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Exhibit 10.9
OTHER INCOME LICENSE AGREEMENT
(PRODUCTS AND/OR SERVICES)
This Agreement
is entered into this 19th day of September, 2005,
("Effective Date") between Wal-Mart Stores,
Inc. its affiliates, successors and
assigns ("Wal-Mart"), a Delaware
corporation with offices at 1300 S.E. 8th
Street, Bentonville, Arkansas and H&R
Block Services, Inc., on its behalf, and
on behalf of its affiliates, franchisees,
subsidiaries, successors, and assigns
("Licensee"), with offices at 4400 Main
Street, Kansas City, Missouri 64111.
WHEREFORE,
Wal-Mart agrees to make space available in certain Wal-Mart
stores for Licensee's tax return
preparation services and Licensee agrees to pay
fees and commission to Wal-Mart upon the
following terms and conditions:
1. Definitions:
(a) "Promotion" means the tax preparation
services offered and provided by
Licensee and its franchisees.
(b) "Site(s)" means an area of space
measured at Six (6) Feet deep by Fifteen
(15) Feet wide in which is placed a kiosk
with privacy screens at least Five (5)
Feet high around the tax preparation
areas.
(c) "Tax Season" means the period beginning
on or about the 15th day of January
through the 18th day of April of the
relevant year.
(d) "Full Tax Season" begins on or about
the 15th day of January and ends on
April 18th or such later date as the
Internal Revenue Service permits the filing
of federal income tax returns without an
extension of the relevant Tax Season.
(e) "Peak Tax Season" begins on or about
the 15th day of January and ends on
March 1st of the relevant Tax Season.
(f) "Tax Timeline" is a timeline describing
the various phases and requirements,
and the deadlines for each, in which
Licensee and Wal-Mart shall determine which
Wal-Mart stores Licensee or its franchisees
may conduct the Promotion for the
relevant Tax Season. An example of a Tax
Timeline is attached to, and
incorporated into, this Agreement as
Exhibit B.
2. LICENSE. WAL-MART HEREBY GRANTS TO
LICENSEE, SUBJECT TO THE TERMS OF THIS
AGREEMENT, THE RIGHT TO OFFER AND CONDUCT
TAX PREPARATION SERVICES AT VARIOUS
WAL-MART STORES ON DATES SPECIFIED IN THE
RELEVANT TAX TIMELINE. AT NOT TIME
DURING THE TERM OF THIS AGREEMENT MAY THIS
LICENSE COMMENCE LATER THAN JANUARY
2ND OF THE RELEVANT TAX SEASON. .
3. Service.
(a) Wal-Mart shall provide Licensee with
the Tax Timeline no later than April
1st of the year preceding the relevant Tax
Season.
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Other Income License Agreement
(b) Licensee shall comply with all
deadlines provided in the relevant Tax
Timeline.
(c) Wal-Mart shall, on or about the date
specified in the relevant Tax Timeline,
provide Licensee with a list of stores in
which Licensee or its franchisees are
granted a license to conduct the Promotion
for the relevant Tax Season (the
"Final List").
(d) Licensee shall conduct the Promotion at
a Site on one of the Pre-approved
Locations. Exhibit C, attached and
incorporated into this Agreement, sets forth
pre-approved locations within any store on
the Final List at which a Site may be
located ("Pre-approved Location(s)").
(i) Wal-Mart has
no obligation to provide, for any reason whatsoever, a
substitute location for the Site other than
one of the Pre-approved Locations.
(ii) If Wal-Mart
reasonably determines that a Site requires relocation to
another Preapproved Location but fails to
notify the Licensee prior to the
installation of telecommunications at
original location, Wal-Mart will reimburse
Licensee for any direct costs incurred,
including the cost of moving and
re-establishing telecommunications at the
new Preapproved Location.
(iii) At no
time, and regardless of where the Site is located, Wal-Mart
shall not be liable to Licensee or its
franchisees for any loss including, but
not limited to, lost profits incurred by
Licensee or its franchisees.
(e) Licensee will be released, at its
option, from its obligations under this
Agreement to conduct the Promotion at a
particular store on the Final List if:
(i) The Site is
located or relocated in an area other than a Pre-approved
Location, or
(ii) Licensee's
franchisee fails to sign an agreement with Licensee under
which the franchisee is contractually
obligated to Licensee to conduct the
Promotion at a store on the Final List and
Licensee notifies Wal-Mart, in
writing, of this failure within three (3)
weeks after the Effective Date.
(iii) If the
Site is located or relocated in an area other than a
Pre-approved Location after
telecommunications are installed, and if Licensee
opts to be released from its obligations
under this Agreement to conduct the
Promotion at that particular store,
Licensor will reimburse Licensee for any
direct costs incurred in the installation
of telecommunications at the
Pre-approved Location.
(iv) Wal-Mart
shall not be liable to Licensee or its franchisees for any
loss including, but not limited to, lost
profits directly or indirectly incurred
by Licensee or its franchisees as a result
of this sub-paragraph.
