alleged:
1. Breach of this Agreement by
Licensee or by Licensee’s Franchisees;
2. Negligence or willful misconduct
by Licensee or Licensee’s Franchisees, or their agents,
employees, representatives, contractors, or customers, while on
Retailer’s property or in relation to Licensee’s
performance under this Agreement;
3. The passive negligence, secondary
liability, vicarious liability, strict liability, or breach of a
statutory or non-delegable duty of Indemnitees, related, directly
or indirectly, to any matter covered under this Section 8B or
to the performance under this Agreement of Licensee or
Licensee’s Franchisees;
4. Any criminal conduct by Licensee
or any of Licensee’s Franchisees, or their agents, employees,
representatives, contractors, or customers, while on
Retailer’s property or in relation to Licensee’s
performance under this Agreement; and
5. Permitted use by Retailer of any
or all of the Licensee’s trade names, trademarks, service
marks, and other identifying marks or intellectual
property.
C. Licensee’s obligation to
indemnify, defend, and hold harmless the Indemnitees under this
Section 8 is independent of, and not limited by, any of
Licensee’s obligations under Section 9, below, even if
damages or benefits are payable under worker’s compensation
or other statutes or if Licensee breaches its obligations under
this Section 8.
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D. Licensee waives any right, at law or in
equity, to indemnity or contribution from the Indemnitee, except as
provided in Section 8E, below.
E. Retailer shall indemnify, defend,
and hold harmless Licensee, Licensee’s Franchisees, and
Licensee’s affiliates, subsidiaries, successors and assigns,
officers, directors, agents and employees against all Claims for
property damage and personal injury, including death, suffered,
incurred, or asserted by any person arising solely out of an act or
omission by Retailer, arising out of operations of the Store in
which a Kiosk is located, or both, but only to the extent caused by
the gross negligence or intentional misconduct of the Retailer.
Notwithstanding anything herein to the contrary, Retailer is not
liable to Licensee or Licensee’s Franchisees, affiliates,
subsidiaries, successors and assigns, officers, and directors, for
any indirect, punitive, exemplary, incidental, consequential. or
special damages, including without limitation, lost profits, lost
income, lost revenues, business interruption, or lost
business.
F. Indemnitee will not be liable to
Licensee, nor to any of Licensee’s Franchisees, for any Claim
relating to the negligence, willful misconduct, or intentional or
criminal conduct of any of Licensee’s customers or
Franchisees.
G. Each party receiving notice, from
whatever source, of an Indemnified Claim shall upon receipt of such
notice:
(1) Notify the Indemnitee, as soon
as is commercially practical, of the assertion, filing, or service
of any Indemnified Claim; and
(2) Immediately take all appropriate
actions necessary to protect and defend the party that must be
indemnified, defended, and held harmless under this Agreement
against the Indemnified Claim.
H. Licensee shall cause the counsel
engaged to defend the Indemnitee with respect to the Indemnified
Claim to acknowledge receipt of, to accept, and to represent
Indemnitee’s interest regarding the Indemnified Claim in
accordance with “Wal-Mart’s Outside Counsel
Guidelines.”
(1) If, in its sole discretion, the
Indemnitee determines that a conflict of interest exists between
the Indemnitee and the indemnifying counsel or that the
indemnifying counsel is not pursuing a defense for the Indemnitee
that is in the Indemnitee’s best interests, the Indemnitee
may request that Licensee replace the indemnifying
counsel.
(2) Licensee may not unreasonably
withhold its consent to replace the indemnifying counsel and will
replace the indemnifying counsel timely or cause the indemnifying
counsel to be replaced timely.
(3) If Licensee unreasonably
withholds consent or the indemnifying counsel is not timely
replaced after the Indemnitee requested, the Indemnitee may replace
the indemnifying counsel, and Licensee will reimburse the
Indemnitee any costs incurred by the Indemnitee in replacing the
counsel.
I. This Section 8 survives the
termination or expiration of this Agreement until applicable law
fully and finally bars all Claims against the Indemnitee. ALL
OBLIGATIONS UNDER THIS AGREEMENT WILL BE ENFORCED TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW FOR THE BENEFIT OF THE
INDEMNITEES. In the event that applicable law affects the validity
or enforceability of this Section 8, then the applicable law
will operate to amend this Section 8 to the minimum extent
necessary to bring the provisions into conformity with the
applicable law. This Section 8, as modified, will continue in
full force and effect.
