License Agreement - H&R Block Tax Services Inc. and ACE Cash Express Inc.
LICENSE AGREEMENT
This LICENSE AGREEMENT ("Agreement") is entered into as of the ~ day of
November, 2000 (the "Effective Date") by and between H&R Block Tax Services,
Inc., a Missouri corporation, with a principal place of business at 4400 Main
Street, Kansas City, Missouri 64111 ("Block") and ACE Cash Express, Inc., a
Texas corporation, with a principal place of business at 1231 Greenway Drive,
Suite 800, Irving, Texas 75038 ("ACE"). Block and ACE are collectively referred
to in this Agreement as the "Parties".
RECITALS
WHEREAS, the Parties desire a relationship that allows ACE to use during the Tax
Season (that period from the first Monday after January 1 through May 31 of each
year during this Agreement) the premises of certain of Block's business
locations for the installation and operation of ACE's Self-Service Machines
(hereinafter "SSMs"), such machines designed to facilitate automated check
cashing transactions;
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. GRANT OF LICENSE
Block grants to ACE a license to use, during the term of and on the
conditions set forth in this Agreement, the area of space needed to
install and operate during the Tax Season an SSM in and on the premises
of no fewer than fifty (50) of Block's locations; such locations are
identified in Exhibit A hereto ("Exhibit A"). Such license is limited
to the use of SSMs by Block's customers. ACE shall not advertise in a
manner that would attract SSM users who are not customers of Block. The
Parties recognize that they may, from time to time, desire to add more
locations. If Block and ACE mutually agree to add more locations, then
Exhibit A will be amended accordingly.
2. EXCLUSIVITY
Block covenants that during the term of this Agreement and within the
United States of America it shall not operate SSMs on its premises on
its own or through others; provided, however, if Block notifies ACE of
a proposed arrangement with any other check casher, automated business
or self-service operator to operate SSMs on Block's premises, Block may
proceed with such arrangement unless ACE enters into a substantially
similar arrangement with Block within sixty (60) days of such notice.
3. TRADE NAMES AND TRADEMARKS
A Party may use the name or logo of the other Party and the trademarks
associated with that name as necessary or reasonably appropriate in
conjunction with the operation and advertisement of SSM's in Block's
locations; provided, however, that any such use is subject to the prior
written approval of such other Party. The Parties acknowledge that
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their right to use such names and Marks is derived solely from this
Agreement and shall cease upon termination of this Agreement.
4. INDEMNIFICATION
A. ACE shall bear the risk of loss in the event any SSM is
damaged or pilfered for any reason. During and after the term
of this Agreement, ACE shall protect, indemnify, and keep
Block harmless from and against any expense (including
reasonable attorney's fees) and damage to persons or property
caused or alleged to have been caused by its agents,
employees, guests, customers or any other persons in
connection with the installation, operation and removal of the
SSM in use on the licensed premises and any theft or attempted
theft relating to such SSMs; provided, however, that ACE shall
not be responsible for any revenues lost by Block as the
result of such events.
B. During and after the term of this Agreement, Block shall
protect, indemnify, and keep ACE harmless from and against any
expense (including reasonable attorney's fees) and damage to
persons or property caused or alleged to have been caused by
its agents, employees, guests, customers or any other persons
in connection with the use of Block's sales and services
(other than the SSM) in, on or from the premises; provided,
however, that Block shall not be responsible for any revenues
lost by ACE as the result of such events.
5. TERM
Unless earlier terminated as provided in Section 6 hereof, this
Agreement shall be for a term beginning on the date hereof and ending
July 1, 2003, and shall then automatically renew from year to year
thereafter for renewal periods of one (1) year each provided that
either Party may terminate this Agreement at the end of the initial or
any renewal term by giving at least sixty (60) days' notice prior to
the commencement of any renewal term.
