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JACKSON HEWITT TAX SERVICE INC S-1/A Filing

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                                 As filed with the Securities and Exchange Commission on June 18, 2004
                                                                                                   Registration No. 333-113593



                           SECURITIES AND EXCHANGE COMMISSION
                                                            WASHINGTON, D.C. 20549



                                                         AMENDMENT NO. 5
                                                                               To
                                                                      Form S-1
                                              REGISTRATION STATEMENT
                                                                           Under
                                              THE SECURITIES ACT OF 1933
                              Jackson Hewitt Tax Service Inc.
                                                        (Exact name of registrant as specified in charter)

                    Delaware                                                   7291                                              20-0779692
            (State or other jurisdiction of                        (Primary Standard Industrial                                 (I.R.S. Employer
           incorporation or organization)                          Classification Code Number)                                 Identification No.)

                                                                    7 Sylvan Way
                                                            Parsippany, New Jersey 07054
                                                                   (973) 496-1040
                       (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)




                                                             Steven L. Barnett, Esq.
                                              Senior Vice President, General Counsel and Secretary
                                                         Jackson Hewitt Tax Service Inc.
                                                                  7 Sylvan Way
                                                          Parsippany, New Jersey 07054
                                                                 (973) 496-1040
                              (Name, address, including zip code, and telephone number, including area code, of agent for service)




                                                                        With copies to:

     Gregory A. Fernicola, Esq.                                    Eric J. Bock, Esq.                                  Vincent J. Pisano, Esq.
Skadden, Arps, Slate, Meagher & Flom                            Executive Vice President,                               Kirkland & Ellis LLP
                 LLP                                               Law and Secretary                                      Citigroup Center
         Four Times Square                                        Cendant Corporation                                   153 East 53rd Street
     New York, New York 10036                                      9 West 57th Street                                 New York, New York 10022
           (212) 735-3000                                       New York, New York 10019                                   (212) 446-4800
                                                                     (212) 413-1800



      Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration
Statement becomes effective.
      If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act, check the following box. 
        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check
the following box and list the Securities Act registration statement number of the earlier effective registration statement for the
same offering. 
        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 
        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 
        If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. 



       The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its
effective date until the registrant shall file a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the Registration
Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section
8(a), may determine.
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The information in this preliminary prospectus is not complete and may be changed. These securities may not be offered until the
registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer
to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

                                            Subject to Completion. Dated June 18, 2004.

                                                      37,500,000 Shares

                                    Jackson Hewitt Tax Service Inc.
                                                         Common Stock


        This is an initial public offering of shares of common stock of Jackson Hewitt Tax Service Inc.

       Cendant Corporation, the sole stockholder of Jackson Hewitt, is offering 37,500,000 shares. Jackson Hewitt will not receive
any of the proceeds from the sale of the shares being offered hereby, unless the underwriters exercise their option to purchase
additional shares.

       Prior to this offering, there has been no public market for the common stock. It is currently estimated that the initial public
offering price per share will be between $18.00 and $20.00. Jackson Hewitt has applied to list the common stock on the New York
Stock Exchange under the symbol ―JTX.‖

        See “ Risk Factors ” on page 10 to read about factors you should consider before buying shares of common stock.



      Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of
these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.



                                                                                       Per Share                Total

            Initial public offering price                                          $                      $
            Underwriting discount                                                  $                      $
            Proceeds, before expenses, to selling stockholder                      $                      $

      To the extent that the underwriters sell more than 37,500,000 shares of common stock, the underwriters have the option to
purchase up to an additional 5,625,000 shares from Jackson Hewitt at the initial public offering price less the underwriting
discount.



        The underwriters expect to deliver the shares in New York, New York on            , 2004.

Goldman, Sachs & Co.                                                                                              JPMorgan


Banc of America Securities LLC
        Citigroup
                  Merrill Lynch & Co.
     Credit Suisse First Boston
              Blaylock & Partners, L.P.
                        CIBC World Markets
                            Lehman Brothers
Prospectus dated   , 2004.
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                                                      PROSPECTUS SUMMARY

       This summary highlights information contained elsewhere in this prospectus. You should read the entire prospectus
carefully, including the section entitled “Risk Factors” and our financial statements and the related notes included elsewhere in this
prospectus, before making an investment decision. Unless otherwise indicated, the terms “Jackson Hewitt,” the “Company,” “we,”
“us” and “our” refer to Jackson Hewitt Tax Service Inc. together with its subsidiaries. Unless otherwise indicated or the context
requires, the term “office” refers to any location where individuals may obtain Jackson Hewitt tax preparation services and the
terms “Jackson Hewitt network” and “network” refer to our franchised, together with our company-owned, offices. Unless
otherwise indicated or the context requires, “Cendant” refers to Cendant Corporation, together with its subsidiaries, excluding
Jackson Hewitt. Unless otherwise indicated or the context requires, yearly references contained throughout this prospectus refer
to our fiscal year which ends on April 30.

                                                           Jackson Hewitt

       Jackson Hewitt is the second largest paid tax return preparer in the United States, based on the number of tax returns filed
by paid preparers, with a nationwide network comprised of 4,330 franchised offices and 605 company-owned offices as of April
30, 2004. We have grown rapidly, more than doubling the number of offices in our network since 1998 and our annual volume of
tax returns prepared since 1999. In 2004, our network filed 3.1 million tax returns, an increase of 11% as compared to 2003.
Despite our growth and industry position, we estimate that the 3.1 million tax returns our network prepared in 2004 represented
less than 5% of the total paid tax return preparer industry in the United States. Until the completion of this offering, Cendant
Corporation, or Cendant, will be our sole stockholder. Cendant is selling all of its ownership stake in us in this offering. We will not
receive any proceeds from the sale of shares of common stock offered by Cendant.

         In 2004, our net revenues were $205.6 million, which were generated from revenues from franchisees including royalty,
marketing and advertising fees and other revenues (43% of net revenues), service revenue including tax return preparation and
related service fees provided at company-owned offices (28% of net revenues), and fees and other revenue received from
financial institutions in connection with our facilitation of the sale of financial products (29% of net revenues). Because of the
higher profit margins inherent in the franchise model, our franchise revenues contribute a disproportionately higher percentage of
our income from operations than those of our company-owned offices. The average revenue per tax return in our network in 2004
was $146.76, an increase of 6% as compared to 2003. In 2004, our net income was $43.0 million, which included a $10.4 million
litigation charge ($6.3 million after-tax).

       At the core of our business strategy is the growth and development of our franchise system. Royalty and marketing and
advertising fees are, collectively, our largest and fastest growing source of revenue. In 2004, revenues from royalty and marketing
and advertising fees were $75.9 million, an increase of approximately 19% compared to 2003. Tax returns filed by our franchised
offices represented 87% of the total number of tax returns filed by our network in 2004.

       Complementing our franchise system are our company-owned offices. Increases in revenues and earnings of our
company-owned offices are derived from growth in our operations and through our acquisition of independent tax return
preparation businesses. Service revenue from our company-owned offices was $56.6 million in 2004, an increase of
approximately 17% compared to 2003. Tax returns filed by our company-owned offices represented 13% of the total tax returns
filed by our network in 2004.

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       Additionally, to meet the needs of our customers, we facilitate the sale of financial products that are primarily designed to
accelerate the availability of funds to our customers and enable them to have their tax returns prepared by trained preparers with
no cash outlay at the time of filing. In 2004, our customers purchased nearly 2.8 million financial products in conjunction with
having their tax returns prepared by our network, approximately 16% more than in 2003. We continue to develop and offer
financial products to meet our customers’ needs and generate incremental revenue.

Industry Opportunity

       Jackson Hewitt is the second largest paid tax return preparer in the United States, based on the number of tax returns filed
by paid preparers in 2003, with an approximate 4% share, and H&R Block is the largest, with an approximate 21% share. The
remaining 75% of the paid tax return preparer industry is highly fragmented and consists of tens of thousands of paid tax return
preparers. In 2003, we estimate our network had the potential to reach only 30% of the population that used paid tax return
preparers. As we expand into new territories and increase our penetration of existing territories, we believe we are well positioned
to increase our share of the paid tax return preparer segment because of our strong brand name, our franchise model, our
electronic filing capability and our ability to offer our customers fast and convenient means of obtaining funds associated with their
tax refunds.

Growth Strategy

        Our objective is to grow our revenues and net income by pursuing the following six strategic initiatives:

       Increase the Number of Offices in Our Network.           The core element of our growth strategy is to expand our network. In
2004, our existing territories were largely under-penetrated, with only 21% of our territories having reached our target of at least
three offices per territory. We also plan to expand into new territories by selling new franchises, converting established third-party
tax preparation businesses to our franchise system and acquiring established tax return preparation businesses to be
company-owned offices. Additionally, we will continue to utilize our relationships with large retailers to enhance office growth in
both existing and new markets. During 2004, our network had approximately 1,400 offices in retailer locations nationwide,
including approximately 1,000 in Wal-Mart stores. We recently renewed our two-year agreement with Wal-Mart allowing us to
continue operating office locations within their retail stores.

       Increase the Number of Tax Returns Filed by Our Existing Offices.          To generate more tax returns throughout our
network, we expect to increase both the number of offices and the number of tax returns filed by existing offices. In 2004, we
increased same-store tax return volume by 5%, despite limited growth in the overall market for tax returns filed by paid tax return
preparers. However, our network has yet to achieve its full potential, since 57% of our offices have been part of our network for
fewer than five years and our experience has demonstrated that the number of tax returns filed per office grows as offices mature.
We also expect to increase the number of tax returns filed within our office network through improved marketing efforts,
operational and productivity enhancements and a focus on growing our share of late-season filers.

       Increase Our Profitability by Using Our Franchise Model.           Our franchise model enables us to grow more quickly with
less capital investment and lower operating expenses than if we directly operated all of the offices in our network. The franchise
model has an inherently higher profit margin than that of our company-owned offices, as our existing infrastructure permits
additional franchise growth without significant additional fixed cost investment.

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       Increase the Profitability of Company-Owned Offices.        We intend to improve the profitability of our company-owned
offices by focusing on growth and by taking advantage of our previous investments in infrastructure. While we will continue to
pursue acquisition opportunities for our company-owned office network, we are focused primarily on organic growth through the
opening of new company-owned offices within existing owned territories as well as increasing office productivity.

       Continue to Focus on Offering Innovative Financial Products.            We continually develop and introduce new products
designed to attract and retain customers and generate incremental revenue. The primary financial products we offer are refund
anticipation loans, accelerated check refunds and assisted direct deposit, which help our customers obtain access to funds more
quickly than if they filed tax returns on their own. We also develop and introduce innovative products, including the introduction
since 2000 of the Jackson Hewitt CashCard, HELP, Gold Guarantee and Money Now.

      Expand into New Markets.       One of our long-term strategies is to expand into markets with income tax systems similar to
the United States’, such as Canada and Puerto Rico. We also plan to develop products and services to capture customers in the
growing online segment.

                                                                 Risk Factors

       An investment in our common stock is subject to a number of risks and uncertainties. Before investing in our common
stock, you should carefully consider the following, as well as the more detailed discussion of risk factors and other information
included in this prospectus:

           •        Our historical growth trend may not be representative of future growth because of our early penetration in the most
                    desirable urban locations;

           •        Changes in tax law or governmental initiatives aimed at reducing complexities or inefficiencies associated with tax
                    return preparation and tax refund processing could diminish the value of our services and reduce demand;

           •        Approximately 29% of our net revenues in 2004 were directly or indirectly derived from the facilitation of refund
                    anticipation loans, which have increasingly become the subject of regulatory scrutiny and consumer activism;

           •        Because of the highly seasonal nature of our business, we face significant operational challenges and the price of
                    our common stock may be prone to volatility;

           •        As an independent public company, we will incur increased costs;

           •        We rely on Cendant to provide transitional services to us and may not be able to replace those services at the
                    same cost;

           •        We may incur significant liability to Cendant pursuant to the indemnification provisions of the transitional
                    agreement; and

           •        Immediately prior to the completion of this offering, we will declare a special dividend to Cendant in an amount of
                    $308.5 million (consisting of $175.0 million of cash and cancellation of a receivable from Cendant of $133.5
                    million). We intend to issue $175.0 million aggregate principal amount of notes in order to fund the cash portion of
                    the special dividend to be paid to Cendant. The special dividend will benefit only Cendant and not you as a
                    stockholder following this offering.

                                                         Relationship with Cendant

       Concurrently with the closing of this offering, we will enter into a transitional agreement with Cendant to provide for an
orderly transition to being an independent public company and to govern continuing business arrangements between us and
Cendant. Under the transitional agreement, Cendant will agree to provide us with various services that are important to our
business.

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        These services include:

           •        human resources, employee benefits, payroll and accounts payable;

           •        financial systems management and call support;

           •        treasury and cash management, tax support and revenue audit;

           •        event marketing;

           •        telecommunications and information technology; and

           •        public and regulatory affairs.

       Assuming this offering is completed on June 30, 2004, we estimate that we will incur costs of approximately $3.9 million for
these transitional services during the remainder of fiscal year 2005. These costs are comparable to the costs we have incurred for
similar services provided by Cendant prior to this offering. The transitional agreement will also provide that we will indemnify
Cendant and its affiliates for potential losses related to the operation of our business prior to this offering and for other matters.

        Immediately prior to the completion of this offering, we will declare a special dividend to Cendant in an amount of $308.5
million (consisting of $175.0 million of cash and cancellation of a receivable from Cendant of $133.5 million). The purpose of the
special dividend is to maximize the consideration to Cendant, our sole stockholder, in connection with the disposition by Cendant
of its entire ownership interest in Jackson Hewitt through this offering.

                                                            New Indebtedness

        Concurrently with the closing of this offering, we will enter into a new revolving credit facility with a syndicate of financial
institutions, including affiliates of several of the underwriters of this offering. The revolving credit facility will provide for borrowings
of up to $100.0 million and will have a five-year maturity. We also intend to issue $175.0 million aggregate principal amount of
five-year floating rate notes to a limited group of institutional investors concurrently with the closing of this offering. All of the
proceeds received from the sale of the notes will be used to fund the cash portion of the special dividend to be paid to Cendant.
The new credit facility and the agreement governing the notes will contain restrictions on our operating flexibility and on our ability
to pay dividends to our stockholders.

                                                          Company Information

       Jackson Hewitt Tax Service Inc. was incorporated in Delaware on February 20, 2004 as a holding company. Our only
material asset is 100% of the equity of Jackson Hewitt Inc., our principal operating subsidiary, which franchises the Jackson
Hewitt Tax Service brand and owns Tax Services of America, Inc., or TSA, and Hewfant, Inc. TSA operates our company-owned
offices. Jackson Hewitt Inc. was incorporated in Virginia in 1985. In January 1998, Jackson Hewitt Inc. became a wholly owned
subsidiary of Cendant. You may contact us at our principal executive offices at 7 Sylvan Way, Parsippany, New Jersey 07054 or
by telephone at (973) 496-1040. Our Internet website address is http://www.jacksonhewitt.com. Any information contained on our
website is not a part of this prospectus.

                                                                      4
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                                                     The Offering

Common stock offered by the selling stockholder               37,500,000 shares

Common stock to be outstanding after this offering            37,587,000 shares (or 43,216,000 shares if the underwriters
                                                              exercise their option to purchase additional shares in full).
                                                              Amounts include an estimated 54,000 shares and 37,000
                                                              shares of common stock expected to be issued under our
                                                              2004 Equity and Incentive Plan to our executive officers and
                                                              employees, respectively, following this offering in exchange
                                                              for Cendant securities they currently hold.

Voting rights                                                 Holders of our common stock are entitled to one vote per
                                                              share on all matters submitted to a vote.

Use of proceeds                                               We will not receive any proceeds from the sale of shares of
                                                              common stock offered by Cendant. If the underwriters
                                                              exercise their option to purchase additional shares in full, we
                                                              estimate that the net proceeds to us from the sale of the
                                                              additional shares of common stock will be $100.7 million,
                                                              after deducting the underwriting discount. We expect to use
                                                              any proceeds from the exercise of the underwriters’ option
                                                              for general corporate purposes, which may include
                                                              repayment of borrowings under the new credit facility and
                                                              share repurchases.

Dividend policy                                               We intend to pay quarterly cash dividends on our common
                                                              stock at an initial rate of $0.07 per share of common stock
                                                              ($0.28 per annum), commencing in the second quarter of the
                                                              current fiscal year ending April 30, 2005. The declaration
                                                              and payment of future dividends will be at the discretion of
                                                              our board of directors and will depend upon many factors
                                                              which are described under ―Dividend Policy‖ and elsewhere
                                                              in this prospectus.

Risk factors                                                  See ―Risk Factors‖ and other information included in this
                                                              prospectus for a discussion of factors you should carefully
                                                              consider before deciding to invest in our common stock.

Stock exchange listing                                        We have applied to list our common stock on the New York
                                                              Stock Exchange under the symbol ―JTX.‖

                                                          5
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          The common stock to be outstanding after this offering excludes:

      •      The exercise by the underwriters of their option to purchase additional shares of our common stock. If the underwriters
             exercise their option to purchase additional shares in full, we will issue 5,625,000 additional shares of common stock;
             and

      •      Approximately 4,800,000 shares of common stock (or approximately 11% of the shares of common stock outstanding
             after this offering) consisting of:

            •       approximately 989,000 shares of common stock issuable upon the exercise of unvested employee stock options to
                    be granted on the date of completion of this offering under our 2004 Equity and Incentive Plan at an exercise price
                    equal to the initial public offering price;

            •       approximately 800,000 shares of common stock issuable upon the exercise of vested employee stock options that
                    will be issued upon completion of this offering under our 2004 Equity and Incentive Plan in exchange for vested
                    Cendant stock options currently held by our executive officers and employees, at a weighted average exercise
                    price of $19.85 per share;

            •       approximately 53,000 shares of common stock issuable upon the exercise of vested employee stock options that
                    will be issued upon completion of this offering under our 2004 Equity and Incentive Plan in exchange for unvested
                    Cendant stock options currently held by our executive officers and employees, at a weighted average exercise
                    price of $10.31 per share;

            •       approximately 2,158,000 additional shares of common stock reserved for future grants under our 2004 Equity and
                    Incentive Plan;

            •       approximately 400,000 additional shares of common stock reserved for future grants under our 401(k) plan; and

            •       approximately 400,000 additional shares of common stock reserved for future grants under the employee stock
                    purchase plan.

      Share numbers and option amounts to be issued in exchange for Cendant restricted stock units and options are based on
the midpoint of the initial public offering price range set forth on the cover page of this prospectus and the average closing price of
Cendant’s stock price over a recent three trading day period. The actual amounts will change based on our stock price and
Cendant’s stock price for the three trading days following the date of the final prospectus. Actual amounts outstanding may also
be reduced to the extent our executive officers and employees elect to exercise their vested Cendant options prior to the
completion of the exchange offer.

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                                         Summary Consolidated Financial Information

       The following tables summarize the consolidated financial information for our business. You should read these tables along
with ―Management’s Discussion and Analysis of Financial Condition and Results of Operations,‖ ―Business‖ and our consolidated
financial statements and the related notes included elsewhere in this prospectus.

      We derived the summary historical consolidated statements of operations data for each of the three years in the period
ended April 30, 2004 and the summary historical consolidated balance sheet data as of April 30, 2004, set forth below, from our
audited consolidated financial statements included elsewhere in this prospectus.

       The summary pro forma consolidated statement of operations data for the year ended April 30, 2004 and the summary pro
forma consolidated balance sheet data as of April 30, 2004 are unaudited and have been derived from our historical consolidated
financial statements adjusted to give effect to the events noted below, as if such events had occurred on May 1, 2003 with respect
to the pro forma consolidated statement of operations data and as of April 30, 2004 with respect to the pro forma consolidated
balance sheet data.

      The summary pro forma consolidated statement of operations data for the year ended April 30, 2004 includes the following
adjustments: (i) a decrease of $4.4 million in other financial product revenue to reflect our new agreement with Santa Barbara
Bank & Trust with respect to the facilitation of refund anticipation loans; (ii) an increase of $5.3 million in selling, general and
administrative expenses to reflect incremental costs that we expect to incur as a result of becoming a public company and from
our separation from Cendant; (iii) an increase of $5.7 million in interest expense resulting from average principal balances
assumed to be outstanding of $175.0 million of notes and $20.8 million under our new credit facility as well as the amortization of
deferred financing costs; and (iv) a decrease of $6.0 million in provision for income taxes as a result of the above adjustments.

       The consolidated pro forma balance sheet data as of April 30, 2004 includes the following adjustments: (i) a decrease of
$3.4 million in cash and cash equivalents, which decreased working capital, and resulted in a commensurate increase in other
non-current assets to give effect to financing costs associated with the notes and the new credit facility described above; (ii) a
decrease of $1.0 million in accounts payable and accrued liabilities, which increased working capital, to give effect to the income
tax benefit associated with the issuance of shares of common stock in exchange for Cendant restricted stock units held by our
executive officers and employees; and (iii) a decrease of $318.0 million in stockholders’ equity primarily to reflect a special
dividend to Cendant in the amount of $319.0 million including $175.0 million in cash funded entirely through the issuance of the
notes and a cancellation of a $144.0 million receivable due from Cendant.

      See ―Unaudited Pro Forma Consolidated Financial Statements‖ included elsewhere in this prospectus for a complete
description of the adjustments made to derive the pro forma consolidated statement of operations data and pro forma
consolidated balance sheet data.

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                                                    Pro Forma
                                                      Fiscal
                                                    Year Ended
                                                     April 30,                      Fiscal Year Ended April 30,

                                                        2004(1)           2004(1)                2003                 2002(2)

Statement of Operations Data
(in thousands, except per share data):
Revenues
Franchise operations revenues:
      Royalty                                       $      51,646     $     51,646           $    43,229          $     35,640
      Marketing and advertising                            24,213           24,213                20,671                17,261
      Financial product fees                               30,384           30,384                25,037                21,635
      Other financial product revenue                      25,860           30,255                23,110                29,518
      Other                                                12,527           12,527                11,080                11,685
Service revenue from company-owned operations              56,590           56,590                48,420                41,252

Net revenues                                              201,220          205,615               171,547               156,991

Expenses:
     Cost of franchise operations                          23,922           23,922                18,971                19,511
     Marketing and advertising                             29,464           29,464                25,086                18,836
     Cost of company-owned office operations               41,639           41,639                34,184                17,697
     Selling, general and administrative                   33,753           28,499                14,997                17,882
     Depreciation and amortization(3)                      11,911           11,911                11,523                12,824

Total expenses                                            140,689          135,435               104,761                86,750

Income from operations                                     60,531           70,180                66,786                70,241
Other income:
      Interest income (expense), net                       (5,504 )            284                  791                  1,449
      Preferred stock dividends from TSA                      —                —                    —                    1,768

Income before income taxes                                 55,027           70,464                67,577                73,458
Provision for income taxes                                 21,484           27,504                26,444                30,935

Net income                                          $      33,543     $     42,960           $    41,133          $     42,523

Pro forma earnings per share(4):
      Basic                                         $        0.89     $       1.15           $      1.10          $       1.13
      Diluted                                       $        0.89     $       1.15           $      1.10          $       1.13

                                                                                       Fiscal Year Ended April 30,

                                                                               2004                2003                 2002

Other Operating Data:
Offices:
      Franchise operations                                                      4,330               3,776                3,385
      Company-owned office operations                                             605                 523                  440

     Total system                                                               4,935               4,299                3,825


Tax returns (in thousands):
      Franchise operations                                                      2,735               2,461                2,200
      Company-owned office operations                                             400                 365                  325

     Total system                                                               3,135               2,826                2,525



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                                                                                                                                                 As of April 30, 2004

                                                                                                                                                                 Pro Forma
                                                                                                                                            Actual              As Adjusted

Consolidated Balance Sheet Data (in thousands):
Cash and cash equivalents                                                                                                               $     5,266            $          1,878
Working capital                                                                                                                              16,756                      14,389
Total assets                                                                                                                                725,942                     581,957
Long-term debt                                                                                                                                  —                       175,000
Stockholders’ equity                                                                                                                        655,096                     337,132


(1)     Selling, general and administrative expenses in 2004 included a $10.4 million charge associated with a litigation settlement. See Note 12 to our consolidated
        financial statements.
(2)     During 2002, we completed our acquisition of TSA, which affected our results of operations as discussed in Note 9 to our consolidated financial statements.
(3)     On January 1, 2002, we adopted the non-amortization provisions of Statement of Financial Accounting Standards No. 142, ―Goodwill and Other Intangible Assets,‖
        or SFAS No. 142. Accordingly, our results of operations before January 1, 2002 reflect the amortization of goodwill and indefinite-lived intangible assets, while our
        results of operations after January 1, 2002 do not reflect this amortization. See Note 2 to our consolidated financial statements for a discussion of our results of
        operations during the fiscal year ended 2002 after applying the non-amortization provisions of SFAS No. 142.
(4)     Based on 37.5 million shares outstanding for basic and diluted earnings per share calculations for all historical periods presented. Assumes 37.6 million basic
        shares and 37.7 million diluted shares expected to be outstanding subsequent to this offering for the pro forma information for the year ended April 30, 2004.

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                                                             RISK FACTORS

    You should carefully consider the following risks and all the information set forth in this prospectus before investing in our
common stock.

                                                    Risks Relating to Our Company

Because our growth has been achieved, in part, through rapidly establishing offices in large markets for our products,
we may not achieve the same levels of growth in revenues and profits in the future as we have in the past.

       Historically, our business has experienced rapid growth in the number of franchises, office locations and revenues. This
high growth rate has been achieved, in part, through our early concentration on rapidly establishing offices in urban areas with
large markets for our products. Our ability to continue to grow our business will be subject to a number of risks and uncertainties
and will depend in large part on:

         finding new opportunities in our existing and new markets;

         continuing to facilitate the sale of financial products;

         attracting capable franchisees;

         hiring, training and retaining skilled managers and seasonal employees;

         expanding and improving the efficiency of our operations and systems; and

         maintaining cost, quality and product innovation to attract customers.

        Accordingly, we may not achieve the same levels of growth in revenues and profits as we have historically.

Because demand for our products is related to the complexity of tax return preparation, government initiatives that
simplify tax return preparation or reduce the need for a third party tax return preparer may decrease demand for our
financial products and services.

       Many taxpayers seek assistance from paid tax return preparers such as Jackson Hewitt because of the level of complexity
involved in tax return preparation and filing. From time to time, politicians and government officials propose measures seeking to
simplify the preparation and filing of tax returns or provide additional assistance with respect to preparing and filing such tax
returns. The passage of any measures that significantly simplify tax return preparation or reduce the need for a third party tax
return preparer may be highly detrimental to our business.

Initiatives that improve the timing and efficiency of processing tax returns could reduce the attractiveness of the
financial products offered to our customers and demand for our services.

       Our performance depends on our ability to offer access to financial products that increase the speed and efficiency by
which our customers can receive funds associated with their tax returns. The federal government and various state and local
municipalities have, from time to time, announced initiatives designed to modernize their operations and improve the timing and
efficiency of processing tax returns. If tax authorities are able to increase the speed and efficiency with which they process tax
returns, the value and attractiveness of the financial products offered to our customers and demand for our services could be
reduced.

Changes in the tax law that result in a decreased number of tax returns filed or a reduced size of refunds could harm our
business.

       Over the past three fiscal years, on average, approximately 91% of our customers were entitled to receive a refund. From
time to time, the Treasury Department and the IRS adopt policy and rule

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changes and other initiatives that result in a decrease in the number of tax returns filed or reduce the size of the refunds. Similar
changes in the tax law could reduce demand for our products and services, causing our revenues or profitability to decline.

States have increasingly taken an active role in regulating refund anticipation loans and the continuation of such trend
could impede our ability to facilitate the sale of these loans and reduce our profitability.

       In 2004, approximately 29% of our net revenues were directly or indirectly derived from the facilitation of refund anticipation
loans by our network. Because these loans are short-term, their effective annual percentage rate is relatively high compared to
other consumer loans. Some states, such as Massachusetts and Mississippi have recently interpreted existing laws in a manner
that would effectively limit the annual percentage rate on refund anticipation loans or restrict our ability to receive fees in
connection with these loans. While we currently operate, and plan to continue to operate, in these states, we and our franchisees
are and will be unable to receive fees based upon the refund anticipation loans we facilitate in such states.

       Consumer advocacy groups have increasingly called for a legislative and regulatory response to the perceived inequity of
these types of loans. In this regard, according to a recent media report, the New York State Comptroller may have similar
concerns. One consumer group has proposed model legislation and advocates adoption by various states of regulations that
would place significant limitations on annual percentage rates and impose costly bonding requirements, among other things.
Legislation of this type, if adopted, would increase costs to us, our franchisees and the financial institutions that provide our
financial products, or could render refund anticipation loans too costly to market.

       States presently considering some form of legislation relating to refund anticipation loans include Alabama, Arizona,
California, Connecticut, Louisiana, New York, Ohio, Oklahoma, Oregon and Vermont. In addition, various jurisdictions such as the
City of New York, Illinois, Minnesota, North Carolina, and Wisconsin have imposed regulatory restraints on the marketing of refund
anticipation loans. These restraints include requirements regarding specific disclosures that must be made to customers. We
operate in each of these jurisdictions.

Our failure to comply with legal and regulatory requirements, particularly those applicable to the facilitation of tax refund
related financial products, could result in substantial sanctions against us which would harm our profitability and
reputation.

        Our tax return preparation business, franchise operations, and our facilitation of the sale of financial products are subject to
extensive regulation and oversight in the United States by the IRS, the Federal Trade Commission, and by state regulatory and
law enforcement agencies. Maryland, Massachusetts and Mississippi have publicly expressed a concern that paid tax preparers
facilitating refund anticipation loans are subject to loan broker statutes. Loan broker statutes vary from state to state, but typically
require paid tax return preparers to register with local regulatory authorities and pay a licensing fee. Loan broker statutes, if
applicable, also typically subject brokered loans, such as refund anticipation loans, to lower state usury requirements and reduced
fees. If, in any particular state, refund anticipation loans made to our customers were actually held to be subject to local usury
laws or reduced fees because our assistance rendered us a loan broker under state law, then the transactions could be less
attractive to the financial institution and our compensation from the financial institution in connection with the program in that state
could be reduced.

       We have recently been contacted by the attorney general’s office of California seeking information about the manner in
which we facilitate the sale of refund related financial products. California has expressed concerns that our business practices
related to the facilitation of these products may violate California’s unfair competition laws or its laws governing unfair or deceptive
business practices. To date, none of these states have filed formal actions or sanctions against us.

       We recently settled a complaint by the New York City Department of Consumer Affairs and paid a $125,000 fine and
contributed $100,000 to New York City’s EITC Campaign, a program to raise public

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awareness of the earned income tax credit, relating to charges that we played a part in promoting refund anticipation loans in a
way that was confusing to customers. In March 2004, the New York City Department of Consumer Affairs advised us that three
franchised offices had not distributed refund anticipation loan disclosure documents to customers, as required by New York City
law.

       If states or other governmental agencies having jurisdiction over our operations were to conclude that our business
practices violate applicable laws, we may become subject to sanctions which could have a material adverse effect on our
business, financial condition and results of operations. These sanctions may include, without limitation:

      •    civil monetary damages and penalties;

      •    criminal penalties; and

      •    injunctions or other restrictions on the manner in which we conduct our business.

       In addition, the financial institutions that provide services to us and our customers as servicers and lenders of refund
anticipation loans and other financial products are subject to significant regulation and oversight by federal and state banking
regulators. The failure of these financial institutions to comply with the regulatory requirements of federal and state government
regulatory bodies, including consumer protection laws, could affect their ability to continue to provide services to us and our
customers, which could have a material adverse effect on our business, financial condition and results of operations.

Our facilitation of refund anticipation loans and other financial products exposes us to the risk of significant losses as a
result of litigation defense and resolution costs.

         Tax return preparers who facilitate the sale of refund anticipation loans have been subject, from time to time, to individual
and class action lawsuits concerning their role in facilitating these loans. These lawsuits have alleged, among other claims,
collusion between the tax return preparers and lenders in violation of federal law and fraud on the part of the tax return preparers
for failing to disclose the nature of the loan or that the tax return preparer receives a fee from the lender in connection with the
loan. We were recently named in a purported class action lawsuit brought by Canieva Hood and Congress of California Seniors in
connection with a lender’s collection of a tax refund in repayment of a defaulted refund anticipation loan. Given the large number
of refund anticipation loans we facilitate every year and the inherent uncertainties of the U.S. legal system, we could experience
significant losses as a result of litigation defense and resolution costs, which would have a significant adverse impact on our
business.

Failure to comply with laws and regulations that protect our customers’ personal information could result in significant
fines and harm our brand and reputation.

       Privacy concerns relating to the disclosure of consumer financial information have drawn increased attention from federal
and state governments. The IRS generally prohibits the use or disclosure by tax return preparers of taxpayers’ information without
the prior written consent of the taxpayer. In addition, the Gramm-Leach-Bliley Act and other Federal Trade Commission
regulations require financial service providers, including tax return preparers, to adopt and disclose consumer privacy policies and
provide consumers with a reasonable opportunity to opt out of having personal information disclosed to unaffiliated third parties for
advertising purposes. Although we have established security procedures to protect against identity theft, breaches of our
customers’ privacy may occur. To the extent the measures we have taken prove to be insufficient or inadequate, we may become
subject to litigation or administrative sanctions, which could result in significant fines, penalties or damages and harm to our brand
and reputation.

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Our success is tied to the operations of our franchisees, yet our ability to exercise control over their operations is
limited.

      During 2004, we derived 37% of our net revenues from the receipt of royalty and marketing and advertising fees from our
franchisees. The amount of these fees is based on the revenues generated by franchised offices. Accordingly, our financial
success depends on our franchisees and the manner in which they operate and develop their offices. Our ability to control the
operations of our franchisees is limited because their businesses are independently owned and operated. Our franchisees may
not operate their offices in a manner consistent with our philosophy and standards or may not increase the level of revenues
generated compared to prior tax seasons.

We may be held responsible by third parties, regulators or courts for the actions of, or failures to act by, our franchisees,
which exposes us to possible fines, other liabilities and bad publicity.

       Our franchisees are independently owned and operated. Our agreements with our franchisees require that they learn about
and comply with all laws and regulations applicable to their businesses. Under our franchise agreements, our franchisees retain
control over the employment and management of all personnel, including the large number of seasonal employees required during
the tax season. Third parties, regulators or courts may seek to hold us responsible for the actions or failures to act by our
franchisees. Although our internal compliance department seeks to monitor the activities of our franchisees, it is unlikely to detect
all problems in our network. In addition, we are parties to agreements with retailers and, to a certain extent, financial institutions
under which we indemnify third parties for our and our franchisees’ failure to comply with laws and regulations applicable to us or
them. Our agreements with Wal-Mart Stores, Inc., Household Tax Masters Inc. and Santa Barbara Bank & Trust are material
commercial agreements under which we indemnify third parties. There are occasions when our and our franchisees’ activities are
not clearly distinguishable. We recently settled a complaint by the New York City Department of Consumer Affairs and paid a
$125,000 fine and contributed $100,000 to New York City’s EITC Campaign in connection with a marketing program related to
refund anticipation loans which related primarily to acts of our franchisees, but where the Department of Consumer Affairs
attributed certain responsibilities to us. Failure to comply with laws and regulations by our franchisees may expose us to liability
and damages that may adversely affect our business.

Disruptions in our relationships with our franchisees could adversely affect our business.

       The continued success and growth of our franchise system depend on our maintaining a satisfactory working relationship
with our franchisees. Lawsuits and other disputes with our franchisees could discourage our franchisees from expanding their
business within our network or lead to bad publicity, which would discourage new franchisees from entering our network. We have
recently settled a lawsuit brought by 154 of our franchisees in which they alleged, among other things, that we should have made
payments to them in connection with their facilitation of refund anticipation loans. We settled this action by agreeing to make a
$2.0 million cash payment, spend an additional $2.0 million in regional advertising from 2004 through 2006, pay additional rebates
to franchisees of up to $3.00 per refund anticipation loan the sales of which they facilitate from 2004 through 2006 and implement
a new office royalty reduction program.

Because we are not a financial institution, we can only facilitate the sale of financial products through our arrangements
with financial institutions, and if such arrangements were terminated for any reason, we may not be able to replace them
on acceptable terms or at all.

       In 2004, approximately 40% of our net revenues were directly or indirectly derived from our facilitation of the sale of
financial products provided to our customers by financial institutions. In addition, our tax return preparation business is, to some
extent, dependent on our ability to facilitate

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the sale of these products, because our customers are often attracted to our business by the availability of these products.
Financial products designed to monetize future tax refunds are specialized financial products, and relatively few financial
institutions offer them. We currently have agreements with Household Tax Masters Inc. and Santa Barbara Bank & Trust. Our
agreement with Household Tax Masters Inc. terminates December 31, 2005 and our agreement with Santa Barbara Bank & Trust
terminates on August 1, 2008. After the termination of these agreements, we may not be able to renew them on similar terms or at
all. If our arrangements with the financial institutions that provide our financial products were to terminate and we were unable to
enter into an alternative relationship with one or more other financial institutions on acceptable terms or at all, our financial results
would be adversely affected.

Disruptions in our relationships with large retailers could negatively affect our growth and profitability.

        During 2004, our network had approximately 1,400 offices located within national and large regional retailers and shopping
malls, which generated approximately 15% of the tax returns prepared by our network. Of these offices, approximately 1,000 were
located within Wal-Mart, with whom we have recently renewed our two-year agreement, which generated approximately 12% of
the tax returns prepared by our network. Our ability to operate in these stores is dependent on our ability to negotiate favorable
agreements with retailers and on the continued operation of these stores. Our agreements with retailers are of limited duration,
typically two years, and we may not be able to renew them on similar terms or at all. In addition, many of these agreements are
not exclusive. In the event we are unable to negotiate favorable agreements with these or comparable retailers or they close a
significant number of stores, especially immediately prior to or during the tax season, our business could incur significant
short-term loss of revenue and, for our company-owned offices, costs for office relocation.

The highly seasonal nature of our business presents a number of financial risks and operational challenges.

       Our business is highly seasonal. We generate substantially all our revenue during the tax season, which is the period from
January through April 15. Additionally, the majority of our revenue is generated in late January and February. The concentration of
our revenue-generating activity during this relatively short period presents a number of operational challenges for us and our
franchisees, including:

         cash and resource management during the first eight months of our fiscal year, when we generally operate at a loss and
          incur fixed costs and costs of preparing for the upcoming tax season;

         flexible staffing, because the number of employees at our network’s offices during the peak of the tax season is
          exponentially higher than at any other time;

         accurate forecasting of revenues and expenses; and

         ensuring optimal uninterrupted operations during peak season.