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J. Any failure by Licensee to comply with this
Section 8 is a material breach of this Agreement, which does
not relieve Licensee of its obligations under this
Section 8.
9. Insurance.
A. Licensee and Licensee’s
Franchisees shall procure and maintain during the Initial Term and
any renewal term of this Agreement, at no expense to Retailer, the
following insurance coverage:
(1) Worker’s Compensation
insurance with statutory limits, or if no statutory limits exist,
with minimum limits of five hundred thousand dollars ($500,000) per
occurrence, and Employer’s Liability coverage with minimum
limits of ($500,000), for each employee for bodily injury by
accident and for each employee for bodily injury by disease.
Licensee and Licensee’s Franchisees shall cause Insurer (as
defined below) to issue an endorsement providing stopgap insurance
in monopolistic states in which a Kiosk may be located.
(2) Commercial General Liability
insurance with a two million dollar ($2,000,000) minimum limit per
occurrence for each Store in which a Kiosk is located or with per
location aggregate limits for each Store in which a Kiosk is
located. This Commercial General Liability policy may not contain
an exclusion for contractual liability assumed by Licensee in this
Agreement unless such coverage is provided by a separate policy
with minimum limits equal to the Commercial General Liability
insurance limits designated in the preceding sentence.
B. Licensee and Licensee’s
Franchisees may satisfy the minimum limits required in
Section 9A(1) and Section 9A(2) by procuring and
maintaining Umbrella/Excess Liability insurance on an umbrella
basis, in excess over, and no less broad than the primary liability
coverage; with the same inception and expiration dates as the
primary liability coverage it is in excess of; with minimum limits
necessary to satisfy the required primary minimum limits; and which
“drop down” for any exhausted aggregate limits of the
primary liability coverage. Licensee and Licensee’s
Franchisees shall cause Insurer (as defined below) to issue an
endorsement to any policy Licensee or Licensee’s Franchisees
procures in satisfaction of its obligations in this paragraph
providing per location per occurrence limits or with per location
aggregate limits for each Store in which a Kiosk is located and
listing as Additional Insured the parties described
below.
C. Licensee and Licensee’s
Franchisees shall procure and maintain all insurance policies
required in this Section 9 from an insurance carrier with a
rating of B+ or better and a financial Size Category rating of VII
or better, as rated in the A.M. Best Key Rating Guide for Property
and Casualty Insurance Companies (the
“Insurer”).
D. Additional Insureds are Wal-Mart
Stores, Inc., its Subsidiaries and its Affiliates, and the
directors, officers, shareholders, employees, agents, and
representatives, and the respective successors and assigns of each,
and any party Retailer has a contractual obligation to indemnify
for Claims in connection with the Store.
E. All insurance policies required
by this Section 9 must be primary, not in excess, and
non-contributory.
F. Upon Retailer’s request,
Licensee shall submit to Retailer Certificates of Insurance and
endorsements evidencing Licensee’s and Licensee’s
Franchisees’ compliance with this Section 9.
(1) All Certificates
of Insurance must show as Certificate Holder “Wal-Mart
Stores, Inc., its subsidiaries and affiliates” at 1300 S.E.
8 th Street, Bentonville, Arkansas
72716-0850.
(2) All Certificates of Insurance
and endorsements must show Licensee or Licensee’s Franchisee
as the Named Insured.
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G. Failure to comply with this Section 9 is
a material breach of this Agreement. Licensee shall indemnify,
defend, and hold harmless the Indemnitees against any Indemnified
Claim that the required insurance would have covered but for
Licensee’s breach.
10. Equipment.
Retailer is neither responsible nor
liable for any injury or damage to any person or property resulting
from the use, misuse, or failure of any equipment Licensee or
Licensee’s Franchisees use even if Retailer furnishes, rents,
or loans the equipment to Licensee or Licensee’s
Franchisees.
A. The acceptance or use of
equipment furnished, rented, or loaned to Licensee or
Licensee’s Franchisees by Retailer is an acceptance by
Licensee of full responsibility for any Claim.
B. Licensee shall indemnify, defend,
and hold harmless the Indemnitees in accordance with
Section 8, above, against any Claims in connection with the
equipment that Retailer furnishes, rents, or loans to Licensee or
Licensee’s Franchisees.
11. Customer Service and Record
Ownership
A. Licensee shall conduct or cause
to be conducted at least one (1) random personal visit of each
Kiosk during each Tax Season during the Term hereof to ensure
quality assurance and compliance with all Licensee’s and
Retailer’s rules and regulations; and shall provide Retailer
with a summary of each visit no later than thirty (30) days
following the applicable visit, and with a summary of all visits
within fifteen days after the end of the Tax Season.