6. TERMINATION
A Party may terminate this Agreement upon giving to the other Party
thirty (30) days' notice and opportunity to cure in the event of a
breach of this Agreement by such other Party. A Party may immediately
terminate this Agreement upon notice of one of the following causes:
(i) the other Party makes a general assignment of all or
substantially all of its assets for the benefit of
creditors; or
(ii) the other party applies for, consents to or
acquiesces in the appointment of a receiver, trustee,
custodian or liquidator for its business or all or
substantially all of its assets including a
receivership or custody relationship imposed by a
governmental or quasi-governmental regulatory
authority; or
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(iii) the other Party files a voluntary petition for relief
under the United States Bankruptcy Code or other
bankruptcy or insolvency laws; or
(iv) an involuntary bankruptcy or insolvency petition
filed against the other Party is not dismissed within
ninety (90) days.
7. FEES
For each person who cashes a check at an SSM in use on Block's
premises, ACE shall charge a fee of * of the face value of such check.
In no event will the fee ACE charges per check exceed *. Block shall
receive within thirty (30) days after the end of each month of the Tax
Season *. At the conclusion of each Tax Season, ACE shall provide, to
Block, a final statement reporting the number of checks transacted and
the total fees received therefrom. Block may, at its expense, audit the
books and records of ACE to verify such fees. If such audit reveals a
variance of more than five percent (5%) in favor of ACE, ACE shall pay
the reasonable cost of such audit.
8. OBLIGATIONS
A. ACE at its sole expense:
(i) will be responsible for the delivery and installation
of the SSM at the premises and any licenses or
certificates that may be required in connection with
such installation.
(ii) will be responsible for maintaining and servicing the
SSM.
(iii) will be responsible for providing the cash inventory.
(iv) will be responsible for providing the armored
vehicles required for delivery and removal of cash
from the SSM.
(v) will be responsible for installing and maintaining
the necessary electrical and communication lines to
operate the SSM.
(vi) at the conclusion of each Tax Season, will be
responsible for the removal of the SSM and
restoration of any damage or alteration of the
premises caused by such removal.
(vii) will comply with all federal and state laws
applicable to the business of operating SSMs,
including, but not limited to, laws regulating the
privacy of consumer information.
B. Licensor:
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and filed separately with the Securities and Exchange Commission.
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(i) will provide access to the SSM during its normal
business hours during the Tax Season.
(ii) will provide ACE with a list of certain store
locations at least ninety (90) days prior to the
commencement date of each tax season, and will
include with such list each store's total number of
checks and dollar volume of checks issued for the
prior year. Exhibit "A" Locations will be created
from the data on that list.
C. Parties:
(i) Information Systems personnel of both Block and ACE
shall work to facilitate the validation of certain
check information in order to reduce risk on the
transaction. ACE shall use check information solely
in connection with the cashing of checks for Block's
customers and not for any other purpose.
(ii) Both Block and ACE shall examine the data contained
in the list described in Section 8B(ii) herein, and
work together to select mutually beneficial locations
for placement of the SSMs.
9. NO WAIVER
No failure or delay by either Party in exercising any term or provision
of this Agreement shall be deemed waived and no breach excused, unless
such waiver or consent shall be in writing and signed by the Party
claimed to have waived or consented. Any consent by any Party to, or
waiver of, a breach by the other shall not constitute a consent to,
waiver of, or excuse of any other or subsequent breach.
10. FORCE MAJEURE
Neither Party shall be liable for delays in the performance of any of
its obligations hereunder due to causes beyond reasonable control,
which shall include, but not be limited to, acts of God, strikes and
inability to obtain labor, services or materials on time, or energy or
fuel crises.
11. ASSIGNMENT
This Agreement and the license granted herein are not assignable by
either Party without the prior written consent of the other Party. This
Agreement shall be binding upon the Parties' respective successors and
assigns.
12. NO STRICT CONSTRUCTION
The language contained herein shall be deemed to be that approved by
all Parties hereto and no rule of strict construction shall be applied
against any Party hereto.