       If we were unable to meet these challenges or we were to experience significant business interruptions during the tax
season, which may be caused by labor shortages, systems failures, work stoppages, adverse weather or other events, many of
which are beyond our control, we could experience cash shortages and loss of business, which would have a material adverse
effect on our business and results of operations.

We rely on Cendant to provide transitional services to us and may not be able to replace those services at the same cost.

      Simultaneously with this offering, we will enter into agreements that will require Cendant to provide transitional services to
us. Specifically, we will enter into a transitional agreement, a sublease

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agreement for our New Jersey corporate headquarters location and a sublease assignment and assumption agreement for our
technology facility in Sarasota, Florida. The terms of the services to be provided under the transitional agreement vary depending
on the specific service to be provided, with the majority of the terms expiring by December 31, 2005 with the exception of
information technology and telecommunications services which expire two years and three years, respectively, from the date of
this offering. We may be unable to sustain these services at the same level as when we were controlled by Cendant. After the
expiration of these agreements, we may not be able to replace these services in a timely manner or on terms and conditions,
including cost, as those we have historically received from Cendant. These agreements were made in the context of a
parent-subsidiary relationship and were negotiated in the context of this offering. Accordingly, these agreements may not reflect
terms that would have resulted from arms-length negotiations with unaffiliated third parties. After this offering, we intend to
transition such services to similar services to be provided by our internal resources, as well as to contract with unaffiliated third
party providers for which we expect to incur higher costs. We may not be able to obtain these services at the same or similar
costs.

We may incur significant liability to Cendant pursuant to the indemnification provisions of the transitional agreement.

       The transitional agreement will provide that we will indemnify Cendant and its affiliates against potential losses based on,
arising out of or resulting from:

         any breach by us of the transitional agreement, the sublease or the sublease assignment and assumption agreement
          with Cendant;

         claims by third parties relating to the ownership or the operation of our assets or properties and the operation or conduct
          of our business, whether in the past or future, including any currently pending litigation against Cendant with respect
          thereto;

         any other activities we engage in;

         any third party claims relating to other acts or omissions arising out of performance of the transitional agreement, the
          sublease or the sublease assignment and assumption agreement whether in the past or future;

         any guaranty, keepwell, net worth or financial condition maintenance agreement of or by Cendant provided to any
          parties with respect to any of our or our subsidiaries’ actual or contingent obligations;

         liabilities under the Securities Act of 1933, as amended (the ―Securities Act‖) related to this offering; and

         other matters described in the transitional agreement.

The only currently pending litigation against us and Cendant is the suit brought by Canieva Hood discussed in this prospectus
under ―Business—Legal Proceedings.‖

Actions taken by us prior to the completion of this offering are intended to be in the best interest of Cendant and such
actions may conflict with your interests.

       Prior to the completion of this offering, we have operated as a wholly owned subsidiary of Cendant. The purpose of this
offering, the issuance of the notes and the payment of the special dividend to Cendant, each as described in this prospectus, is to
maximize the consideration to Cendant in connection with the disposition by Cendant of its entire ownership interest in Jackson
Hewitt through this offering. This purpose is not aligned with the interests of our stockholders following this offering, and in
evaluating the transactions and agreements with Cendant, which are described in this prospectus, you should be aware that
actions taken by us prior to the completion of this offering are intended to be in the best interest of Cendant and such actions may
conflict with your interests.

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       Specifically, immediately prior to the completion of this offering, we will declare a special dividend to Cendant in an amount
of $308.5 million (consisting of $175.0 million of cash and cancellation of a receivable from Cendant of $133.5 million). We intend
to issue $175.0 million aggregate principal amount of notes in order to fund the cash portion of the special dividend to be paid to
Cendant. The special dividend will benefit only Cendant and not you as a stockholder following this offering.

Our network faces significant competition in the tax return preparation business and faces a competitive threat from
software providers and Internet businesses that increasingly enable and encourage taxpayers to prepare their own
returns.

       The tax return preparation business is highly competitive. Our network competes with H&R Block, which is larger and more
widely recognized than us, and with smaller independent tax return preparation services, small national and regional franchisors,
regional tax return preparation businesses, regional and national accounting firms and financial service institutions that prepare
tax returns as part of their businesses. We also compete with volunteer organizations that prepare tax returns at no cost for
low-income taxpayers. Online filing alternatives and service providers and software vendors offer products and services that
enable untrained individuals to prepare and file their own tax returns. The availability of these alternatives may reduce demand for
our products and limit the amount of fees that we can charge. Competitors may develop or offer more attractive or lower cost
products and services than ours which could erode our customer base.

An increase in the use of free tax preparation services offered by volunteer organizations to low-income taxpayers could
result in a loss of our customers and could negatively impact our financial performance.

       In 2004, approximately 72% of the tax returns that our network prepared were for taxpayers with less than $29,999 of
adjusted gross income. These taxpayers may qualify as low-income taxpayers eligible for free tax preparation through volunteer
organizations. An increase in the use by low-income taxpayers of free tax preparation services offered by volunteer organizations
could result in a loss of our customers and could negatively impact our financial performance.

Our business relies on technology systems and electronic communications, which, if disrupted, could significantly
affect our business.

       Our ability to file tax returns electronically and to facilitate the sale of financial products depends on our ability to
electronically communicate with all of our network’s offices, the IRS and the financial institutions that provide the financial products
we offer. Our electronic communications network is subject to disruptions of various magnitudes and durations. Any severe
disruption of our network or electronic communications, especially during the tax season, could impair our ability to complete our
customers’ tax filings, to facilitate the sale of financial products or to maintain our operations, which, in turn, could have a material
adverse effect on our business and results of operations.

We are a holding company that depends on cash flow from our subsidiaries to meet our obligations.

      We are a holding company with no material assets other than the stock of our subsidiaries. Accordingly, all our operations
are conducted by our subsidiaries. As a holding company, we require dividends and other payments from our subsidiaries to meet
cash requirements or to pay dividends. If our subsidiaries are unable to pay us dividends and make other payments to us when
needed, we will be unable to pay dividends or satisfy our obligations.

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Our new credit facility and the agreement governing the notes will contain restrictive covenants and other requirements
that may limit our business flexibility by imposing operating and financial restrictions on our operations.

        The agreements governing our indebtedness will impose significant operating and financial restrictions on us. Our new
credit facility and the agreement governing the notes will include restrictive covenants that will require us to maintain specified
financial ratios and satisfy financial condition tests. Specifically, our new credit facility will contain financial covenants requiring us
to maintain a maximum consolidated leverage ratio of 3.25 to 1.00 through April 30, 2005, 3.00 to 1.00 from May 1, 2005 to April
30, 2006 and 2.50 to 1.00 from May 1, 2006 to maturity and to maintain a minimum consolidated fixed charge coverage ratio of
3.00 to 1.00 through April 30, 2006 and 3.50 to 1.00 from May 1, 2006 to maturity. In addition, the credit facility will contain various
customary restrictive covenants that will limit our and our subsidiaries’ ability to, among other things, (i) incur additional
indebtedness or guarantees, (ii) create liens or other encumbrances on our property, (iii) enter into a merger or similar transaction,
(iv) sell or transfer any of our property except in the ordinary course of business and (v) make dividend and other restricted
payments. In addition, the new credit facility will limit the maximum amount of our cash dividends to 30% of our cumulative
consolidated net income for the period commencing on May 1, 2003 and ending on April 30 of the fiscal year preceding the year in
which such cash dividends are paid. The agreement governing the notes will contain substantially similar provisions. We do not
believe that this limitation contained in the debt agreements will limit our ability to pay our proposed quarterly cash dividend of
$0.07 per share of common stock in accordance with our stated dividend policy, even assuming the exercise in full of the
underwriters’ option to purchase additional shares and exercise of all outstanding options.

       Our ability to comply with the ratios or tests may be affected by events beyond our control, including prevailing economic,
financial and industry conditions. These covenants may prevent us from incurring additional indebtedness to expand our
operations and execute our growth strategy. In addition, a breach of any of these covenants, ratios or tests could result in a
default under the agreements governing our indebtedness. Upon the occurrence of an event of default under the new credit facility
or the agreement governing the notes, the lenders or noteholders could elect to declare all amounts owed to them, together with
accrued interest, to be immediately due and payable. If the lenders or noteholders accelerate the payment of the indebtedness,
our assets may not be sufficient to repay the indebtedness and we may be unable to otherwise satisfy creditor claims.

Our floating rate debt financing exposes us to interest rate risks.

        Following this offering, we will have $175.0 million of floating rate debt outstanding and we may borrow up to $100.0 million
of additional funds under our new credit facility, all of which will bear interest at rates that vary with prevailing market interest rates.
Accordingly, a rise in market interest rates will adversely affect our financial results. We expect to draw most heavily on the new
credit facility from May through February of each year and then repay a significant portion of this debt by the end of each tax
season. Therefore, a significant rise in interest rates during our off-season will have a disproportionate impact on our profitability.

                                                Risks Related to Our Common Stock

Because the tax season is relatively short and straddles two fiscal quarters, our quarterly results may not be indicative
of our performance, which may increase the volatility of the trading price of our common stock.

     We experience quarterly variations in revenues and operating income as a result of many factors, including the highly
seasonal nature of the tax return preparation business, the timing of off-season

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activities and the hiring of personnel. Due to the foregoing factors, our quarter-to-quarter results vary significantly. In addition,
because our peak period straddles the third and fourth fiscal quarters and a variety of factors may result in a delay or acceleration
in the number of tax returns processed in January, year-to-year quarterly comparisons are not as meaningful as year-to-year tax
season comparisons. To the extent our quarterly results vary significantly from year to year, our stock price may be subject to
significant volatility.

Although we intend to pay dividends, in the future, our financial condition, debt covenants or Delaware law may prohibit
us from doing so.

       Although we initially intend to pay cash dividends at the rate of $0.07 per share of common stock per quarter commencing
in the second quarter of the current fiscal year ending April 30, 2005, the payment of dividends will be at the discretion of our
board of directors and will depend, among other things, on our earnings, capital requirements and financial condition. Our ability to
pay dividends will be subject to compliance with customary financial covenants that will be contained in the new credit facility and
the agreement governing the notes we expect to enter into contemporaneously with this offering. The new credit facility and the
agreement governing the notes will limit the maximum amount of our cash dividends to 30% of our cumulative consolidated net
income for the period commencing on May 1, 2003 and ending on April 30 of the fiscal year preceding the year in which such cash
dividends are paid. We do not believe that this limitation contained in the debt agreements will limit our ability to pay our proposed
quarterly cash dividend of $0.07 per share of common stock in accordance with our stated dividend policy, even assuming the
exercise in full of the underwriters’ option to purchase additional shares and exercise of all outstanding options. Dividends may
also be limited or prohibited by any future borrowings or issuances of preferred stock. In addition, applicable law requires that our
board of directors determine that we have adequate surplus prior to the declaration of dividends. We cannot assure you that we
will pay dividends at the levels currently anticipated or at all.

There may be a limited public market for our common stock, and our stock price may experience volatility.

       There can be no assurance that an active trading market for our common stock will develop as a result of this offering or be
sustained in the future. In addition, the stock market has from time to time experienced extreme price and volume fluctuations that
often have been unrelated to the operating performance of particular companies. Changes in earnings estimates by analysts and
economic and other external factors may have a significant impact on the market price of our common stock. Fluctuations or
decreases in the trading price of our common stock may adversely affect the liquidity of the trading market for our common stock
and our ability to raise capital through future equity financing.

Provisions in our charter documents and Delaware law may delay or prevent our acquisition by a third party.

       Our certificate of incorporation, by-laws and our rights plan contain several provisions that may make it more difficult for a
third party to acquire control of us without the approval of our board of directors. These provisions include, among other things, a
classified board of directors, the elimination of stockholder action by written consent, advance notice for raising business or
making nominations at meetings and ―blank check‖ preferred stock. Blank check preferred stock enables our board of directors,
without stockholder approval, to designate and issue additional series of preferred stock with such dividend, liquidation,
conversion, voting or other rights, including the right to issue convertible securities with no limitations on conversion, as our board
of directors may determine, including rights to dividends and proceeds in a liquidation that are senior to the common stock.

    These provisions may make it more difficult or expensive for a third party to acquire a majority of our outstanding voting
common stock. We are also subject to certain provisions of Delaware law which

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could delay, deter or prevent us from entering into an acquisition, including Section 203 of the Delaware General Corporation Law,
which prohibits a Delaware corporation from engaging in a business combination with an interested stockholder unless specific
conditions are met. These provisions also may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other
transaction that might otherwise result in our stockholders receiving a premium over the market price for their common stock.

Our stockholder rights plan could prevent you from receiving a premium over the market price for your shares of
common stock from a potential acquirer.

        Our board of directors has approved the adoption of a stockholder rights plan, which will become effective upon completion
of this offering. This plan entitles our stockholders to acquire shares of our common stock at a price equal to 50% of the then
current market value in limited circumstances when a third party acquires 15% or more of our outstanding common stock or
announces its intent to commence a tender offer for at least 15% of our common stock, in each case, in a transaction that our
board of directors does not approve. Because, under these limited circumstances, all of our stockholders would become entitled to
effect discounted purchases of our common stock, other than the person or group that caused the rights to become exercisable,
the existence of these rights would significantly increase the cost of acquiring control of our company without the support of our
board of directors. The existence of the rights plan could therefore deter potential acquirers and thereby reduce the likelihood that
you will receive a premium for your common stock in an acquisition.

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                                 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

       This prospectus, including the sections entitled ―Prospectus Summary,‖ ―Risk Factors,‖ ―Management’s Discussion and
Analysis of Financial Condition and Results of Operations‖ and ―Business,‖ contains forward-looking statements. These
statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and
other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future
results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks
and other factors include those listed under ―Risk Factors‖ and elsewhere in this prospectus. You can identify forward-looking
statements by terminology such as ―may,‖ ―will,‖ ―should,‖ ―expects,‖ ―intends,‖ ―plans,‖ ―anticipates,‖ ―believes,‖ ―estimates,‖
―predicts,‖ ―potential,‖ ―continues‖ or the negative of these terms or other comparable terminology. Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity,
performance or achievements. Except as required by law, we do not undertake any obligation to update any forward-looking
statements for any reason after the date of this prospectus or to conform these statements to actual results or to changes in our
expectations.

       All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be
important factors that could cause results to differ materially from those indicated in such statements. We believe that these
factors include, but are not limited to, the following:

         our ability to achieve the same level of growth in revenues and profits that we have in the past;

         government initiatives that simplify tax return preparation, improve the timing and efficiency of processing tax returns or
          decrease the number of tax returns filed or the size of the refunds;

         government regulation and oversight, including regulation of refund anticipation loans;

         our exposure to litigation;

         our ability to protect our customers’ personal information;

         the success of our franchised offices and our ability to exert control over them;

         our responsibility to third parties for the acts of our franchisees;

         disruptions in our relationships with our franchisees;

         changes in our relationship with financial product providers that could affect our ability to facilitate the sale of financial
          products;

         changes in our relationships with retailers that could affect our growth and profitability;

         seasonality of our business and its effect on our stock price;

         our ability to sustain or negotiate services currently provided by Cendant at reasonable costs;

         competition from tax return preparation service providers;

         our ability to offer innovative new products and services;

         our reliance on electronic communications;

         our reliance on cash flow from subsidiaries;

         our compliance with debt covenants;

         our exposure to increases in prevailing market interest rates;

         the effect of market conditions, general conditions in the tax return preparation industry or general economic conditions;
          and

         changes in accounting policies or practices.

                                                                     20
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                                                       USE OF PROCEEDS

        We will not receive any proceeds from the sale of shares of common stock being offered by Cendant. If the underwriters
exercise their option to purchase additional shares in full, we estimate that the net proceeds to us from the sale of the additional
shares of common stock will be $100.7 million, after deducting the underwriting discount. We expect to use any proceeds from the
underwriters’ exercise of their option for general corporate purposes, which may include repayment of borrowings under the new
credit facility and share repurchases. Pending any such use of proceeds, we intend to invest the proceeds in short-term interest
bearing instruments or money market accounts.

                                                        DIVIDEND POLICY

        We intend to pay quarterly cash dividends on our common stock at an initial rate of $0.07 per share of common stock
($0.28 per annum), commencing in the second quarter of the current fiscal year ending April 30, 2005. The declaration and
payment of dividends to holders of our common stock will be at the discretion of our board of directors and will depend on many
factors, including our financial condition, earnings, legal requirements and other factors as our board of directors deems relevant.
Our new credit facility and the agreement governing the notes will limit the maximum amount of our cash dividends to 30% of our
cumulative consolidated net income for the period commencing on May 1, 2003 and ending on April 30 of the fiscal year
preceding the year in which such cash dividends are paid. We do not believe that this limitation contained in the debt agreements
will limit our ability to pay our proposed quarterly cash dividend of $0.07 per share of common stock in accordance with our stated
divided policy, even assuming the exercise in full of the underwriters’ option to purchase additional shares and exercise of all
outstanding options. In addition, we may in the future issue or enter into other debt instruments or agreements that could further
limit our ability to pay dividends.

                                                                 21
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                                                                      CAPITALIZATION

      The following table sets forth our capitalization as of April 30, 2004 and should be read in conjunction with ―Management’s
Discussion and Analysis of Financial Condition and Results of Operations‖ and the consolidated financial statements and their
accompanying notes included elsewhere in this prospectus. The as adjusted amounts reflect:

       •     the issuance by us of $175.0 million aggregate principal amount of notes;

       •     a special dividend to Cendant in the amount of up to $319.0 million (consisting of $175.0 million in cash, which will be
             funded by the entire proceeds received from the sale of the notes, and cancellation of a receivable from Cendant of up
             to $144.0 million); and

       •     the issuance of 91,000 shares of common stock to executive officers and employees under our 2004 Equity and
             Incentive Plan as discussed elsewhere in this prospectus.
                                                                                                                           As of April 30, 2004

                                                                                                                      Actual               As Adjusted

                                                                                                                               (in thousands)
Credit facility                                                                                                   $       —               $           —
Floating-rate notes                                                                                                       —                       175,000

                                                                                                                          —                       175,000

Stockholders’ equity:
   Common stock, par value $0.01 per share, 200,000,000 shares of common stock authorized; 37,500,000 shares of
      common stock issued and outstanding (or 37,591,000 shares of common stock issued and outstanding upon
      completion of this offering)                                                                                        375                         376
Additional paid-in capital                                                                                            475,844                     336,756
Retained earnings                                                                                                     178,877                         —

      Total stockholders’ equity                                                                                      655,096                     337,132

      Total capitalization                                                                                        $ 655,096               $       512,132



                                                                                22
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                                           SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

       The following table sets forth our selected historical consolidated financial data as of and for each of the years in the
five-year period ended April 30, 2004. You should read this information in conjunction with the information under ―Management’s
Discussion and Analysis of Financial Condition and Results of Operations,‖ ―Business‖ and our historical consolidated financial
statements and the related notes thereto included elsewhere in this prospectus. Our historical consolidated statement of
operations data and consolidated balance sheet data as of and for each of the years in the four-year period ended April 30, 2004
have been derived from our audited consolidated financial statements. Our historical consolidated statement of operations data
and consolidated balance sheet data as of and for the year ended April 30, 2000 have been derived from our unaudited financial
statements. In management’s opinion, these unaudited consolidated financial statements have been prepared on the same basis
as the audited consolidated financial statements. Our historical consolidated financial statements as of April 30, 2004 and 2003
and for each of the years in the three-year period ended April 30, 2004 and Deloitte & Touche LLP’s audit report on these
historical consolidated financial statements have been included elsewhere in this prospectus.
                                                                                           Fiscal Years Ended April 30,

                                                                            2004(1)        2003           2002(2)         2001         2000

Statement of Operations Data
   (in thousands, except per share data):
Revenues
Franchise operations revenues:
      Royalty                                                           $     51,646   $    43,229    $     35,640   $ 30,675      $ 24,760
      Marketing and advertising                                               24,213        20,671          17,261     15,074        12,248
      Financial product fees                                                  30,384        25,037          21,635     16,618        14,338
      Other financial product revenue                                         30,255        23,110          29,518      3,447         2,178
      Other                                                                   12,527        11,080          11,685      9,691         7,040
Service revenue from company-owned operations                                 56,590        48,420          41,252        —           1,107

Net revenues                                                                 205,615       171,547         156,991        75,505       61,671

Expenses:
     Cost of franchise operations                                             23,922        18,971          19,511        12,861       23,308
     Marketing and advertising                                                29,464        25,086          18,836        13,474       10,200
     Cost of company-owned office operations                                  41,639        34,184          17,697           —            —
     Selling, general and administrative                                      28,499        14,997          17,882        13,955       15,283
     Depreciation and amortization(3)                                         11,911        11,523          12,824        13,990       14,894

Total expenses                                                               135,435       104,761          86,750        54,280       63,685

Income (loss) from operations                                                 70,180        66,786          70,241        21,225       (2,014 )
Other income:
      Interest income, net                                                       284          791            1,449         1,842        2,898
      Preferred stock dividends from TSA                                         —            —              1,768         1,181          304

Income before income taxes                                                    70,464        67,577          73,458        24,248        1,188
Provision for income taxes                                                    27,504        26,444          30,935        13,298        3,505
Minority interest                                                                —             —               —             —            (40 )

Net income (loss)                                                       $     42,960   $    41,133    $     42,523   $ 10,950      $ (2,277 )

Earnings (loss) per share:
      Basic                                                             $       1.15   $      1.10    $       1.13   $      0.29   $    (0.06 )
      Diluted                                                           $       1.15   $      1.10    $       1.13   $      0.29   $    (0.06 )
Weighted average shares outstanding:
      Basic                                                                   37,500        37,500          37,500        37,500       37,500
      Diluted                                                                 37,500        37,500          37,500        37,500       37,500

Other Operating Data:
Offices:
   Franchise operations                                                        4,330         3,776           3,385         3,345        2,765
   Company-owned office operations                                               605           523             440           —             37

  Total system                                                                 4,935         4,299           3,825         3,345        2,802

Tax returns (in thousands):
  Franchise operations                                                         2,735         2,461           2,200         2,212        1,759
  Company-owned office operations                                                400           365             325           —             13

  Total system                                                                 3,135         2,826           2,525         2,212        1,772
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                                                                                                                          As of April 30,

                                                                                          2004               2003                2002                2001               2000

Consolidated Balance Sheet Data (in thousands):
Cash and cash equivalents                                                            $        5,266      $       1,543       $       2,312      $       1,017       $       2,227
Working capital                                                                              16,756             11,263              20,607              6,837              13,623
Total assets                                                                                725,942            661,901             617,799            574,838             562,778
Long-term debt                                                                                  —                  —                   —                  —                   —
Stockholder’s equity                                                                        655,096            612,136             571,003            528,479             517,529


(1)     Selling, general and administrative expenses in 2004 included a $10.4 million charge associated with a litigation settlement. See Note 12 to our consolidated
        financial statements.
(2)     During 2002, we completed our acquisition of TSA, which affected our results of operations as discussed in Note 9 to our consolidated financial statements.
(3)     On January 1, 2002, we adopted the non-amortization provisions of SFAS No. 142. Accordingly, our results of operations before January 1, 2002 reflect the
        amortization of goodwill and indefinite-lived intangible assets, while our results of operations after January 1, 2002 do not reflect this amortization. See Note 2 to our
        consolidated financial statements for a discussion of our results of operations during the fiscal year ended 2002 after applying the non-amortization provisions of
        SFAS No. 142.

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                            UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

      You should read the pro forma consolidated financial statements presented below in conjunction with the information under
―Management’s Discussion and Analysis of Financial Condition and Results of Operations,‖ ―Business‖ and our historical
consolidated financial statements and the related notes thereto included elsewhere in this prospectus.

       The pro forma consolidated statement of operations for the year ended April 30, 2004 and the pro forma consolidated
balance sheet as of April 30, 2004 are unaudited and have been derived from our historical consolidated financial statements
adjusted to give effect to our new agreement with Santa Barbara Bank & Trust, the initial public offering and the related
transactions described in the accompanying notes to the unaudited pro forma consolidated financial statements, as if they had
occurred on May 1, 2003 with respect to the pro forma consolidated statement of operations and as of April 30, 2004 with respect
to the pro forma consolidated balance sheet. The unaudited pro forma consolidated financial statements are based upon available
information and assumptions that we believe are reasonable. These pro forma consolidated financial statements are not
necessarily indicative of the results of future operations or the actual results that would have been achieved had the transactions
occurred on the dates indicated.

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                                          Unaudited Pro Forma Consolidated Statement of Operations
                                                                                                  For the Year Ended April 30, 2004

                                                                                                            Pro Forma
                                                                                    Historical             Adjustments                Pro Forma

                                                                                                  (in thousands, except per share
                                                                                                             amounts)
Revenues
Franchise operations revenues:
      Royalty                                                                   $        51,646            $          —               $    51,646
      Marketing and advertising                                                          24,213                       —                    24,213
      Financial product fees                                                             30,384                       —                    30,384
      Other financial product revenue                                                    30,255                    (4,395 )(1)             25,860
      Other                                                                              12,527                       —                    12,527
Service revenue from company-owned office operations                                     56,590                       —                    56,590

Net revenues                                                                           205,615                     (4,395 )               201,220

Expenses
     Cost of franchise operations                                                        23,922                       —                    23,922
     Marketing and advertising                                                           29,464                       —                    29,464
     Cost of company-owned office operations                                             41,639                       —                    41,639
     Selling, general and administrative                                                 28,499                     5,254 (2)              33,753
     Depreciation and amortization                                                       11,911                       —                    11,911

             Total expenses                                                            135,435                      5,254                 140,689

Income from operations                                                                   70,180                    (9,649 )                60,531
Other income (expense):
      Interest income (expense), net                                                        284                    (5,788 )(3)             (5,504 )

Income before income taxes                                                               70,464                   (15,437 )                55,027
Provision for income taxes                                                               27,504                    (6,020 )(4)             21,484

Net income                                                                      $        42,960            $       (9,417 )           $    33,543

Earnings per share:
      Basic                                                                     $          1.15                                       $      0.89

     Diluted                                                                    $          1.15                                       $      0.89

Weighted average shares outstanding(5):
     Basic                                                                               37,500                                            37,591

     Diluted                                                                             37,500                                            37,694




                              See accompanying notes to unaudited pro forma consolidated financial statements.

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                                                 Unaudited Pro Forma Consolidated Balance Sheet
                                                                                                         As of April 30, 2004

                                                                                                            Pro Forma
                                                                                           Historical      Adjustments           Pro Forma

                                                                                                           (in thousands)
Assets
Current assets:
     Cash and cash equivalents                                                         $         5,266     $       (3,388 )(6)   $     1,878
     Accounts receivable, net                                                                   31,315                —               31,315
     Notes receivable, net                                                                       1,944                —                1,944
     Prepaid expenses and other                                                                  4,810                —                4,810
     Deferred income taxes                                                                       5,074                —                5,074

            Total current assets                                                               48,409             (3,388 )            45,021
Property and equipment, net                                                                    37,347                —                37,347
Goodwill                                                                                      392,368                —               392,368
Other intangibles, net                                                                         89,902                —                89,902
Due from Cendant                                                                              143,985           (143,985 )(7)            —
Notes receivables, net                                                                          1,985                —                 1,985
Other non-current assets                                                                       11,946              3,388 (6)          15,334

Total assets                                                                           $      725,942      $    (143,985 )       $   581,957

Liabilities and Stockholders’ Equity
Current liabilities:
      Accounts payable and accrued liabilities                                         $        31,653     $       (1,021 )(8)   $    30,632

            Total current liabilities                                                           31,653            (1,021 )            30,632
Deferred income taxes                                                                           26,335               —                26,335
Other non-current liabilities                                                                   12,858               —                12,858
Long-term debt                                                                                     —             175,000 (3)         175,000

             Total liabilities                                                                  70,846           173,979             244,825

Stockholders’ equity:
     Common stock                                                                                 375                  1 (8)            376
     Additional paid-in capital                                                               475,844           (141,705 )(7)
                                                                                                                   2,617 (8)         336,756
      Retained earnings                                                                       178,877           (177,280 )(7)
                                                                                                                  (1,597 )(8)           —

             Total stockholders’ equity                                                       655,096           (317,964 )           337,132

Total liabilities and stockholders’ equity                                             $      725,942      $    (143,985 )       $   581,957



                                  See accompanying notes to unaudited pro forma consolidated financial statements.

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Notes to unaudited pro forma consolidated financial statements
(1)   Reflects an adjustment to give effect to our new agreement with Santa Barbara Bank & Trust (―SBBT‖). To reduce the variability of other financial product revenue, we
      renegotiated our agreement with SBBT, the provider of approximately 80% of the refund anticipation loans that we facilitate. In lieu of sharing revenue based upon the
      amount of finance fees received by SBBT and uncollected loans made by SBBT, we would have received fees of $18.00 for each refund anticipation loan facilitated
      under the new agreement in 2004, consisting of a fixed fee of $16.00 and an additional fee of $2.00. Our historical and pro forma results in 2004 include revenue of
      $8.8 million with respect to collections of refund anticipation loans facilitated prior to May 1, 2003. These collection revenues will decline to zero over the next three to
      four years under our new SBBT agreement. Revenue of $620,000 from Household Tax Masters Inc. for refund anticipation loans facilitated during the 2003 tax season
      has not been affected by this adjustment.

(2)   Reflects adjustments to include incremental costs that we expect to incur as a result of becoming a public company and from our separation from Cendant. The
      adjustments include costs related to directors and officers and other insurance, stock-based compensation pursuant to new options granted immediately following the
      offering that vest over a four year period, employment agreements and other costs associated with being a separate public company.

(3)   Reflects adjustments to give effect to interest expense for our new credit facility, the issuance of $175.0 million aggregate principal amount of floating rate notes and the
      amortization of deferred financing costs. Assumes the average principal balances outstanding under the new credit facility and the notes would have been $20.8 million
      and $175.0 million, respectively, in 2004. The average annual interest rate for the new credit facility and the notes would have been 2.61% in 2004. A 1 / 8 % change in
      interest rates would result in a change of approximately $245,000 in annual interest expense.

(4)   Reflects adjustments to give effect to income taxes related to the pro forma adjustments recorded at the statutory tax rate of 39%.

(5)   Basic weighted average shares outstanding gives effect to the issuance of 91,000 shares of common stock in exchange for Cendant restricted stock units held by our
      executive officers and employees. Diluted weighted average shares outstanding gives effect to the issuance of stock options in exchange for Cendant stock options
      held by our executive officers and employees. Share numbers and option amounts to be issued in exchange for Cendant restricted stock units and options are based
      on the midpoint of the initial public offering price range set forth on the cover page of this prospectus and the average closing price of Cendant’s stock price over a
      recent three trading day period. The actual amounts will change based on our stock price and Cendant’s stock price for the three trading days following the date of the
      final prospectus. Actual amounts outstanding may also be reduced to the extent our executive officers and employees elect to exercise their vested Cendant options
      prior to the completion of the exchange offer.

      The pro forma consolidated statement of operations does not reflect a non-recurring pre-tax compensation charge of an estimated $4.6 million associated with the
      issuance of common stock and options to purchase shares of our common stock issued in exchange for Cendant restricted stock units and stock options currently held
      by our executive officers and employees.

(6)   Reflects an adjustment to give effect to financing costs associated with the new credit facility and the issuance of the $175.0 million aggregate principal amount of
      floating rate notes.

(7)   Reflects an adjustment to give effect to the special dividend paid to Cendant in the amount of $319.0 million. The $175.0 million cash portion of the special dividend will
      be funded entirely from the net proceeds of the notes placement. The remaining $144.0 million reflects the cancellation of a receivable due from Cendant.

(8)   Reflects an adjustment to give effect to the issuance of 91,000 shares of common stock in exchange for Cendant restricted stock units held by our executive officers
      and employees, including the related income tax benefit.

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                                      MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS

       The following discussion should be read in conjunction with our selected consolidated financial data and our consolidated
financial statements and the related notes included elsewhere in this prospectus.

Overview

       Jackson Hewitt is the second largest paid tax return preparer in the United States, based on the number of tax returns filed
by paid preparers, with a nationwide network comprised of 4,330 franchised offices and 605 company-owned offices as of April
30, 2004. We have grown rapidly, more than doubling the number of offices in our network since 1998 and our annual volume of
tax returns prepared since 1999. In 2004, our network filed 3.1 million tax returns, an increase of 11% as compared to 2003. Our
revenues and profits are primarily dependent on the successful operations of our franchise system and our company-owned
offices.

        We manage and evaluate the operating results of our business in two segments:

         Franchise operations: This segment consists of the operations of our franchise business, including royalty and marketing
          and advertising revenue, financial product fees, other financial product revenue and other revenue.

         Company-owned office operations: This segment consists of the operations of our company-owned offices for which we
          earn service revenue for the preparation of tax returns and related services.

Revenue that we earn consists of the following components:

        Franchise operations revenue:

         Royalty revenue: We earn royalty revenue from our franchisees. Our franchise agreements require franchisees to pay us
          a royalty fee of 15% of their revenue (12% for most franchises that joined our system before 2000). In 2004, our average
          royalty rate was 12.8%. Franchisees earn revenue primarily from the preparation of tax returns and from application fees
          charged in conjunction with the facilitation of financial products. We recognize royalty revenue upon the completion and
          filing of tax returns by our franchisees.

         Marketing and advertising revenue: In addition to royalty revenue, franchisees pay us a marketing and advertising fee
          equal to 6% of their revenue. We recognize marketing and advertising revenue upon the completion and filing of tax
          returns by our franchisees.

         Financial product fees: We earn fixed fees from the financial institutions that provide our financial products for the
          facilitation of the sale of tax refund-based financial products to customers throughout our network, including refund
          anticipation loans, accelerated check refunds and assisted direct deposits. The fixed fees that we earn from the financial
          institutions originate from a handling fee (typically $25) paid by the customer to the financial institution upon approval
          and funding of the respective products. We earn a portion of the total handling fee depending upon the product
          facilitated, with the fees that we earn varying in amounts up to $14.55 per product. These financial products are offered
          pursuant to our contractual arrangements with financial institutions. We recognize revenue for the fixed fees we earn at
          the time financial products are sold. In addition, our network offers other products which include the Jackson Hewitt
          CashCard and our Gold Guarantee extended warranty product. Revenue from our Gold Guarantee product is deferred
          and recognized over the term of the extended warranty.

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         Other financial product revenue: Other financial product revenue is solely related to the facilitation of refund anticipation
          loans. In addition to the fixed fees recorded in financial product fees we earn from the facilitation of refund anticipation
          loans, we have historically earned other financial product revenue equal to a portion (ranging from 59% to 100%) of the
          difference between finance fees paid by customers throughout our network to the financial institutions and loan amounts
          that the financial institutions are unable to collect. The finance fees are calculated as a percentage (typically 3%) of the
          total loan amount (subject to a minimum fee of $10 and maximum fee of $75). In addition, there is a $10 surcharge if an
          earned income tax credit is claimed. The finance fees are set aside as a reserve against uncollected loans. Other
          financial product revenue is recognized only to the extent that the reserves maintained by the lending financial
          institutions exceed the uncollected loans made by these financial institutions at the end of each reporting period. Other
          financial product revenue has varied over the past three years based upon the financial institutions’ ability to manage
          credit risk and collect loan balances either through the remittance of refunds from the IRS or from the customer.

           To reduce the variability of other financial product revenue, we have renegotiated our agreement with Santa Barbara
           Bank & Trust, the provider of approximately 80% of the refund anticipation loans that we facilitate. Under the new
           agreement, which became effective as of May 5, 2004, in lieu of earning revenue based upon the amount of finance fees
           and uncollected loans, we will earn primarily a fixed fee based upon the number of refund anticipation loans facilitated.
           Although there will be a variable component to the fees received under the new agreement, we do not currently
           anticipate such fees or potential reimbursement obligation will have a material impact on our consolidated results of
           operations. Under our current agreement with our other provider of refund anticipation loans, Household Tax Masters
           Inc., we will continue to earn other financial product revenue based on the amount of finance fees collected and
           uncollected loans.

         Other revenue: Other revenue consists of ancillary fees we earn from franchisees, including a $2 fee per tax return paid
          by franchisees for the processing of each electronically-transmitted tax return. We recognize revenue from processing
          fees at the time the tax returns are filed. Approximately 88% of all tax returns filed by our network are filed electronically.
          Other revenue also includes revenue that we earn from the sale or transfer of territories. Revenue is recognized when all
          material services or conditions relating to the sale have been performed (generally upon completion of a mandatory
          training program for new franchisees).

        Company-owned office operations revenue:

         Service revenue: Service revenue includes only revenue earned at our company-owned offices, which primarily consists
          of fees that we earn directly from our customers for the preparation of tax returns. Such fees include base fees for the
          preparation of tax returns and related fees for the facilitation of financial products earned by our company-owned offices.
          Related fees vary in amounts up to $39 per product. We recognize service revenue upon the completion and filing of tax
          returns by our company-owned offices.

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      Our consolidated results of operations are set forth below and are followed by a more detailed discussion of each of our
business segments, as well as a detailed discussion of certain corporate and other expenses.