(f) If Wal-Mart elects to close a store
included on the Final List prior to or
during the relevant Tax Season, Wal-Mart
shall use commercially reasonable
efforts to provide Licensee with a
substitute location; however, Wal-Mart shall
not be liable, under any circumstances, for
any loss (including, but not limited
to, lost profits) sustained by Licensee or
its franchisees if a substitute
location is not provided. In the event a
substitute location is not provided,
Licensee will be released from any
obligation in this Agreement to pay future
license fees or future
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Other Income License Agreement
commissions related to that closed store.
Furthermore, Wal-Mart shall return to
Licensee the pro rata share of any license
fee paid in advance of Licensee's use
of the license.
(g) Licensee shall operate the Site(s)
Monday through Saturday each week of the
relevant Tax Season at least ten (10) hours
a day and for at least five (5)
hours a day on each Sunday in the relevant
Tax Season, unless prohibited by
local law. Any variance in working hours
must have the prior approval of the
Wal-Mart store manager.
(h) Licensee may elect to cease the
Promotion at one or more Site(s) during the
relevant Tax Season provided that Licensee
provide the Wal-Mart Other Income
Department with prior notice of each Site
Licensee elects to cease the Promotion
no later than February 20th of the relevant
Tax Season. Licensee shall remain
liable under this Agreement for all
obligations to pay license fees and
commissions for any Site at which it elects
to cease its Promotion, just as if
the Promotion was conducted at the Site(s)
for the Full Tax Season.
(i) Wal-Mart makes no guaranties that
Licensee or its franchisees will be
allowed to conduct the Promotion in the
same stores each Tax Season. Licensee
shall, at its own expense, conduct within
sixty (60) days following the end of
the relevant Tax Season, a survey of store
managers at which the Promotion was
held that measures the store managers'
satisfaction with the Promotion and shall
share the results of this survey with the
Wal-Mart Other Income Department.
Wal-Mart shall have the right to approve
the survey design and substance.
4. Term. This Agreement commences on the
latter date on which signed by both
parties and continues through the 30th day
of May 2007, unless terminated
earlier in accordance with the provisions
of Section 19. This Agreement may not
be renewed or extended.
5. Indemnification.
(a) Supplier agrees to indemnify, defend
and hold harmless Wal-Mart, its
affiliates, subsidiaries, successors and
assigns and their officers, directors,
agents and employees, from and against any
and all losses, damages, injuries,
claims, suits, demands, judgments, decrees,
costs, expenses, and liabilities,
including but not limited to reasonable
attorneys' fees and court costs, for
property damage, economic injury, and
personal injury, including death, which
may be suffered, incurred or asserted by
any person in connection with or
arising out of any act or omission of
Supplier its affiliates, subsidiaries,
employees, franchisees, agents, or assigns
from the breach of this Agreement,
and/or from the operation of the
Promotion.
(b) Wal-Mart agrees to indemnify, defend
and hold harmless Supplier, its
affiliates, franchisees, subsidiaries,
successors and assigns and the officers,
directors, agents and employees of each
from and against any and all losses,
damages, injuries, claims, suits, demands,
judgments, decrees, costs, expenses
and liabilities, including, but not limited
to, reasonable attorneys' fees and
court costs, for property damage and
personal injury, including death, which may
be suffered, incurred or asserted by any
person arising solely out of any act or
omission of Wal-Mart, and/or the operation
of the Store in which the Site is
located. It being expressly understood that
under no circumstances will Wal-Mart
be liable to Supplier, its affiliates,
subsidiaries, employees, franchisees,
agents, or assigns for lost profits.
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Other Income License Agreement
(c) Each party receiving notice of matter
that raises the obligation to
indemnify, defend, or hold harmless by
either party shall promptly notify the
other party. The party with the obligation
under this Agreement to indemnify,
defend, and hold harmless immediately shall
take necessary and appropriate
action to protect the interests of the
other party. Any counsel, whom Supplier
provides to Defend Wal-Mart, its
affiliates, subsidiaries, successors and
assigns and their officers, directors,
agents and employees, shall accept, and
acknowledge receipt of, Wal-Mart's
Indemnity Counsel Guidelines ("Guidelines")
and shall conduct the Defense of Wal-Mart,
its affiliates, subsidiaries,
successors and assigns and their officers,
directors, agents and employees,
strictly in accordance with the Guidelines.
If Wal-Mart determines that a
conflict of interest exists, Wal-Mart may
request Supplier replace or cause to
be replaced the counsel. If the counsel is
not timely replaced, Wal-Mart may
replace the counsel, and Supplier, as part
of its Indemnity obligation under
this Agreement, shall pay to the new
counsel or reimburse to Wal-Mart any and
all fees and expenses as to the new
counsel, including all expenses or costs to
change counsel. At all times, each
indemnified party shall have the right to
direct its defense, including the right to
accept or reject any terms and
conditions requisite to the resolution of
any matter for which the other party
is indemnifying, defending, and holding
harmless the indemnified party, its
affiliates, franchisees, subsidiaries,
successors and assigns and their
officers, directors, agents and
employees.