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13. FURTHER ASSURANCES
Each Party hereto agrees to do all acts and things and to make, execute
and deliver such written documents as shall from time to time be
reasonably required to carry out the terms and provisions of this
Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date and year first above written.
H&R BLOCK TAX SERVICES, INC. ACE CASH EXPRESS, INC.
A Missouri corporation A Texas corporation
By: /s/ Patrick D. Petrie By: /s/ Brent Turner
------------------------------- ---------------------------------------
Name: Patrick D. Petrie Brent Turner
------------------------------- Assistant Vice President
Self Service Business
Title: Vice President--Retail Operations
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ADDENDUM NO. 1 TO THE
LICENSE AGREEMENT DATED NOVEMBER 22, 2000
This Addendum No. 1 ("Addendum") is made and entered into as of May 31, 2001, by
and among ACE Cash Express, Inc., a Texas corporation ("ACE") and H&R Block Tax
Services, Inc., a Missouri corporation ("Block") individually referred to as
"Party" and collectively referred to as "Parties."
RECITALS
WHEREAS, the Parties entered into that certain License Agreement dated the 22nd
day of November 2000, for the placement of ACE's Self-Service Machines ("SSMs")
in no fewer than fifty (50) of Block's business location premises ("locations"),
during that period of time from the first Monday after January 1 through May 31
of each year ("Tax Season") for the purpose of facilitating automated check
cashing transactions (the "Agreement"):
WHEREAS, the Parties desire to amend that Agreement as follows:
NOW THEREFORE, in consideration of the foregoing recitals and the mutual
covenants herein set forth, and the acknowledgment of good and valuable
consideration the receipt and sufficiency is hereby acknowledged, and intending
to be legally bound, the Parties hereto agree as follows:
The following Provision 1. Grant of License to the Agreement is replaced as of
the date of this addendum with the following:
"Block grants to ACE a license to use, during the term of and on the
conditions set forth in this Agreement, the area of space needed to
install and operate during the Tax Season an SSM in and on the premises
of Block's locations as mutually agreed to according to the following
schedule:
o No less than * locations in Tax Season 2002
o No less than * locations in Tax Season 2003
o No less than * locations in Tax Season *
Such locations are identified in Amended Exhibit A No. 1 hereto
("Amended Exhibit A No.1"). Such license is limited to the use of SSMs
by Block's customers. ACE shall not advertise in a manner that would
attract SSM users who are not customers of Block. The parties recognize
that they may, from time to time, desire to add more locations. If
Block and ACE mutually agree to add more locations, then Amended
Exhibit A No.1 will be amended accordingly.
Should ACE not be able to meet the schedule of minimum machine
installations each year as indicated in this provision, Block shall
have the right to engage other
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and filed separately with the Securities and Exchange Commission.
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service providers to provide a similar service in locations in which
ACE has not installed an SSM, *.
Should Block not be able to meet the schedule of minimum machine
installations each year as indicated in this provision, ACE shall have
the right to enter into similar agreements with other either tax
preparation or electronic filing service providers to provide a similar
service.
In the event that either party cannot meet the schedule of minimum
machine installations each year, the event will not be construed as a
breach of this agreement."
The following Provision 2. Exclusivity to the Agreement is replaced as of the
date of the addendum with the following:
*
ACE agrees that during the term of this Agreement and within the United
States of America that it shall not operate SSMs, including SSMs
designed for a "checkless" product, in the retail locations of any
other provider of either tax preparation or electronic filing
services."
The following is hereby added as of the date of the addendum as subsection C to
Provision 4. Indemnification:
"Each Party hereby releases and waives all claims, rights of
recovery and causes of action against the other party, its officers, directors,
employees, agents or invitees in connection with any loss, including, but not
limited to, any injuries, death and property damage to the extent any such
losses may be covered by the proceeds of insurance. Moreover, Block and ACE
shall be relieved of their respective obligations of indemnity to the extent of
the amount actually recovered by Block or ACE from one or more of the insurance
carriers of Block or ACE. The indemnities and releases set forth in this
Agreement shall survive the expiration of the term of this Agreement."