Consolidated Results of Operations                                                                 Fiscal Year Ended April 30,
  (in thousands):
                                                                                         2004                  2003                  2002


Revenue
Franchise operations revenues:
    Royalty                                                                          $    51,646          $    43,229            $    35,640
    Marketing and advertising                                                             24,213               20,671                 17,261
    Financial product fees                                                                30,384               25,037                 21,635
    Other financial product revenue                                                       30,255               23,110                 29,518
    Other                                                                                 12,527               11,080                 11,685
Service revenue from company-owned operations                                             56,590               48,420                 41,252

Net revenues                                                                             205,615              171,547                156,991

Expenses:
    Cost of franchise operations                                                          23,922               18,971                 19,511
    Marketing and advertising                                                             29,464               25,086                 18,836
    Cost of company-owned office operations                                               41,639               34,184                 17,697
    Selling, general and administrative                                                   28,499               14,997                 17,882
    Depreciation and amortization                                                         11,911               11,523                 12,824

Total expenses                                                                           135,435              104,761                 86,750

Income from operations                                                                    70,180               66,786                 70,241
Other income:
    Interest income, net                                                                    284                    791                 1,449
    Preferred stock dividends from TSA                                                      —                      —                   1,768

Income before income taxes                                                                70,464               67,577                 73,458
Provision for income taxes                                                                27,504               26,444                 30,935

Net income                                                                           $    42,960          $    41,133            $    42,523


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        The table below presents selected key operating statistics for our franchise and company-owned office operations.
                                                                                                                                 Fiscal Year Ended April 30,

                                                                                                                         2004                 2003                2002
Operating Statistics
Offices:
     Franchise operations                                                                                                 4,330                3,776               3,385
     Company-owned office operations                                                                                        605                  523                 440

      Total system                                                                                                        4,935                4,299               3,825

Tax returns (in thousands):
    Franchise operations                                                                                                  2,735                2,461               2,200
    Company-owned office operations                                                                                         400                  365                 325

      Total system                                                                                                        3,135                2,826               2,525

Average revenue per tax return:
    Franchise operations(1)                                                                                          $ 147.53             $ 139.67          $ 130.76
    Company-owned office operations(2)                                                                               $ 141.48             $ 132.66          $ 126.93
    Total system                                                                                                     $ 146.76             $ 138.77          $ 130.26

Financial products (in thousands)                                                                                         2,769                2,396               1,906
Average financial product fees per product(3)                                                                        $    10.97           $    10.45        $      11.35

(1)     Calculated as total revenue earned by our franchisees, which does not represent revenues earned by Jackson Hewitt, divided by the number of tax returns prepared
        by our franchisees. We earn royalty and marketing and advertising revenue, which represents a percentage of the revenue received by our franchisees.
(2)     Calculated as tax preparation revenue and related fees received by company-owned offices divided by the number of tax returns prepared by company-owned
        offices.
(3)     Calculated as revenue earned from financial product fees (as reflected in our consolidated results of operations) divided by the number of financial products
        facilitated.




We calculate average revenue per tax return in franchise operations in the manner set forth below.
                                                                                                                     Fiscal Year Ended April 30,

                                                                                                          2004                     2003                    2002

                                                                                                                    (dollars in thousands, except
                                                                                                                         per tax return data)
Total revenue earned by Jackson Hewitt franchisees(A)                                                 $ 403,505              $ 343,733                 $ 287,662


Average royalty rate(B)                                                                                       12.8 %                   12.6 %                   12.4 %
Marketing and advertising rate(C)                                                                              6.0 %                    6.0 %                    6.0 %

Combined royalty and marketing and advertising rate(B plus C)                                                 18.8 %                   18.6 %                   18.4 %

Royalty revenue(A times B)                                                                            $    51,646            $     43,229              $   35,640
Marketing and advertising revenue(A times C)                                                               24,213                  20,671                  17,261

Total royalty and marketing and advertising revenue                                                   $    75,859            $     63,900              $   52,901


Number of tax returns prepared by franchisees(D)                                                            2,735                    2,461                     2,200


Average revenue per tax return prepared by franchisees(A divided by D)                                $    147.53            $     139.67              $   130.76

Amounts may not recalculate due to rounding differences.

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Fiscal Year Ended April 30, 2004 as Compared to the Fiscal Year Ended April 30, 2003

       The number of tax returns prepared within our network increased by 11%, and the average revenue per tax return,
including both franchised and company-owned offices, increased by 6% in 2004 compared with the prior year. One driver of return
growth was the expansion of our network as the average number of offices per territory increased to 1.8 at April 30, 2004 from 1.7
at April 30, 2003. Average revenue per tax return is calculated as tax preparation and related fees received divided by the total
number of tax returns prepared. Average revenue per tax return increased primarily as a result of annual price adjustments.

       In conjunction with the growth in tax returns prepared and financial products facilitated, net revenues increased $34.1
million, or 20%, in 2004 as compared with the prior year. This increase was primarily due to a $12.0 million, or 19%, increase in
royalty, marketing and advertising revenue in our franchise operations, an $8.2 million, or 17%, increase in service revenue at
company-owned offices, and a $5.3 million, or 21%, increase in financial product fees. Also contributing to the increase in net
revenues was an increase of $7.1 million in other financial product revenue.

       Total expenses increased by $30.7 million, or 29% in 2004 as compared with the prior year due to increased costs of
$9.1 million in our franchise operations segment and $8.9 million in our company-owned office operations segment. In our
franchise operations segment, marketing and advertising costs increased in conjunction with our growth, as they are closely tied
to the marketing and advertising revenue earned from franchisees and we incurred higher personnel costs to support our growing
base of franchise offices. In our company-owned office operations segment, we experienced higher costs due to the growth in the
number of offices. In addition, selling, general and administrative expenses in 2004 included a $10.4 million charge associated
with a litigation settlement in connection with an action filed by 154 of our franchisees against us and Santa Barbara Bank & Trust
alleging, among other things, that we breached an agreement with them by not paying them a portion of other financial product
revenue. The $10.4 million charge reflects the total amount we expect to incur related to this settlement. Management is not
aware of any other similar proceedings or actions.

       Net income increased to $43.0 million in 2004 from $41.1 million for the prior year. Apart from the impact of the litigation
settlement discussed above, net income increased to approximately $49.3 million in 2004 from $41.1 million in 2003.

Fiscal Year Ended April 30, 2003 as Compared to the Fiscal Year Ended April 30, 2002.

       The number of tax returns prepared by our network increased by 12% and the average revenue per tax return including
both franchised and company-owned offices increased by 7% in 2003, as compared to the prior year. Average revenue per tax
return is calculated as tax preparation and related fees received divided by the total number of tax returns prepared. Average
revenue per tax return increased primarily as a result of annual price adjustments.

        In conjunction with the growth in tax returns prepared and financial products facilitated, net revenues increased $14.6
million, or 9%, for 2003 as compared to the prior year. This increase was primarily due to an $11.0 million, or 21%, increase in
royalty and marketing and advertising revenue in our franchise operations, a $7.2 million, or 17%, increase in service revenue at
company-owned offices, and a $3.4 million, or 16%, increase in financial product fees. The increase in net revenues was partially
offset by a $6.4 million, or 22%, decrease in other financial product revenue primarily as a result of lower collections on refund
anticipation loans. Other financial product revenue has varied each year as it is dependent upon the ability of the financial
institutions that provide refund anticipation loans to manage credit risk and collect loan balances either through the remittance of
refunds from the IRS or from the customer. Refunds may be denied by the IRS due to the disallowance of credits such as earned
income tax credits, claims from other indebtedness and customer fraud.

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       Total expenses increased by $18.0 million, or 21%, in 2003 as compared with the prior year primarily due to increased
costs in our company-owned offices segment as a result of the timing of our acquisition of TSA on January 18, 2002. If TSA had
been acquired on May 1, 2001, expenses in 2002 would have been $109.6 million as compared to $104.8 million in 2003.

      Net income decreased to $41.1 million in 2003 from $42.5 million in 2002 primarily due to the impact of the acquisition of
TSA. If TSA had been acquired on May 1, 2001, net income would have been $28.2 million in 2002.

Franchise Operations

       At the core of our business strategy is the growth and development of our franchise system. We derive a significant portion
of our revenue from royalty and marketing and advertising fees which are also our fastest growing source of revenue. We earn
royalty fees based on our franchisees’ revenue. We provide our franchisees with services designed to increase their revenues,
including training, administrative support, access to our proprietary ProFiler tax return preparation software and tax refund-related
financial products, product development and quality assurance. Marketing and advertising fees are based on our franchisees’
revenue and are used to support national advertising programs, brand development, website development and our franchisees’
regional and local advertising.
                                                                                                         Fiscal Year Ended April 30,

                                                                                                  2004                2003                 2002

Business drivers:
Offices                                                                                             4,330               3,776                3,385
Tax returns (in thousands)                                                                          2,735               2,461                2,200

Operating results (in thousands):
Revenues:
     Royalty                                                                                  $    51,646         $    43,229          $    35,640
     Marketing and advertising                                                                     24,213              20,671               17,261
     Financial product fees                                                                        30,384              25,037               21,635
     Other financial product revenue                                                               30,255              23,110               29,518
     Other                                                                                         12,527              11,080               11,685

Net revenues                                                                                      149,025             123,127              115,739


Expenses:
     Cost of franchise operations                                                                  23,922              18,971               19,511
     Marketing and advertising                                                                     24,212              20,631               16,353
     Selling, general and administrative                                                            3,597               3,365                4,362
     Depreciation and amortization                                                                  7,608               7,274               11,626

Total expenses                                                                                     59,339              50,241               51,852

Income from operations                                                                             89,686              72,886               63,887
Interest income, net                                                                                  657                 791                1,449

Income before income taxes                                                                    $    90,343         $    73,677          $    65,336



Fiscal Year Ended April 30, 2004 as Compared to the Fiscal Year Ended April 30, 2003

        The number of franchised offices grew by 15% to 4,330 at April 30, 2004 from 3,776 at April 30, 2003.

       In 2004, royalty revenue increased by $8.4 million, or 19%, as compared with 2003 and marketing and advertising revenue
increased by $3.5 million, or 17%, as compared with 2003. These increases resulted primarily from an 11% increase in the
number of tax returns prepared and a 6% increase in the average revenue per tax return. Average revenue per tax return is
calculated as tax

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preparation and related fees received by franchisees divided by the total number of tax returns prepared. Average revenue per tax
return increased primarily as a result of annual price adjustments. We also benefited from a slight increase in the average royalty
rate we earn, which increased to 12.8% in 2004 from 12.6% in 2003 as the network included more territories at the 15% royalty
fee rate. Franchisees facilitated the sale of 2.4 million financial products in 2004 as compared with 2.1 million in 2003, for which
we earned royalty and marketing and advertising revenue of $14.3 million in 2004 and $11.6 million in 2003.

        Financial product fee revenue increased by $5.3 million, or 21%, in 2004 as compared with 2003. Growth in the number of
tax returns prepared contributed to a 16% increase in the number of financial products facilitated in 2004 as compared with 2003.
During 2004, we facilitated the sale of approximately 2.8 million financial products as compared to approximately 2.4 million
financial products in 2003. These sales included 1.1 million refund anticipation loans facilitated by our network in 2004 as
compared to 1.0 million refund anticipation loans for the prior year. We earned financial product fees in connection with our
facilitation of the sale of refund anticipation loans of $15.9 million in 2004 as compared with $14.1 million in 2003. We recognized
a 5% increase in the average financial product fee per product, which was primarily due to the growth of our Gold Guarantee
product.

       Other financial product revenue increased by $7.1 million, or 31%, during 2004 as compared with 2003 due to higher
collections of loans from prior tax seasons. Other financial product revenue has varied as it is dependent upon a number of factors
involving risk related to the receipt of income tax refunds. To reduce the variability of other financial product revenue, we have
renegotiated our agreement with Santa Barbara Bank & Trust, the provider of approximately 80% of the refund anticipation loans
that we facilitate. Under the new agreement, which became effective as of May 5, 2004, in lieu of sharing revenue based upon the
amount of finance fees and uncollected loans, we earn primarily a fixed fee that is more closely tied to the number of refund
anticipation loans facilitated.

      In 2004, total expenses increased by $9.1 million, or 18%, as compared with 2003, principally due to increases in cost of
franchise operations expenses and marketing and advertising expenses. Cost of franchise operations expenses increased
primarily due to costs related to increased personnel to support franchisees and expense attributable to growth in the Gold
Guarantee program. We incurred additional marketing and advertising expenses in 2004 as marketing and advertising revenue
has grown and as we continued to increase the awareness of our brand to drive new customer growth. Selling, general and
administrative expenses, as well as depreciation and amortization, grew at modest rates in 2004 as compared to 2003.

        Income before income taxes increased by $16.7 million, or 23%, in 2004 as compared with 2003.

Fiscal Year Ended April 30, 2003 as Compared to the Fiscal Year Ended April 30, 2002

        The number of franchised offices grew by 12% to 3,776 offices at April 30, 2003 from 3,385 offices at April 30, 2002.

       During 2003 as compared with 2002, royalty revenue increased by $7.6 million, or 21%, and marketing and advertising
revenue increased by $3.4 million, or 20%. These increases resulted from a 12% increase in the number of tax returns prepared
in our franchise system and a 7% increase in the average revenue per tax return. Average revenue per tax return is calculated as
tax preparation and related fees received divided by the total number of tax returns prepared. Average revenue per tax return
increased primarily as a result of annual price adjustments. Additionally, the average royalty rate that we earned from our
franchisees increased slightly to 12.6% in 2003 from 12.4% in 2002. Franchisees facilitated the sale of 2.1 million financial
products in 2003 as compared with 1.7 million in 2002, for which we earned royalty and marketing and advertising revenue of
$11.6 million in 2003 and $9.3 million in 2002.

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       Financial product fee revenue increased by $3.4 million, or 16%, during 2003 as compared with 2002 primarily due to the
increase in the number of tax returns prepared and the facilitation of higher financial product sales. We facilitated the sale of
nearly 2.4 million financial products in 2003 as compared with approximately 1.9 million financial products in the prior year, an
increase of 26%. Facilitation of the sales of refund-based financial products increased by approximately 196,000 in 2003 as
compared to 2002, while sales of our Gold Guarantee product accounted for approximately 285,000 of the year-to-year increase.
Our financial product sales included approximately 975,000 refund anticipation loans facilitated by our network in 2003 as
compared to approximately 809,000 refund anticipation loans in 2002, and we earned total fees of $14.1 million in 2003 as
compared to $12.0 million in the prior year. Because sales of our Gold Guarantee product are recognized over the warranty period
and grew at a disproportionately high rate, the average revenue per financial product declined by 8%.

      Other financial product revenue decreased by $6.4 million, or 22%, in 2003 principally due to lower collection rates for our
refund anticipation loan program.

       Total expenses decreased by $1.6 million, or 3%, in 2003 as compared with the prior year primarily due to a decrease in
amortization following our adoption of Statement of Financial Accounting Standards No. 142, ―Goodwill and Other Intangible
Assets,‖ on January 1, 2002, which eliminated the amortization of goodwill and other indefinite-lived intangible assets, as well as
reductions in selling, general and administrative costs that were partially offset by increases in marketing and advertising costs.
We incurred additional marketing and advertising expenses in conjunction with the growth in marketing and advertising revenue
and as we continued to increase the awareness of our brand.

        Income before income taxes increased by $8.3 million, or 13%, in 2003 as compared with the prior year.

Company-Owned Office Operations

       Complementing our franchise system are our company-owned offices. Prior to our acquisition of TSA on January 18, 2002,
we did not have significant company-owned office operations. Tax returns filed by our company-owned offices represented 13% of
the total tax returns filed within our network in 2004.
                                                                                                       Fiscal Year Ended April 30,

                                                                                                2004               2003              2002

Business drivers:
Offices                                                                                          605                523               440
Tax returns (in thousands)                                                                       400                365               325
Average revenue per tax return(1)                                                           $ 141.48           $ 132.66          $ 126.93

Operating results (in thousands):
Service revenue from company-owned office operations                                        $ 56,590           $ 48,420          $ 41,252

Expense:
    Cost of operations                                                                          41,639             34,184            17,697
    Marketing and advertising                                                                    5,252              4,455             2,483
    Selling, general and administrative                                                          3,075              2,435               937
    Depreciation and amortization                                                                4,303              4,249             1,198

Total expenses                                                                                  54,269             45,323            22,315

Income before income taxes                                                                  $    2,321         $    3,097        $ 18,937


(1)     Calculated as service revenue from company-owned office operations, which includes tax preparation and related fees,
        divided by the number of tax returns prepared.

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Fiscal Year Ended April 30, 2004 as Compared to the Fiscal Year Ended April 30, 2003

       The number of tax returns grew by 10% in 2004 as compared with 2003 and average revenue per tax return increased by
7%, which contributed to an increase of $8.2 million, or 17%, in revenue. Growth in tax returns prepared by our network in 2004
was due to the number of offices increasing by 82, or 16%. Average revenue per tax return is calculated as tax preparation and
related fees received divided by the total number of tax returns prepared. Average revenue per tax return increased primarily as a
result of annual price adjustments. Company-owned offices facilitated the sale of 374,000 financial products to 2004 as compared
with 311,000 in 2003, for which we earned service revenue of $12.2 million in 2004 and $10.0 million in 2003.

       Total expenses increased by $8.9 million, or 20%, in 2004 as compared with 2003. This was primarily due to a $7.5 million,
or 22%, increase in the cost of operations as we increased the number of company-owned offices. The increase in marketing and
advertising costs of approximately $797,000, or 18%, was closely tied to the expansion of offices and growth in the number of
returns prepared. Selling, general and administrative costs increased due primarily to increased costs in training and support
infrastructure.

       Our results also reflect an allocation for marketing and advertising expense based on the proportion of company-owned
office operations revenue to total revenue.

       Income before income taxes decreased approximately $776,000, or 25%, in 2004 as compared with 2003. Expense growth
outpaced revenue growth in 2004 primarily due to the investment in new offices as compared to growth in offices primarily due to
acquisitions in 2003. As these new offices mature, we expect productivity to drive growth in revenue and income before income
taxes.

Fiscal Year Ended April 30, 2003 as Compared to the Fiscal Year Ended April 30, 2002

     We acquired TSA on January 18, 2002. Prior to the acquisition, TSA was our largest franchisee for which we earned royalty
and marketing and advertising revenues.

       The number of tax returns prepared grew by 12% in 2003 as compared with the prior year and average revenue per tax
return increased by 5%, which contributed to an increase of $7.2 million, or 17%, of revenue. Because most of our revenue is
earned from January through April, the timing of the TSA acquisition did not have a significant impact on the total revenue earned.
Our number of new offices increased by 83, or 19%, in 2003 primarily driven by acquisitions. Average revenue per tax return is
calculated as tax preparation and related fees received divided by the total number of tax returns prepared. Average revenue per
tax return increased primarily as a result of annual price adjustments. Company-owned offices facilitated the sale of 311,000
financial products in 2003 as compared with 195,000 in 2002, for which we earned service revenue of $10.0 million in 2003 and
$8.4 million on 2002.

       Total expenses increased primarily as a result of the inclusion of TSA in our consolidated results for the full fiscal year in
2003 as compared to the inclusion of TSA in our consolidated results for only three and one half months in 2002. Due to the timing
of the TSA acquisition and the seasonality of our business, if TSA had been acquired on May 1, 2001, expenses would have been
$45.2 million in 2002.

      Income before income taxes decreased $15.8 million, or 84%, in 2003 as compared with the prior year. If TSA had been
acquired on May 1, 2001, income before income taxes would have increased by $6.0 million.

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Corporate and Other

       Corporate and other expenses consist of corporate functions, including legal, finance, strategic development activities and
other costs which are not allocated to our franchise operations or company-owned office operations, as well as certain unusual
expenses such as litigation costs.
                                                                                                        Fiscal Year Ended April 30,

                                                                                              2004                       2003                 2002

                                                                                                               (in thousands)
General and administrative expense                                                        $    21,827                $    9,197         $     12,583

Loss from operations                                                                          (21,827 )                  (9,197 )            (12,583 )
    Interest expense                                                                             (373 )                     —                    —
    Other income                                                                                  —                         —                  1,768

Loss before income taxes                                                                  $ (22,200 )                $ (9,197 )         $ (10,815 )


Fiscal Year Ended April 30, 2004 as Compared to the Fiscal Year Ended April 30, 2003

       Loss before income taxes increased $13.0 million primarily due to a $10.4 million charge recorded to reflect the settlement
of an action filed by 154 of our franchisees against us and Santa Barbara Bank & Trust alleging, among other things, that we
breached an agreement with them by not paying them a portion of other financial product revenue. The $10.4 million charge
reflects the total amount we expect to incur related to this settlement. Management is not aware of any similar proceedings or
actions.

Fiscal Year Ended April 30, 2003 as Compared to the Fiscal Year Ended April 30, 2002

      Loss before income taxes decreased $1.6 million, or 15%, primarily due to a reduction in general and administrative
expenses primarily resulting from costs incurred in 2002 to close our Virginia Beach facility. This reduction was partially offset by
the absence in 2003 of $1.8 million of preferred stock dividends (other income) received prior to our acquisition of TSA.

Seasonality and Quarterly Results of Operations

       Given the seasonal nature of the tax preparation business, we have generated and expect to continue to generate
substantially all our revenues during the tax season period from January through April of each year, which will overlap our third
and fourth quarters. During 2004, we generated approximately 91% of our revenues during this period. We generally operate at a
loss through the first eight months of each fiscal year, during which we incur costs associated with preparing for the upcoming tax
season.

        The following table presents certain unaudited quarterly consolidated statements of operations data for each of our last
eight fiscal quarters. In the opinion of our management, this quarterly information has been prepared on the same basis as the
consolidated financial statements appearing elsewhere in this prospectus and includes all adjustments (consisting only of normal
recurring adjustments) necessary to present fairly the unaudited quarterly results set forth herein. Our quarterly results have in the
past been subject to fluctuations, and thus, the operating results for any quarter are not necessarily indicative of results for a full
year. In addition, these results may not be indicative of results that would have existed or resulted if we had operated
independently of Cendant.
                                        Fiscal Quarter Ended                                            Fiscal Quarter Ended

                          April 30,     Jan. 31,      Oct. 31,      July 31,            April 30,         Jan. 31,          Oct. 31,         July 31,
                           2004          2004          2003          2003                2003              2003              2002             2002

                                                                       (in thousands)
Net revenues            $ 132,771      $ 59,528     $ 7,544       $   5,772         $ 112,533        $ 48,617              $ 4,566          $ 5,831
Net income (loss)       $ 52,431       $ 7,161      $ (5,345 )    $ (11,287 )       $ 46,048         $ 7,921               $ (5,983 )       $ (6,853 )

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Refund Anticipation Loan Risk-Sharing

       We facilitate the sale of refund anticipation loans pursuant to agreements with Santa Barbara Bank & Trust and Household
Tax Masters Inc. In 2004, approximately 80% of refund anticipation loans facilitated by our network were sold pursuant to our
contractual relationship with Santa Barbara. Under our existing agreement with Household Tax Masters Inc. and previous
agreement with Santa Barbara, we share the risks of non-collection on refund anticipation loans. If actual loan losses exceed
anticipated loan losses in a given year, we are obligated to reimburse these financial institutions for a majority of the deficit.
Conversely, if actual loan losses are less than anticipated, we receive a majority of the surplus. We have experienced
considerable variability in the amount of revenue we earned.

       To reduce the variability of other financial product revenue, we have renegotiated our agreement with Santa Barbara. Under
the terms of the new agreement, which became effective as of May 5, 2004, in lieu of sharing revenue and losses based upon the
amount of finance fees received by Santa Barbara and uncollected loans made by Santa Barbara, the new agreement provides
for Santa Barbara to pay us the following fees:

               a fixed fee of $16.00 for each refund anticipation loan facilitated by our network;

               an additional fee of $2.00 for each refund anticipation loan facilitated by our network if the amount of finance fees
                received by Santa Barbara exceeds uncollected loans by a threshold amount ranging from at least 0.5% to 0.6% of
                the aggregate principal amount of refund anticipation loans made by Santa Barbara to our customers, plus to the
                extent that Santa Barbara collects loans that were made in the prior year, we will be entitled to an amount, equal to
                the excess, if any, of 25% of the principal amount of such loan collections over the product of (a) $2.00 and (b) the
                number of loans made by Santa Barbara in the current year; and

               a variable fee equal to 50% of the amount by which the total amount of finance fees received by Santa Barbara
                exceeds uncollected loans by a threshold amount of at least 1.0% of the aggregate principal amount of refund
                anticipation loans made by Santa Barbara to our customers.

       If the amount of uncollected loans exceeds the finance fees received by Santa Barbara, we have agreed to reimburse
Santa Barbara in an amount equal to 50% of such difference. Based on our historical experience, we do not currently expect that
this potential reimbursement obligation or the variable fee will have a material impact on our consolidated results of operations.

Separation from Cendant and Related Transactions

        Upon completion of this offering, we will enter into a transitional agreement, a sublease agreement for our corporate New
Jersey headquarters and a sublease assignment and assumption agreement for our technology facility in Sarasota, Florida with
Cendant to provide for an orderly transition to being an independent company and to govern continuing arrangements between us
and Cendant. Under the transitional agreement, Cendant will agree to provide us with various services, including services relating
to facilities, human resources and employee benefits, payroll, financial systems management, treasury and cash management,
accounts payable services, tax support, event marketing, revenue audit services, telecommunications services, information
technology services, call support services and public and regulatory affairs. The transitional agreement will also contain
agreements relating to indemnification, tax sharing and tax indemnification, access to information and non-solicitation of
employees.

        The majority of the services to be covered in the transitional agreement will expire by December 31, 2005, with the
exception of information technology services and telecommunication services, which will expire in two years and three years,
respectively, from the date of this offering. We do not expect any of the services to be provided under these agreements to expire
before December 31, 2004. Additionally, all of the services to be provided under the transitional agreement may be terminated by
us, without penalty, upon not less than 30 days prior written notice to Cendant, except for information technology services which
will require a termination payment to Cendant in an amount equal to the unamortized lease costs of computer hardware specific to
our mainframe environment, as well as for

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any unpaid actual costs incurred by Cendant with respect to these services. For almost all services to be provided, Cendant does
not have the ability to terminate the provision of the services prior to the expiration date, with the exception of telecommunications
services, revenue audit services and call support services which Cendant may terminate upon prior written notice to us of 180
days, 120 days, and 120 days, respectively. Cendant may terminate the sublease for our New Jersey corporate headquarters
prior to the expiration date upon 120 days prior written notice, but Cendant is required to relocate us, at Cendant’s cost, to
mutually acceptable office space.

        Under the transitional agreement, the cost of each transitional service will generally reflect the same payment terms and will
be calculated using the same cost allocation methodologies for the particular service as those associated with the costs in our
historical financial statements. The transitional agreement is being negotiated in the context of a parent-subsidiary relationship.
The provision of many of the services will be transitioned at similar costs to those allocated by Cendant historically. After the
expiration of the transitional agreement, we may not be able to replace these services in a timely manner or on terms and
conditions, including cost, as favorable as those we have received from Cendant. We are developing a plan to increase our own
internal capabilities to reduce our reliance on Cendant for these services. We expect to incur a substantial increase in costs for the
following services: insurance coverage (specifically directors and officers and errors and omissions coverage); financial systems
management; and employee benefits. As part of this plan, we have, or will have, expanded our accounting and finance team and
implemented the necessary systems to manage the transition of these services and handle the additional responsibilities of
operating as an independent public company. In addition, we have, or will have, expanded our capabilities in other functional
areas such as human resources, legal and preferred alliances to enable us to adequately support and provide the services which
we have received historically from Cendant. We have identified completion dates in our transition plan that coincide with the
expiration dates for the services outlined in the transitional agreement. For example, for services we intend to perform internally,
such as treasury and cash management, tax support, internal audit, purchasing and general legal support, we are currently
recruiting individuals to fill these positions and have recently hired certain personnel, including a controller and a general counsel.
For services we intend to outsource to third-party service providers at the end of 2004, such as payroll and human resources
administration, financial system consulting services and investor relations, we are seeking proposals from third-party service
providers and expect to select providers by mid-summer 2004. We expect to begin a similar selection process later this year for
other services we intend to outsource during 2005, such as revenue audit services and tax advisory services. Furthermore, we
have contracted with a third party insurance broker to assist us in obtaining our insurance coverage and provide us with risk
management services upon our separation from Cendant.

      The following table reflects the additional costs associated with being an independent public company which are
incremental to our historical costs. The table also reflects variations in costs resulting from our separation from Cendant.
                                                                                                                          Fiscal Year
                                                                                                                              2005
                                                                                                                         In thousands

New Costs of Being a Public Company:
    Insurance                                                                                                           $      2,264
    Equity awards and equity compensation                                                                                      2,021
    Board of Directors fees                                                                                                      659
    Other                                                                                                                        364
Variation in Costs from Separating from Cendant:
    Costs to be handled internally –
         Staff additions to replace Cendant support (1)                                                  1,154
         Less: Cendant support historically allocated                                                   (1,139 )

              Subtotal                                                                                                             15
     Costs to be outsourced –
         Services outsourced (2)                                                                         1,070
         Less: Cendant support historically allocated                                                   (1,139 )

                Subtotal                                                                                                          (69 )

  Estimated incremental costs for 2005                                                                                  $      5,254


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(1)   Includes hiring of new employees to replace historical Cendant support for corporate related functions such as finance, legal
      and human resources.
(2)   Includes professional services outsourced to replace Cendant support for corporate related functions such as payroll, risk
      management, financial systems management and facilities management.

Our public company costs will include incremental costs for equity awards, executive compensation, directors and officers and
errors and omissions insurance, external audit fees and board of directors fees. The transitional services costs represent those
services that we have historically received from Cendant, directly or through third party providers, that we will be required to
provide upon the expiration of the terms of the services to be provided under the transitional agreement.

       Our pro forma consolidated financial statements reflect additional costs such as recruiting fees for key personnel, software
development fees for payroll and employee benefit interfaces and consulting fees for implementation of new systems to facilitate
an orderly transition to being a public company. We expect to incur a substantial increase in costs for the following services
required for our transition to being a public company: directors and officers and errors and omissions insurance coverage, external
audit services and board of directors fees, which are collectively expected to be approximately $3.3 million for fiscal year 2005. In
addition, we will incur incremental costs (anticipated to be approximately $2.0 million for fiscal year 2005) associated with equity
awards that will be granted and increased compensation that will be paid to our officers and employees.

      You should refer to the ―Certain Relationships and Related Transactions‖ section of this prospectus and Note 8 to our
consolidated financial statements for a description of these and other intercompany agreements and transactions between us
and Cendant.

Contractual Obligations

        The following table presents pro forma future contractual obligations:
                                                                                                          2009 &
                                                                        2005-2006     2007-2008         thereafter           Total

                                                                                              (in thousands)
Borrowings(1)                                                          $      —       $     —         $ 175,000          $ 175,000
Transitional agreement(2)                                                   4,793           336             —                5,129
Operating lease obligations                                                12,220         3,636             452             16,308

      Total                                                            $ 17,013       $ 3,972         $ 175,452          $ 196,437


(1)     Represents the aggregate principal amount of notes we intend to issue concurrent with the closing of this offering.
(2)     Represents total estimated costs associated with the transitional agreement for the periods presented. The estimate is
        based on the pricing terms of the transitional agreement and historical volumes.

Liquidity and Capital Resources

       Our revenues have been and are expected to continue to be highly seasonal. As a result, we generate most of our
operating funds during the tax season that consists of the period from January through April. Following tax season, we require
funds to cover our operating expenses as well as to reinvest in the business for future growth. Subsequent to this offering we will
fund our operations through our operating cash flow and through our new credit facility, as required.

       In 2004, we generated cash flows of approximately $63.6 million from operating activities, which were approximately
$857,000 lower than 2003 due to an increase in receivables from other financial product revenues, partially offset by growth in tax
return volume. We also invested approximately $9.5 million in the purchase of equipment, the acquisitions of independent tax
preparation businesses and

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the funding of development advances during 2004, which was $4.3 million lower than 2003. We have historically invested in these
activities to grow the business and expect to continue to make such investments following each tax season.

       With respect to financing activities, Cendant, our parent corporation, has historically received the benefit of our operating
cash flow and has funded our operations following the end of the tax season. Consequently, until the consummation of this
offering, our financing activities have consisted solely of the settlement of intercompany transactions with Cendant.

       Our total current assets as of April 30, 2004 were $48.4 million as compared with $32.2 million as of April 30, 2003. The
increase is predominantly due to growth in the business, an increase in receivables from franchisees and the timing of funds
transferred to Cendant. Other long-term assets increased with our additional investment in equipment, development advances and
financing of new territories. Notes receivable from franchisees are generally four years in duration and are due in annual
installments of principal and interest on February 28 of each year. These notes generally bear interest at rates between 8% and
                                                         th


12% and are secured by the underlying franchise and the personal guarantee of the individual owners of each franchise.

         Over the next three to five year period, our financial targets include growing our net revenues by approximately 14% to
19%, our income from operations as a percentage of net revenues by approximately 50 to 100 basis points and our earnings per
share by approximately 20% to 25%, in each case, on an annual basis. We plan to achieve this growth by pursuing the strategic
initiatives of our growth strategy, as discussed in this prospectus. We intend to fund such growth from cash generated from our
operations and our ability to utilize our new credit facility. Given that our business has historically generated significant cash, as
evidenced by the $63.6 million of cash that we generated from operating activities in 2004, and the availability of borrowings under
our revolving credit facility of $100.0 million, we currently believe that we have sufficient liquidity and financial resources to fund
our operations, including the payment of quarterly dividends of approximately $2.6 million and the obligations associated with our
new indebtedness. The preceding forward-looking statements are based on management estimates, currently available
information and assumptions which management believes to be reasonable. Forward-looking statements are inherently subject to
significant economic, competitive and other uncertainties and contingencies, many of which are beyond the control of
management. We caution that these statements may not be indicative of future performance and we can provide no assurance
that such targets will be achieved. Actual results may differ materially from those expressed or implied in the forward-looking
statements. See ―Special Note Regarding Forward-Looking Statements‖ and ―Risk Factors.‖

New Indebtedness

       Concurrently with the closing of this offering, we will enter into a five-year revolving credit facility with a syndicate of
financial institutions, including affiliates of several of the underwriters of this offering. The revolving credit facility will provide for
borrowings of up to $100.0 million which will bear interest at floating rates tied to either the Prime rate or LIBOR. Borrowings will
be available for general corporate purposes, working capital and potential acquisitions. To the extent we complete any
acquisitions, we may require additional debt or equity financing to meet our capital needs.

       Our new credit facility will contain financial covenants requiring us to maintain a maximum consolidated leverage ratio of
3.25 to 1.00 through April 30, 2005, 3.00 to 1.00 from May 1, 2005 to April 30, 2006 and 2.50 to 1.00 from May 1, 2006 to maturity
and to maintain a minimum consolidated fixed charge coverage ratio of 3.00 to 1.00 through April 30, 2006 and 3.50 to 1.00 from
May 1, 2006 to maturity. In addition, the credit facility will contain various customary restrictive covenants that limit our and our
subsidiaries’ ability to, among other things, (i) incur additional indebtedness or guarantees, (ii) create liens or other encumbrances
on our property, (iii) enter into a merger or similar transaction, (iv)

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sell or transfer any of our property except in the ordinary course of business and (v) make dividend and other restricted payments.
Our new credit facility will limit the maximum amount of our cash dividends to 30% of our cumulative consolidated net income for
the period commencing on May 1, 2003 and ending on April 30 of the fiscal year preceding the year in which such cash dividends
are paid. We do not believe that this limitation contained in the debt agreements will limit our ability to pay our proposed quarterly
cash dividend of $0.07 per share of common stock in accordance with our stated dividend policy, even assuming the exercise in
full of the underwriters’ option to purchase additional shares and exercise of all outstanding options.

       Concurrently with the closing of this offering, we also intend to issue $175.0 million aggregate principal amount of floating
rate notes. The notes will bear interest at 1.5% above the three-month LIBOR, and the term of the notes will be five years. The
agreement governing the notes will contain substantially similar covenants to those contained in the new credit facility, as well as
customary event of default provisions and other terms and conditions that are consistent with those contained in similar debt
obligations of issuers with a credit quality similar to ours. The entire proceeds from the sale of the notes will be used to fund the
cash portion of the special dividend to be paid to Cendant. The purpose of the special dividend is to maximize the consideration to
Cendant in connection with the disposition by Cendant of its entire ownership interest in Jackson Hewitt through this offering.

       Our liquidity position may be negatively affected by unfavorable conditions in the market in which we operate. In addition,
our inability to generate sufficient profits during tax season may unfavorably impact our funding requirements.

Changes in Accounting Policies and Recently Issued Accounting Pronouncements

      Our changes in accounting policies and recently issued accounting pronouncements are reflected in Note 2 to our
consolidated financial statements.

Critical Accounting Policies

       In presenting our financial statements in conformity with generally accepted accounting principles, we are required to make
estimates and assumptions that affect the amounts reported therein. Events that are outside of our control cannot be predicted
and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable
change to current conditions, it could result in a material adverse impact to our consolidated results of operations, financial
position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the
most appropriate at that time. The following accounting policy may affect reported results resulting in variations in our financial
results both on an interim and fiscal year end basis.

Goodwill

        We have reviewed the carrying value of our goodwill as required by SFAS No. 142, ―Goodwill and Other Intangible Assets,‖
by comparing the carrying value of our reporting units to their fair value and determined that the carrying amount of our reporting
units did not exceed their respective fair value. When determining fair value, we utilized various assumptions, including projections
of future cash flows. A change in these underlying assumptions will cause a change in the results of the tests and, as such, could
cause fair value to be less than the respective carrying amount. In such event, we would then be required to record a charge,
which would impact earnings. We will continue to review the carrying value of goodwill for impairment annually, or more frequently
if circumstances indicate impairment may have occurred. An adverse change to our business will impact our consolidated results
and may result in an impairment of our goodwill. The aggregate carrying value of our goodwill was approximately $392.4 million at
April 30, 2004. See Note 4 to our consolidated financial statements for more information on goodwill.

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                                                               BUSINESS

Overview

       Jackson Hewitt is the second largest paid tax return preparer in the United States based on the number of tax returns filed
by paid preparers, with a nationwide network comprised of 4,330 franchised offices and 605 company-owned offices as of April
30, 2004. We have grown rapidly, more than doubling the number of offices in our network since 1998 and our annual volume of
tax returns prepared since 1999. In 2004, our network filed 3.1 million tax returns, an increase of 11% as compared to 2003.
Despite our growth and industry position, we estimate that the 3.1 million tax returns our network prepared in 2004 represented
less than 5% of the total paid tax return preparer industry in the United States.

       In 2004, our net revenues were $205.6 million, which were generated from revenues from franchisees including royalty,
marketing and advertising fees and other revenues (43% of net revenues), service revenue including tax return preparation and
related service fees provided at company-owned offices (28% of net revenues), and fees and other revenue received from
financial institutions in connection with our facilitation of the sale of financial products (29% of net revenues). Because of the
higher profit margins inherent in the franchise model, our franchise revenues contribute a disproportionately higher percentage of
our income from operations than those of our company-owned offices.

       At the core of our business strategy is the growth and development of our franchise system. Royalty and marketing and
advertising fees are, collectively, our largest and fastest growing source of revenue. In 2004, revenues from royalty and marketing
and advertising fees were $75.9 million, an increase of approximately 19% compared to 2003. We earn royalty and marketing and
advertising fees based on our franchisees’ revenue, for which we provide support and services, as well as national and regional
advertising programs, designed to increase their revenues. Our franchise model enables us to grow more quickly with less capital
investment and lower operating expenses than if we directly operated all of the offices in our network. Tax returns filed by our
franchised offices represented 87% of the total number of tax returns filed by our network in 2004.