B. Licensee shall promptly respond,
resolve, or both, all customer complaints related to the
Promotion.
C. All files and information related
to Licensee’s and Licensee’s Franchisee’s
customers remain the property of Licensee.
12. Taxes and
Permitting
A. Licensee shall determine whether
a sales tax number is required to conduct the Promotion and which,
if any, federal, state, and local licenses and permits are required
to conduct the Promotion and shall secure, at no cost to Retailer
all such sales tax numbers and all applicable licenses and permits
as may be required.
(1) Licensee shall not use any of
Retailer’s sales tax numbers or licenses and
permits.
(2) Licensee’s Franchisees
shall not use any of Retailer’s sales tax numbers or licenses
and permits.
B. Licensee shall pay all
appropriate tax liabilities levied upon its operation of the
Promotion and on its property within the Store.
13. Use of Name;
Co-Promotion.
A. Licensee shall not use
Retailer’s trade names, trademarks, service names, service
marks, or logos without the prior written consent of Retailer.
Neither Licensee nor Licensee’s Franchisees may list Retailer
as a customer in any press releases, advertisements, trade shows,
posters, reference lists, or similar public announcements without
Retailer’s prior, written permission. The foregoing notice
and approval procedures do not apply to required government
filings, including, without limitation, filings with the Securities
Exchange Commission, Federal Trade Commission or state franchise
agencies, or communications with financial analysts, as long as
such communications are not derogatory with respect to the other
party or its parents, affiliates, or subsidiaries.
B. Retailer shall only use
Licensee’s name to advertise the fact that Licensee is
engaged in the Promotion at participating Stores, but Retailer is
not obligated to advertise the fact that Licensee is engaged in the
Promotion at participating Stores.
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C. Licensee shall during the Initial Term and
any Extension Terms, promote and advertise its Promotion offered in
the Stores, in a marketing program to be established by Retailer,
and in which Retailer shall participate, as specified pursuant to
the marketing program. Licensee shall be required to provide $5
Million the first year of the Initial Term for the marketing
program, to promote the launch of the Promotions in the Stores, in
accordance with the marketing program; provided that if the Final
List for the 2010 Tax Season has less than 1,800 Stores then
Licensee shall be required to provide $3 Million the first year of
the Initial Term for the marketing program, and if the Final List
for the 2010 Tax Season has 1,800 or more Stores but less than
2,100 Stores then Licensee shall be required to provide $4 Million
the first year of the Initial Term for the marketing program. The
amounts provided by Licensee shall be used for advertising and
promotion outside of the Store and any amounts contributed by
Retailer shall be used for advertising and promotion inside of the
Store.
14. Default and
Termination.
A. The non-defaulting party may
terminate this Agreement in the entirety in the event of the
occurrence of any of the following, each of which constitutes an
events of default hereunder, by the other party, and in the event
of a material breach under Section 14A(1) the non-defaulting
party may terminate this Agreement in its entirety or as to the
Store in which the material breach occurred and any other Stores
operated by the same operator (by way of example, if the breach
occurred in a Store operated by Licensee, then the Agreement may be
terminated as to all Stores operated by Licensee, and if the breach
occurred in a Store operated by Licensee’s Franchisee, then
the Agreement may be terminated as to all Stores operated by that
Franchisee), by providing written notice thereof to the defaulting
party:
(1) A material breach of this
Agreement that remains uncured more than fifteen (15) days
after the non-breaching party notifies the breaching party, in
writing, of the breach;
(2) Either party becomes insolvent
or bankrupt, files a voluntary petition in bankruptcy, makes an
assignment for the benefit of creditors, consents to the
appointment of a trustee or receiver, or ceases paying its debt in
the ordinary course as they become due or becomes
insolvent;
(3) A trustee or receiver is
appointed for a substantial part of the properties of either party
and the appointment is not dismissed within thirty
(30) days;
(4) Bankruptcy reorganization,
arrangement, or liquidation proceedings instituted by or against
either party, and if against that party, are consented to or are
not dismissed within thirty (30) days;
(5) A transfer, at any time during
the term of this Agreement, of any part or all
of Licensee’s shares of stock which results
in a change of control of Licensee as of
the Effective Date hereof, so that the person or entity
with such control as of the Effective Date no longer has
such control of Licensee. As used herein, a person
or entity shall be deemed to control another entity if such