The following Provision 5. Term to the Agreement is replaced as of the date of
the addendum with the following:
"Unless earlier terminated as provided in Section 6 hereof, this
Agreement shall be for a term beginning on the date hereof and ending
*, and shall then automatically renew from year to year thereafter for
renewal periods of one (1) year each provided that either Party may
terminate this Agreement at the end of the initial or any renewal term
by giving at least sixty (60) days' notice prior to the commencement of
any renewal term."
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and filed separately with the Securities and Exchange Commission.
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The following Provision 7. Fees to the Agreement is replaced as of the date of
this addendum with the following:
"For each person who cashes a check at an SSM in use on Block's
premises, ACE shall charge a fee (the "Fee") not to exceed * of the
face value of such check. In no event will the Fee exceed *. Any
rounding of the Fee shall be adjusted in favor of the customer. * ACE
will use its best efforts in order to achieve competitive price
leadership in each of the markets where the SSM locations are placed in
the markets of Block's competitors, but in no circumstance will ACE be
required to charge * of the face value of the check. Block shall
receive within thirty (30) days after the end of the Tax Season, *.
Within such thirty day period, Ace will provide to Block, a reporting
to date of the number of checks transacted, volume cashed, bad debt and
the total fees received. Block may, at its expense, audit the books and
records of ACE to verify such fees. If such audit reveals a variance of
more than five percent (5%) in favor of ACE, ACE shall pay the
reasonable cost of such audit."
The following is hereby added to the Agreement, Provision 8. subsection C
Parties effective as of the date of this addendum:
"(iii) ACE and Block will share * losses incurred arising out of
stolen, lost or forged checks cashed at any SSM, provided the following
control procedures are implemented.
a) Block shall use reasonable efforts to ask all clients in offices
containing an SSM or in offices referring clients to an office with an
SSM the primary taxpayers * (or similar question), and submit this data
to ACE in the same manner in which data is transmitted to ACE under the
section 8. Obligations, C. Parties -subsection (i).
b) Block shall use reasonable efforts to implement and document dual
control (pertaining to the process where whomever dispenses a check to
a customer, must write their initials on the check as well as having
another Block employee, authorized to dispense checks, write their
initials on the check) over the issuance of checks in offices
containing an SSM or in offices referring clients to an office with an
SSM.
c) Block and ACE jointly implement an authorization code system for SSM
activation by clients.
Either party reserves the right to temporarily turn-off any machine in
the event that losses are deemed to be occurring. Both parties agree to
use reasonable efforts in resolving the reason for such losses which
would allow for the machine to be turned back on."
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* Confidential treatment has been requested for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission. Such portions are omitted from this filing
and filed separately with the Securities and Exchange Commission.
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The following replaces subsection B of Provision 8. entitled
Obligations: Licensor, effective as of the date of this addendum:
"(i) will provide access to the SSM during normal business hours during
the Tax Season. Additionally, Block will use reasonable efforts to make
the location of the SSM, within the Block office, highly visible to the
consumer in the lobby area."
"(ii) will work with ACE to agree upon a list of locations no later
than each May 31st for installations related to the following Tax
Season, excluding May 31, 2001."
"(iii) will provide access to each location beginning the first
business day of August for installations to be completed for the coming
tax season"
"(iv) will allow ACE to leave the SSM during the term of this agreement
in any or all of Block's offices where SSM's are installed."
The following is hereby added to Provision 11. Assignment, effective as of the
date of this addendum:
"Such assignment shall not be unreasonably withheld. Block's refusal to
approve an assignment to an entity which on its own or through others
competes with Block's tax preparation and electronic filing business
shall be deemed to be unreasonable."