      Complementing our franchise system are our company-owned offices. Increases in revenues and earnings of our
company-owned offices are derived from growth in our operations and through our acquisition of independent tax return
preparation businesses. Service revenue from our company-owned offices was $56.6 million in 2004, an increase of
approximately 17% compared to 2003. Company-owned offices provide us with the opportunity to demonstrate the benefits of new
products and develop and implement new initiatives that may be made available to our franchise system. Tax returns filed by our
company-owned offices represented 13% of the total tax returns filed by our network in 2004.

        Annual tax refunds represent an important source of funds for many of our customers. As a result, they typically file their tax
returns early in the tax season, shortly after W-2s are available in order to receive their tax refunds as quickly as possible. In 2004,
approximately 75% of our customers filed their tax returns by the end of February. We refer to these customers as early-season
filers. To meet the needs of early-season filers, we provide convenient tax return preparation services and electronic filing of tax
returns, and we facilitate the sale of financial products that accelerate the availability of funds to them.

       Additionally, we earn revenues from financial institutions in connection with our facilitation of the sale of financial products to
our customers. In 2004, our customers purchased nearly 2.8 million financial products in conjunction with having their tax returns
prepared by our network, approximately 16% more than in 2003. The substantial majority of our financial product revenues comes
from fees and other revenue related to refund anticipation loans and accelerated check refunds provided by

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financial institutions to our customers. These products enable customers to have access to funds more quickly than if they filed
their tax returns on their own and waited to receive a tax refund directly from the IRS. These products also enable customers to
have their tax returns prepared by trained preparers with no cash outlay at the time of filing. We continue to develop and offer
additional products designed to attract and retain customers and generate incremental revenue. Since 2000, we have introduced
a number of financial products, including the Jackson Hewitt CashCard , HELP , Gold Guarantee and Money Now .
                                                                           ®          SM                ®                   SM




Industry Overview

        According to the IRS, approximately 131 million individual tax returns were filed in 2003. Of these tax returns, approximately
59%, or 77 million tax returns, were prepared with the help of a paid tax return preparer. The paid tax return preparer industry has
grown over time increasing at a compound annual growth rate of approximately 4% from 1997 to 2003 and increasing as a
percent of total returns filed from approximately 50% to 59% over the same period. In 2003, H&R Block was the largest paid tax
return preparer, with an approximate 21% share, and Jackson Hewitt was the second largest, with an approximate 4% share. We
believe that no other preparer has greater than a 1% share. Excluding H&R Block and us, the paid tax return preparer industry,
representing approximately 58 million annual tax returns, is highly fragmented and consists of tens of thousands of paid tax return
preparers, including national and regional tax return preparation services, accountants, attorneys, small independently-owned
companies and financial service institutions that prepare tax returns as an ancillary part of their business. We believe we are well
positioned to increase our share of the paid tax return preparer segment because of our strong brand name, our franchise model,
our electronic filing capability and our ability to offer our customers fast and convenient means of obtaining funds associated with
their tax refunds.

       The increasing use of electronically-filed tax returns has been a significant development for taxpayers and the tax return
preparation industry. To reduce administrative costs, the IRS has set a target of increasing the number of tax returns filed
electronically to 80% by 2007. Through April 30, 2004, 49% of tax returns were filed electronically. Our network filed 88% of our
tax returns electronically in 2004, making us a leader in this area. We believe that taxpayers have an incentive to file electronically
because of the associated benefits, including acknowledgment of receipt of the filing, better accuracy and faster refund
processing.

     The industry has also benefited from year-over-year price increases. Our average revenue per customer has grown at a
compound annual growth rate of 7% since 1999, which we believe is similar to pricing growth in the overall industry.

Customer Segments

       The table below shows the breakdown of tax returns filed in 2003 by adjusted gross income, or AGI, for all individual tax
returns in the United States and tax returns filed by us.
                                                                    Total U.S. Individual                        Tax Returns Filed by
                                                                        Tax Returns                                Jackson Hewitt

Less than $29,999                                                                            53 %                                        73 %
$30,000 to $49,999                                                                           19                                          16
$50,000 or more                                                                              28                                          11

Total                                                                                       100 %                                       100 %



      We segment our customers based on whether they file their tax return in the early season or late season. In 2004,
approximately 40% of all tax returns filed with the IRS were filed between January 1st

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and February 27th, representing the early-season filers. Early-season filers generally view their tax refunds as an important
source of funds and file their tax returns shortly after receiving their W-2s in order to receive their refunds as quickly as possible.

         In 2004, approximately 75% of our customers were early-season filers, who tend to have a lower AGI than our late-season
filers. In 2004, 97% of our early-season filers were eligible to receive a refund. Reflecting their focus on speed, approximately 82%
of our early-season filers in 2004 purchased a financial product that accelerated their ability to access the funds associated with
their tax refunds. Our late-season filers tend to have a higher AGI on average and attribute less value to the early receipt of their
refunds, leading to a lower penetration rate for financial products; approximately 42% of our late-season filers purchased a
refund-based financial product in 2004. Late-season filers also tend to have more complex tax return preparation needs, which
typically generate higher tax return preparation fees.

Industry Opportunity

       Our network prepared over 3.1 million tax returns in 2004, making our network the second largest tax return preparation
service in the United States. Despite our strong industry position, we believe there are significant opportunities for us to grow. The
tax returns our network prepared in 2003 represented only 2% of the total individual tax returns in the United States and less than
4% of the total tax returns filed by paid tax return preparers in 2003.

       In 2003 and 2004, approximately 89% of our customers had an AGI of less than $50,000. In 2003, the 2.5 million tax
returns prepared by our network for this segment represented approximately 3% of all tax returns filed by individuals with less than
$50,000 AGI in the United States, representing a significant opportunity. We also define our opportunity in terms of the geographic
reach of our existing network. We have divided the country into approximately 4,500 territories, each consisting of approximately
50,000 people. As of April 30, 2004, our network had offices operating in approximately 2,700 territories, leaving the remaining
40% of territories available to expand our network. In 2003, of the 77 million tax returns prepared with the help of a paid tax return
preparer, only 23 million tax returns, or 30% of the paid tax preparer industry, were filed by individuals residing within territories in
which we operate.

Our Growth Strategy

        Our objective is to grow our revenues and net income by pursuing the following six strategic initiatives:

         increase the number of offices in our network;

         increase the number of tax returns filed by our existing offices;

         increase our profitability by using our franchise model;

         increase the profitability of company-owned offices;

         continue to focus on offering innovative financial products; and

         expand into new markets.

Increase the Number of Offices in Our Network

        The core element of our growth strategy is to expand our network. Over the past six years, we have increased the number
of offices in our network at a compounded average annual rate of 16%, from approximately 2,000 offices in 1998 to 4,935 offices
as of April 30, 2004.

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       Increase penetration of existing markets . Within territories our network currently serves, we believe we have the
opportunity to increase the number of offices in our network significantly without saturation. In 2004, our existing territories were
largely under-penetrated, with only 21% of our territories having reached our target of at least three offices per territory. On
average, we had 1.8 offices per territory in 2004.

        Expand our presence in the retailer channel . We also intend to expand our network through our relationships with
national and large regional retailers and shopping malls, including Wal-Mart Stores, Inc., K-Mart Corp., Simon Property Group,
General Growth Property, Inc., The Kroger Co., Rent-A-Center, Inc. and other chains, whose customer demographics significantly
overlap with ours. Our agreements with these retailers allow Jackson Hewitt offices to be located within the retail stores in
high-traffic areas during the tax season at relatively modest costs. During 2004, our network had approximately 1,400 offices in
retailer locations nationwide, including approximately 1,000 in Wal-Mart stores. We recently renewed our two-year agreement with
Wal-Mart allowing us to continue operating office locations within their retail stores. We continually pursue similar opportunities
with other retailers.

      Franchise sales . We expect to increase the number of our franchised offices each year through the sale of new
franchises. We divide the country into specific territories, which are geographic areas generally containing 50,000 people. W e
have identified a total of approximately 4,500 territories in the United States of which approximately 40%, or 1,800 territories,
remain available to expand our network. We focus primarily on selling new territories to high-quality franchisees already in our
franchise system and secondarily to tax preparers or entrepreneurs new to our franchise system. Over the past three years, we
sold an average of over 200 territories per year.

       Conversions . Conversions of existing tax return preparers to Jackson Hewitt offices present the opportunity for
established third-party tax return preparation businesses to join our franchise system in return for a conversion payment. Because
the paid tax return preparer industry is large and highly-fragmented, we believe that there are opportunities to convert high-quality
tax return preparation businesses to our franchise system. Conversions involve both independent tax return preparers joining our
franchise system directly and our franchisees acquiring established high-quality independent tax return preparers in their territory.
Through conversions, we are able to add a mature base of customers to our franchise system, thereby accelerating the growth in
the number of tax returns prepared as compared to the growth generated during the ordinary maturation period of new offices.
Conversions added 77 offices and approximately 59,000 tax returns in 2004 to our network.

       Acquisitions . Acquisitions present the opportunity for us to add established third-party tax return preparation businesses
to our company-owned office network. Acquisitions in 2004 added six offices and approximately 18,000 tax returns to our
operational results.

Increase the Number of Tax Returns Filed by Our Existing Offices

       We intend to increase the number of tax returns filed in our network’s existing offices. In 2004, we increased same-store tax
return volume by 5%, despite limited growth in the overall market for tax returns filed by paid tax return preparers. We attribute this
growth to office maturation, operational improvements and improved marketing efforts, including sponsorships and increased
marketing to late-season filers.

       Our experience indicates that mature offices generally outperform newer offices. More mature offices increase the number
of tax returns prepared by building brand awareness and customer recognition in a given location, improving tax preparer
productivity, reinvesting in and expanding office operations and capturing new and repeat customers. However, our network has
yet to achieve its full potential. For the 2004 tax season, our network opened 1,104 new offices and 57% of our network’s

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current offices have been a part of our network for fewer than five years. The following chart identifies the average number of tax
returns prepared by offices in our network in 2004 at various maturity levels:
                                                                                     Offices as a %
                                                                                        of Total                     Average Number
                                                                                        Jackson                       of Tax Returns
Number of Tax Seasons in our Network                                                 Hewitt Offices                 Prepared per Office

1 year                                                                                    22%                              284
2 years                                                                                   15%                              434
3 years                                                                                   10%                              536
4 years                                                                                   10%                              636
5+ years                                                                                  43%                              833

       Customer acquisition . We believe we can acquire both early- and late-season customers by focusing on hourly workers,
large employers and specific occupational categories that fit our core demographic. While our core customers remain
early-season filers, we intend to increase our efforts to reach more late-season filers. In 2004, our network prepared
approximately 760,000 tax returns during the period from March 1st through April 15th, as compared to approximately 708,000 tax
returns for late-season filers during the comparable period in the prior year. In addition to improving the overall volume of tax
returns prepared per office, increased activity in the late season will also help to more fully utilize capacity.

       We intend to increase our share of the tax preparation industry by focusing our advertising and marketing efforts on
improving the recognition of the Jackson Hewitt brand name with targeted national, regional and local marketing. Our marketing
efforts include national advertising and sponsorships, regional advertising and partnering with large, high-traffic retailers to drive
customer awareness and increase customer traffic. National advertising focuses on both early-season and late-season filers
through network television advertisements, direct-to-consumer marketing and sponsorships of sports organizations whose fan
base closely mirrors our core customer demographic group, including the Professional Bowlers Association and the Roush Racing
team, a participant on the NASCAR racing circuit. At the regional level, we customize marketing plans with franchisees to target
our message to key markets, using local and regional television, radio and outdoor advertising.

      Customer retention . We also focus on retaining existing customers who have previously used our services and products.
Our customer retention efforts include enhancing our product offering, improving customer service, maintaining office appearance
and providing selected product offerings to returning customers, such as HELP.

       Improve operational efficiencies . We intend to continue to make operational and functional improvements to increase
productivity, capacity and the volume of tax returns prepared. Our managers assist our franchisees in office site selection to
maximize traffic flow and improve operations and managerial decision-making. Functional improvements include upgraded system
performance to increase productivity, management tools to increase the volume of tax returns prepared and operational
efficiencies and improved tax return preparer training to increase retention of seasonal tax preparers and enhance quality of
service.

Increase Our Profitability by Using Our Franchise Model

       Our franchise model enables us to grow more quickly with less capital investment and lower operating expenses than if we
directly operated all of the offices in our network. The franchise model has an inherently higher profit margin than that of our
company-owned offices, as our existing infrastructure permits additional franchise growth without significant additional fixed cost
investment.

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We therefore intend to increase profitability by growing the revenue we generate through the franchise system by adopting
management initiatives that promote growth and improving our technology infrastructure, product offering and marketing efforts.
These improvements have generated significant increases in franchisees’ revenues. In 1999, only 15 of our franchisees generated
more than $1 million in revenues. In 2004, 94 franchisees generated more than $1 million in revenues.

Increase the Profitability of Company-Owned Offices

       We intend to improve the profitability of our company-owned offices by focusing on growth and by taking advantage of our
previous investments in infrastructure. Our company-owned operations strategy began with the consolidation of some of our
largest franchisees and expanded as we grew our share through the acquisition and integration of independent tax preparation
businesses. In 2002, we acquired TSA to better focus on growth and to improve cost management. TSA is a wholly owned
subsidiary of Jackson Hewitt Inc., which is a wholly owned subsidiary of Jackson Hewitt Tax Service Inc. While we will continue to
pursue acquisition opportunities for our company-owned office network, we are focused primarily on organic growth through the
opening of new company-owned offices within existing territories as well as increasing office productivity. For example, in 2002
and 2003 we added an average of 45,000 tax returns through acquisitions. In contrast, in 2004, we acquired only approximately
18,000 tax returns, and added 82 offices, representing an increase of 16% in the number of offices.

Continue to Focus on Offering Innovative Financial Products

       We continue to develop and offer additional products designed to attract and retain customers and generate incremental
revenue. The primary financial products we offer are refund anticipation loans, accelerated check refunds and assisted direct
deposits, which help our customers obtain access to funds more quickly than if they filed tax returns on their own. We also
develop and introduce innovative products—including the Jackson Hewitt CashCard, a MasterCard-branded debit card, and the
Holiday Express Loan Program, or HELP which are unique to the industry. Our CashCard provides our customers, many of whom
do not have bank accounts, with the convenience and safety of a debit card that they can use at thousands of locations
nationwide. HELP provides selected customers with the opportunity to receive loans during the November and December holiday
shopping season, well in advance of their tax refund. In addition, we have introduced other products including Gold Guarantee
and Money Now. In 2004, our customers purchased nearly 2.8 million financial products in conjunction with having their tax
returns prepared by our network, representing approximately 16% more products than were purchased in 2003.

Expand into New Markets

       One of our long-term strategies is to expand into markets with income tax systems similar to the United States’, such as
Canada and Puerto Rico. We also plan to develop products and services to capture customers in the growing online segment.
These initiatives are at an early stage and we continue to review them in light of changing business conditions. We may change
our plans, and future developments could differ from those we intend or expect to occur.

Business Description

       We generate revenues from fees paid by our franchisees, service revenue earned at company-owned offices and revenue
earned in connection with our facilitation of the sale of financial products. Our total revenues were $205.6 million in 2004. Royalty,
marketing and advertising fees paid by our franchisees and other revenues, collectively, were $88.4 million in 2004, or 43% of our
net revenues. Service revenue, including tax return preparation and related services revenues provided at our company-owned
offices was $56.6 million in 2004, or 28% of our net revenues. Fees and other revenue received from financial institutions in
connection with financial products were $60.6 million in 2004, or 29% of our net revenues.

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Tax Return Preparation Services

       We provide our customers with fast and accurate tax return preparation services and electronic filing. We provide one of the
most comprehensive computerized tax return preparation services in the industry and are capable of filing any individual tax
return. Our tax return preparation process is designed to ensure accuracy at each step. We use our proprietary software, ProFiler,
which features built-in error detection, to prepare customers’ tax returns. We also check tax returns through systems at our
corporate headquarters before electronically filing our customers’ tax returns with the IRS and the appropriate state departments
of revenue.

       We generate revenue from fees for preparing tax returns and electronically filing tax returns either directly, for those tax
returns prepared in company-owned offices, or indirectly, in the form of royalty payments for tax returns prepared at our franchised
offices.

Financial Products

        We facilitate the sale of the financial products listed below that enable our customers to have access to funds more quickly
than if they filed their tax returns on their own and waited to receive a refund directly from the IRS. We enable our customers to
have their tax returns prepared by trained tax return preparers with no cash outlay at the time of filing. To obtain these products,
our customers pay an application fee to our franchisees and company-owned offices, a fee to the financial institution providing the
financial product and, in the case of a refund anticipation loan, a finance charge.

        We facilitate the sale of the following refund-based financial products:

         Refund Anticipation Loan . Through this program, our customers may apply for loans in an amount up to $7,000,
          secured by their federal income tax refund. The borrowed funds are generally disbursed to customers within one to three
          days from the time their tax returns are filed with the IRS. In 2004, approximately 35% of our customers purchased a
          refund anticipation loan. This percentage has grown from 27% in 2001.

         Money Now .         Money Now allows qualifying customers to receive an advance of up to $730 on their refund
          anticipation loan on the same day as their tax returns are filed in anticipation of the receipt of their refund anticipation
          loan or tax refund.

         Accelerated Check Refund . This product is not a loan and is designed for our customers who wish to receive their
          federal and state income tax refunds quickly but do not elect to receive the funds immediately. Our customers choose to
          have their tax refunds deposited by the taxing authorities directly into bank accounts established for this purpose by a
          financial institution, generally allowing us to dispense bank checks directly to the customers within two to three weeks of
          filing their tax returns. In 2004, approximately 32% of our customers purchased an accelerated check refund. This
          percentage has grown from 30% in 2001.

         Assisted Direct Deposit . This product is not a loan and is designed for customers who have their own bank
          accounts, but do not wish to make an up-front cash payment for tax return preparation. We facilitate the direct deposit of
          their tax refunds, net of any fees, into their checking or savings accounts.

        We also facilitate the sale of the following financial products:

         HELP . Through this product, qualifying customers receive an unsecured $575 loan during the November and
          December holiday shopping season provided by financial institutions.

         Jackson Hewitt CashCard . We market this MasterCard-branded debit card, which our customers may accept as an
          alternative to a check when they choose the refund anticipation loan or accelerated check refund products. Customers
          may use the card to obtain cash at an

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           automated teller machine or to make retail purchases at any location that accepts MasterCard. Customers pay an
           upfront fee, and transaction and other fees to the financial institution providing this product.

         Gold Guarantee . Gold Guarantee is an extended warranty that extends our basic guarantee which covers only
          penalties and interest. Under the Gold Guarantee, if our tax return preparer makes an error, we pay for any additional
          taxes owed up to $6,000. The guarantee extends for a three-year period subsequent to filing.

      Receivables from the financial institutions that provide financial products to our customers are recorded in our wholly owned
subsidiary, Hewfant, Inc.

Franchise Operations

Franchise Development

      Our historical growth has been largely attributable to the expansion of our franchise system. In 2004, we sold 240 new
franchise territories and increased the number of our franchised offices by 554.

       We grow our franchise operations through the development of our existing franchisee relationships and through the
selective recruitment of new franchisees. In addition, we are actively engaged in an effort to add new franchisees through our
conversion program.

        We believe that our franchise arrangements provide incentives to franchisees to increase the number of offices in their
territory, because we charge an initial franchise fee of only $25,000 for a territory and do not charge this fee again when a
franchisee adds new offices within its territory. In addition, our franchise agreement establishes performance standards for
franchisees, including the requirement that they prepare at least 500 tax returns per territory in their second year as a franchisee,
at least 600 tax returns in their third year and at least 1,000 tax returns in their fifth year and thereafter. These performance
standards give our franchisees an incentive to invest in their growth and increase their market penetration.

       Conversions of established third-party tax return preparation businesses to Jackson Hewitt offices present the opportunity
for an established tax return preparer to join our franchise system in return for a conversion payment. Because the paid tax return
preparer industry is large and highly-fragmented, we believe that there are opportunities to convert high-quality, independent tax
return preparation businesses to our franchise system. Conversions involve both independent tax return preparers joining our
franchise system directly and our franchisees acquiring established high-quality, independent tax return preparers in their territory.
Through conversions, we are able to add a mature base of customers to our franchise system, thereby accelerating the growth in
the number of tax returns prepared as compared to the growth generated during the ordinary maturation period of new offices.

       We provide the converted franchisee with investment capital to cover the costs of conversion and to grow their current tax
return base. For franchisees who enter our network through our conversion program, we typically waive the application and initial
franchise fee. The investment capital is provided to them through our acceptance of a note from the new franchisee that will be
forgiven if the converted franchisee meets certain performance-based criteria. Although conversions are typically completed
without a one-time franchise fee, the accelerated time to maturity more than offsets the foregone $25,000 initial franchise fee and
the investment capital we provide them. In 2004, we provided investment capital for conversions of $1.6 million.

       The strength of our existing franchise system enables us to selectively recruit new franchisees. In 2004, approximately 60%
of our sales of territories were sold to our existing franchisees and the remaining territories were sold to new franchisees. For our
recruitment of new franchisees, we advertise in select publications that target entrepreneurs who are interested in new franchise

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opportunities. We also respond to inquiries from potential franchisees who contact us through our website or are referred to us by
our existing franchisees. In 2004, Entrepreneur magazine named us as one of the top five franchise opportunities.

Franchise Fees

      Upon executing the franchise agreement, the franchisee is required to pay an application fee of $500 and an initial
franchise fee of $25,000. We will, at our discretion, finance a portion of the initial franchise fee. We currently offer financing for our
franchisees at rates ranging from an 8% annual percentage rate to a 12% annual percentage rate on the amount borrowed by the
franchisee, depending on the creditworthiness of the franchisee.

      In addition to the initial franchise fee and other start-up expenses, our franchise agreements require new franchisees to pay
us royalties equal to 15% of their revenue (12% for most franchises who joined our network before 2000 and who signed a new
franchise agreement under our early renewal program) and marketing and advertising fees equal to 6% of their revenue. We also
charge franchisees a $2 fee for each tax return that they file electronically with the IRS.

       Pursuant to our franchise agreements, we may spend in any fiscal year an amount greater or less than the aggregate
contributions of marketing and advertising fees for that fiscal year. We may carry over unused marketing and advertising fees from
year to year, and we are under no obligation to refund any unspent marketing and advertising fees to our franchisees if their
franchise agreements terminate or expire.

The Franchise Agreement

        Under the terms of our franchise agreement, each franchisee receives the right to operate Jackson Hewitt Tax Service
offices within their designated geographic territory. Franchisees are permitted to operate as many offices within a specified
territory as they choose. The term of the franchise agreement is 10 years. In 1999 and 2000, we offered our franchisees the
opportunity to renew their franchise relationship with us before their franchise agreement expired. In this early renewal program,
93% of our franchisees entered into our new franchise agreement for a new 10-year term, and, less than 1% of our franchise
agreements come up for renewal before 2008.

       We require our franchisees to maintain quality standards in their choice of office location, office appearance, equipment and
computer hardware, customer service and minimum opening hours. Each franchisee must obtain and continuously maintain the
proper permits and certificates required by law, including an Electronic Filing Identification Number required in order to file federal
tax refunds electronically. We distribute a business manual to our franchisees describing standards of business conduct and
customer service. We monitor the quality of service, office appearance, accuracy of tax returns and training of personnel for all
Jackson Hewitt offices, through our staff of ten regional directors and by sampling tax returns.

Franchisee Support

       We provide our franchisees with services designed to increase their revenues, including training, administrative support,
access to our proprietary ProFiler tax return preparation software and tax refund-related financial products, product development,
quality assurance, toll-free tax preparer support service and a dedicated field staff to advise and monitor their business. We also
provide our franchisees assistance with their marketing programs, the advantage of being linked to a toll-free office locator service
and information based on our market research. We believe that our franchise system gives our franchisees a competitive
advantage over other local and regional tax services in their market.

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       We believe our proprietary ProFiler software and support enable our franchisees to retain existing customers once
marketing efforts have helped to bring them into their offices. The technological backbone of our operating system is our
proprietary ProFiler software, which offers both an interview-based and a forms-based tax return preparation system. The
forms-based aspect of ProFiler allows for easier integration of acquired and converted tax return preparation businesses and
allows our network to attract experienced tax return preparers as employees. ProFiler also enables franchised office managers to
view reports that allow them to better manage the office. Developing, monitoring and updating our software are all services we
provide to our franchisees.

       We offer extensive training courses including initial franchisee training and ProFiler training for new franchisees as well as
more advanced training for general managers of our large operators. Throughout the year, we offer numerous workshops that
address such topics as how to train tax return preparers, tax updates, recruiting and staffing, new product updates and local
advertising. We prepare and update our course materials as necessary. Our training department develops computer-based
training courses on a number of tax-related topics and distributes them to our franchisees. Additionally, we provide each
franchisee with field support to aid in site selection, market analysis and business strategies. We also provide access to a
franchise service manager at our corporate headquarters who is available to provide information on research, updates and
upcoming events. By joining our network, a franchisee is also given the opportunity to benefit from our buying power through our
vendor relationships.

       Selected franchisees are members of our Preferred Customer Group, which includes franchisees who are generally our
largest and fastest growing and operate many franchised offices in multiple territories. In addition to providing these franchisees
with preferential support services, we recognize them publicly for their continued growth and support of the system and look to
them for input with respect to the services and products we provide or should provide in the future.

      To promote compliance with franchise agreement, we audit franchisees on a random basis to ensure compliance with our
operating manuals.

Office Site Selection

       Offices in our network are typically 600 to 1,050 square feet and are able to accommodate anywhere from three to ten work
stations. As with any retail operation, the location of a tax return preparation office is vital to its success. For this reason, we
maintain the right to approve the site selection of all franchised offices and utilize specific criteria to evaluate potential office
locations. In particular, we expect our network’s offices to:

         be highly visible from a major intersection or busy street or be located within a highly-trafficked retail store;

         have high levels of automobile or foot traffic; and

         be close to shopping malls or other major food or clothing retailers, preferably discounters.

       Our network expansion and profitability have benefited from our relationships with national and large regional retailers and
shopping malls, including Wal-Mart Stores, Inc., K-Mart Corp., Simon Property Group, General Growth Property, Inc., The Kroger
Co., Rent-A-Center, Inc. and other chains, whose customer demographics significantly overlap with ours. Our agreements with
these retailers allow Jackson Hewitt offices to be located within the retail stores and shopping malls in high-traffic areas during the
tax season at relatively modest costs. During 2004, our network had approximately 1,400 offices in retailer locations nationwide,
including approximately 1,000 in Wal-Mart stores. We recently renewed our two-year agreement with Wal-Mart allowing us to
continue operating office locations within their retail stores.

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Marketing and Advertising

       In 2004, we incurred $29.5 million in marketing and advertising expense, including national, regional and local campaigns to
increase brand awareness and attract both early-season and late-season filers. Our budget is funded by both franchisee and
company contributions. Our marketing efforts include national advertising and sponsorships, regional advertising and partnering
with large, high-traffic retailers to drive customer awareness and increase customer traffic. National advertising focuses on
early-season and late-season filers through network television advertisements, direct-to-consumer marketing and sponsorships of
sports organizations whose fan base closely mirrors our core customer demographic group, including the Professional Bowlers
Association and the Roush Racing team, a participant on the NASCAR racing circuit. At the regional level, we customize
marketing plans with franchisees to target our message to key markets, using local and regional television, radio and outdoor
advertising.

Intellectual Property

       We regard our intellectual property as critical to our success, and we rely on patent, trademark, copyright and trade secret
laws in the United States to protect our proprietary rights. We pursue the protection of our trademarks by applying to register the
trademarks in the United States. In addition, we seek to protect our proprietary rights through the use of confidentiality agreements
with employees, consultants, advisors and others.

        We have obtained federal trademark registration of a number of marks, including Jackson Hewitt Tax Service, Gold
Guarantee, Get More in Return, Jackson Hewitt CashCard, ProFiler and SuperFast Refunds. We have also applied for federal
trademark registration of a number of marks, including HELP and Holiday Express Loan Program. We also assert a common law
right to Money Now .

Personnel

      As of April 30, 2004, we employed 345 full-time employees, consisting of 87 employees at our corporate headquarters
located in Parsippany, New Jersey, 145 employees at our technology facility located in Sarasota, Florida, 94 employees at our
company-owned offices and 19 other full-time employees. In addition, our company-owned offices employed approximately 6,000
seasonal employees during the 2004 tax season.

Competition

        Our business focuses on two customer bases, the consumer of tax return preparation services and the individual or other
entity ready to operate a Jackson Hewitt franchise. We believe the basis for competition for consumers of our tax return
preparation services includes product mix, price, service and a reputation for quality. Our network competes with H&R Block,
which is larger and more widely recognized than us, and with smaller independent tax return preparation services, small national
and regional franchisors, regional tax return preparation businesses, regional and national accounting firms and financial service
institutions that prepare tax returns as part of their businesses. We also face competition from the Free File Alliance, a consortium
of the IRS and online preparation services that provides free online tax preparation and filing for selected filers and volunteer
organizations that prepare tax returns at no cost for low-income taxpayers. Our ability to compete in the tax return preparation
business depends on the geographical area, specific site location, local economic conditions, quality of on-site office
management, the ability to file tax returns electronically with the IRS and our ability to facilitate our customers’ obtaining financial
products. We believe that customers choose our network’s offices because:

         of our convenient locations;

         they wish to obtain funds associated with their tax refunds quickly;

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         they prefer not to prepare their own tax returns; and

         they are unwilling to pay the higher fees charged by most accountants or tax attorneys.

       As the second largest franchisor of branded tax return preparation services, we seek to grow our system of franchised
offices. Our competition for tax preparation franchises is relatively limited, with only one relatively small franchisor competing with
us directly to attract franchisees on a national level. We believe that H&R Block, the largest tax franchisor, does not currently
compete with us for new franchisees or franchised office locations because it currently is not selling new territories. We also face
competition from regional franchisors of tax return preparation services. To some extent, we also compete with franchisors of
other high-margin services that attract entrepreneurial franchisees. We believe franchisees are attracted to us because we:

         are a well-known, national franchise;

         facilitate the sale of financial products sought by customers;

         offer low-cost financing and start-up costs are relatively low;

         have a reputation for quality;

         provide advertising support; and

         have been recognized as an outstanding franchise opportunity by Entrepreneur magazine.

Facilities

       All of the offices in our company-owned network are leased. In connection with this offering, we will enter into a sublease
agreement with Cendant for 38,886 square feet for our corporate headquarter space in Parsippany, New Jersey and a sublease
assignment and assumption agreement for our 27,000 square foot technology facility in Sarasota, Florida. See ―Certain
Relationships and Related Transactions—Transitional Agreement.‖

Regulation

      We and our franchisees must comply with laws and regulations relating to our business. Regulations specific to our
business are described below.

Tax Return Preparation

       Federal legislation requires tax preparers to, among other things, set forth their signatures and identification numbers on all
tax returns prepared by them, and retain for three years all tax returns prepared. Federal laws also subject tax preparers to
accuracy-related penalties in connection with the preparation of tax returns. Preparers may be enjoined from further acting as tax
preparers if they continually or repeatedly engage in specified misconduct.

      With certain exceptions, the IRS prohibits the use or disclosure by income tax preparers of income tax return information
without the prior written consent of the taxpayer. In addition, the Gramm-Leach-Bliley Act and related Federal Trade Commission
regulations require income tax return preparers to adopt and disclose consumer privacy policies, and provide consumers a
reasonable opportunity to opt out of having personal information disclosed to unaffiliated third parties for advertising purposes.
Some states have adopted or proposed more strict opt-in requirements in connection with use or disclosure of consumer
information.

        The IRS requires any tax return preparer with respect to any tax return or claim for refund who fails to comply with due
diligence requirements imposed by regulations with respect to determining eligibility for or the amount of the earned income tax
credit to pay a penalty of $100 for each failure. We have put systems and processes in place to comply with this due diligence
obligation.

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       Many of our income tax courses are regulated and licensed in select states. Failure to obtain a tax school license could
affect our revenues and limit our ability to develop interest in tax return preparation as a career or obtain qualified tax return
preparers.

Financial Product Regulation

       Federal statutes and regulations also regulate an electronic filer’s involvement in refund anticipation loans. Electronic filers
must clearly explain that the refund anticipation loan is a loan and not a substitute for, or a quicker way of receiving, an income tax
refund. Federal laws place restrictions on the fees an electronic filer may charge in connection with refund anticipation loans.
Massachusetts and Mississippi have interpreted existing laws in a manner that would effectively limit the annual percentage rate
on refund anticipation loans or restrict our ability to receive fees in connection with these loans. In addition, some municipal
governments require certain disclosures with respect to refund anticipation loans. There are also many states that have statutes
regulating, through licensing and other requirements, the activities of brokering loans, providing credit services and offering credit
repair services to consumers for a fee.

       Loan broker statutes vary from state to state, but typically require paid tax return preparers who assist or facilitate refund
anticipation loans made by others to register with local regulatory authorities and pay a licensing fee. Where they exist, loan
broker statutes also often purport to subject brokered or assisted loans, such as refund anticipation loans, to lower state usury
requirements or limit the amount of fees that can be charged in connection with the facilitation of such loans. In the case of
national banks, federal preemption principles may preclude the application of state usury limitations. A New York state appellate
court has held that federal preemption principles preclude the application of state usury limitations to national banks under these
circumstances based upon the involvement of a local loan broker. However, there is no assurance that other state challenges, if
any, to federal preemption will not be successful.

       If, in any particular state, refund anticipation loans made to our customers were actually held to be subject to local usury
laws or reduced fees because our assistance rendered us a loan broker under state law, then the transactions could be less
attractive to the financial institution and our compensation from the financial institution in connection with the program in that state
could be reduced.

       In addition, we are subject to federal and state laws that govern the marketing of other financial products. These laws
prohibit deceptive claims, and require that our marketing practices are fair and not misleading.

      Many states have statutes requiring the licensing of persons offering contracts of insurance. We have received inquiries
from certain state insurance regulators about our Gold Guarantee program and the applicability of the state insurance statutes. In
those states where the inquiries are closed, the regulators affirmed our position that the Gold Guarantee is not a contract of
insurance and is therefore not subject to state insurance licensing laws.

Franchise Regulations

      Our franchising activities are subject both to federal and state laws and regulations. Federal Trade Commission Trade
Regulation Rule, 16 C.F.R. § 436, or the FTC Rule, requires a franchisor to give any prospective franchisee specified information
about the nature of the franchise investment on the earlier of:

         the first personal meeting;

         10 business days before any binding agreement is signed; or

         10 business days before any consideration is paid.

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       In addition to these disclosures, the franchisor must provide the prospective franchisee with a franchise agreement that
reflects the specific terms on which the franchisee will be licensed to do business at least five business days before signing any
binding agreement. There is no private right of action available to franchisees and prospective franchisees under this rule.
Franchisees who claim violations must bring their complaints to the Federal Trade Commission or, in some states, they may bring
their complaints in conjunction with claims under a state unfair and deceptive trade practices law. Violators are subject to civil
penalties.

       The FTC Rule requires a franchisor to provide information in specific areas in a specific format. This information is
contained in an offering circular. This regulation also permits a franchisor to prepare an offering circular in accordance with the
format designed by the North American Securities Administrators Association, called the Uniform Franchise Offering Circular or
UFOC. We have selected the UFOC format for our franchise offering circular because it is accepted in all states with franchise
registration and disclosure laws, eliminating the need to prepare multiple forms of offering circulars.

       Federal regulation governs franchisor conduct in all states; however, California, Hawaii, Illinois, Indiana, Maryland,
Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin have enacted
state franchise investment laws or franchise registration and disclosure laws. The federal regulation permits state laws to govern
franchising if they provide protection that is equal to or greater than that provided by federal regulation. Most of these state laws
require franchisors to provide specific information to franchisees, generally in the UFOC format or with state-specific modifications
to the UFOC format. As a general rule, these formats are similar to the UFOC and impose no significant additional requirements
on franchisors.

       Most state laws provide a franchisee with a private right of action to seek direct recourse against a franchisor, in addition to
administrative penalties, if a franchisor fails to comply with a state’s franchising laws. Moreover, some states, like California, have
laws that govern the relationship between franchisor and franchisee after the franchise agreement is signed, such as laws that:

         mandate notice and cure periods before termination;

         restrict the grounds for termination without the opportunity to cure a default; or

         restrict the franchisor’s ability to enforce a post-term competition covenant.

        The FTC Rule, the state franchise investment laws and the UFOC format require a franchisor to update its offering circular
to include new financial statements. Federal regulation and the UFOC format also require a franchisor to update its offering
circular in the event of material changes, such as significant changes in financial condition, changes to major fee structures, or
changes in business opportunities being offered. We intend to update our offering circular following the completion of this offering
to reflect our status as an independent, publicly-owned corporation and file for registration or exemption in the appropriate states
with franchise registration laws.

Legal Proceedings

        On August 27, 2002, a plaintiff group comprising 154 franchisees filed an action against us and Santa Barbara Bank &
Trust in Superior Court of New Jersey, Morris County. The suit alleged, among other things, that we breached an agreement with
them by not paying them a portion of surpluses in refund anticipation loan loss reserves. They sought a declaratory judgment, an
accounting, payment of an incentive rebate, unspecified compensatory and punitive damages, treble damages and attorneys’
fees. By an order dated December 6, 2002, the court dismissed the conversion and fraud counts of the complaint with prejudice.
Plaintiffs filed an amended complaint on March 17, 2003. The parties submitted the matter to mediation in July 2003, which
resulted in a settlement in which we agreed, among other things, to make a $2.0 million cash payment, spend an additional $2.0
million on regional

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advertising from 2004 through 2006, pay additional rebates to franchisees of up to $3.00 per refund anticipation loan the sales of
which they facilitate from 2004 through 2006, subject to certain performance criteria, and implement a new office royalty reduction
program. The total charges for the settlement in the amount of $10.4 million have been recorded in 2004.

      On December 19, 2003, the court issued a ruling enforcing the settlement and dismissed the action with prejudice. As of the
date of this prospectus, 151 plaintiffs in the action have executed the settlement agreement, and one has appealed the
enforcement order of December 19, 2003.