(d) All indemnities, waivers, and
obligations to defend in this Agreement are
and shall be (i) independent of, and will
not be limited by, each other or any
insurance obligations in this Agreement
(whether or not complied with) or
damages or benefits payable under workers'
compensation or other statutes and
(ii) will survive the termination of this
Agreement. The indemnity, waiver, and
obligation to defend provisions in this
Agreement shall include all applicable
law affecting the validity or
enforceability of those provisions, and the
applicable law will operate to amend those
provisions to the minimum extent
necessary to bring the provisions into
conformity with the applicable law. The
provisions, as modified, shall continue in
full force and effect. ALL
INDEMNITIES, WAIVERS, AND OBLIGATIONS TO
DEFEND IN SECTION 4 OF THIS AGREEMENT
SHALL BE ENFORCED TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW FOR THE
BENEFIT OF THE PARTY BEING INDEMNIFIED.
6. Insurance.
(a) Coverage. Licensee shall procure and
maintain during the term of this
Agreement, at Licensee's sole cost and
expense, from companies 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 following insurance in the amounts and
with the conditions set forth:
(i) Workers' Compensation insurance
with statutory limits or if no
statutory limits exist, with minimum limits of Five Hundred
Thousand
Dollars ($500,000) per occurrence.
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Other Income License Agreement
(ii) Employer's
Liability insurance with minimum limits of Five Hundred
Thousand Dollars ($500,000) for each employee for bodily injury
by
accident and for each employee for bodily injury by disease.
(iii) Commercial
General Liability insurance, including Personal and
Advertising Injury, Environmental Liability, Products-Completed
Operations, Bodily Injury, and Property Damage, with minimum limits
of
Five Hundred Thousand Dollars ($500,000) per occurrence, One
Million
Dollars ($1,000,000) general aggregate, Five Hundred Thousand
Dollars
($500,000) products-completed operations aggregate, and Five
Hundred
Thousand Dollars ($500,000) personal and advertising injury per
occurrence. Licensee shall obtain an endorsement to each
insurance
policy to provide aggregate limits per location.
(iv) Business
Automobile Liability insurance with minimum combined single
limits of Five Hundred Thousand Dollars ($500,000). Licensee
shall
cause each insurance company to provide coverage for liability
arising
out of the operation of owned, hired, and non-owned vehicles.
(v) Contractual Liability insurance
with minimum limits of One Million
Dollars ($1,000,000) per occurrence, and Two Million Dollars
($2,000,000) general aggregate. Licensee shall obtain an
endorsement
to each insurance policy to provide aggregate limits per location.
The
contractual liability insurance shall not be limited to coverage
for
the Indemnity, Waiver, and obligation to Defend provisions in
this
Agreement, but, instead, the contractual liability insurance
shall
cover all of Licensee's obligations to the fullest extent
possible
under the contractual liability endorsement. Further, the
contractual
liability insurance shall not limit, in any way, coverage provided
to
Wal-Mart and its subsidiaries, affiliates, officers, directors,
employees, and agents as additional insureds under each of
Licensee's
insurance policies.
(vi)
Umbrella/Excess Liability Insurance with minimum limits of Two
Million
Dollars ($2,000,000). Licensee shall cause each insurance company
to
provide the insurance on an umbrella basis in excess over and no
less
broad than the liability coverage required in this Agreement, with
the
same inception and expiration dates as Commercial General
Liability
insurance, and with coverage that "drops down" for exhausted
aggregate
limits under liability coverage in this Agreement and to issue
an
endorsement with aggregate limits of insurance per location.
(b) Requirements. Licensee shall cause each
insurance company (i) to issue the
insurance on an occurrence basis, (ii) to
provide defense as an additional
benefit and not within the limits of
liability, (iii) to issue an endorsement to
all policies that the policies are primary
and that Wal-Mart's policies are
excess, secondary and noncontributing, (iv)
to issue an endorsement to all
policies to provide a waiver of subrogation
in favor of Wal-Mart, (v) to issue
an endorsement to all policies, except the
workers' compensation and employer's
liability insurance policies, to include
Wal-Mart and its subsidiaries,
affiliates, officers, directors, employees,
and agents as "additional insureds,"
and (vi) to include in each insurance
policy a provision that the insurance
company or companies shall not cancel,
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Other Income License Agreement
renew, or change coverage from the
requirements of this Agreement without
providing at least thirty (30) days advance
written notice to Wal-Mart. The
insurance company or companies shall not
exclude from coverage the negligence,
strict liability, or gross negligence,
whether sole or otherwise, of the
"additional insureds." Licensee releases
Wal-Mart and its subsidiaries,
affiliates, officers, directors, employees,
and agents from any liability
covered by the insurance for which
subrogation is waived; the release applies to
any liabilities, no matter how caused, not
just to insurance proceeds actually
received. Licensee shall provide to
Wal-Mart at least thirty (30) days advance
written notice of any cont