The following is added as a Provision 14. Mutual Non Disclosure to the Agreement
effective as of this addendum:
"14. Mutual Non Disclosure
Each party agrees to keep confidential any information given to the
other party relating to the subject matter of this Agreement and any
Addendum or Amendments thereto, or any information exchanged concerning
the business of either party ("Confidential Information"). Such
Confidential Information, whether oral or written, in whatever form
provided shall remain the property of the party disclosing such
Confidential Information, and each party shall keep confidential and
restrict disclosure of the Confidential Information solely to legal
counsel and need-to-know representatives/employees of the receiving
party ("authorized disclosure"). The receiving party shall have no
obligation to preserve the confidentiality of any Confidential
Information which: (i) was previously known to the receiving party free
of any obligation to keep it confidential; or (ii) is or becomes
publicly available, by other than unauthorized disclosure; or (iii) is
received by the receiving party from a third party who is rightfully in
possession of such Confidential Information and has no legal obligation
to keep it confidential; or (iv) is the subject of any legal proceeding
to compel disclosure of such Confidential Information, provided the
receiving party promptly notifies the
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disclosing party of the receipt of notice of such legal proceeding and
affords the disclosing party the opportunity to contest it. Nothing
contained in the Agreement or this Addendum No.1 shall be construed as
granting or conferring any rights by license or otherwise in any
Confidential Information disclosed."
The following is added as a Provision 15. Joint Marketing Agreement to the
Agreement effective as of this addendum:
"15. Joint Marketing Agreement:
Each party will use its best efforts to enter into a mutually agreeable
joint marketing arrangement for the purpose of promoting and developing
their respective check cashing (ACE) and tax preparation (Block)
services throughout the United States each year this Agreement remains
in effect."
The following is added as a Provision 16. Press Releases to the Agreement
effective as of this addendum:
"16. Press Releases:
"Should either party desire to issue a press release subsequent to the
execution of this addendum regarding the terms and conditions included
herein, the other party has the right to approve the content of such
press release prior to issuance. Such approval shall not be
unreasonably withheld."
The following is added as a Provision 17. Limitation of Liability. IN NO EVENT
SHALL ACE BE LIABLE FOR ANY EXEMPLARY, SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES TO BLOCK INCLUDING WITHOUT LIMITATION, ANY PAYMENT FOR LOST BUSINESS,
FUTURE PROFITS, LOSS OF GOODWILL, FEE REVENUE, REIMBURSEMENT FOR EXPENDITURES OR
INVESTMENTS MADE OR COMMITMENTS ENTERED INTO, CREATION OF CLIENTELE, OVERHEAD OR
FACILITIES INCURRED OR ACQUIRED BASED UPON THE BUSINESS DERIVED OR ANTICIPATED
UNDER THIS AGREEMENT WHETHER FORESEEABLE OR NOT, FOR ANY SSM THAT BECOMES OR IS
RENDERED INOPERABLE OR IF SUCH EQUIPMENT OTHERWISE MALFUNCTIONS.
This Addendum No. 1 shall expire or terminate concurrently with the Agreement,
as extended hereby.
Except to the extent expressly provided in this Addendum, the terms and
conditions of the Agreement shall remain in full force and effect. This Addendum
including Amended Exhibit A No. 1 and the Agreement constitute and contain the
entire agreement of the Parties hereto and supersede any and all prior
agreements, negotiations, correspondence, understandings and communications
between the Parties, whether written or oral, respecting the subject matter.
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H&R Block Tax Services, Inc. ACE Cash Express, Inc.
a Missouri corporation a Texas corporation
By: /s/ Patrick D. Petrie By: /s/ Brent Turner
----------------------- ----------------------------
Name: Patrick D. Petrie Name: Brent Turner
--------------------- Its: Assistant Vice President/
Its: VP Finance and Admin. Self Service Business
---------------------- Date: 6/01/2001
Date: 5/31/01 --------------------------
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