       On April 4, 2003, Canieva Hood and Congress of California Seniors brought a purported class action suit against Santa
Barbara Bank & Trust and us in the Superior Court of California (Santa Barbara) in connection with the provision of refund
anticipation loans, seeking declaratory relief as to the lawfulness of the practice of cross-lender debt collection, the validity of
Santa Barbara’s cross-lender debt collection provision and whether the method of inducing customers to enter into the provision is
unlawful or fraudulent. We were joined in the action for allegedly aiding and abetting the actions of Santa Barbara Bank & Trust.
Ms. Hood has also filed a separate suit against us and Cendant on December 18, 2003 in the Ohio Court of Common Pleas
(Montgomery County) and is seeking to certify a class in the action. The allegations relate to the same set of facts as the
California action. We currently have a motion pending in the Ohio court to stay, or dismiss, the Ohio action while permitting the
California action to proceed. While this matter is at a preliminary stage, we believe that we have meritorious defenses to the
claims and intend to defend them vigorously.

       In September 2003, the New York City Department of Consumer Affairs (―DCA‖) issued a Notice of Violation to us and our
New York City franchisees. The notice alleged violations as a result of misleading advertisements of tax refund/loan programs and
the purported failure by franchisees to distinguish to consumers between loan products and non-financial product electronic filing
options. The DCA contended that deficiencies in our training materials and marketing of loan products contributed to consumers’
confusion. On February 6, 2004, we reached a settlement with the DCA, pursuant to which we agreed, among other things, to pay
a $125,000 fine and contribute $100,000 to New York City’s EITC Campaign, a program to raise public awareness of the earned
income tax credit. In March 2004, the DCA advised us that three franchised offices had not distributed refund anticipation loan
disclosure documents to customers, as required by New York City law.

       In addition, we are from time to time subject to other legal proceedings and claims in the ordinary course of business, none
of which we believe are likely to have a material adverse effect on our financial position, results of operations or cash flows. There
can be no assurance that such litigation, or any future litigation, will not have a material adverse effect on our business, financial
condition or results of operations.

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                                                                            MANAGEMENT

Directors and Executive Officers

       In connection with this offering, we intend to amend and restate our certificate of incorporation and by-laws. The following
summary of our management and directors contains reference to provisions of the amended and restated certificate of
incorporation and by-laws, including the classification of the board of directors, the election and term of service of directors that
will be in effect upon the completion of this offering. The following summary also contains reference to provisions of the amended
and restated certificate of incorporation and by-laws, including the composition of the board of directors and its committees and
compensation committee interlocks, that will be in effect upon the completion of this offering or within the time period prescribed
by the New York Stock Exchange listing rules.

       The following table sets forth information concerning our directors and executive officers. All our directors hold office for the
remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until
their successors are duly elected and qualified. Executive officers serve at the request of the board of directors.
                                                                  Ag
Name                                                               e                                                    Position

Michael D. Lister                                                50          Chairman, President and Chief Executive Officer
Mark L. Heimbouch                                                39          Chief Financial Officer and Director
Perb B. Fortner                                                  60          Executive Vice President, Franchise Operations
Richard P. Enchura                                               54          Senior Vice President and President of Tax Services of America
William A. Scavone                                               36          Senior Vice President, Franchise Sales, Administration and Development
Steven L. Barnett                                                39          Senior Vice President, General Counsel and Secretary
Ulysses L. Bridgeman, Jr.                                        50          Nominee for Director (1)
Rodman L. Drake                                                  61          Nominee for Director (1)
Margaret Milner Richardson                                       61          Nominee for Director (1)
Louis P. Salvatore                                               57          Nominee for Director (1)
James C. Spira                                                   61          Nominee for Director (1)


(1)   Messrs. Bridgeman, Drake, Salvatore and Spira and Ms. Richardson will be nominated and elected as directors effective upon the effective date of the registration
      statement.

         Set forth below is information concerning our directors and the nominees for director.

       Michael D. Lister has served as our President and Chief Executive Officer since September 2003 and our Chairman of the
board since March 2004. From September 2001 to August 2003, he served as our President and Chief Operating Officer. From
June 2001 to August 2001, he served as our Chief Operating Officer. From October 1999 to May 2001, he served as our
Executive Vice President of Operations. From May 1976 until September 1999, Mr. Lister served in various positions with H&R
Block, Inc., progressing from a tax preparer to Senior Vice President and Regional Director.

       Mark L. Heimbouch has served as our Chief Financial Officer since May 2003 and a director since March 2004. From
January 2003 to April 2003, Mr. Heimbouch pursued private investment activities. From August 2000 to December 2002, Mr.
Heimbouch served as Chief Financial Officer of Teranex Inc. From May 1999 to August 2000, he served as Chief Financial Officer
of Duro Communications, Inc. From January 1993 to May 1999, Mr. Heimbouch held various positions with First Data Corporation,
including Vice President of Finance and Mergers and Acquisitions for Western Union International. From May 1986 to January
1993, Mr. Heimbouch served as a manager with Deloitte & Touche LLP.

      Ulysses L. Bridgeman, Jr. will become a director effective upon the effective date of the registration statement. Since May
1988, Mr. Bridgeman has been the owner and president of Bridgeman Foods, Inc. in Louisville, Kentucky, which owns and
operates 153 Wendy’s Old Fashioned

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Hamburger Restaurants in five states. Mr. Bridgeman serves on the board of directors of Fifth Third Bank, which files reports
pursuant to the Securities Exchange Act of 1934 (the ―Exchange Act‖).

       Rodman L. Drake will become a director effective upon the effective date of the registration statement. Since January
2002, Mr. Drake has been a managing director of Baringo Capital LLC, a private equity group he co-founded. From November
1997 to January 2002, Mr. Drake was president of Continuation Investments Group Inc., a private equity firm. Mr. Drake was a
co-founder of KMR Power Corporation, a developer of independent power projects in Latin America and served as its co-chairman
from 1993 to 1997. From 1969 to 1990, Mr. Drake was employed by Cresap, McCormick & Paget, an international management
and strategy consulting firm, where he was managing director and chief executive officer from 1980 to 1990. Mr. Drake serves on
the boards of directors of Hyperion Total Return Fund, Inc., Hyperion Strategic Mortgage Income Fund, Inc. and Hyperion 2005
Investment Grade Opportunity Term Trust, Inc., which file reports pursuant to the Exchange Act.

       Margaret Milner Richardson will become a director effective upon the effective date of the registration statement. Since
June 2003, Ms. Richardson has been pursuing personal interests. From 1997 to 2003, Ms. Richardson was a partner at Ernst &
Young LLP, where she was the National Director of IRS Practice and Procedure and an advisor to the Foreign Investment
Advisory Council in Russia. From 1993 to 1997, Ms. Richardson was appointed by the President of the United States and
confirmed by the Senate to be the Commissioner of the Internal Revenue Service. From 1977 to 1993, Ms. Richardson practiced
law with Sutherland, Asbill and Brennan in Washington, D.C. Ms. Richardson was a member of the Internal Revenue Service
Commissioner’s Advisory Group from 1988 to 1990 and chaired the group in 1990. Ms. Richardson serves on the board of
directors of Legg Mason, Inc., which files reports pursuant to the Exchange Act.

       Louis P. Salvatore will become a director effective upon the effective date of the registration statement. Since September
2002, Mr. Salvatore has been the representative of one of the four board members of Arthur Andersen LLP, overseeing the
wind-down of Arthur Andersen’s activities. From September 1992 to August 2002, Mr. Salvatore was the managing partner of
Arthur Andersen’s metropolitan New York offices, and from January 1998 to August 2002, he was the Northeast Region managing
partner. From 1989 to January 2001, Mr. Salvatore was a member of the Andersen Worldwide S.C. Board of Partners and, from
August 2000 to January 2001, he was Interim Managing Partner—Chief Executive Officer of Andersen Worldwide.

      James C. Spira will become a director effective upon the effective date of the registration statement. Since October 2003,
Mr. Spira has been chairman of Brulant, Inc., an information technology consulting firm in Northern Ohio. From July 2003 to
October 2003, Mr. Spira served, and continues to serve, on the public company boards of directors set forth below. From July
2000 to July 2003, Mr. Spira was president and chief operating officer of American Greetings Corporation. From May 1999 to July
2000, Mr. Spira was chairman of AmericanGreetings.com. From July 1995 to May 1999, Mr. Spira was a managing partner of
DiamondCluster International, Inc., a global management consulting firm. Mr. Spira serves on the boards of directors of American
Greetings Corporation and Ciber Inc., which file reports pursuant to the Exchange Act.

        Set forth below is information concerning our executive officers, in addition to Messrs. Lister and Heimbouch.

      Perb B. Fortner has served as our Executive Vice President, Franchise Operations since January 2003. From October
2000 to December 2002, he served as our Senior Vice President of Operations. From 1969 to September 2000, Mr. Fortner
served in various positions with H&R Block, Inc. (Kansas City, Missouri) progressing from Assistant District Manager to Director,
Franchise Operations, Assistant Vice President and Regional Director.

     Richard P. Enchura has served as our Senior Vice President and President of TSA, responsible for operating TSA since
October 2000. From 1971 to October 2000, Mr. Enchura worked for H&R Block

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in a variety of roles from District Manager to Regional Director to Director of H&R Block’s eastern division. Mr. Enchura has over
32 years of experience building and running operations in the paid tax return preparer industry.

      William A. Scavone has served as our Senior Vice President of Franchise Sales, Administration and Development since
October 2000. From February 1998 until October 2000, he served as Vice President of Sales and Advertising with Transactional
Data Solutions (a MasterCard Company), a provider of database advertising and market research services located in Purchase,
New York. From May 1995 until February 1998, Mr. Scavone served as President and General Manager of Strategic Marketing
LLC.

       Steven L. Barnett has served as our Senior Vice President, General Counsel and Secretary since May 2004. From May
2003 to May 2004, Mr. Barnett served as Executive Vice President, General Counsel and Secretary of Paragon Financial
Corporation, a specialty mortgage finance company. Mr. Barnett was a consultant to Paragon Financial Corporation from
December 2002 to April 2003. From September 2002 to November 2002, Mr. Barnett pursued personal interests. From June 2002
to August 2002, Mr. Barnett provided transitional consulting services to NRT Incorporated in connection with the sale of the
company to Cendant. From April 1998 to May 2002, Mr. Barnett was Executive Vice President, General Counsel and Secretary of
NRT Incorporated, the nation’s largest residential real estate brokerage company. Mr. Barnett was a Senior Vice President and
Assistant General Counsel of Footlocker, Inc. (f/k/a Woolworth Corporation) from May 1997 to April 1998. From October 1989 to
April 1997, Mr. Barnett was a corporate attorney, specializing in mergers & acquisitions with the law firm of Skadden, Arps, Slate,
Meagher & Flom LLP, New York, New York.

Composition of the Board of Directors

         Our certificate of incorporation provides that our board of directors shall consist of such number of directors as from time to
time fixed exclusively by resolution of the board, which currently consists of four persons. Prior to the completion of this offering,
the certificate of incorporation will be amended to divide our board into three classes, with each class being elected each year.
Each director will serve a three-year term, with termination staggered according to class, except that Class I directors will have an
initial term expiring in 2005, Class II directors will have an initial term expiring in 2006 and Class III directors will have an initial
term expiring in 2007. Class I will be comprised of Messrs. Drake and Bridgeman. Class II will be comprised of Messrs. Spira and
Heimbouch. Class III will be comprised of Messrs. Salvatore and Lister and Ms. Richardson.

Presiding Director

       Prior to the completion of this offering, our board of directors will create a position of presiding director. The presiding
director will be an independent director designated by the non-management members of the board annually. The presiding
director’s primary responsibilities will include presiding over periodic executive sessions of the non-management members of the
board of directors, advising the Chairman of the board and committee chairs with respect to meeting agenda and information
needs, providing advice with respect to the selection of committee chairs and performing other duties that the board may from
time to time delegate to assist it in the fulfillment of its responsibilities.

Committees of the Board of Directors

       Pursuant to our certificate of incorporation, the board of directors’ authority to designate committees is subject to the
provisions of the by-laws. Pursuant to the by-laws, the board of directors may designate one or more directors as alternate
members of any committee to fill any vacancy on the committee and to fill a vacant chairmanship of a committee occurring as a
result of a member or chairman leaving the committee, whether through death, resignation, removal or otherwise. Under the
by-laws, the board of directors will establish the following committees:

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Executive Committee

       The executive committee will be comprised of not fewer than three directors elected by a majority of the board. The
executive committee may exercise all of the powers of the board of directors when the board is not in session, including the power
to authorize the issuance of stock, except that the executive committee has no power to (a) alter, amend or repeal the by-laws or
any resolution or resolutions of the board of directors, (b) declare any dividend or make any other distribution to our stockholders,
(c) appoint any member of the executive committee or (d) take any other action which legally may be taken only by the full board
of directors. The Chairman of the board will serve as chairman of the executive committee. It is expected that the executive
committee will be comprised of Messrs. Lister, Heimbouch and Salvatore.

Compensation Committee

       The compensation committee will be comprised of not fewer than three directors elected by a majority of the board. The
compensation committee will oversee the administration of our benefit plans, review and administer all compensation
arrangements for executive officers and establish and review general policies relating to the compensation and benefits of our
officers and employees. All members of the compensation committee will be required to be independent under the rules of the
New York Stock Exchange and our director independence criteria. It is expected that the compensation committee will be
comprised of Messrs. Spira (Chairman), Drake and Bridgeman.

Audit Committee

       The audit committee will be comprised of not fewer than three directors elected by a majority of the board. The audit
committee will oversee our accounting and financial reporting processes, as well as the audits of our financial statements. All
members of the audit committee will be required to be independent under the rules of the New York Stock Exchange and our
director independence criteria. In addition, each member of the audit committee will be required to have the ability to read and
understand fundamental financial statements. The audit committee will also be required to have at least one member that qualifies
as an ―Audit Committee financial expert‖ as defined by the rules of the SEC. It is expected that the audit committee will be
comprised of Messrs. Salvatore (Chairman) and Spira and Ms. Richardson.

Corporate Governance Committee

      The corporate governance committee will be comprised of not fewer than three directors elected by a majority of the board.
All members of the corporate governance committee will be required to be independent under the rules of the New York Stock
Exchange and our director independence criteria. The corporate governance committee’s responsibilities will include identifying
and recommending to the board appropriate director nominee candidates and providing oversight with respect to corporate
governance matters. It is expected that the corporate governance committee will be comprised of Ms. Richardson (Chairman)
and Messrs. Drake and Bridgeman.

Compensation Committee Interlocks and Insider Participation

       None of our executive officers will serve as a member of the board of directors or compensation committee of any entity
that has one or more executive officers serving as a member of our board of directors or compensation committee.

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Compensation of Directors and Executive Officers

Compensation of Directors

         The following sets forth the compensation expected to be paid to our non-employee directors in 2004:
                                                                                                                                                 Compensation $(1)(2)

Annual Retainer                                                                                                                                                 50,000 (3)
New Director Equity Grant                                                                                                                                       50,000 (4)
Board and Committee Meeting Attendance Fee                                                                                                                           0
Audit Committee Chair                                                                                                                                           15,000
Audit Committee Member                                                                                                                                          12,500
Compensation Committee Chair                                                                                                                                    10,000
Compensation Committee Member                                                                                                                                    8,000
Corporate Governance Committee Chair                                                                                                                             9,000
Corporate Governance Committee Member                                                                                                                            7,000
Presiding Director Stipend                                                                                                                                      15,000

(1)   Members of our board of directors who are also our officers or employees will not receive compensation for serving as a director (other than travel-related expenses for
      meetings held outside of our headquarters).
(2)   The presiding director stipend and all committee membership stipends are to be paid 50% in cash and 50% in the form of deferred stock units relating to our common
      stock. These units will be issued under our 2004 Equity and Incentive Plan (or a successor plan). Directors may elect to receive more than 50% of such stipends in the
      form of deferred stock units relating to our common stock, which will be issued under our 2004 Equity and Incentive Plan. The number of deferred stock units to be so
      granted will be determined by dividing the value of the compensation to be paid in the form of deferred stock units by the fair market value per share of our common
      stock as of the date of grant. Each deferred stock unit entitles the holder to receive one share of our common stock immediately following such non-employee director’s
      retirement or separation of service from the board for any reason. The non-employee directors may not sell or receive value from any deferred stock unit prior to such
      separation of service.
(3)   The annual retainer will be paid to our non-employee directors in installments on a quarterly basis. 50% percent of the retainer will be paid in cash, with the remaining
      50% to be paid in the form of deferred stock units relating to our common stock. These units will be issued under our 2004 Equity and Incentive Plan (or a successor
      plan). A non-employee director may elect to receive his or her entire retainer in the form of deferred stock units.
(4)   The number of deferred stock units to be granted will equal $50,000 divided by the fair market value of our common stock on the date of grant. For the initial grant, the
      initial public offering price will be the fair market value.

Non-Employee Directors Deferred Compensation Plan

We have adopted our Non-Employee Directors Deferred Compensation Plan which allows us to issue deferred stock units from
our 2004 Equity and Incentive Plan to our non-employee directors. Under the 2004 Equity and Incentive Plan, these deferred
stock units are referred to as ―restricted stock units.‖ In addition to paying these directors in part in the form of deferred stock units,
as noted in the table above, our non-employee directors may also elect to defer under this plan all or any part of their fees that
would otherwise be payable in cash. The deferred stock units to be issued pursuant to this elective deferral would also be issued
under our 2004 Equity and Incentive Plan.

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Executive Officer Compensation

       The following table sets forth information concerning total compensation paid to our Chief Executive Officer and our four
other most highly compensated executive officers who served in such capacities as of December 31, 2003 for services rendered
to us in 2003. While our fiscal year will end on April 30 in the future, our compensation has been until now determined based on
Cendant’s fiscal year. Cendant’s most recently completed fiscal year ended December 31, 2003. We have also included an
executive officer, Mr. Heimbouch, whom we expect will be one of our five most highly compensated executive officers in 2004. We
refer to these executives as our ―named executive officers‖ elsewhere in this prospectus. This table includes compensation
received by the named executive officers from us as well as from Cendant. All material compensation reflected in this section was
paid or awarded directly by Cendant and was recorded by us as compensation expense.

Summary Compensation Table
                                                                                                                                Long-Term
                                                                 Annual Compensation                                           Compensation

                                                                                                                                   Restricted
          Name and                     Calendar                                                     Other Annual                   Stock Unit                All Other
      Principal Position                 Year              Salary(1)           Bonus(2)            Compensation(3)                 Awards(4)              Compensation(5)

Michael D. Lister                           2003          $   270,770          $ 152,308                            —          $        400,007          $             10,154
President & Chief Executive
   Officer
Richard P. Enchura                          2003              201,947             121,520                           —                   225,005                        14,531
Senior Vice President and
   President of Tax Services
   of America
William A. Scavone                          2003              332,324                   —                           —                   150,000                        10,000
Senior Vice President,
   Franchise Sales,
   Administration and
   Development
Perb B. Fortner                             2003              201,947             113,473                           —                   225,005                        18,058
Executive Vice President,
   Franchise Operations
Jeanmarie Cooney                            2003              195,825              91,376                           —                   124,997                        15,874
Senior Vice President,
   Business & Strategic
   Development
Mark L. Heimbouch                           2003              112,404              97,705                           —                    49,995                         2,950
Chief Financial
   Officer (6)


(1)   Effective upon the completion of this offering, Mr. Lister’s annual base salary will increase to $330,000, and Mr. Heimbouch’s annual base salary will increase to
      $250,000. Mr. Scavone’s salary amount includes $182,323 in sales commissions.
(2)   Bonus amounts include 2003 bonuses paid in February 2004, which were paid in connection with our attainment of pre-established performance goals. Bonus amounts
      also include individual performance incentives paid in respect of 2003 upon attainment of pre-established individual and operational performance goals. Mr.
      Heimbouch’s bonus amount includes a $10,000 signing bonus.
(3)   For each named executive officer, perquisites and personal benefits have a value less than the lesser of $50,000 or 10% of the officer’s salary and bonus.
(4)   On April 22, 2003, Cendant granted to each named executive officer (other than Mr. Heimbouch) a number of restricted stock units relating to Cendant common stock.
      One-quarter of the restricted stock units will vest on each of the first four anniversaries of the date of grant, subject to the named executive officer remaining
      continuously employed with Cendant through each such vesting date. Upon vesting, each restricted stock unit entitles the holder to receive one share of Cendant
      common stock. In connection with this offering, each of our named executive officers will cease to be employed with Cendant, and each Cendant unvested restricted
      stock unit will terminate in accordance with its terms. Pursuant to the exchange offer described under ―2004 Equity and Incentive Plan,‖ each named executive officer
      will receive a number of shares of common stock from Jackson Hewitt of equivalent value in exchange for the termination of the Cendant unvested restricted stock
      units. Each named executive officer was originally granted the following number of Cendant restricted stock units: Mr. Lister, 29,326; Mr. Enchura, 16,496; Mr. Scavone,
      10,997; Mr. Fortner, 16,496; Ms. Cooney, 9,164. Mr. Heimbouch was granted 2,723 Cendant restricted stock units on July 16, 2003 in connection with the
      commencement of his employment with us. The value of the shares underlying the Cendant restricted stock units as of the date of grant are shown in the table above
      and reflect a per unit value of $13.64 (for Mr. Heimbouch, a per unit value of $18.36). The value of

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      the shares of Cendant common stock underlying such awards as of December 31, 2003, reflecting a per share closing price of $22.27 on December 31, 2003, equaled:
      Mr. Lister, $653,090; Mr. Enchura, $367,366; Mr. Scavone, $244,903; Mr. Fortner, $367,366; Ms. Cooney, $204,082; Mr. Heimbouch, $60,641. Holders of restricted
      stock units are entitled to receive cash dividend equivalents at the same time and to the same extent that Cendant pays dividends to holders of its common stock.
      Dividend equivalents are subject to the same vesting schedule as the restricted stock units to which they relate, and are paid in cash upon the vesting and payment of
      the related restricted stock units.
(5)   Amounts consist of matching contributions to a non-qualified deferred compensation plan and/or 401(k) plan sponsored and maintained by Cendant. Such defined
      contribution match includes matching contributions relating to 2003 bonuses that were paid in the first quarter of 2004.
(6)   Mr. Heimbouch commenced employment with us on May 1, 2003.

Cendant Stock Options

      No Cendant stock options were granted to our named executive officers during 2003. The following table sets forth
information concerning the exercise of options to purchase shares of Cendant common stock during 2003 by each of our named
executive officers and the year-end value of unexercised options to purchase shares of Cendant common stock.

Aggregated Option Exercises in 2003 and Option Values as of December 31, 2003
                                 Shares                                           Number of Securities Underlying                           Value of Unexercised
                               Acquired on               Value                        Unexercised Options                                   In-the-Money Options
        Name                   Exercise (#)            Realized ($)                      at Year-End (#)                                        at Year-End ($)

                                                                               Exercisable                Unexercisable              Exercisable            Unexercisable

Michael D. Lister                     60,000                 545,250                  262,666                       33,334                942,051                   382,756
Richard P. Enchura                       N/A                     N/A                   77,333                        6,667                781,909                    85,721
William A. Scavone                    12,000                 102,992                   27,000                       10,000                115,853                   128,575
Perb B. Fortner                       15,000                 164,900                   57,333                        6,667                515,309                    85,721
Jeanmarie Cooney                      64,250                 561,583                  168,423                       18,750                646,113                   241,078
Mark L. Heimbouch                        N/A                     N/A                      N/A                          N/A                    N/A                       N/A

2004 Equity and Incentive Plan

        Our Jackson Hewitt Tax Service Inc. 2004 Equity and Incentive Plan will provide for the grant of annual cash bonuses and
long-term cash awards, as well as equity-based awards, including restricted stock, restricted stock units, stock options, stock
appreciation rights and other equity-based awards to our directors, officers and other employees, advisors and consultants who
are selected by our compensation committee for participation in the plan. The plan will also provide for the deferral of officer and
director compensation. Unless earlier terminated by our board of directors, the plan will expire on the tenth anniversary of the date
of its adoption. Termination of the plan is not intended to adversely affect any award that is then outstanding without the award
holder’s consent. Our board of directors may amend the plan at any time. Plan amendments are not intended to adversely affect
any award that is then outstanding without the award holder’s consent, and we must obtain stockholder approval of a plan
amendment if stockholder approval is required to comply with any applicable law, regulation or stock exchange rule.

       Following the closing of this offering, we will grant new stock options to purchase approximately 989,000 shares of common
stock under the 2004 Equity and Incentive Plan. We expect to incur compensation expense of approximately $1.5 million, $1.7
million, $1.7 million, $1.7 million and $213,000 for the fiscal years ending April 30, 2005, 2006, 2007, 2008 and 2009, respectively,
relating to such grants.
       Subject to the consent of each holder, Cendant restricted stock units and stock options currently held by our executive
officers and employees will be cancelled and converted into awards of our Company under the 2004 Equity and Incentive Plan.
We will issue approximately 91,000 shares of common stock in exchange for the unvested Cendant restricted stock units currently
held by our

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officers and employees. We will also issue vested options to purchase approximately 800,000 shares of common stock in
exchange for vested Cendant stock options currently held by our officers and employees and vested stock options to purchase
approximately 53,000 shares of common stock in exchange for unvested Cendant stock options currently held by our officers and
employees. We will incur additional compensation expense of approximately $4.6 million for the fiscal year ending April 30, 2005
as a result of the exchange of Cendant restricted stock units and stock options.

        The number of shares of our common stock and options to purchase shares of our common stock that we will issue
pursuant to the exchange of Cendant restricted stock units and stock options will be determined based upon a ratio equal to the
average closing price of Cendant common stock during a period of three trading days immediately following this offering divided
by the average closing price of our common stock for the same three-day trading period. The exercise price of the options to
purchase shares of our common stock that will be issued pursuant to the exchange of Cendant stock options will be determined
by dividing the exercise price of the Cendant stock options by the ratio equal to the average closing price of Cendant stock during
a period of three trading days immediately following this offering divided by the average closing price of our common stock for the
same three-day trading period. Share numbers and option amounts are based on the midpoint of the initial public offering price
range set forth on the cover page of this preliminary prospectus and the average closing price of Cendant’s stock price as of a
recent three day period. The actual amounts will change based on our stock price and Cendant’s stock price following the closing
of this offering. Actual amounts outstanding may also be reduced to the extent our executive officers and employees elect to
exercise their Cendant options prior to completion of the exchange offer.

Administration

       The plan will be administered under the oversight of our compensation committee, which will have the authority, among
other things, to determine who will be granted awards and all of the terms and conditions of the awards. The compensation
committee will also be authorized to determine to what extent an award may be settled, cancelled, forfeited or surrendered, to
interpret the plan and any awards granted under the plan and to make all other determinations necessary or advisable for the
administration of the plan. Where the vesting or payment of an award under the plan is subject to the attainment of performance
goals, the compensation committee will be responsible for determining that the performance goals have been attained. Neither the
compensation committee nor our board of directors will have the authority under the plan to reprice, or to cancel and re-grant, any
stock option granted under the plan, or to take any action that would lower the exercise, base or purchase price of any award
granted under the plan without first obtaining the approval of our stockholders.

Cash Incentive Programs

       The plan will provide for the grant of annual and long-term cash awards to plan participants selected by our compensation
committee. The maximum value of the total cash payment that any plan participant may receive under the plan’s annual cash
incentive program for any year will be $1 million, and the maximum value of the total payment that any plan participant may
receive with respect to each performance period under the plan’s long-term cash incentive program will be $1 million for each year
covered by the performance period. Payment of awards granted under the cash incentive programs may be made subject to the
attainment of performance goals to be determined by our compensation committee in its discretion. The compensation committee
may base performance goals on one or more of the following criteria, determined in accordance with generally accepted
accounting principles, where applicable:

      pre-tax income or after-tax income;

      earnings including operating income, earnings before or after taxes, earnings before or after interest, depreciation,
       amortization, or extraordinary or special items;

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      net income excluding amortization or impairment of intangible assets, or goodwill;

      earnings or book value per share (basic or diluted);

      return on assets (gross or net), return on investment, return on capital, or return on equity;

      return on revenues;

      cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or
       cash flow in excess of cost of capital;

      economic value created;

      operating margin or profit margin;

      stock price or total stockholder return;

      earnings from continuing operations;

      cost targets, reductions and savings, productivity and efficiencies;

      franchise sales targets; and

      strategic business criteria, consisting of one or more objectives based on meeting specified market penetration or market
       share, geographic business expansion, customer satisfaction, employee satisfaction, human resources management,
       supervision of litigation, information technology, and goals relating to divestitures, joint ventures and similar transactions.

      The performance goals may be expressed in terms of attaining a specified level of the particular criterion, an increase or
decrease in the particular criterion or a comparison of achievement against a peer group of companies, and may be applied to us
or one of our subsidiaries or divisions or strategic business units. The compensation committee will have the authority to make
equitable adjustments to the performance goals in recognition of unusual or non-recurring events, in response to changes in laws
or regulations or to account for extraordinary or unusual events.

     No payment may be made under either of the cash incentive programs under the plan prior to determination by the
compensation committee that the applicable performance goals have been attained.

Equity Incentive Program

        Our board of directors will determine the number of shares of our common stock that will be available for grants pursuant to
the equity incentive program under the plan. Shares issued under the plan may be authorized but unissued shares or treasury
shares. If any shares subject to an award granted under the plan are forfeited, cancelled, exchanged or surrendered, if an award
terminates or expires without a distribution of shares or if shares of stock are surrendered or withheld as payment of either the
exercise price of an award or surrendered or withheld as payment of either the exercise price of an award or withholding taxes in
respect of an award, those shares of common stock will again be available for awards under the plan. Under the plan, no more
than 4,000,000 shares of our common stock may be issued in the aggregate, including shares of common stock underlying
awards granted to our executive officers and employees in exchange for Cendant awards as described above. Under the plan, no
more than 400,000 shares of our common stock may be made subject to stock options (other than options issued in exchange for
Cendant awards as described above) or stock appreciation rights to a single individual in any year, and no more than 200,000
shares of our common stock may be made subject to stock-based awards other than stock options or stock appreciation rights
(including restricted stock and restricted stock units, but not including any shares issued in exchange for Cendant awards as
described above) in any year. In the event that the compensation committee determines that any corporate event, such as a stock
split, reorganization, merger, consolidation, repurchase or share exchange, affects our common stock such that an adjustment is
appropriate in order to prevent

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dilution or enlargement of the rights of plan participants, then the compensation committee will make those adjustments as it
deems necessary or appropriate to any or all of:

      •    the number and kind of shares or other property that may thereafter be issued in connection with future awards;

      •    the number and kind of shares or other property that may be issued under outstanding awards;

      •    the exercise price or purchase price of any outstanding award; and/or

      •    the performance goals applicable to outstanding awards.

       The compensation committee will determine all of the terms and conditions of equity-based awards under the plan,
including whether the vesting or payment of an award will be subject to the attainment of performance goals. The performance
goals that may be applied to awards under the equity incentive program under the plan are the same as those discussed above
under ―–Cash Incentive Programs.‖

       The terms and conditions of stock options and stock appreciation rights granted under the plan will be determined by the
compensation committee and set forth in an agreement. Stock options granted under the plan may be ―incentive stock options‖
within the meaning of Section 422 of the Internal Revenue Code, or non-qualified stock options. A stock appreciation right confers
on the participant the right to receive an amount, in cash or shares of our common stock (in the discretion of the compensation
committee), equal to the excess of the fair market value of a share of our common stock on the date of exercise over the grant
price of the stock appreciation right, and may be granted alone or in tandem with another award. The exercise price of an option
or stock appreciation right granted under the plan will not be less than the fair market value of our common stock on the date of
grant. The grant price of a stock appreciation right granted in tandem with a stock option will be the same as the stock option to
which the stock appreciation relates. The vesting of a stock option or stock appreciation right will be subject to such conditions as
the compensation committee may determine, which may include the attainment of performance goals.

       The terms and conditions of awards of restricted stock and restricted stock units granted under the plan will be determined
by the compensation committee and set forth in an award agreement. A restricted stock unit confers on the participant the right to
receive a share of our common stock or its equivalent value in cash, in the discretion of the compensation committee. These
awards will be subject to restrictions on transferability which may lapse under those circumstances that the compensation
committee determines, which may include the attainment of performance goals. The compensation committee may determine that
the holder of restricted stock or restricted stock units may receive dividends (or dividend equivalents, in the case of restricted
stock units) that may be deferred during the restricted period applicable to these awards.

      The plan will also provide for other equity-based awards, the form and terms of which will be determined by the
compensation committee consistent with the purposes of the plan. The vesting or payment of one of these awards may be made
subject to the attainment of performance goals.

       The plan will provide that, unless otherwise determined by the compensation committee, in the event of a change in control
(as defined in the plan), all awards granted under the plan will become fully vested and/or exercisable, and any performance
conditions will be deemed to be fully achieved.

Employee Stock Purchase Plan

      We adopted and expect to sponsor an employee stock purchase plan which will enable our eligible employees to purchase
shares of our common stock at a discount using amounts deducted from their

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eligible wages. Amounts will be deducted during each payroll cycle and accumulated during calendar month offering periods. At
the end of each offering period, accumulated amounts will be used to purchase shares of our common stock at a discount of 5%
from the closing price as of the last day of the offering period. The aggregate number of shares of our common stock that will be
available for issuance under our employee stock purchase plan is 400,000. The plan will be administered under the oversight of
our compensation committee, which has the discretion to alter how the plan will be administered, including with respect to the
frequency of offering periods and the amount of the discount.

401(k) Plan

       We adopted a 401(k) plan for the benefit of our employees intended to permit employees to save on a tax favorable basis
for their retirements. We expect to establish an investment alternative under this plan which invests in shares of our common
stock. We expect that no more than 400,000 shares of our common stock will be initially available under this plan.

Employment Agreements

        Each of our named executive officers has signed an offer letter with us that sets forth his or her position, salary and
benefits, and pursuant to which each officer acknowledges his or her status as an ―at-will‖ employee. Mr. Lister’s offer letter
obligates us to pay him one year’s salary as severance pay in the event that his employment is terminated for reasons other than
death, disability, retirement, voluntary resignation or termination for ―cause‖ (as defined by us). Mr. Lister’s and Mr. Heimbouch’s
offer letters will be superseded by the new employment agreements described below.

       We expect to enter into employment agreements with two of our named executive officers, Messrs. Lister and Heimbouch,
which will become effective subject to and upon completion of this offering. The employment agreements will set forth the base
salary, bonus opportunities and initial equity awards to be provided to these officers, as well as each officer’s entitlement to
employee benefits and officer perquisites.

      Mr. Lister’s employment agreement will provide him with an annual base salary equal to $330,000 and an annual target
bonus opportunity, subject to attainment of performance goals, equal to 100% of his earned base salary in the applicable year. Mr.
Heimbouch’s employment agreement will provide him with an annual base salary equal to $250,000 and an annual target bonus
opportunity, subject to attainment of performance goals, equal to 60% of his earned base salary in the applicable year.

      Each employment agreement will provide that in the event we terminate the officer’s employment, other than for cause (as
defined in the employment agreements) or in the event the officer resigns under a constructive discharge (as defined in the
employment agreements), the officer will become entitled to a cash severance benefit of 200% of the sum of the officer’s then
current base salary plus target annual bonus (299% if the termination occurs within one year following a change in control of our
company). Such severance payment will be subject to the officer executing a release of claims in our favor.

       Each employment agreement will provide that if employment is terminated by us other than for cause or if the officer resigns
under a constructive discharge, and if any payments or benefits that such officer receives with respect to his equity-based awards
will be subject to the excise tax imposed on ―excess parachute payments‖ under Section 4999 of the Internal Revenue Code, we
will be obligated to pay to such officer an additional ―gross-up‖ payment such that such officer will be made whole with respect to
those payments or benefits under such officer’s equity-based awards.

       Each employment agreement will contain important restrictive covenants intended to protect our confidential information
and limit each officer’s ability to compete against us or solicit our employees.

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Severance Agreements

       We have provided each of Messrs. Fortner, Enchura, Scavone and Barnett and Ms. Cooney with letters governing the
terms of their severance, which will become effective upon consummation of this offering. The terms of the severance letters
provide that in the event such officer’s employment is terminated by us without cause, then such officer will become entitled to a
cash severance benefit of 100% of the such officer’s then current base salary (200% if the termination occurs within one year
following a change in control of our company). In addition, Mr. Barnett’s severance letter provides that if such termination occurs
within his first year of employment, he will be entitled to a cash severance benefit of 100% of his then current base salary and
target annual bonus. The terms of severance for Messrs. Lister and Heimbouch are governed by their respective employment
agreements as described above.

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                                   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transitional Agreement

        Upon completion of this offering, we will enter into a transitional agreement with Cendant to provide for an orderly transition
to being an independent company and to govern our continuing relationship with Cendant. We will also enter into a sublease
agreement for our New Jersey corporate headquarters and a sublease assignment and assumption agreement for our technology
facility in Sarasota, Florida. Under the transitional agreement, Cendant will agree to provide us with various services, including
services relating to facilities, human resources and employee benefits, payroll, financial systems management, treasury and cash
management, accounts payable services, tax support, event marketing, revenue audit services, telecommunications services,
information technology services, call support services and public and regulatory affairs. The transitional agreement will also
contain agreements relating to indemnification, tax sharing and tax indemnification, access to information and non-solicitation of
employees.

        Under the transitional agreement, the cost of each transitional service will generally reflect the same payment terms and will
be calculated using the same cost allocation methodologies for the particular service as those associated with the costs on our
historical financial statements. The transitional agreement is being negotiated in the context of a parent-subsidiary relationship
and in the context of this offering. Most of the services to be provided under the transitional agreement may be terminated by us
without penalty upon written notice to Cendant and there are no fixed or minimum contractual purchase obligations under the
transitional agreement. After the expiration of the arrangements contained in the transitional agreement, we may not be able to
replace these services in a timely manner or on terms and conditions, including cost, as favorable as those we have received from
Cendant. We are developing a plan to increase our own internal capabilities in the future to reduce our reliance on Cendant for
these services. We will have the right to receive reasonable information with respect to charges for transitional services provided
by Cendant.

      The following sets forth a summary of the services that will be provided to us by Cendant under the transitional agreement
and the manner of allocation of costs to us for these services. Also set forth is a summary of intercompany transactions since the
beginning of our last fiscal year and for the two fiscal years preceding our last fiscal year. We believe these allocations
approximate the actual costs to Cendant to provide these services.