controlling person or entity possesses, directly or indirectly, the
power to direct or cause the direction of the management and
policies of such controlled entity, whether through the ownership
of voting securities or interests, or by contract;
(6) The occurrence of a dissolution,
reorganization, merger, consolidation or privatization of
Licensee;
(7) All or substantially all of the
assets or property of Licensee are sold or otherwise disposed of in
one transaction or series of related transactions to persons or
groups unrelated to the persons or groups which control Licensee as
of the Effective Date; or
(8) The earlier of (i) thirty
(30) days after a notice of the occurrence of a
default (“Notice”) is given to Licensee or any of its
affiliates under any obligations of
Licensee and/or its affiliates under any
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agreements for the borrowing of
money from any institutional lender(s) having a balance due at the
time of default of more than $10 Million as to each credit facility
and/or in the aggregate; provided that such Notice has not been
withdrawn by such lender prior to the expiration of such thirty
(30) day period and (ii) the date that any such
lender begins exercising any of its remedies upon any default under
any such agreements. Licensee shall immediately provide notice to
Retailer of any such notice of default and notice of the
exercise of remedies by any lender upon such default, and failure
to provide such notice shall constitute a Material Breach of this
Agreement. An “affiliate” shall mean a person or
entity that controls, is controlled by or is under common control
with Licensee, and which may include without limitation, a
subsidiary of Licensee, Licensee’s parent company or a
sibling company of Licensee.
B. Retailer shall not be deemed to
be in default hereunder for a non-material breach of this Agreement
unless it remains uncured more than thirty (30) days after
Licensee party notifies Retailer, in writing, of the
breach.
C. Retailer has the right to require
Licensee to replace an operator of a Kiosk in the event of any of
the following: (1) a non-material breach of this Agreement
that remains uncured more than fifteen (15) days after
Retailer notifies Licensee, in writing, of the breach; (2) any
action by Licensee or Licensee’s Franchisee that Retailer, in
its reasonable discretion, determines constitutes unprofessional
conduct, that may harm Retailer’s reputation, or that may
result in or do result in criminal charges against Licensee,
Licensee’s Franchisees, or both; or (3) any failure by
Licensee or by Licensee’s Franchisees to staff a Kiosk with
at least one (1) appropriately trained person for at least
three (3) consecutive days at any time after any part of the
Kiosk is installed on the floor (even if the Kiosk is not fully
operational), or if Retailer relocates Licensee after any part of
the Kiosk is installed on the floor, any failure by Licensee or by
Licensee’s Franchisees to staff a Kiosk with at least one
(1) appropriately trained person for at least three
(3) consecutive days after any part of the Kiosk is installed
in the new location (even if the Kiosk is not fully operational).
Retailer shall provide written notice to Licensee if any of the
foregoing occurs, and Licensee shall have thirty (30) days
from receipt of such notice to replace the operator. The
replacement operator must be another Franchisee of Licensee or
Licensee directly (if Licensee is not the operator in breach). If
Licensee fails to replace the operator, Retailer shall have the
right to terminate the license granted under this Agreement with
respect to the Store in which such operator is located; provided,
however, that the exclusivity provisions set forth in
Section 18.C. shall still apply to such Store.
Licensee’s or Licensee’s Franchisees failure to comply
with Sections 4, 5 (except as otherwise provided in
Section 14C(2) below), or 6 of this Agreement shall be
considered a non-material breach of this Agreement.
(1) Retailer’s right to
require Licensee to replace an operator and to terminate the
license granted with respect to a particular Store under
Section 14C(2) above regarding unprofessional conduct, etc.,
shall apply to all Stores operated by the same Franchisee (by way
of example, if the breach is by Licensee’s Franchisee, then
the Agreement may be terminated as to all Stores operated by that
Franchisee) and further provided that under Section 14(C)(2)
above regarding unprofessional conduct, etc., if the action is by
Tax Services of America, Inc., then Retailer shall have the right
to terminate the Agreement as to all Stores operated by Tax
Services of America, Inc., and further provided that if the action
is by Jackson Hewitt Inc., then Retailer shall have the right to
terminate the Agreement in its entirety.
(2) In the event Licensee or any of
Licensee’s Franchisees places or allows any signs, banners,
posters or other signage to be placed outside or on the exterior of
the Store, that shall constitute a material breach of this
Agreement, for which there shall be no right to notice and no right
to cure, th