      Indemnification.       We will indemnify Cendant, its subsidiaries and its officers, directors, employees and agents against
losses (including, but not limited to, those arising out of litigation matters and other claims) based on, arising out of or resulting
from:

         any breach by us of the transitional agreement, the sublease agreement for our New Jersey headquarters or the
          sublease assignment and assumption agreement;

         the ownership or the operation of the assets or properties, and the operation or conduct of the business of, including
          contracts entered into and any activities engaged in by, us or our subsidiaries and our franchisees, whether in the past
          or future, including any currently pending litigation against Cendant with respect thereto;

         any other activities we engage in;

         any third party claims relating to other acts or omissions arising out of performance of the transitional agreement, the
          sublease or the sublease assignment and assumption agreement, whether in the past or future;

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         any guaranty, keepwell, net worth or financial condition maintenance agreement of or by Cendant provided to any
          parties with respect to any of our or our subsidiaries’ actual or contingent obligations; and

         other matters described in the transitional agreement.

The only currently pending litigation against us and Cendant is the suit brought by Canieva Hood discussed in this prospectus
under ―Business—Legal Proceedings.‖

        In addition, we have agreed to indemnify Cendant and its officers, directors, employees and agents against civil liabilities,
including liabilities under the Securities Act relating to misstatements in or omissions from the registration statement of which this
prospectus forms a part and any other registration statement that we file under the Securities Act, other than misstatements or
omissions relating to information specifically about Cendant (other than our business) in the registration statement and furnished
in writing by Cendant for use in the preparation of any such registration statement, against which Cendant has agreed to
indemnify us.

         We do not currently expect to purchase insurance to specifically cover potential claims for indemnification by Cendant and
its officers, directors, employees and agents.

      The transitional agreement will also provide that Cendant will indemnify us and our officers, directors, employees and
agents against losses involving claims by third parties based on, arising out of or resulting from:

         any breach by Cendant of the transitional agreement, the sublease or the sublease assignment and assumption
          agreement; and

         the operation or conduct of the business of Cendant, whether in the past or future, other than the business of Jackson
          Hewitt, its subsidiaries or its predecessors.

        Tax Sharing and Tax Indemnification.        In connection with our separation from Cendant, we will enter into a tax sharing
and indemnification agreement with Cendant that will govern the allocation between the companies of tax liabilities and related tax
matters, such as the preparation and filing of tax returns and tax contests, for the taxable periods before and after the completion
of this offering.

        The tax sharing and indemnification agreement also will provide that:

         we will be responsible for the respective tax liabilities imposed on or attributable to us and any of our subsidiaries
          relating to all taxable periods (except for income taxes relating to being a member of a Cendant federal, state or local
          affiliated or similar income tax group). Accordingly, we will indemnify Cendant and its subsidiaries against any such tax
          liabilities imposed on or attributable to us and any of our subsidiaries;

         after the separation, we will be responsible for preparing and filing all tax returns required to be filed by us or any of our
          subsidiaries; and

         we will be responsible for handling, settling, and contesting any tax liability for which we are liable under the terms of the
          tax sharing and indemnification agreement.

        Access to Information.       The following terms will govern access to information under the transitional agreement:

         within 30 days of our separation from Cendant, Cendant will deliver to us copies of all historical records related primarily
          to our business;

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         subject to applicable confidentiality provisions and other restrictions, we and Cendant will each give the other any
          information within that company’s possession that the requesting party reasonably needs:

              to comply with requirements imposed on the requesting party by a governmental authority;

              for use in any proceeding or to satisfy audit, accounting, tax or similar requirements; or

              to comply with its obligations under the transitional agreement or the ancillary agreements;

         we will provide to Cendant, at no charge, all financial and other data and information that Cendant determines is
          necessary or advisable to prepare its financial statements and any reports or filings with any governmental authority;

         we and Cendant will each use reasonable best efforts to provide assistance to the other with respect to litigation and to
          make available to the other directors, officers, other employees and agents as witnesses, in legal, administrative or other
          proceedings, and will cooperate and consult to the extent reasonably necessary with respect to any litigation;

         the company providing information, consulting or witness services under the transitional agreement will be entitled to
          reimbursement from the other for reasonable expenses; and

         we and Cendant will agree to hold in strict confidence all information concerning or belonging to the other obtained prior
          to the date of the distribution or furnished pursuant to the transitional agreement or any ancillary agreement, subject to
          applicable law.

       Franchise Agreement Guarantees.          Regulations applicable to the offer and sale of franchises require the inclusion of
audited financial statements in offering materials delivered to prospective franchisees. As a wholly owned subsidiary of Cendant,
we did not have our own audited financial statements. Therefore, Cendant’s audited financial statements, and its guarantee of our
obligations under the franchise agreements attributable to such offering materials, were included in the offering materials to satisfy
the regulations. Accordingly, Cendant historically has guaranteed the performance of our obligations to our franchisees under our
franchise agreements. Following this offering and our separation from Cendant, we will include our own audited financial
statements in the franchise offering materials, and Cendant will no longer provide these guarantees in connection with franchise
agreements entered into or replaced after completion of this offering.

       Insurance.     We will be required to purchase our own insurance policies following the completion of this offering. Our
insurance in the future will be significantly more expensive than the current insurance costs allocated to us by Cendant. We have
paid, and currently pay, Cendant for a variety of insurance products. Cendant has generally allocated the cost of insurance to us
based on the number of our employees. Under the transitional agreement, Cendant will provide us with consulting services in
connection with the administration and monitoring of our own insurance policies until June 30, 2005. We will have the right to
terminate the provision of this service without penalty upon 30 days written notice to Cendant. Cendant does not have early
termination rights under the transitional agreement. These insurance policies include executive risk coverage, property and
casualty, workers compensation, umbrella liability insurance and losses from crime.

       Our allocated share of the costs of insurance was $228,000 in 2004, $102,000 in 2003 and $39,000 in 2002. In addition,
costs for our directors’ and officers’ insurance in 2004, 2003 and 2002 were included in our share of Cendant’s general corporate
overhead, which is discussed below. We expect our cost for insurance to increase by approximately $3.0 million, primarily due to
directors and officers insurance and errors and omissions insurance.

     Facilities.    Cendant has allocated to us the cost of occupying 24,591 usable square feet within the 7 Sylvan Way
complex for our corporate headquarters in Parsippany, New Jersey and 27,000

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square feet for our technology facility in Sarasota, Florida. We pay Cendant rent under this arrangement and for related services
such as access to the cafeteria, maintenance and security for the 7 Sylvan Way complex. We pay rent directly to the landlord of
the Sarasota, Florida facility under Cendant’s lease. We will need additional space within our 7 Sylvan Way complex for additional
support services personnel following the completion of this offering. Cendant will continue to charge rent and allocate related costs
to us for the 7 Sylvan Way complex under the sublease agreement for a period of fifteen months from completion of this offering at
a cost of $1.1 million annually, subject to operating cost fluctuations in 2005. Cendant may terminate the sublease upon 120 days
prior written notice; however, Cendant will be required to relocate us, at Cendant’s cost, to mutually acceptable office space. We
expect that the lease for the Sarasota, Florida facility will be assigned to us by Cendant prior to the completion of this offering. Our
rent and related costs under these agreements were $1.5 million in 2004, $970,000 in 2003 and $92,000 in 2002.

       Preferred Alliance and Suppliers.       Prior to this offering, we participated in Cendant’s preferred alliance and supplier
programs, under which Cendant earns a commission for our purchases of goods and services from certain preferred vendors. We
expect that the third party agreements where we, and not Cendant or one of its affiliates, are the party to the relevant agreement
will be assigned to us by Cendant prior to the completion of this offering. We expect that the third party agreements where both we
and Cendant are covered by a single agreement will be amended so that we will become a party to a separate but identical
agreement with the third party vendor. For 2004, 2003 and 2002, Cendant allocated the costs of administration of the preferred
alliance and supplier programs to us through our share of Cendant’s general corporate overhead, which is discussed below.

      Human Resources and Employee Benefits.            Prior to this offering, Cendant provided us with human resources services,
as well as the administration of Cendant’s compensation, retirement and benefits plans in which we participate, and will continue
doing so under the transitional agreement through December 31, 2004. Cendant has allocated the cost of these services to us
based on the number of our employees and will continue to allocate these costs to us in this manner under the transitional
agreement. Following the completion of this offering, we will establish our own 401(k), life insurance and accidental death and
dismemberment insurance benefit plans, among others. We were allocated costs for:

         administration of Cendant’s health and welfare plans;

         services Cendant’s executive officers performed for us based on the level of support they provided;

         services provided to us by Cendant’s human resources service center based on our total number of employees; and

         corporate recruiting, compensation support, corporate training and other programs.

      Our allocated share of the cost of these services was $126,000 in 2004, $97,000 in 2003 and $110,000 in 2002, and we
estimate the cost of these services under the transitional agreement will be approximately $13,000 per month through December
31, 2004. We may terminate the provision of these services without penalty upon 30 days written notice to Cendant. Cendant
does not have early termination rights with respect to these services.

        Payroll.   Prior to this offering, Cendant provided us with payroll management services and will continue doing so under
the transitional agreement through December 31, 2004. We may terminate the provision of these services without penalty upon 30
days written notice to Cendant. Cendant does not have early termination rights with respect to these services. In addition, the
transitional agreement will include provisions for tax filings and the distribution of W-2s to our employees for the 2004 tax year.
Cendant has allocated the cost of payroll management services to us based on the number of our

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employees and will continue to allocate these costs to us in this manner under the transitional agreement. In addition, we will pay
Cendant a one time management fee of $25,000 to manage the transition of our payroll processing to a third party provider. Our
allocated share of the costs of these services was $25,000 in 2004, $23,000 in 2003 and $25,000 in 2002, and we estimate the
cost of these services under the transitional agreement will be approximately $3,000 per month, excluding the one-time
management fee.

       Financial Systems Management.           Prior to this offering, Cendant provided us with financial systems management and
will continue doing so under the transitional agreement through December 31, 2005. We may terminate the provision of these
services without penalty upon 30 days written notice to Cendant. Cendant does not have early termination rights with respect to
these services. For 2004, 2003 and 2002, Cendant allocated the cost of these services to us through our share of Cendant’s
general corporate overhead, which is discussed below. Under the transitional agreement, Cendant will allocate these costs to us
based on resources used and time spent for support services. We estimate the cost for these services under the transitional
agreement will be approximately $2,000 per month. Following our separation from Cendant, we may need to purchase new
licenses for software licensed from various third parties which may be required to operate our financial management systems.

       Treasury and Cash Management.          Prior to this offering, Cendant provided us with our treasury and cash management
services and will continue doing so under the transitional agreement through December 31, 2004. We may terminate the provision
of these services without penalty upon 30 days written notice to Cendant. Cendant does not have early termination rights with
respect to these services. For 2004, 2003 and 2002, Cendant allocated the cost of these services to us through our share of
Cendant’s general corporate overhead, which is discussed below. Under the transitional agreement, we will pay Cendant a flat
monthly fee of $5,000 for these services, which will also include assisting us in establishing our own cash management system.

       Accounts Payable Services.         Prior to this offering, Cendant provided us with management of our accounts payable
processing and will continue doing so under the transitional agreement through December 31, 2005. We may terminate the
provision of these services without penalty upon 30 days written notice to Cendant. Cendant does not have early termination
rights with respect to these services. Cendant has allocated the cost of this service to us based on the number of transactions it
processed for us and will continue to allocate these costs to us in this manner under the transitional agreement. Our allocated
share of costs for this service was approximately $17,000 in 2004, $17,000 in 2003 and $30,000 in 2002, and we estimate the
cost for these services under the transitional agreement will be approximately $3,000 per month.

       Tax Support.      Prior to this offering, Cendant provided us with corporate tax services. Cendant has allocated the cost of
these services to us based on the number of tax returns prepared, an estimate of fees for tax consulting services attributable to us
and other specialty tax services provided to us. Under the transitional agreement, Cendant will provide corporate tax preparation
services to us to complete our 2003 corporate tax return, the corporate tax return following the end of our 2004 fiscal year and the
two-month period at the beginning of the 2005 fiscal year. We may terminate the provision of these services without penalty upon
30 days written notice to Cendant. Cendant does not have early termination rights with respect to these services. Our allocated
share of costs for these services was $137,000 in 2004, $90,000 in 2003 and $83,000 in 2002, and we estimate the cost for these
services will be approximately $74,000 through December 31, 2004.

     Event Marketing.      Prior to this offering, Cendant provided us with event marketing services, such as arranging our
annual franchisee conventions and other franchisee events, and will continue doing so under the transitional agreement through
December 31, 2005. Neither Cendant nor we have

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the ability to terminate these services prior to the expiration of the transitional agreement. Cendant has allocated the cost of these
services to us based on the number of meetings and the number of attendees at meetings planned by Cendant for us and will
continue to allocate costs to us in this manner under the transitional agreement. Our allocated share of the cost for these services
was $86,000 in 2004, $59,000 in 2003 and $56,000 in 2002, and we estimate the cost for these services under the transitional
agreement will be approximately $96,000 annually.

       Marketing.    Prior to this offering, we participated in Cendant’s third party agreement for the purchase of national media
advertising. We paid advertising costs directly to the third party vendor. In addition, Cendant allocated the costs of managing
these agreements to us through our share of Cendant’s general corporate overhead, which is discussed below. We will need to
negotiate our own agreements with media vendors following completion of this offering.

       Revenue Audit Services.       Prior to this offering, Cendant provided us with revenue audit services by internal auditors and
will continue doing so under the transitional agreement through December 31, 2005. We may terminate the provision of these
services without penalty upon 30 days prior written notice to Cendant. Cendant may terminate providing these services to us,
without penalty, after December 31, 2004 upon 120 days prior written notice to us. Cendant has allocated the cost of these
services to us based on the number of audits performed on our business and will continue to allocate costs to us in this manner
under the transitional agreement. Our allocated share of the costs for these services was $95,000 in 2004, $86,000 in 2003 and
$55,000 in 2002, and we estimate the cost for these services under the transitional agreement will be approximately $202,000
annually.

       Telecommunications Services.            Prior to this offering, Cendant provided us with telecommunications services, including
our local and long distance rate per minute charges, through arrangements it has with third-party providers and will continue doing
so under the transitional agreement as an unaffiliated entity until June 30, 2007. Both Cendant and we may terminate the
provision of telecommunications services by Cendant, without penalty, upon 180 days written notice by the terminating party. We
paid the third party providers directly for these services and our equipment use, and will continue to pay them in this manner under
the transitional agreement. We have also paid, and will continue under the transitional agreement to pay for a period of up to three
years, Cendant a management fee of approximately $8,000 per month for use of the Cendant telecommunications group’s
services. Our allocated share of the costs for telecommunications services, including the management fees, was $511,000 in
2004 (net of vendor credits totaling $133,000), $635,000 in 2003 and $600,000 in 2002, and we estimate the cost for these
services under the transitional agreement will be approximately $629,000 per year, subject to changes in our actual usage of such
services.

        Information Technology Services.        Prior to this offering, Cendant provided us with information technology support and
services at their data center in Denver, Colorado through a contract with a third party and will continue doing so under the
transitional agreement for a period of up to two years from the date of the completion of this offering. We may terminate the
provision of these services upon 90 days written notice to Cendant, and we would be required to pay Cendant a penalty in an
amount equal to the unamortized lease costs of computer hardware specific to our mainframe environment, as well as for any
unpaid actual costs incurred by Cendant with respect to these services. Cendant does not have early termination rights with
respect to these services. Cendant has allocated the costs for these services to us based on usage and the level of support we
received from these service providers and will continue to allocate costs to us in this manner under the transitional agreement.
Our allocated share of the costs for these services was $1.1 million in 2004, $1.7 million in 2003 and $1.6 million in 2002, and we
estimate the cost for these services under the transitional agreement will be approximately $116,000 per month, subject to
changes in our actual usage of such services.

      Call Support Services.       Prior to this offering, Cendant provided us with customer service support through its Aberdeen,
South Dakota call center and will continue doing so under the

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transitional agreement until December 31, 2005. We may terminate the provision of these services without penalty upon 60 days
prior written notice to Cendant. Cendant may terminate providing these services to us, without penalty, after June 30, 2005 upon
120 days prior written notice to us. Cendant has allocated the costs for call support based on the number of calls serviced for us in
the call center and will allocate costs to us in the future based on the number of minutes incurred for the calls serviced for us
under the transitional agreement. Our allocated share of the costs for call support was $142,000 in 2004, $131,000 in 2003 and
$139,000 in 2002, and we estimate the cost for these services under the transitional agreement will be approximately $.95 per call
minute (which is based on the average per minute for the last two years).

      Executive Support.     Prior to this offering, Cendant provided us with executive support services through the support of
Cendant’s Financial Services Division of which we are a part. Our allocated share of the costs for executive support was $417,000
in 2004, $175,000 in 2003 and $108,000 in 2002. Following the completion of this offering, we will no longer be required to pay
these costs.

       Public and Regulatory Affairs.      Prior to this offering, Cendant provided us with public and regulatory services, including
governmental affairs, and will continue doing so under the transitional agreement for no longer than one year following this
offering. We may terminate the provision of these services without penalty upon 30 days written notice to Cendant. Cendant does
not have early termination rights with respect to these services. For 2004, 2003 and 2002, Cendant allocated the cost of these
services to us through our share of Cendant’s general corporate overhead, which is discussed below. Under the transitional
agreement, we will pay Cendant for these services based on the time spent in providing such services. We estimate the cost for
these services under the transitional agreement will be approximately $7,000 per month.

       General Corporate Overhead.       In addition to the services discussed above which are directly allocated to us by
Cendant, certain corporate services are charged to us through Cendant’s general corporate overhead allocation, which is
calculated based on a percentage of our revenues. These services include certain of those services discussed above, as well as
purchasing, corporate travel services. Our share of the general corporate overhead was $2.0 million in 2004, $1.6 million in 2003
and $1.0 million in 2002.

        Non-Solicitation of Employees.           We and Cendant have agreed that for a period of two years following the completion of
this offering, neither of us will solicit for employment each other’s existing employees with total annual base salary plus cash
bonus of $150,000 or more, without the consent of the other party.

Equity-based Compensation

        Historically, Cendant has made equity-based compensation grants to our named executive officers. During 2003, the
aggregate value attributed to the grant of restricted stock units to our named executive officers as of the date of grant was $2
million, which is included in compensation expense in our financial statements over the vesting period. During 2004 and 2003, we
recorded compensation expense of $484,000 and $10,000, respectively. See ―Management—Summary Compensation Table.‖ In
accordance with past practice, Cendant has not required that our named executive officers pay any purchase price for the
restricted stock units, which were granted as long-term incentive compensation awards in respect of services rendered and to be
rendered to us by these executives.

       Following the closing of this offering, we will grant new stock options to purchase approximately 989,000 shares of common
stock under the 2004 Equity and Incentive Plan. We expect to incur compensation expense of approximately $1.5 million, $1.7
million, $1.7 million, $1.7 million and $213,000 for the fiscal years ending April 30, 2005, 2006, 2007, 2008 and 2009, respectively,
relating to such grants.

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       Subject to the consent of each holder, Cendant restricted stock units and stock options currently held by our executive
officers and employees will be cancelled and converted into awards of our Company under the 2004 Equity and Incentive Plan.
We will issue approximately 54,000 shares and 37,000 shares of common stock in exchange for the unvested Cendant restricted
stock units currently held by our executive officers, which includes Messrs. Lister, Heimbouch, Fortner, Enchura and Scavone and
Ms. Cooney, and employees, respectively. We will also issue vested options to purchase approximately 357,000 shares and
443,000 shares of common stock in exchange for vested Cendant stock options currently held by our executive officers and
employees, respectively, and vested stock options to purchase approximately 17,000 shares and 36,000 shares of common stock
in exchange for unvested Cendant stock options currently held by our executive officers and employees, respectively. We will
incur additional compensation expense of approximately $4.6 million for the fiscal year ending April 30, 2005 as a result of the
exchange of Cendant restricted stock units and stock options reflecting approximately $2.4 million of compensation expense
related to our executive officers and approximately $2.2 million of compensation expense related to all other employees.

       The number of shares of our common stock and options to purchase shares of our common stock that we will issue
pursuant to the exchange of Cendant restricted stock units and stock options will be determined based upon a ratio equal to the
average closing price of Cendant common stock during a period of three trading days immediately following this offering divided
by the average closing price of our common stock for the same three-day trading period. The exercise price of the options to
purchase shares of our common stock that will be issued pursuant to the exchange of Cendant stock options will be determined
by dividing the exercise price of the Cendant stock options by the ratio equal to the average closing price of Cendant stock during
a period of three trading days immediately following this offering divided by the average closing price of our common stock for the
same three-day trading period. For purposes of this preliminary prospectus, share numbers and option amounts are based on the
midpoint of the initial public offering price range set forth on the cover page of this preliminary prospectus and the average closing
price of Cendant’s stock price as of a recent three day period. The actual amounts will change based on our stock price and
Cendant’s stock price following the closing of this offering. Actual amounts outstanding may also be reduced to the extent our
executive officers and employees elect to exercise the Cendant options prior to completion of the exchange offer.

Special Dividend to be Paid to Cendant

      Historically, we have not paid dividends to our parent, Cendant. Prior to the completion of this offering, we intend to declare
a special dividend to Cendant in the amount of $308.5 million. The $175.0 million cash portion of this special dividend will be
funded entirely from the net proceeds of the notes placement. The remaining $133.5 million consists of the cancellation of a
receivable from Cendant. The purpose of the special dividend is to maximize the consideration to Cendant in connection with the
disposition by Cendant of its entire ownership interest in Jackson Hewitt through this offering. The receivable originated in January
1998 when we became a wholly owned subsidiary of Cendant and consists of funds generated from our operations that have
been transferred to Cendant since that date, less expenses paid by Cendant on our behalf and less the current income taxes
payable to Cendant associated with being included in Cendant’s consolidated income tax return.

Agreement with Wright Express

       We have an agreement with Wright Express Financial Services Corporation, a subsidiary of Cendant, to provide the
Jackson Hewitt CashCard to our customers. Under the agreement, Wright Express provides a MasterCard branded debit card
under the Jackson Hewitt brand that allows our customers to receive their tax refund proceeds on the card. Wright Express
prepares, produces and distributes to us the cards, cardholder agreements and related disclosures, establishes a cardholder
relationship with the customer and manages the customer transactions. Wright Express pays us 50%

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of the net revenue, which includes interchange revenue received from MasterCard, cardholder fees and interest revenue, less
transaction processing costs and direct program support charges incurred by Wright Express and third party vendors. The term of
the agreement is through September 30, 2005. Under this agreement, we received $497,000 in revenue for the year ended April
30, 2004. Revenue under this agreement for the year ended April 30, 2003 was nominal.

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                                         PRINCIPAL AND SELLING STOCKHOLDER

      As of the date of this prospectus, all 37,500,000 of our issued and outstanding shares of common stock are owned by
Cendant through its wholly owned subsidiary, Cendant Finance Holding Corporation. Cendant is selling all 37,500,000 shares of
our common stock in this offering. Cendant’s principal executive office is located at 9 West 57 Street, New York, New York
                                                                                           th


10019.

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                                                 DESCRIPTION OF CAPITAL STOCK

        In connection with this offering, we will amend and restate our certificate of incorporation and by-laws. The following
summary of our capital stock does not relate to our current certificate of incorporation or by-laws, but rather is a description of our
capital stock pursuant to the amended and restated certificate of incorporation and by-laws that will be in effect immediately prior
to this offering.

        Our authorized capital stock will consist of 200,000,000 shares of common stock, par value $0.01 per share, and
10,000,000 shares of preferred stock. Immediately prior to the completion of this offering, we will have 37,500,000 shares of
common stock issued and outstanding and held of record by Cendant. In addition to the 37,500,000 shares to be sold by Cendant
in this offering, there will be outstanding 91,000 shares of common stock issued to our employees following completion of this
offering as described under ―Management—2004 Equity and Incentive Plan.‖ No shares of preferred stock are currently
outstanding.

       The following summary of certain provisions of the common stock and preferred stock does not purport to be complete and
is subject to, and qualified in its entirety by, the provisions of our certificate of incorporation which is included as an exhibit to the
registration statement of which this prospectus is a part, and by the provisions of applicable law. See ―Where You Can Find
Additional Information.‖

Common Stock

General

       Each holder of common stock is entitled to one vote for each share held of record on each matter submitted to a vote of
stockholders. Subject to preferences that may be granted to the holders of preferred stock, each holder of common stock is
entitled to share ratably in distributions to stockholders and to receive ratably such dividends as may be declared by the board of
directors out of funds legally available therefor, and, in the event of the liquidation or dissolution of the corporation, is entitled to
share ratably in all assets of the corporation remaining after payment of liabilities. Holders of common stock have no conversion,
preemptive or other subscription rights and there are no redemption rights or sinking fund provisions with respect to the common
stock. The outstanding common stock is validly issued, fully paid, and non-assessable.

       Subject to the rights and preferences of the holders of any shares of our preferred stock which may at the time be
outstanding, holders of our common stock are entitled to such dividends as the board of directors may declare out of funds legally
available. The holders of common stock will possess exclusive voting rights in us, except to the extent the board of directors
specifies voting power with respect to any preferred stock issued. Except as described below, holders of common stock are
entitled to one vote for each share of common stock, but will not have any right to cumulate votes in the election of directors. In
the event of our liquidation, dissolution or winding up, the holders of common stock will be entitled to receive, after payment of all
of our debts and liabilities and of all sums to which holders of any preferred stock may be entitled, the distribution of any of our
remaining assets. Holders of common stock will not be entitled to preemptive rights with respect to any shares which may be
issued. Any shares of common stock sold under this prospectus will be fully paid and non-assessable upon issuance against full
payment of the purchase price for such shares. We have applied to list our common stock on the New York Stock Exchange.

Certain Provisions

       Provisions of our certificate of incorporation, by-laws and Delaware law, which are summarized below, may be deemed to
have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that a stockholder might consider
in such stockholder’s best interest, including those attempts that might result in a premium over the market price for our common
stock.

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       Classified Board of Directors.        Our board of directors is divided into three classes serving staggered three-year terms,
with one-third of the board being elected each year. Our classified board, together with certain other provisions of our certificate of
incorporation authorizing the board to fill vacant directorships or increase the size of the board, may prevent a stockholder from
removing, or delaying the removal of, incumbent directors, and simultaneously gaining control of the board by filling vacancies
created by such removal with his own nominees.

       Newly Created Directorships, Vacancies and Removal.               Newly created directorships resulting from any increase in the
number of directors and any vacancies on the board of directors resulting from death, resignation, disqualification, removal or
other cause shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even if less than a
quorum of the board of directors remains. Any director elected in accordance with the preceding sentence shall hold office for the
remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until
such director’s successor shall have been elected and qualified. No decrease in the number of directors constituting the board of
directors shall shorten the term of any incumbent director. Our certificate of incorporation provides that directors may be removed
from office only for cause and only by the affirmative vote of holders of at least 60% of the shares then entitled to vote generally in
an election of directors, voting together as a single class.

       Special Meetings of Stockholders.         A special meeting of stockholders may be called only by the Chairman of the board
of directors, the President or the board of directors pursuant to a resolution approved by a majority of the entire board of directors.

       Quorum at Stockholder Meetings.         The holders of not less than one-third of the shares entitled to vote at any meeting
of the stockholders, present in person or by proxy, shall constitute a quorum at all stockholder meetings.

       Stockholder Action By Written Consent.        Our certificate of incorporation provides that any action required or permitted
to be taken by our stockholders at an annual or special meeting of stockholders must be effected at a duly called meeting and
may not be taken or effected by a written consent of stockholders.

       Advance Notice of Stockholder-Proposed Business at Annual Meetings.                 Our by-laws provide that for business to
be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to
our Secretary. To be timely, a stockholder’s notice must be delivered to or mailed and received at our principal executive offices,
not less than 90 days nor more than 120 days prior to the anniversary date of the last annual meeting; provided, however, that in
the event that the annual meeting is called for a date that is not within 25 days before or after the anniversary date, notice by the
stockholder must be received not later than the close of business on the 10th day following the day on which notice of the date of
the annual meeting was first given to stockholders. A stockholder’s notice to the Secretary must set forth as to each matter the
stockholder proposes to bring before the annual meeting:

         a brief description of the business desired to be brought before the annual meeting;

         the name and address, as they appear on our books, of the stockholder proposing such business;

         the class and number of our shares which are beneficially owned by the stockholder;

         a description of all arrangements or understandings between such stockholder and any other person or persons
          (including their names) in connection with the proposal of business by such stockholder and any material interest of the
          other person in the business; and

         a representation that the stockholder intends to appear in person or by proxy at the meeting to bring the business before
          the meeting.

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      In addition, the by-laws provide that for a stockholder entitled to vote in the election of directors generally to properly
nominate a director at a meeting of stockholders, the stockholder must have given timely notice thereof in writing to our secretary.
To be timely, a stockholder’s notice must be received at our principal executive offices not later than:

         in the case of an annual meeting, not less than 90 days nor more than 120 days prior to the anniversary date of the last
          annual meeting of our stockholders; provided, however, that in the event that the annual meeting is called for a date that
          is not within 25 days before or after the anniversary date of the last annual meeting, notice by the stockholder in order to
          be timely must be received not later than the close of business on the 10th day following the day on which notice of the
          date of the annual meeting was first given to stockholders.

         with respect to a special meeting of stockholders, the close of business on the tenth day following the date on which
          notice of such meeting is first given to stockholders.

        Such stockholder’s notice to the secretary must set forth:

         the name and address of the stockholder who intends to make the nomination and of the person or persons to be
          nominated;

         a representation that the stockholder is the holder of record of Jackson Hewitt common stock entitled to vote at such
          meeting and intends to appear in person or by proxy at the meeting to nominate each such nominee;

         a description of all arrangements between such stockholder and each nominee;

         such other information with respect to each nominee as would be required to be included in a proxy statement filed
          pursuant to the proxy rules of the SEC; and

         the consent of each nominee to serve as director of the company if so elected.

       Amendments to By-Laws.         Our certificate of incorporation provides that our board of directors or the holders of at least
60% of the voting power of all shares of our capital stock then entitled to vote generally in the election of directors, voting together
as a single class, have the power to amend or repeal our by-laws.

        Amendment of the Certificate of Incorporation.           Any proposal to amend, alter, change or repeal any provision of our
certificate of incorporation, except as may be provided in the terms of any preferred stock, requires approval by the affirmative
vote of both a majority of the members of our board then in office and a majority vote of the voting power of all of the shares of our
capital stock entitled to vote generally in the election of directors, voting together as a single class. However, any proposal to
amend, alter, change or repeal the provisions of our certificate of incorporation relating to:

         the classification of our board;

         removal of directors;

         the prohibitions on stockholder action by written consent or stockholder calls for special meetings;

         amendment of by-laws; or

         amendment of the certificate of incorporation

requires approval by the affirmative vote of 60% of the voting power of all of the shares of our capital stock entitled to vote
generally in the election of directors, voting together as a single class.

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      Rights Plan.     Each share of common stock has attached to it one right. Each right entitles the holder to purchase one
one-thousandth of a share of a new series of our preferred stock designated as series A junior participating preferred stock at an
exercise price of $116.00, subject to adjustment. The following summary description of the rights agreement does not purport to
be complete and is qualified in its entirety by reference to the rights agreement between us and The Bank of New York, as rights
agent, a copy of which is filed as an exhibit to the registration statement of which this prospectus is a part and is incorporated
herein by reference.

       Rights will only be exercisable under limited circumstances specified in the rights agreement when there has been a
distribution of the rights and such rights are no longer redeemable by us. A distribution of the rights would occur upon the earlier
of:

         10 business days, or such later date as our board of directors may determine, following a public announcement that any
          person or group, other than one involving Cendant, has acquired beneficial ownership of 15% or more of the outstanding
          shares our common stock, other than as a result of repurchases of stock by us or inadvertence by certain stockholders
          as set forth in the rights agreement; or

         10 business days, or such later date as our board of directors may determine, after the date of the commencement or
          the date of first public announcement with respect thereto, whichever is earlier, of a tender offer or exchange offer that
          would result in any person, group or related persons acquiring beneficial ownership of 15% or more of the outstanding
          shares of our common stock.

       The rights will expire at 5:00 P.M. (New York City time) on the tenth anniversary of the closing of this offering, unless such
date is extended or the rights are earlier redeemed or exchanged by us.

         If any person or group acquires shares representing 15% or more of the outstanding shares of our common stock, the
―flip-in‖ provision of the rights agreement will be triggered and the rights will entitle a holder, other than such person, any member
of such group or related person, as such rights will be null and void, to acquire a number of additional shares of our common stock
having a market value of twice the exercise price of each right. If we are involved in a merger or other business combination
transaction, each right will entitle its holder to purchase, at the right’s then-current exercise price, a number of shares of the
acquiring or surviving company’s common stock having a market value at that time of twice the rights’ exercise price.

       Up to and including the tenth business day following a public announcement that a person or group of affiliated or
associated persons has acquired beneficial ownership of 15% or more of the outstanding shares of our common stock, other than
as a result of repurchases of stock by us, we may redeem the rights in whole, but not in part, at a price of $.01 per right, payable
in cash, common stock or other consideration that we deemed appropriate. Promptly upon our election to redeem the rights, the
rights will terminate and the only right of the holders of rights will be to receive the $.01 redemption price.

       At any time after any person or group acquires 15% or more of outstanding shares of our common stock, and prior to the
acquisition by such person or group of fifty percent (50%) or more of outstanding shares of our common stock, our board of
directors may exchange the rights, other than rights owned by such person, group or related parties which have become void, in
whole or in part, for our common stock at an exchange ratio of one share of common stock, for one one-thousandth of a share of
our series A junior participating preferred stock of the right, or of a share of a class or series of our preferred stock or other
security having equivalent rights, preferences and privileges, per right, subject to adjustment.

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       Until a right is exercised, the holder of the right, as such, will have no rights as a stockholder of our company, including,
without limitation, no right to vote or to receive dividends. While the distribution of the rights will not be taxable to stockholders or
to us, stockholders may, depending upon the circumstances, recognize taxable income in the event that the rights become
exercisable for our common stock or other consideration or for common stock of the acquiring or surviving company or in the
event of the redemption of the rights as set forth above.

        Any of the provisions of the rights agreement may be amended by our board of directors prior to the distribution of the
rights. After such distribution, the provisions of the rights agreement may be amended by our board of directors in order to cure
any ambiguity, to make changes which do not adversely affect the interests of holders of rights or to shorten or lengthen any time
period under the rights agreement. The foregoing notwithstanding, no amendment may be made at such time as the rights are not
redeemable.

        The existence of the rights agreement and the rights is intended to deter coercive or partial offers which may not provide
fair value to all stockholders and to enhance our ability to represent all of our stockholders and thereby maximize stockholder
value.

       Delaware Law.     We will be subject to the provisions of Section 203 of the Delaware General Corporation Law regulating
corporate takeovers. In general, those provisions prohibit a Delaware corporation from engaging in any business combination with
any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder,
unless:

         prior to that date, the board approved either the business combination or the transaction that resulted in the stockholder
          becoming an interested stockholder;

         upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the
          interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction
          commenced; or

         on or after the date the business combination is approved by the board and authorized at a meeting of stockholders by
          at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

        Section 203 defines ―business combination‖ to include the following:

         any merger or consolidation involving the corporation and the interested stockholder;

         any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested
          stockholder;

         subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of
          the corporation to the interested stockholder;

         any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any
          class or series of the corporation beneficially owned by the interested stockholder; or

         the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial
          benefits provided by or through the corporation.

       In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the
outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by any of these
entities or persons.

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Dividends

       Subject to the preferences, if any, of any series of preferred stock, holders of record of shares of common stock are entitled
to receive dividends when, if and as may be declared by the board of directors out of funds legally available for such purposes.

Preferred Stock

       The board of directors, without further action by the holders of common stock, may issue shares of preferred stock. The
board of directors is vested with authority to fix by resolution the designations and the powers, preferences and relative,
participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including, without limitation, the
dividend rate, conversion or exchange rights, redemption price and liquidation preference of any series of shares of preferred
stock, and to fix the number of shares constituting any such series.

       The authority possessed by the board of directors to issue preferred stock could potentially be used to discourage attempts
by others to obtain control of the corporation through a merger, tender offer, proxy contest, or otherwise by making such attempts
more difficult to achieve or more costly. The board of directors may issue preferred stock with voting and conversion rights that
could adversely affect the voting power of the holders of common stock. There are no current agreements or understandings for
the issuance of preferred stock and the board of directors has no present intention to issue any shares of preferred stock.

Limitation of Liability and Indemnification of Directors and Officers

        As permitted by the Delaware General Corporation Law, we have adopted provisions in our certificate of incorporation that
limit or eliminate the personal liability of our directors for a breach of their fiduciary duty of care as a director. The duty of care
generally requires that, when acting on behalf of the corporation, directors exercise an informed business judgment based on all
material information reasonably available to them. Consequently, a director will not be personally liable to us or our stockholders
for monetary damages for breach of fiduciary duty as a director, except for liability for:

         any breach of the director’s duty of loyalty to us or our stockholders;

         any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

         any act related to unlawful stock repurchases, redemptions or other distributions or payment of dividends; or

         any transaction from which the director derived an improper personal benefit.

       These limitations of liability do not generally affect the availability of equitable remedies such as injunctive relief or
rescission. Our certificate of incorporation also authorize us to indemnify our officers, directors and other agents to the fullest
extent permitted under Delaware law and we may advance expenses to our directors, officers and employees in connection with a
legal proceeding, subject to limited exceptions.

        As permitted by the Delaware General Corporation Law, our certificate of incorporation and by-laws provide that:

         we shall indemnify our directors and officers to the fullest extent permitted by the Delaware General Corporation Law,
          subject to limited exceptions; and

         we may purchase and maintain insurance on behalf of our current or former directors, officers, employees or agents
          against any liability asserted against them and incurred by them in any such capacity, or arising out of their status as
          such.

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       We may enter into separate indemnification agreements with each of our directors which may be broader than the specific
indemnification provisions contained in the Delaware General Corporation Law. These indemnification agreements may require
us, among other things, to indemnify our directors against liabilities that may arise by reason of their status or service as directors,
other than liabilities arising from willful misconduct. These indemnification agreements may also require us to advance any
expenses incurred by the directors as a result of any proceeding against them as to which they could be indemnified and to obtain
directors’ and officers’ insurance if available on reasonable terms.

     At present, there is no pending litigation or proceeding involving any of our directors, officers, employees or agents in which
indemnification by us is sought, nor are we aware of any threatened litigation or proceeding that may result in a claim for
indemnification.

Transfer Agent and Registrar

        The transfer agent and registrar for our common stock is The Bank of New York.

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                                               SHARES ELIGIBLE FOR FUTURE SALE

      Upon completion of this offering, 37,591,000 shares of our common stock will be outstanding (assuming no exercise of the
underwriters’ option to purchase up to an additional 5,625,000 shares). The 37,500,000 shares sold in this offering (43,125,000
shares if the underwriters exercise their option to purchase additional shares in full) will be freely tradable without restriction under
the Securities Act, except for any such shares held at any time by an affiliate of us, as such term is defined under Rule 144
promulgated under the Securities Act.

Rule 144

      In general, under Rule 144 as currently in effect, beginning 90 days after the date of this prospectus, a person or persons
whose shares are aggregated, who has beneficially owned restricted shares for at least one year, including persons who may be
deemed to be our ―affiliates,‖ would be entitled to sell within any three-month period a number of shares that does not exceed the
greater of:

         1.0% of the number of shares of common stock then outstanding, which will equal approximately 376,000 shares
          immediately after this offering; or

         the average weekly trading volume of our common stock on the New York Stock Exchange during the four calendar
          weeks before a notice of the sale on Form 144 is filed.

       Sales under Rule 144 are also subject to certain manner of sale provisions and notice requirements and to the availability of
certain public information about us.

Rule 144(k)

      Under Rule 144(k), a person who is not deemed to have been one of our ―affiliates‖ at any time during the 90 days
preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, including the holding
period of any prior owner other than an ―affiliate,‖ is entitled to sell these shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144.

Stock Options and Restricted Stock Grants

        As described above under ―Management—2004 Equity and Incentive Plan‖, following the closing of this offering, we will
issue 91,000 shares of common stock and options to purchase 1,842,000 shares of common stock. Following the consummation
of this offering, we intend to file one or more registration statements on Form S-8 under the Securities Act to register shares of
common stock issued or reserved for issuance under our 2004 Equity and Incentive Plan. Any such Form S-8 registration
statement will automatically become effective upon filing. Accordingly, shares of common stock registered under any such
registration statement will be available for sale in the open market, unless such shares of common stock are subject to restrictions
on transfer imposed by us or the lock-up restrictions described in this prospectus.

Lock-up Agreements

       As of the date of this prospectus, we, our senior officers, including those officers listed under ―Management,‖ and our
directors have agreed that we and they will not, directly or indirectly, offer, sell, offer to sell, contract to sell, grant any option to
purchase or otherwise dispose of, loan, pledge or transfer (or announce any offer, sale, offer of sale, contract of sale, grant of any
options to purchase or otherwise dispose of, loan, pledge or transfer) or grant any rights with respect to any shares of common
stock or similar securities of the corporation or any securities convertible into, or exercisable

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or exchangeable for, any shares of common stock of the corporation without the prior written consent of the representatives of the
underwriters, for a period of 180 days from the date of this prospectus. Our senior officers, including those listed under
―Management,‖ will receive approximately 71,000 shares of our common stock in exchange for their unvested Cendant restricted
stock units and vested options to purchase approximately 656,000 shares of common stock in exchange for their vested and
unvested Cendant stock options, all of which will be subject to the above provisions for a period of 180 days from the date of the
prospectus. Certain of our employees will receive approximately 20,000 shares of our common stock in exchange for their
unvested Cendant restricted stock units and vested options to purchase approximately 197,000 shares of common stock in
exchange for their vested and unvested Cendant stock options, all of which will be subject to the above provisions for a period of
90 days from the date of the prospectus. Following the closing of this offering, we will grant to our senior officers and employees
new stock options to purchase approximately 989,000 shares of common stock under the 2004 Equity and Incentive Plan. These
new stock options will vest ratably over a four-year period with the first vesting date occurring one year from the date of grant. We
intend to grant our non-employee directors approximately 13,000 deferred stock units in connection with their new director equity
grant, which will be subject to the above provisions for a period of 180 days from the date of the prospectus.

       For purposes of this preliminary prospectus, share numbers and option amounts are based on the midpoint of the initial
public offering price range set forth on the cover page of this preliminary prospectus and the average closing price of Cendant’s
stock price as of a recent three day period. The actual amounts will change based on our stock price and Cendant’s stock price
following the closing of this offering. Actual amounts outstanding may also be reduced to the extent our executive officers and
employees elect to exercise the Cendant options prior to completion of the exchange offer.

       Notwithstanding anything contained in the lock-up agreements, we may issue and sell common stock pursuant to any stock
option plan, stock ownership plan or dividend reinvestment plan of ours in effect at the time of the pricing of this offering and upon
the conversion of securities or the exercise of warrants outstanding at the time of the pricing of this offering and up to 5% of the
number of shares of common stock then outstanding as consideration in connection with acquisitions, provided that the recipients
agree to the restrictions in the lock-up agreements. Individuals may also transfer securities subject to the lock-up agreements as
bona fide gifts or to a trust for the direct or indirect benefit of such individual or his or her ―immediate family,‖ provided that the
recipient agrees to the restrictions in the lock-up agreements.

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                                                              UNDERWRITING

       Jackson Hewitt, Cendant and the underwriters named below have entered into an underwriting agreement with respect to
the shares being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of shares
indicated in the following table. Goldman, Sachs & Co. and J.P. Morgan Securities Inc. are acting as co-lead managers and as the
representatives of the underwriters. Each of the other underwriters listed on the cover of the prospectus is acting as a
co-manager.

                                             Underwriters                                                               Number of Shares

Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Banc of America Securities LLC
Citigroup Global Markets Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Credit Suisse First Boston LLC
Blaylock & Partners, L.P.
CIBC World Markets Corp.
Lehman Brothers Inc.

     Total                                                                                                                        37,500,000


      The underwriters are committed to take and pay for all of the shares being offered, if any are taken, other than the shares
covered by the option described below unless and until this option is exercised.

      If the underwriters sell more shares than the total number set forth in the table above, the underwriters have an option to
buy up to an additional 5,625,000 shares from Jackson Hewitt to cover such sales. They may exercise that option for 30 days. If
any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same
proportion as set forth in the table above.

      The following tables show the per share and total underwriting discounts and commissions to be paid to the underwriters by
Jackson Hewitt and Cendant. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to
purchase additional shares.

                                               Paid by Jackson Hewitt                                           Paid by Cendant

                                          No Exercise            Full Exercise                         No Exercise             Full Exercise

Per Share                               $            —       $                                        $                    $
Total                                   $            —       $                                        $                    $

        Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of
this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $                   per share
from the initial public offering price. Any such securities dealers may resell any shares purchased from the underwriters to certain
other brokers or dealers at a discount of up to $         per share from the initial public offering price. If all the shares are not sold at
the initial public offering price, the representatives may change the offering price and the other selling terms.

       Jackson Hewitt currently anticipates that it will undertake a directed share program, pursuant to which it will direct the
underwriters to reserve up to 1,875,000 shares of common stock for sale to directors, officers, employees and franchisees of
Jackson Hewitt at the initial public offering price through a directed share program. The number of shares of common stock
available for sale to the general public in the public offering will be reduced to the extent these persons purchase any reserved
shares. Any shares not so purchased will be offered by the underwriters to the general public on the same basis as other shares
offered hereby.

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       Jackson Hewitt, its senior officers, including those officers listed under ―Management,‖ and directors have agreed with the
underwriters, subject to limited exceptions, not to dispose of or hedge any of their common stock or securities convertible into or
exchangeable for shares of common stock other than pursuant to the exchange offer described herein during the period from the
date of this prospectus continuing through the date 180 days after the date of this prospectus, and certain of Jackson Hewitt’s
other employees have also agreed to such restrictions, subject to limited exceptions, through the date 90 days after the date of
this prospectus. See ―Shares Eligible for Future Sale—Lock-Up Agreements.‖

        Prior to this offering, there has been no public market for the shares. The initial public offering price will be negotiated
among Jackson Hewitt, Cendant and the representatives of the underwriters. Among the factors to be considered in determining
the initial public offering price of the shares, in addition to prevailing market conditions, will be Jackson Hewitt’s historical
performance, estimates of Jackson Hewitt’s business potential and earnings prospects, an assessment of Jackson Hewitt’s
management and the consideration of the above factors in relation to market valuation of companies in related businesses.

        Jackson Hewitt has applied to list the common stock on the New York Stock Exchange under the symbol ―JTX.‖ In order to
meet one of the requirements for listing the common stock on the New York Stock Exchange, the underwriters have undertaken to
sell lots of 100 or more shares to a minimum of 2,000 beneficial holders.

       In connection with the offering, the underwriters may purchase and sell shares of common stock in the open market. These
transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Shorts
sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering.
―Covered‖ short sales are sales made in an amount not greater than the underwriters’ option to purchase additional shares from
Jackson Hewitt in the offering. The underwriters may close out any covered short position by either exercising their option to
purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered
short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as
compared to the price at which they may purchase additional shares pursuant to the option granted to them. ―Naked‖ short sales
are any sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the
open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward
pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in
the offering. Stabilizing transactions consist of various bids for or purchases of common stock made by the underwriters in the
open market prior to the completion of the offering.

       The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a
portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the
account of such underwriter in stabilizing or short covering transactions.

        Purchases to cover a short position and stabilizing transactions may have the effect of preventing or retarding a decline in
the market price of our common stock, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise
affect the market price of the common stock. As a result, the price of the common stock may be higher than the price that
otherwise might exist in the open market. If these activities are commenced, they may be discontinued at any time. These
transactions may be effected on the New York Stock Exchange, in the over-the-counter market or otherwise.

      Each underwriter has represented, warranted and agreed that: (i) it has not offered or sold and, prior to the expiry of a
period of six months from the closing date, will not offer or sell any shares to

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persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995; (ii) it has only communicated or caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial
Services and Markets Act 2000 (―FSMA‖)) received by it in connection with the issue or sale of any shares in circumstances in
which section 21(1) of the FSMA does not apply to Jackson Hewitt; and (iii) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United
Kingdom.

       The shares may not be offered or sold, transferred or delivered, as part of their initial distribution or at any time thereafter,
directly or indirectly, to any individual or legal entity in the Netherlands other than to individuals or legal entities who or which trade
or invest in securities in the conduct of their profession or trade, which includes banks, securities intermediaries, insurance
companies, pension funds, other institutional investors and commercial enterprises which, as an ancillary activity, regularly trade
or invest in securities.

        The shares may not be offered or sold by means of any document other than to persons whose ordinary business is to buy
or sell shares or debentures, whether as principal or agent, or in circumstances which do not constitute an offer to the public within
the meaning of the Companies Ordinance (Cap. 32) of Hong Kong, and no advertisement, invitation or document relating to the
shares may be issued, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed
or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect
to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to ―professional investors‖ within
the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made thereunder.

        This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this
prospectus and any other document or material in connection with the offer or sale, or invitation or subscription or purchase, of the
shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for
subscription or purchase, whether directly or indirectly, to persons in Singapore other than under circumstances in which such
offer, sale or invitation does not constitute an offer or sale, or invitation for subscription or purchase, of the shares to the public in
Singapore.

      Each underwriter has acknowledged and agreed that the shares have not been registered under the Securities and
Exchange Law of Japan and are not being offered or sold and may not be offered or sold, directly or indirectly, in Japan or to or for
the account of any resident of Japan, except (i) pursuant to an exemption from the registration requirements of the Securities and
Exchange Law of Japan and (ii) in compliance with any other applicable requirements of Japanese law.

        The underwriters do not expect sales to discretionary accounts to exceed five percent of the total number of shares offered.

      Cendant will pay the total expenses of the offering, which are estimated to be approximately $         . Jackson Hewitt will
pay any expenses in connection with the exercise by the underwriters of their option to purchase additional shares.

         Jackson Hewitt and Cendant have each agreed to indemnify the several underwriters against certain liabilities, including
liabilities under the Securities Act.

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       Affiliates of some of the underwriters act as lenders to Cendant under its credit facility. Since the net proceeds of this
offering will initially be used by Cendant to reduce the outstanding balance under Cendant’s credit facility, those affiliates may
receive over 10% of the net proceeds of this offering. Because some of the underwriters may receive more than 10% of the entire
net proceeds in this offering, the underwriters may be deemed to have a ―conflict of interest‖ under Rule 2710(h) of the Conduct
Rules of the National Association of Securities Dealers, Inc. Accordingly, this offering will be made in compliance with the
applicable provisions of Rule 2720 of the conduct rules. Rule 2720 requires that the initial public offering price can be no higher
than that recommended by a ―qualified independent underwriter‖, as defined by the NASD. Goldman, Sachs & Co. has served in
that capacity and performed due diligence investigations and reviewed and participated in the preparation of the registration
statement of which this prospectus forms a part. Goldman, Sachs & Co. will receive $1,000 as compensation for such role.

       Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform,
various financial advisory and investment banking services for Jackson Hewitt, for which they received or will receive customary
fees and expenses. Concurrently with this offering, Jackson Hewitt plans to issue $175.0 million aggregate principal amount of
floating rate notes in a private placement for which J.P. Morgan will receive a customary placement fee. Jackson Hewitt also plans
to enter into a new credit facility for borrowings of up to $100 million for which J.P. Morgan will receive a customary arrangement
fee and affiliates of several of the underwriters, including J.P. Morgan, will receive other fees.

                                                         LEGAL COUNSEL

       We are being represented by Skadden, Arps, Slate, Meagher & Flom, LLP, New York, New York, in connection with this
offering. Kirkland & Ellis LLP, New York, New York, will pass upon certain legal matters for the underwriters.

                                                             EXPERTS

       The consolidated financial statements as of April 30, 2004 and 2003 and for each of the three years in the period ended
April 30, 2004, included in this prospectus, have been audited by Deloitte & Touche LLP, independent registered public
accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion and includes an
explanatory paragraph relating to the adoption of the fair value method of accounting for stock-based compensation on January 1,
2003 and the adoption of the non-amortization provisions for goodwill and other indefinite-lived intangibles on January 1, 2002)
and has been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

                                                                 93
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                                       WHERE YOU CAN FIND ADDITIONAL INFORMATION

       We have filed with the Securities and Exchange Commission, or SEC, a registration statement on Form S-1 under the
Securities Act of 1933, as amended, with respect to the shares of common stock offered hereby. This prospectus, which
constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement, certain
items of which are omitted as permitted by the rules and regulations of the SEC. For further information, reference is made to the
registration statement and to the exhibits and schedules filed with it, which are available for inspection without charge at the public
reference facilities maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Copies of the material
containing this information may be obtained from the SEC upon payment of the prescribed fees. The SEC also maintains an
Internet website that contains reports, proxy and information statements and other information regarding registrants that file
electronically with the SEC. The address of this website is http://www.sec.gov. We expect that our annual and quarterly reports
will be available on our website at http://www.jacksonhewitt.com.

       Upon completion of this offering, we will become subject to the periodic reporting and other information requirements of the
Exchange Act and will file periodic reports, proxy statements and other information with the SEC. Such reports may be inspected
at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
SEC’s regional office located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material may be
obtained by mail from the Public Reference Branch of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

                                                                   94
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                                        Index to Consolidated Financial Statements


                                                                                     Page

Report of Independent Registered Public Accounting Firm                               F-2
Consolidated Balance Sheets                                                           F-3
Consolidated Statements of Operations                                                 F-4
Consolidated Statements of Stockholder’s Equity                                       F-5
Consolidated Statements of Cash Flows                                                 F-6
Notes to Consolidated Financial Statements                                            F-7

                                                           F-1
Table of Contents

                            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of Jackson Hewitt Tax Service Inc.:

We have audited the accompanying consolidated balance sheets of Jackson Hewitt Tax Service Inc. (the ―Company‖), a
wholly-owned subsidiary of Cendant Corporation, as of April 30, 2004 and 2003, and the related consolidated statements of
operations, stockholder’s equity, and cash flows for each of the three years in the period ended April 30, 2004. These
consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the consolidated financial position of
the Company at April 30, 2004 and 2003, and the consolidated results of its operations and its cash flows for each of the three
years in the period ended April 30, 2004 in conformity with accounting principles generally accepted in the United States of
America.

As discussed in Note 2 to the consolidated financial statements, on January 1, 2003, the Company adopted the fair value method
of accounting for stock-based compensation. Also, as discussed in Note 2, on January 1, 2002, the Company adopted the
non-amortization provisions for goodwill and other indefinite-lived intangible assets.


/s/ Deloitte & Touche LLP
Parsippany, New Jersey
May 12, 2004

                                                                  F-2
Table of Contents

                                                 JACKSON HEWITT TAX SERVICE INC.

                                                  CONSOLIDATED BALANCE SHEETS

                                               (In thousands, except per share amounts)
                                                                                                         As of April 30,

                                                                                                  2004                     2003

ASSETS
Current assets:
    Cash and cash equivalents                                                                 $     5,266           $        1,543
    Accounts receivable (net of allowance for doubtful accounts of $1,121 and $1,911)              31,315                   20,355
    Notes receivable, net                                                                           1,944                    1,824
    Prepaid expenses and other                                                                      4,810                    2,344
    Deferred income taxes                                                                           5,074                    6,141

           Total current assets                                                                    48,409                   32,207
Property and equipment, net                                                                        37,347                   42,148
Goodwill                                                                                          392,368                  391,004
Other intangibles, net                                                                             89,902                   91,213
Due from Cendant                                                                                  143,985                   93,664
Notes receivable, net                                                                               1,985                    1,555
Other non-current assets                                                                           11,946                   10,110

           Total assets                                                                       $ 725,942             $ 661,901

LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
    Accounts payable and accrued liabilities                                                  $    31,653           $       20,944

           Total current liabilities                                                               31,653                   20,944
Deferred income taxes                                                                              26,335                   23,134
Other non-current liabilities                                                                      12,858                    5,687

           Total liabilities                                                                       70,846                   49,765

COMMITMENTS AND CONTINGENCIES (Note 12)
STOCKHOLDER’S EQUITY
   Common stock, par value $0.01 per share—authorized 200,000,000 shares; issued and
     outstanding, 37,500,000 shares                                                                   375                      375
   Additional paid-in capital                                                                     475,844                  475,844
   Retained earnings                                                                              178,877                  135,917

           Total stockholder’s equity                                                             655,096                  612,136

           Total liabilities and stockholder’s equity                                         $ 725,942             $ 661,901


                                            See Notes to Consolidated Financial Statements.

                                                                 F-3
Table of Contents

                                           JACKSON HEWITT TAX SERVICE INC.

                                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                          (In thousands, except per share amounts)
                                                                                            For the Years Ended April 30,

                                                                                     2004                2003                   2002


Revenues
Franchise operations revenues:
    Royalty                                                                      $    51,646        $    43,229             $    35,640
    Marketing and advertising                                                         24,213             20,671                  17,261
    Financial product fees                                                            30,384             25,037                  21,635
    Other financial product revenue                                                   30,255             23,110                  29,518
    Other                                                                             12,527             11,080                  11,685
Service revenue from company-owned office operations                                  56,590             48,420                  41,252

Net revenues                                                                         205,615            171,547                 156,991

Expenses
   Cost of franchise operations                                                       23,922             18,971                  19,511
   Marketing and advertising                                                          29,464             25,086                  18,836
   Cost of company-owned office operations                                            41,639             34,184                  17,697
   Selling, general and administrative                                                28,499             14,997                  17,882
   Depreciation and amortization                                                      11,911             11,523                  12,824

           Total expenses                                                            135,435            104,761                  86,750

Income from operations                                                                70,180             66,786                  70,241
Other income:
    Interest income, net of interest expense of $373, $36 and $38                        284                 791                  1,449
    Preferred stock dividends from Tax Services of America                               —                   —                    1,768

Income before income taxes                                                            70,464             67,577                  73,458
Provision for income taxes                                                            27,504             26,444                  30,935

Net income                                                                       $    42,960        $    41,133             $    42,523

Earnings per share
    Basic and diluted                                                            $       1.15       $       1.10            $      1.13


                                       See Notes to Consolidated Financial Statements.

                                                              F-4
Table of Contents

                                  JACKSON HEWITT TAX SERVICE INC.

                          CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY

                                               (In thousands)
                                                                        Additional                      Total
                                                                         Paid-in         Retained   Stockholder’s
                                                  Common Stock           Capital         Earnings      Equity

                                                            Amoun
                                               Shares         t

Balance, May 1, 2001                           37,500       $ 375      $ 475,844     $     52,261   $   528,480
    Net income                                    —           —              —             42,523        42,523

Balance, April 30, 2002                        37,500            375      475,844          94,784       571,003
    Net income                                    —              —            —            41,133        41,133

Balance, April 30, 2003                        37,500            375      475,844         135,917       612,136
    Net income                                    —              —            —            42,960        42,960

Balance, April 30, 2004                        37,500       $ 375      $ 475,844     $ 178,877      $   655,096




                               See Notes to Consolidated Financial Statements.

                                                    F-5
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                                                            JACKSON HEWITT TAX SERVICE INC.

                                                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                            (In thousands)
                                                                                                                     For the Years Ended April 30,

                                                                                                              2004                 2003              2002


Operating Activities:
  Net income                                                                                              $    42,960          $    41,133       $    42,523
  Adjustments to reconcile net income to net cash provided by operating activities:
     Depreciation and amortization                                                                             11,911               11,523            12,824
     Loss on disposal of assets                                                                                    11                1,117               139
     Amortization of development advances                                                                         840                  216               249
     Preferred stock dividends from Tax Services of America                                                       —                    —              (1,768 )
     Provision for uncollectible receivables                                                                    1,297                  790             3,058
     Provision for litigation settlement                                                                       10,410                  —                 —
     Deferred income taxes                                                                                      4,964                1,387            (3,828 )
     Changes in assets and liabilities, excluding the impact
        of acquisitions:
           Accounts receivable                                                                                (12,257 )             11,308           (30,409 )
           Notes receivable                                                                                      (550 )             (1,190 )         (13,683 )
           Prepaid expenses and other                                                                          (2,466 )             (1,144 )            (855 )
           Other non-current assets                                                                            (1,040 )             (2,833 )          (1,227 )
           Accounts payable and accrued liabilities                                                             8,212               (1,755 )           7,054
           Other non-current liabilities                                                                         (742 )              3,855              (424 )

            Net cash provided by operating activities                                                          63,550               64,407            13,653

Investing Activities:
     Capital expenditures                                                                                      (3,965 )             (5,228 )         (22,666 )
     Funding of development advances                                                                           (1,636 )             (3,406 )          (2,149 )
     Net assets acquired (net of cash overdraft of $270
        in 2002)                                                                                               (3,905 )             (5,200 )          (3,870 )
     Investment in Tax Services of America                                                                        —                    —              (4,360 )

            Net cash used in investing activities                                                              (9,506 )            (13,834 )         (33,045 )

Financing Activities:
     (Increase)/decrease in due from Cendant                                                                  (50,321 )            (51,342 )          20,687

            Net cash provided by (used in) financing activities                                               (50,321 )            (51,342 )          20,687

Net increase (decrease) in cash and cash equivalents                                                            3,723                 (769 )           1,295
Cash and cash equivalents, beginning of period                                                                  1,543                2,312             1,017

Cash and cash equivalents, end of period                                                                  $     5,266          $     1,543       $     2,312

Supplemental Disclosures of Cash Flow Information:
  Cash paid during the period for:
     Interest                                                                                             $           1        $          9      $          2



                                                        See Notes to Consolidated Financial Statements.

                                                                                      F-6
Table of Contents

                                              JACKSON HEWITT TAX SERVICE INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

1.   BASIS OF PRESENTATION

       Jackson Hewitt Tax Service Inc. (―JHTS‖), a wholly-owned subsidiary of Cendant Corporation (―Cendant‖), was
incorporated on February 20, 2004 as a Delaware holding company. Simultaneous with the incorporation of JHTS, Cendant
contributed all outstanding shares of Jackson Hewitt Inc. to JHTS. JHTS accounted for the contribution of outstanding shares as a
change in reporting entities under common control and has recognized the outstanding shares at their carrying amounts at the
date of transfer. Accordingly, the accompanying consolidated financial statements have been prepared as though JHTS existed
throughout the periods presented.

         On March 15, 2004, Cendant announced that it intends to sell its 100% ownership of JHTS’s common stock through an
initial public offering. In contemplation of the initial public offering, JHTS declared a stock dividend which increased the number of
common shares outstanding from 100 to 37,500,000. Stockholder’s equity has been adjusted retroactively for the effect of the
stock dividend for all periods presented.

       Through Jackson Hewitt Inc., JHTS provides computerized preparation of federal and state personal income tax returns
through a network of franchised and company-owned offices. The consolidated financial statements include the accounts and
transactions of JHTS and its subsidiaries as well as entities in which JHTS directly or indirectly has a controlling financial interest
(collectively, the ―Company‖). For more information regarding the Company’s consolidation policy, refer to Note 2 –Summary of
Significant Accounting Policies.

      In presenting the consolidated financial statements, management makes estimates and assumptions that affect the
amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information.
Accordingly, actual results could differ from those estimates.

     The Company’s fiscal year ends April 30th, which differs from Cendant’s fiscal year-end of December 31st. The adoption of
new accounting pronouncements in the periods presented coincides with Cendant’s fiscal year-end.

        The Company’s comprehensive income is comprised solely of net income.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       Consolidation Policy.        On January 17, 2003, the Financial Accounting Standards Board (―FASB‖) issued FASB
Interpretation No. 46, ―Consolidation of Variable Interest Entities‖ (―FIN 46‖). Such Interpretation addresses the consolidation of
variable interest entities (―VIEs‖), including special purpose entities (―SPEs‖) that are not controlled through voting interests or in
which the equity investors do not bear the residual economic risks and rewards. The provisions of FIN 46 were effective
immediately for transactions entered into by the Company subsequent to January 31, 2003 and became effective for all other
transactions as of July 1, 2003. However, in October 2003, the FASB permitted companies to defer the July 1, 2003 effective date
to December 31, 2003 in whole or in part. On December 24, 2003, the FASB issued a complete replacement of FIN 46 (―FIN
46R‖), which clarified certain complexities of FIN 46 and generally requires adoption no later than December 31, 2003 for entities
that were considered SPEs under previous guidance, and no later than March 31, 2004 for all other entities. The Company
adopted FIN 46R in its entirety as of December 31, 2003 even though adoption for non-SPEs was not required until March 31,
2004.

       In connection with its Jackson Hewitt franchise arrangements, the Company has provided some level of financial support to
certain of its franchisees in the form of loans and/or development

                                                                  F-7
Table of Contents

                                             JACKSON HEWITT TAX SERVICE INC.

                                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

advances. Based on its analyses, the Company has concluded that it is not the primary beneficiary under these franchise
agreements and therefore does not consolidate the operations of such franchisees under the provisions of FIN 46R. However,
with respect to the franchisees for which financial support has been provided, the Company believes that it has a significant
variable interest. At April 30, 2004, the Company had provided financial support, in the form of loans and advances, in the amount
of $14,096 to 320 franchisees (see Note 6—Notes Receivable, net and Note 7—Development Advances). Such amount less the
allowance for uncollectible amounts as of April 30, 2004 of $3,551, represents the Company’s maximum exposure to losses.

       Stock-Based Compensation.         Under Cendant’s existing stock plans, Cendant common stock awards are granted to the
Company’s employees. Prior to January 1, 2003, the Company measured its stock-based compensation using the intrinsic value
approach under Accounting Principles Board (―APB‖) Opinion No. 25, as permitted by Statement of Financial Accounting
Standards (―SFAS‖) No. 123, ―Accounting for Stock-Based Compensation.‖ Accordingly, the Company did not recognize
compensation expense upon the issuance of its stock options to employees because the option terms were fixed and the exercise
price equaled the market price of the underlying common stock on the date of grant. Therefore, the Company was not allocated
compensation expense upon Cendant’s issuance of common stock options to the Company’s employees.

       On January 1, 2003, the Company (in conjunction with Cendant’s adoption) adopted the fair value method of accounting for
stock-based compensation provisions of SFAS No. 123. The Company also adopted SFAS No. 148, ―Accounting for Stock-Based
Compensation—Transition and Disclosure,‖ in its entirety on January 1, 2003, which amended SFAS No. 123 to provide
alternative methods of transition for a voluntary change to the fair value based method of accounting provisions. As a result, the
Company now expenses all employee stock awards over their vesting periods based upon the fair value of the award on the date
of grant. As the Company elected to use the prospective transition method, Cendant has allocated expense to the Company only
for employee stock awards that were granted or modified subsequent to December 31, 2002.

      The following table illustrates the effect on net income and earnings per share as if the fair value based method had been
applied to all employee stock awards granted by Cendant to the Company’s employees for all periods presented:
                                                                                                      For the Years Ended
                                                                                                            April 30,

                                                                                           2004                2003             2002


Reported net income                                                                    $ 42,960            $ 41,133         $ 42,523
Add back: Stock-based employee compensation expense included in reported
  net income, net of tax   (a)
                                                                                              301                     6            —
Less: Total stock-based employee compensation expense determined under the
  fair value based method for all awards, net of tax(b)
                                                                                             (702 )            (6,032 )         (3,598 )

Pro forma net income                                                                   $ 42,559            $ 35,107         $ 38,925

Pro forma earnings per share:
     Basic and diluted                                                                 $     1.13          $     0.94       $     1.04

(a)
        For a detailed account of compensation expense recorded within the consolidated statements of operations for stock
        awards granted by Cendant subsequent to December 31, 2002, see Note 13—Stock-Based Compensation.

                                                               F-8
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                                             JACKSON HEWITT TAX SERVICE INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)
(b)
        The 2003 amounts reflect the August 27, 2002 acceleration of the vesting schedules for certain options previously granted
        by Cendant (see Note 13—Stock-Based Compensation). Pro forma compensation expense reflected for grants awarded
        prior to January 1, 2003 is not indicative of future compensation expense that would be recorded by the Company, as
        future expense will vary based upon factors such as the type of award granted by Cendant or the Company and the
        then-current fair market value of such award.

      Costs Associated with Exit or Disposal Activities.         On January 1, 2003, the Company adopted SFAS No. 146,
―Accounting for Costs Associated with Exit or Disposal Activities.‖ Such standard nullifies EITF Issue No. 94-3, ―Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring).‖ Under SFAS No. 146, a liability related to an exit or disposal activity (including restructurings) initiated after
December 31, 2002 is not recognized until such liability has actually been incurred whereas under EITF Issue No. 94-3 a liability
was recognized at the date of commitment to an exit or disposal plan. The impact of adopting this standard was not material to the
Company’s results of operations or financial position.

       Guarantees.         On January 1, 2003, the Company adopted FASB Interpretation No. 45, ―Guarantor’s Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,‖ in its entirety. Such
Interpretation elaborates on the disclosures to be made by a guarantor about its obligations under certain guarantees issued. It
also clarifies that a guarantor is required to recognize, at the inception of certain guarantees issued or modified after December
31, 2002, a liability for the fair value of the obligation undertaken in issuing the guarantee. The impact of adopting this
Interpretation was not material to the Company’s results of operations or financial position.

       Goodwill and Identifiable Intangible Assets. On January 1, 2002, the Company adopted SFAS No. 142, ―Goodwill and
Other Intangible Assets,‖ in its entirety. Prior to the adoption, all intangible assets (including goodwill) were amortized over the
estimated periods to be benefited, on a straight-line or accelerated basis. Therefore, the results of operations for the fiscal year
ended April 30, 2002 reflect the amortization of goodwill and indefinite-lived intangible assets through December 31, 2001, while
the results of operations for the years ended April 30, 2004 and 2003 do not reflect such amortization (see below for pro forma
disclosure depicting the Company’s results of operations during 2002 after applying the non-amortization provisions of SFAS No.
142). In connection with SFAS No. 142, the Company is required to assess goodwill and indefinite-lived intangible assets for
impairment annually, or more frequently if circumstances indicate impairment may have occurred.

       The Company assesses goodwill for such impairment by comparing the carrying value of its reporting units to their fair
values. The Company’s reporting units are the same as its reportable operating segments. The Company determines the fair
value of its reporting units utilizing discounted cash flows and incorporates assumptions that it believes marketplace participants
would utilize. When available and as appropriate, the Company uses comparative market multiples to corroborate the discounted
cash flow results. The Company’s amortizable intangible assets are tested for impairment based on the comparison of its
undiscounted cash flows to its carrying amounts and, if impaired, written down to fair value based on either discounted cash flows
or appraised values. Indefinite-lived intangible assets are tested for impairment and written down to fair value, as required by
SFAS No. 142.

                                                                 F-9
Table of Contents

                                             JACKSON HEWITT TAX SERVICE INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

         The Company performed its initial impairment assessment on January 1, 2002 in connection with the adoption of SFAS No.
142 and determined that the carrying amounts of its reporting units did not exceed their respective fair values. Accordingly, the
initial implementation of this standard did not result in a charge and, as such, did not impact the Company’s results of operations
during 2002. Subsequent to the initial assessment, the Company has performed its review annually, or more frequently if
circumstances indicated impairment may have occurred, and during the years ended April 30, 2004, 2003 and 2002, determined
that no such impairment had occurred.

      Had the Company applied the non-amortization provisions of SFAS No. 142 commencing May 1, 2001, net income and
earnings per share would have been as follows for 2002:
                                                                                                                        Year
                                                                                                                       Ended
                                                                                                                      April 30,
                                                                                                                        2002



            Reported net income                                                                                   $ 42,523
            Add back: Goodwill amortization                                                                          6,260
            Add back: Trademark amortization, net of tax                                                               910

            Pro forma net income                                                                                  $ 49,693

            Pro forma earnings per share:
                 Basic and diluted                                                                                $        1.33

        Impairment or Disposal of Long-Lived Assets.           On January 1, 2002, the Company adopted SFAS No. 144, which
supercedes SFAS No. 121, ―Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,‖
and replaces the accounting and reporting provisions of APB Opinion No. 30, ―Reporting Results of Operations—Reporting the
Effects of Disposal of a Segment of a Business and Extraordinary, Unusual and Infrequently Occurring Events and Transactions,‖
as it relates to the disposal of a segment of a business. SFAS No. 144 requires the use of a single accounting model for long-lived
assets to be disposed of by sale, including discontinued operations, by requiring those long-lived assets to be measured at the
lower of carrying amount or fair value less cost to sell. The impairment recognition and measurement provisions of SFAS No. 121
were retained for all long-lived assets to be held and used with the exception of goodwill and indefinite-lived intangible assets, but
including amortizable intangible assets.

       The Company evaluates the recoverability of its long-lived assets (which included goodwill and indefinite-lived intangible
assets prior to the adoption of SFAS No. 144) by comparing the respective carrying values of the assets to the current and
expected future cash flows, on an undiscounted basis, to be generated from such assets. Property and equipment is evaluated
separately within each segment. The adoption of this standard had no impact on the Company’s results of operations or financial
position.

      Cash Equivalents.      The Company considers highly liquid unrestricted investments purchased with an original maturity of
three months or less to be cash equivalents.

      Property and Equipment.         Property and equipment are stated at cost less accumulated depreciation and amortization.
Depreciation is computed utilizing the straight-line method over the estimated useful lives of the related assets. Amortization of
leasehold improvements is computed

                                                                F-10
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                                              JACKSON HEWITT TAX SERVICE INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

utilizing the straight-line method over the estimated benefit period of the related assets or the lease term, if shorter. Useful lives
generally range from 5 to 7 years for furniture, fixtures and equipment, from 3 to 10 years for computer software and from 2 to 15
years for leasehold improvements.

        Revenue Recognition.       Revenue that the Company earns is comprised of the following components:

      Royalty Revenue: The Company earns royalty revenue from its franchisees. The Company’s franchise agreements require
franchisees to pay royalty fees based on their revenue. Royalty revenue is recognized upon the reporting of the revenue related to
the completion and filing of tax returns prepared by the Company’s franchisees.

      Marketing and Advertising Revenue: The Company earns marketing and advertising revenue from its franchisees. The
Company’s franchisee agreements require franchisees to pay marketing and advertising fees based on their revenue. Marketing
and advertising revenue is recognized upon the reporting of revenue related to the completion and filing of tax returns prepared by
the Company’s franchisees.

       Financial Product Fees: The Company facilitates the sale of refund based financial products including refund anticipation
loans, accelerated check refunds and assisted direct deposit for which it earns a fixed fee that originates from a handling fee paid
by the customer to the financial institutions who provide the products. These financial products are offered pursuant to contractual
arrangements with financial institutions. In addition, the Company offers other products including an extended warranty product.
The Company recognizes revenue for the fixed fees that it earns upon the sale of the financial products to its customers. Revenue
attributable to the Company’s extended warranty product is deferred and recognized ratably over the term of the extended
warranty.

       Other Financial Product Revenue: Other financial product revenue represents revenue the Company earns equal to a
portion (ranging from 59% to 100%) of the difference between finance fees paid by customers to the financial institutions and loan
amounts that the financial institutions are unable to collect. This revenue is in addition to the fixed fees recorded in financial
product fees earned from the facilitation of refund anticipation loans. The finance fee is calculated as a percentage of the total loan
amount (subject to a minimum and maximum fee). The finance fees are maintained by the financial institutions as a reserve
against uncollected loans. Other financial product revenue is recognized only to the extent that the reserves maintained by the
lending financial institutions exceed the uncollected loans made by these financial institutions at the end of each reporting period.
(See Note 16—Subsequent Event.)

       Other Revenue: Other revenue consists of ancillary fees the Company earns from franchisees, including a fee per tax
return paid by franchisees for the processing of each electronically-transmitted tax return. Other revenue also includes revenue
that the Company earns from the sale or transfer of territories to franchisees. Revenue is recognized when all material services or
conditions relating to the sale have been performed (generally upon completion of a mandatory initial training program for new
franchisees).

       Service Revenue: Service revenue includes only revenue earned at company-owned offices and primarily consists of fees
that the Company earns directly from customers for the preparation of tax returns. These fees include base fees for the
preparation of tax returns and related fees for the

                                                                 F-11
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                                                JACKSON HEWITT TAX SERVICE INC.

                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

facilitation of financial products earned by the company-owned offices. Service revenue is recognized upon the completion and
filing of tax returns prepared at company-owned offices.

      Marketing and Advertising Expenses.        Marketing and advertising costs are expensed in the period the advertising
occurs. Advertising expenses totaled $24,017, $21,396 and $15,449 for the years ended April 30, 2004, 2003 and 2002,
respectively.

Earnings Per Share

      The computation of basic and diluted earnings per share is based upon the Company’s net income divided by the weighted
average number of common shares outstanding during the year. As of April 30, 2004, the Company had not granted any common
stock options or restricted stock units (―RSU‖) to employees.

        The following table presents the computation of basic and diluted earnings per share:
                                                                                           For the Years Ended April 30,

                                                                                        2004                  2003              2002

            Net income, basic and diluted                                           $ 42,960              $ 41,133          $ 42,523
            Weighted average shares outstanding (000):
                 Basic and diluted                                                      37,500                37,500            37,500
            Earnings per share:
                 Basic and diluted                                                  $     1.15            $     1.10        $      1.13

3.   PROPERTY AND EQUIPMENT, NET

        Property and equipment, net, consists of:
                                                                                                          As of April 30,

                                                                                                   2004                     2003

            Computer software                                                                  $   41,856              $    41,295
            Furniture, fixtures and equipment                                                      10,971                    8,606
            Leasehold improvements                                                                  4,431                    3,766
            Software under development                                                                329                      —

                                                                                                    57,587                   53,667
            Less accumulated depreciation and amortization                                         (20,240 )                (11,519 )

            Total                                                                              $   37,347              $    42,148


                                                                F-12
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                                                  JACKSON HEWITT TAX SERVICE INC.

                                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                       (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

4.   GOODWILL AND OTHER INTANGIBLES, NET

            Intangible assets consists of:
                                                                As of April 30, 2004                                      As of April 30, 2003

                                                      Gross                              Net                Gross                                    Net
                                                     Carrying        Accumulated       Carrying            Carrying           Accumulated          Carrying
                                                     Amount          Amortization      Amount              Amount             Amortization         Amount

     Amortized intangible assets:
     Franchise agreements         (a)
                                                 $     16,052       $      (9,579 )    $ 6,473         $     15,000          $      (8,000 )       $   7,000
     Customer relationships        (b)
                                                        6,664              (4,235 )      2,429                5,871                 (2,658 )           3,213

                                                 $     22,716       $     (13,814 )    $ 8,902         $     20,871          $     (10,658 )       $ 10,213

     Unamortized intangible assets:
     Goodwill                                    $ 392,368                                             $ 391,004

     Jackson Hewitt
       trademark                                 $     81,000                                          $     81,000

      (a)
                 Amortized over a period of 10 years.
      (b)
                 Amortized over a period of 5 years.

            The changes in the carrying amount of goodwill by segment are as follows:
                                                                                                             Company-
                                                                                                              Owned
                                                                                       Franchise               Office
                                                                                       Operations            Operations                Total

               Balance at May 1, 2002                                                  $ 336,767             $ 50,068              $ 386,835
               Additions                                                                     —                  4,169                  4,169

               Balance at April 30, 2003                                                 336,767                54,237                 391,004
               Additions                                                                     —                   2,060                   2,060
               Change in tax basis of acquired assets                                        —                    (696 )                  (696 )

               Balance at April 30, 2004                                               $ 336,767             $ 55,601              $ 392,368


            Amortization expense relating to all intangible assets was as follows:
                                                                                                           For the Years Ended April 30,

                                                                                                      2004                2003             2002



               Goodwill                                                                           $     —             $     —           $ 6,260
               Trademarks                                                                               —                   —             1,500
               Franchise agreements                                                                   1,579               1,500           1,500
               Customer relationships                                                                 1,577               2,066             592

                    Total                                                                         $ 3,156             $ 3,566           $ 9,852


                                                                          F-13
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                                               JACKSON HEWITT TAX SERVICE INC.

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                       (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

     Based on the Company’s amortizable intangible assets as of April 30, 2004, the Company expects related amortization
expense to be as follows for each of the respective periods in the fiscal year ended April 30:
                                                                                                                    Amount

            2005                                                                                                   $ 2,655
            2006                                                                                                     2,393
            2007                                                                                                     2,151
            2008                                                                                                     1,150
            2009                                                                                                       105
            Thereafter                                                                                                 448

                    Total                                                                                          $ 8,902


5.   FRANCHISING ACTIVITIES

        The number of owned and franchised offices in operation are as follows:

                                                                                                            As of April 30,

                                                                                                   2004          2003         2002

Company-owned
Beginning balance                                                                                   523            440          —
Additions                                                                                           131             83          —
Disposals                                                                                           (49 )          —            —
Transfers from TSA                                                                                  —              —            440

Ending balance                                                                                      605            523          440

Franchised
Beginning balance                                                                                 3,776          3,385        3,345
Additions                                                                                           973            900          755
Disposals                                                                                          (419 )         (509 )       (275 )
Transfers to TSA                                                                                    —              —           (440 )

Ending balance                                                                                    4,330          3,776        3,385


      Initial franchise fees totaled $6,496, $5,908 and $5,830 for the years ended April 30, 2004, 2003 and 2002, respectively,
and are included in other revenues on the consolidated statements of operations.

                                                               F-14
Table of Contents

                                               JACKSON HEWITT TAX SERVICE INC.

                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

6.   NOTES RECEIVABLE, NET

       The Company finances a portion of the initial franchise fee associated with new territory sales under promissory notes
receivable from franchisees. These notes accrue interest annually, ranging from 8% to 12%, and are typically due in four annual
installments, including accrued interest, at February 28th each year. These notes are recorded on the Company’s consolidated
balance sheets at cost, and are reviewed for collectibility based on the underlying franchisee’s payment history, financial status
and revenue base. The resulting provision is included within cost of franchise operations on the Company’s consolidated
statements of operations.

        Notes receivable, net consists of the following:
                                                                                                                 As of April 30,

                                                                                                          2004                     2003

Notes receivable                                                                                      $    7,480               $    8,028
Less allowance for uncollectible amounts                                                                  (3,551 )                 (4,649 )

Notes receivable, net                                                                                      3,929                    3,379
Less current portion                                                                                       1,944                    1,824

Notes receivable, net—non-current                                                                     $    1,985               $    1,555


7.   DEVELOPMENT ADVANCES

      The Company maintains a program to advance monies to independent tax practices to assist in the conversion of their
operations to the Jackson Hewitt brand and to further expand their businesses. These development advances are capitalized and
made in the form of promissory notes that are forgivable over a 10-year period subject to the achievement of certain performance
standards. Advances were $6,616 and $5,820 at April 30, 2004 and 2003, respectively, and are included in other non-current
assets on the consolidated balance sheets.

8.   RELATED PARTIES

       The Company is allocated general corporate overhead expenses from Cendant for corporate-related functions as well as
other expenses directly attributable to the Company. Cendant allocates corporate overhead to the Company based on a
percentage of the Company’s forecasted revenues and allocates other expenses that directly benefit the Company based on the
Company’s actual utilization of the services. Corporate expense allocations include executive management, finance, insurance,
human resources, information technology, legal and real estate facility usage. These amounts are included in selling, general and
administrative expenses in the consolidated statements of operations. The Company believes the assumptions and
methodologies underlying the allocations of general corporate overhead and direct expenses from Cendant to the Company are
reasonable and represent the amounts that would have been incurred if the Company had performed these functions as a
stand-alone company.

                                                               F-15
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                                            JACKSON HEWITT TAX SERVICE INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

       All allocated overhead expenses as well as direct charges are included in due from Cendant on the consolidated balance
sheets. No interest was charged by Cendant or received by the Company in any period presented with respect to intercompany
balances. Cendant uses cash swept from the Company’s bank accounts to fund these disbursements. The major categories of
intercompany activity between the Company and Cendant were as follows:
                                                                                   For the Years Ended April 30,

                                                                            2004                2003                   2002



            Due from Cendant, beginning balance                         $    93,664         $    42,322            $    63,009

            Corporate allocations                                            (4,251 )            (3,959 )               (3,138 )
            Payroll and related                                             (22,092 )           (20,569 )              (17,206 )
            Accounts payable funding                                        (64,909 )           (42,043 )              (49,001 )
            TSA investment funding                                              —                   —                  (21,443 )
            Income taxes                                                    (20,845 )           (24,168 )              (34,734 )
            Cash sweeps                                                     162,418             142,081                104,835

                                                                             50,321              51,342                (20,687 )

            Due from Cendant, ending balance                            $ 143,985           $    93,664            $    42,322

            Average balance due from Cendant                            $ 118,825           $    67,993            $    52,665


      The Company also earned commissions and access fees from preferred vendor agreements through Cendant.
Commissions and access fees directly attributable to the Company and its franchisees are allocated to the Company through the
Due from Cendant account. Revenue from these agreements was $1,092, $302 and $1,000 for the years ended April 30, 2004,
2003 and 2002, respectively, and is included in other revenue on the consolidated statements of operations.

      During the year ended April 30, 2003, the Company entered into an agreement with Wright Express Financial Services
Corporation, a subsidiary of Cendant, to provide a debit card product to the Company’s customers. The term of the agreement is
through September 30, 2005. Revenue recorded under this agreement was $497 and $0 for the years ended April 30, 2004 and
2003, respectively, and is included in financial product fees on the consolidated statements of operations.

9.   ACQUISITIONS

       Assets acquired and liabilities assumed in business combinations were recorded on the Company’s consolidated balance
sheets as of the respective acquisition dates based upon their estimated fair values at such dates. The results of operations of
businesses acquired by the Company have been included in the Company’s consolidated statements of operations since their
respective dates of acquisition. The excess of the purchase price over the estimated fair values of the underlying assets acquired
and liabilities assumed was allocated to goodwill.

      Tax Services of America, Inc.      On January 18, 2002, the Company acquired all of the outstanding common stock of
TSA for $3,600 in cash.

                                                               F-16
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                                                 JACKSON HEWITT TAX SERVICE INC.

                                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                     (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

        The allocation of the purchase price is summarized as follows:
                                                                                                         Amount

                    Cash consideration                                                               $     3,600
                    Book value of Jackson Hewitt’s existing net investment in TSA                         37,309
                    Amounts due Jackson Hewitt from TSA                                                   24,830

                    Jackson Hewitt’s basis in TSA                                                         65,739
                    Fair value of net assets acquired                                                    (15,671 )

                    Excess purchase price over fair value of assets acquired and liabilities
                      assumed                                                                        $    50,068


      The following table summarizes the estimated fair values of the TSA assets acquired and liabilities assumed at the date of
acquisition:
                                                                                                             Amount

                    Total current assets                                                                 $        24
                    Property and equipment, net                                                                3,376
                    Intangible assets                                                                          5,079
                    Goodwill                                                                                  50,068
                    Deferred income taxes                                                                     13,959

                         Total assets acquired                                                                72,506

                    Total current liabilities                                                                  6,640
                    Long-term debt                                                                               127

                         Total liabilities assumed                                                             6,767

                    Net assets acquired                                                                  $ 65,739


        The goodwill was assigned to the company-owned office operations segment.

        Prior to the acquisition, TSA operated under a franchise agreement with the Company and was a joint venture between the
Company and two of its largest franchisees. TSA acquired independent tax preparation practices and converted them to the
Company’s tax service brand. In 1999, the Company initially funded TSA with 80 tax preparation locations and $5,000 in cash in
exchange for a non-voting preferred stock investment. Simultaneously with the Company’s contribution to TSA, the Company’s
joint venture partners contributed a total of 40 tax preparation locations to TSA in exchange for shares of common stock of TSA.

       The Company earned a 12% royalty fee and a 6% marketing and advertising fee on the net revenues of TSA, pursuant to
the terms of the franchise agreement. For the period May 1, 2001 through January 18, 2002 (the date of acquisition) such fees
were $186. Such amounts were recorded on the Company’s consolidated statements of operations within royalty and marketing
and advertising revenue. In addition, the Company earned initial franchise fee revenue on new territory sales to TSA, which
approximated $875 for the period May 1, 2001 through January 18, 2002. Such amounts are recorded on the Company’s
consolidated statements of operations within other revenue.

                                                                   F-17
Table of Contents

                                                  JACKSON HEWITT TAX SERVICE INC.

                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                     (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

       The Company also provided administrative services to TSA and made payments for services on TSA’s behalf totaling $512
for the period from May 1, 2001 through January 18, 2002.

      The following unaudited pro forma information combines the results of operations of the Company and TSA for the year
ended April 30, 2002 calculated as if the acquisition had occurred on May 1, 2001. The pro forma information has been prepared
for comparative purposes only and does not give effect to any synergies expected to result from the acquisition of TSA. The pro
forma information is not necessarily indicative of the results of operations that would have occurred had the acquisition been
consummated at the beginning of 2002 or of the results that may occur in the future. The Company’s net revenues, income from
operations, net income and earnings per share would have been as follows had the acquisition of TSA occurred on May 1, 2001:
                                                                                                           Year Ended
                                                                                                            April 30,
                                                                                                              2002

                                                                                                           (Unaudited)
                    Pro forma results:
                         Net revenues                                                                  $ 156,941
                         Income from operations                                                           47,347
                         Net income                                                                       28,247
                    Pro forma earnings per share:
                         Basic and diluted                                                             $         0.75

      Other Acquisitions.        During the years ended April 30, 2004 and 2003, the Company acquired six and 13, respectively,
independent tax preparation operations for $3,905 and $5,200, respectively, in cash, which resulted in $2,060 and $4,169,
respectively, in goodwill (allocated to the company-owned office operations segment). These acquisitions were not significant to
the Company’s results of operations, financial position or cash flows.

10.    ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

        Accounts payable and accrued liabilities consists of:
                                                                                                       As of April 30,

                                                                                                    2004                 2003

            Accounts payable                                                                    $    2,168         $      1,945
            State income taxes payable                                                               1,473                  —
            Accrued payroll and related                                                              6,653                7,046
            Legal settlement                                                                         2,672                  —
            Deferred warranty income                                                                 5,508                2,205
            Accrued marketing and advertising                                                        8,946                7,018
            Accrued purchase price                                                                   1,814                1,356
            Other accrued liabilities                                                                2,419                1,374

            Total accounts payable and accrued liabilities                                      $ 31,653           $ 20,944


                                                                F-18
Table of Contents

                                                JACKSON HEWITT TAX SERVICE INC.

                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

11.   INCOME TAXES

        The Company is included in the consolidated federal income tax return of Cendant. In addition, the Company files unitary
and combined state income tax returns with Cendant in jurisdictions where required. The provision for income taxes is computed
as if the Company filed its federal and state tax returns on a stand-alone basis.

        The provision for income taxes consists of:
                                                                                       For the Years Ended April 30,

                                                                                   2004            2003                   2002



            Current
                Federal                                                          $ 18,671        $ 21,105           $ 29,137
                State                                                               3,869           3,952              5,626

                                                                                   22,540          25,057                 34,763

            Deferred
                Federal                                                              4,546           1,110                (3,092 )
                State                                                                  418             277                  (736 )

                                                                                     4,964           1,387                (3,828 )

            Provision for income taxes                                           $ 27,504        $ 26,444           $ 30,935


        Deferred income tax assets and liabilities consist of:
                                                                                                        As of April 30,

                                                                                                 2004                     2003

            Current deferred income tax assets
                Accrued liabilities and deferred income                                      $    5,012             $      2,930
                Provision for doubtful accounts and other                                         1,869                    3,937

            Current deferred income tax assets                                                    6,881                    6,867

            Current deferred income tax liabilities
                Prepaid expenses                                                                  1,807                      726

            Current deferred income tax liabilities                                               1,807                      726

            Current net deferred income tax asset                                            $    5,074             $      6,141

            Non-current deferred income tax assets
                Net operating loss carryforwards                                             $    6,650             $      8,745
                Accrued liabilities and deferred income                                           6,584                    4,114
                Valuation allowance                                                              (1,112 )                 (1,112 )

            Non-current deferred income tax assets                                               12,122                   11,747

            Non-current deferred income tax liabilities
                Depreciation and amortization                                                    36,465                   33,257
                Other                                                                             1,992                    1,624

            Non-current deferred income tax liabilities                                          38,457                   34,881
Non-current net deferred income tax liability          $ 26,335   $ 23,134


                                                F-19
Table of Contents

                                               JACKSON HEWITT TAX SERVICE INC.

                                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                     (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

      As of April 30, 2004, the Company had federal net operating loss carryforwards of approximately $15,821, which expire in
2020 through 2022. A portion of the federal net operating loss carryforwards is subject to annual usage limitations under Internal
Revenue Code Section 382. The valuation allowance of $1,112 as of April 30, 2004 relates to deferred tax assets for state net
operating loss carryforwards that may not be realized. The valuation allowance will be adjusted to goodwill when, and if, the
Company determines that the deferred income tax assets are more likely than not to be realized.

        The Company’s effective income tax rate differs from the U.S. statutory rate as follows:
                                                                                                     For the Years
                                                                                                    Ended April 30,

                                                                                           2004           2003             2002



            Federal statutory rate                                                         35.0 %         35.0 %           35.0 %
            State and local income taxes, net of federal tax benefits                       3.9            4.1              4.3
            Amortization of non-deductible goodwill                                         —              —                2.7
            Other                                                                           0.1            —                0.1

            Effective tax rate                                                             39.0 %         39.1 %           42.1 %


12.   COMMITMENTS AND CONTINGENCIES

Leases

        The Company is committed to making rental payments under noncancelable operating leases covering various facilities and
equipment. Rent expense totaled $9,109, $7,444 and $2,379 for the years ended April 30, 2004, 2003 and 2002, respectively, and
is included in selling, general and administrative expense and cost of company-owned office operations expense on the
consolidated statements of operations.

        Future minimum lease payments required under noncancelable operating leases are as follows:
                                                                                                                 Amount

                    2005                                                                                     $     7,223
                    2006                                                                                           4,997
                    2007                                                                                           2,550
                    2008                                                                                           1,086
                    2009                                                                                             378
                    Thereafter                                                                                        74

                        Total                                                                                $ 16,308


Litigation

        On August 27, 2002, a plaintiff group comprising 154 franchisees filed an action against the Company and Santa Barbara
Bank & Trust in the Superior Court of New Jersey, Morris County. The suit alleged, among other things, that the Company
breached an agreement with the plaintiffs by not paying them a portion of surpluses in refund anticipation loan loss reserves. The
plaintiffs sought a declaratory

                                                                  F-20
Table of Contents

                                              JACKSON HEWITT TAX SERVICE INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

judgment, an accounting, payment of an incentive rebate, unspecified compensatory and punitive damages, treble damages and
attorneys’ fees. By an order dated December 6, 2002, the court dismissed the conversion and fraud counts of the complaint with
prejudice. The plaintiffs filed an amended complaint on March 17, 2003. The parties submitted the matter to mediation in July
2003, which resulted in a settlement. On December 19, 2003, the court issued a ruling enforcing the settlement and dismissed the
action with prejudice. As of April 30, 2004, 151 plaintiffs in the action have executed the settlement agreement, and one has
appealed the enforcement order of December 19, 2003. Accordingly, a $10,410 charge was included within selling, general and
administrative expense on the accompanying consolidated statement of operations in 2004.

       On April 4, 2003, Canieva Hood and Congress of California Seniors brought a purported class action suit against Santa
Barbara Bank & Trust and the Company in the Superior Court of California (Santa Barbara) in connection with the provision of
refund anticipation loans, seeking declaratory relief as to the lawfulness of the practice of cross-lender debt collection, the validity
of Santa Barbara’s cross-lender debt collection provision and whether the method of inducing customers to enter into the provision
is unlawful or fraudulent. The Company was joined in the action for allegedly aiding and abetting the actions of Santa Barbara
Bank & Trust. Ms. Hood has also filed a separate suit against the Company and Cendant on December 18, 2003 in the Ohio Court
of Common Pleas (Montgomery County) and is seeking to certify a class in the action. The allegations relate to the same set of
facts as the California action. The Company currently has a motion pending in the Ohio court to stay, or dismiss, the Ohio action
while permitting the California action to proceed. While this matter is at a preliminary stage, the Company believes that it has
meritorious defenses to the claims and intends to defend them vigorously.

        The Company is involved in other pending litigation in the usual course of business. In the opinion of management, such
other litigation will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

13.   STOCK-BASED COMPENSATION

      Under its existing stock plans, Cendant may grant stock options, stock appreciation rights, restricted shares and RSUs to
the Company’s employees. Prior to January 1, 2003, Cendant typically used stock options as a form of equity compensation.
However, subsequent to December 31, 2002, Cendant changed the method by which it provides stock-based compensation to the
Company’s employees and began issuing Cendant RSUs in place of stock options.

                                                                 F-21
Table of Contents

                                            JACKSON HEWITT TAX SERVICE INC.

                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

Stock Options

        Employee stock options granted by Cendant generally have a ten-year term and vest ratably over periods ranging from two
to five years. These employee stock options were granted with exercise prices at then-current fair market value. The activity of
Cendant’s stock option plans related to the Company’s employees consisted of:
                                                                              For the Years Ended April 30,

                                                           2004                                2003                               2002

                                                                   Weighted                           Weighted                            Weighted
                                                                   Average                            Average                             Average
                                                                   Exercise                           Exercise                            Exercise
                                                 Options            Price            Options           Price            Options            Price

Beginning balance                               1,968,348          $ 15.21          2,107,144         $ 15.10         1,588,041           $ 13.31
    Granted at fair market value                      —                —               20,000           13.02           712,180             18.50
    Exercised                                    (537,087 )          12.84            (78,980 )          9.96           (84,658 )           11.22
    Forfeited                                     (34,666 )          17.97            (79,816 )         16.93          (108,419 )           14.23

Ending balance                                  1,396,595          $ 16.06          1,968,348         $ 15.21         2,107,144           $ 15.10


       During 2002, Cendant’s Board of Directors accelerated the vesting of certain options previously granted with exercise
prices greater than or equal to $15.1875. In connection with such action, 1,163,903 options (with a weighted average exercise
price of $19.20), substantially all of which were scheduled to become exercisable by January 2004, became exercisable as of
August 27, 2002. In addition, the post-employment exercise period for the modified options was reduced from one year to thirty
days. However, if the employee remains employed by Cendant through the date on which the option was originally scheduled to
become vested, the post-employment exercise period will be one year. In accordance with the provisions of the FASB
Interpretation No. 44, ―Accounting for Certain Transactions Involving Stock Compensation (an Interpretation of APB Opinion No.
25),‖ there was no charge associated with this modification since none of the modified options had intrinsic value because the
market price of the underlying Cendant common stock on August 27, 2002 was less than the exercise price of the modified
options.

    The table below summarizes information regarding outstanding and exercisable Cendant stock options issued to the
Company’s employees as of April 30, 2004:
                                                               Outstanding Options                            Exercisable Options

                                                                       Weighted
                                                                       Average           Weighted                            Weighted
                                                                      Remaining          Average                             Average
                                                   Number of          Contractual        Exercise         Number of          Exercise
                                                    Options              Life             Price            Options            Price

            $0.01 to $10.00                          400,865                  4.6       $    9.51             400,865       $      9.51
            $10.01 to $20.00                         725,741                  6.0           17.47             691,737             17.70
            $20.01 to $30.00                         269,989                  4.4           21.98             269,989             21.98

                                                   1,396,595                  5.2       $ 16.06           1,362,591         $ 16.13


                                                                  F-22
Table of Contents

                                              JACKSON HEWITT TAX SERVICE INC.

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

       The weighted-average grant-date fair value of Cendant common stock options granted during the years ended April 30,
2003 and 2002 was $5.98 and $8.51, respectively. The fair values of these stock options are estimated on the dates of grant using
the Black-Scholes option-pricing model with the following weighted average assumptions for stock options granted in 2003 and
2002:
                                                                                                              For the Years
                                                                                                             Ended April 30,

                                                                                                          2003            2002

            Dividend yield                                                                                  —              —
            Expected volatility                                                                            49.0 %         50.0 %
            Risk-free interest rate                                                                         2.4 %          4.2 %
            Expected holding period (years)                                                                 3.6            4.5

Restricted Stock Units

      Each RSU granted by Cendant entitles the employee to receive one share of Cendant common stock upon vesting, which
occurs ratably over a four-year period. The activity of Cendant’s RSU plans related to the Company’s employees consisted of:
                                                                                      For the Years Ended April 30,

                                                                           2004                                          2003

                                                                                    Weighted                                      Weighted
                                                                                  Average Grant                                 Average Grant
                                                                 RSUs                 Price                  RSUs                   Price

Beginning balance                                              140,471            $        13.64                —              $         —
    Granted at fair market value                                 2,723                     18.36            140,471                    13.64
    Vested                                                     (34,607 )                   13.64                —                        —
    Forfeited                                                   (2,090 )                   13.64                —                        —

Ending balance                                                 106,497            $        13.76            140,471            $       13.64


      The Company is allocated compensation expense for such RSUs on a basis consistent with the related vesting period.
During the years ended April 30, 2004 and 2003, the Company recorded pre-tax compensation expense of $484 and $10,
respectively, in connection with these RSUs, which is included within selling, general and administrative expenses on the
Company’s consolidated statements of operations.

Exchange Offer

       On April 23, 2004, the Company and Cendant initiated an exchange program under which Company employees who
currently participate in Cendant’s stock options and RSU programs could elect to exchange their vested and unvested Cendant
awards for fully vested Company stock options and common stock. The amount of Company stock options and common stock to
be issued under the exchange program will be based upon an exchange ratio determined by comparing the three-day average
closing price of Cendant common stock immediately following the initial public offering and the average closing price of the
Company’s stock for the same period. The exchange of Cendant securities will result in a charge to the Company’s consolidated
statement of operations on the exchange date, which is expected to occur immediately following the initial public offering.

                                                              F-23
Table of Contents

                                                  JACKSON HEWITT TAX SERVICE INC.

                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)

14.   FINANCIAL INSTRUMENTS

Credit Risk and Exposure

       Financial instruments that potentially subject the Company to concentrations of credit risk consist of accounts and notes
receivable. The Company manages such risk by evaluating the financial position and creditworthiness of such counterparties. As
of April 30, 2004, there were no significant concentrations of credit risk with any individual counterparty or groups of
counterparties. Concentrations of credit risk associated with receivables are considered minimal due to the Company’s diverse
customer base. Bad debts associated with trade receivables have not been significant. The Company does not normally require
collateral or other security to support credit sales.

Fair Value

      The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable and accrued liabilities
approximate fair value due to the short-term maturities of these assets and liabilities. The fair value of notes receivable is
determined based on the net present value of estimated payments to be received over the life of the note. The carrying amount
and estimated fair value for notes receivable were $3,929 and $4,405, respectively, as of April 30, 2004; and $3,379 and $3,899,
respectively, as of April 30, 2003.

15.   SEGMENT INFORMATION

     Management evaluates the operating results of each of its reportable segments based upon revenue and income before
income taxes.
                                                                             Company-
                                                                              Owned
                                                               Franchise       Office
                                                               Operations    Operations     Corporate (a)        Total

            Year ended April 30, 2004
            Total revenues                                     $ 149,025     $ 56,590       $        —       $ 205,615

            Expenses:
            Cost of operations                                     23,922        41,639            —              65,561
            Marketing and advertising                              24,212         5,252            —              29,464
            Selling, general and administrative                     3,597         3,075         21,827            28,499
            Depreciation and amortization                           7,608         4,303            —              11,911

            Total expenses                                         59,339        54,269         21,827           135,435

            Income (loss) from operations                      $   89,686    $    2,321     $ (21,827 )      $    70,180

            Income (loss) before income taxes                  $   90,343    $    2,321     $ (22,200 )      $    70,464

            Segment assets                                     $ 511,485     $ 65,584       $ 148,873        $ 725,942

            Capital expenditures                               $    1,483    $    2,482     $        —       $     3,965


                                                               F-24
Table of Contents

                                                  JACKSON HEWITT TAX SERVICE INC.

                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

                    (Unless otherwise noted, all dollar amounts are in thousands except per share amounts)
                                                                            Company-
                                                                             Owned
                                                              Franchise       Office
                                                              Operations    Operations     Corporate (a)        Total


            Year ended April 30, 2003
            Total revenues                                   $ 123,127     $ 48,420        $        —       $ 171,547

            Expenses:
            Cost of operations                                   18,971        34,184              —             53,155
            Marketing and advertising                            20,631         4,455              —             25,086
            Selling, general and administrative                   3,365         2,435            9,197           14,997
            Depreciation and amortization                         7,274         4,249              —             11,523

            Total expenses                                       50,241        45,323            9,197          104,761

            Income (loss) from operations                    $   72,886    $    3,097      $    (9,197 )    $    66,786

            Income (loss) before income taxes                $   73,677    $    3,097      $    (9,197 )    $    67,577

            Segment assets                                   $ 491,252     $ 70,844        $   99,805       $ 661,901

            Capital expenditures                             $    2,514    $    2,714      $        —       $     5,228

            Year ended April 30, 2002
            Total revenues                                   $ 115,739     $ 41,252        $        —       $ 156,991

            Expenses:
            Cost of operations                                   19,511        17,697             —              37,208
            Marketing and advertising                            16,353         2,483             —              18,836
            Selling, general and administrative                   4,362           937          12,583            17,882
            Depreciation and amortization                        11,626         1,198             —              12,824

            Total expenses                                       51,852        22,315          12,583            86,750

            Income (loss) from operations                    $   63,887    $ 18,937        $ (12,583 )      $    70,241

            Income (loss) before income taxes                $   65,336    $ 18,937        $ (10,815 )      $    73,458

            Segment assets                                   $ 495,265     $ 73,553        $   48,981       $ 617,799

            Capital expenditures   (b)
                                                             $   21,754    $      912      $        —       $    22,666

(a)
        Represents unallocated corporate overhead and common assets supporting both segments, including amounts due from
        Cendant.
(b)
        Includes investment of $16,494 for tax preparation software.

16.   SUBSEQUENT EVENT

       To reduce the variability of other financial product revenue, the Company renegotiated its agreement with Santa Barbara
Bank & Trust, the provider of approximately 80% of the refund anticipation loans that the Company facilitates. Under the new
agreement, which became effective as of May 5, 2004, in lieu of earning revenue based upon the amount of finance fees and
uncollected loans, the Company will earn primarily a fixed fee based upon the number of refund anticipation loans facilitated.
Under the Company’s current agreement with its other provider of refund anticipation loans, the Company will continue to earn
other financial product revenue based on the amount of finance fees collected and uncollected loans.
******

F-25
Table of Contents




No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this
prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the
shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in
this prospectus is current only as of its date.



                                                        TABLE OF CONTENTS

                                                                                                                                 Page

Prospectus Summary                                                                                                                    1
Risk Factors                                                                                                                         10
Special Note Regarding Forward-Looking Statements                                                                                    20
Use of Proceeds                                                                                                                      21
Dividend Policy                                                                                                                      21
Capitalization                                                                                                                       22
Selected Historical Consolidated Financial Data                                                                                      23
Unaudited Pro Forma Consolidated Financial Statements                                                                                25
Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                29
Business                                                                                                                             44
Management                                                                                                                           59
Certain Relationships and Related Transactions                                                                                       71
Principal and Selling Stockholder                                                                                                    80
Description of Capital Stock                                                                                                         81
Shares Eligible for Future Sale                                                                                                      88
Underwriting                                                                                                                         90
Legal Counsel                                                                                                                        93
Experts                                                                                                                              93
Where You Can Find Additional Information                                                                                            94
Index to Consolidated Financial Statements                                                                                          F-1



Through and including              , 2004 (the 25th day after the date of this prospectus), all dealers effecting transactions in these
securities, whether or not participating in this offering, may be required to deliver a prospectus. This in addition to a dealer’s
obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.




                                                      37,500,000 Shares

                                    Jackson Hewitt Tax Service Inc.
                                                         Common Stock



                                                         PROSPECTUS
    Goldman, Sachs & Co.
          JPMorgan
Banc of America Securities LLC
           Citigroup
      Merrill Lynch & Co.
  Credit Suisse First Boston
   Blaylock & Partners, L.P.
     CIBC World Markets
       Lehman Brothers
Table of Contents

                                  PART II.   INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.      Other Expenses of Issuance and Distribution.

       The following table sets forth the costs, other than underwriting discounts and commissions, payable in connection with the
sale of the common stock being registered. All amounts, except the SEC registration fee, the NASD filing fee and the New York
Stock Exchange listing fee, are estimates.
                                                    Expenses                                                                 Amount

SEC registration fee                                                                                                     $     109,279
NASD filing fee                                                                                                                 30,500
New York Stock Exchange listing fee                                                                                            221,100
Printing and engraving expenses                                                                                                700,000
Legal fees and expenses                                                                                                      1,050,000
Transfer agent and registrar fees                                                                                                1,350
Accounting fees and expenses                                                                                                 1,550,000
Blue Sky fees and expenses                                                                                                       1,000
Miscellaneous                                                                                                                  300,000

     Total*                                                                                                              $ 3,963,229


*       Cendant has agreed to pay all of such expenses.

Item 14.      Indemnification of Officers and Directors.

       Section 102 of the General Corporation Law of the State of Delaware allows a corporation to eliminate the personal liability
of directors to a corporation or its stockholders for monetary damages for a breach of a fiduciary duty as a director, except where
the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law,
authorized the payment of a dividend or approved a stock repurchase or redemption in violation of Delaware corporate law or
obtained an improper personal benefit.

        Section 145 of the Delaware General Corporation Law empowers a Delaware corporation to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the right of such corporation) by reason of the fact that such
person is or was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation
as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The indemnity
may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding, provided that such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. A Delaware corporation
may indemnify directors, officers, employees and other agents of such corporation in an action by or in the right of a corporation
under the same conditions against expenses (including attorneys’ fees) actually and reasonably incurred by the person in
connection with the defense and settlement of such action or suit, except that no indemnification is permitted without judicial
approval if the person to be indemnified has been adjudged to be liable to the corporation. Where a present or former director or
officer of the corporation is successful on the merits or otherwise in the defense of any action, suit or proceeding referred to above
or in defense of any claim, issue or matter therein, the corporation must indemnify such person against the expenses (including
attorneys’ fees) which he or she actually and reasonably incurred in connection therewith.

                                                                  II-1
Table of Contents

        Section 174 of the General Corporation Law of the State of Delaware provides, among other things, that a director who
willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption, may be held
liable for such actions. A director who was either absent when the unlawful actions were approved or dissented at the time, may
avoid liability by causing his or her dissent to such actions to be entered into the books containing the minutes of the meetings of
the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful
acts.

       The Registrant’s By-Laws contain provisions that provide for indemnification of officers and directors and their heirs and
distributees to the full extent permitted by, and in the manner permissible under, the General Corporation Law of the State of
Delaware.

      As permitted by Section 102(b)(7) of the General Corporation Law of the State of Delaware, the Registrant’s Certificate of
Incorporation contains a provision eliminating the personal liability of a director to the Registrant or its stockholders for monetary
damages for breach of fiduciary duty as a director, subject to some exceptions.

      The Registrant maintains, at its expense, a policy of insurance which insures its directors and officers, subject to exclusions
and deductions as are usual in these kinds of insurance policies, against specified liabilities which may be incurred in those
capacities.

         In addition, the Registrant has agreed to indemnify Cendant and its officers, directors, employees and agents against civil
liabilities, including liabilities under the Securities Act of 1933 relating to misstatements in or omissions from the registration
statement of which this prospectus forms a part and any other registration statement that the Registrant files under the Securities
Act, other than misstatements or omissions relating to information specifically about Cendant in the registration statement and
furnished in writing by Cendant for use in the preparation of any such registration statement, against which Cendant has agreed to
indemnify the Registrant.

Item 15.     Recent Sales of Unregistered Securities.

       On February 27, 2004, the Registrant issued 100 shares of common stock to Cendant Finance Holding Corporation in
connection with the organization of the Registrant for aggregate consideration of $1.00. This transaction was exempt from
registration under the Securities Act by virtue of the exemption provided by Section 4(2) of the Securities Act for transactions not
involving a public offering.

       Concurrently with the closing of this offering, the Registrant intends to issue a guaranty in respect of $175.0 million
aggregate principal amount of floating rate notes to be issued by Jackson Hewitt Inc. to a limited number of institutional investors.
This transaction will be exempt from registration under the Securities Act by virtue of the exemption provided under Section 4(2) of
the Securities Act for transactions not involving a public offering.

       Following the closing of the offering, the Registrant will issue to executive officers and various employees of the Registrant
and its subsidiaries approximately 91,000 shares of common stock and options to purchase an aggregate of approximately
853,000 shares of its common stock in exchange for restricted stock units and stock options of Cendant Corporation held by them.
The issuance of such stock options and common stock will be exempt from the registration requirements of the Securities Act
pursuant to Rule 701 promulgated thereunder.

                                                                  II-2
Table of Contents

Item 16.       Exhibits and Financial Statement Schedules.

        (a) Exhibits.
 Exhibit No.                                                             Description


         1.1             Form of Underwriting Agreement.
         3.1             Form of Amended and Restated Certificate of Incorporation.*
         3.2             Form of Amended and Restated By-laws.*
         4.1             Form of Common Stock Certificate.*
         4.2             Form of Rights Plan.*
         5.1             Opinion and Consent of Skadden, Arps, Slate, Meagher & Flom LLP.*
        10.1             Form of Employment Agreement between Jackson Hewitt Tax Service Inc. and Michael D. Lister.*
        10.2             Form of Employment Agreement between Jackson Hewitt Tax Service Inc. and Mark L. Heimbouch.*
        10.3             Form of Transitional Agreement among Cendant Corporation, Cendant Operations, Inc. and Jackson
                           Hewitt Tax Service Inc.*
        10.4             Refund Anticipation Loan Program Agreement between Jackson Hewitt Inc. and Santa Barbara Bank &
                           Trust, dated May 5, 2004 (including exhibits).
        10.5             Amended and Restated Program Agreement between Jackson Hewitt Inc., Household Tax Masters Inc.
                          and Beneficial Franchise Company Inc., dated as of January 1, 2003.**
        10.6             Form of Credit Agreement among Jackson Hewitt Tax Service Inc., as Parent, Jackson Hewitt Inc., as
                           Borrower, the Lenders named therein and JPMorgan Chase Bank, as Administrative Agent.
        10.7             Leasing Operations Supplier Agreement (Products and/or Services) between Jackson Hewitt Inc. and
                           Wal-Mart Stores, Inc., dated April 8, 2004.*
        10.8             Form of Franchise Agreement.*
        10.9             2004 Equity and Incentive Plan.*
      10.10              Employee Stock Purchase Plan.*
      10.11              Form of Settlement Agreement between Jackson Hewitt Inc. and the Settling Plaintiff.*
      10.12              Form of Settlement Agreement between Jackson Hewitt Inc. and the Settling Franchisee.*
      10.13              Form of Note Purchase Agreement relating to the Notes.
      10.14              Letter Agreement for Steven L. Barnett.*
      10.15              Letter Agreement for Richard P. Enchura.*
      10.16              Letter Agreement for Perb B. Fortner.*
      10.17              Letter Agreement for William A. Scavone.*
      10.18              Letter Agreement for Jeanmarie Cooney.*
      10.19              Non-employee Directors Deferred Compensation Plan.
        21.1             Subsidiaries of the Registrant.*
        23.1             Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
        23.2             Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1).*
        24.1             Power of Attorney.*
        99.1             Consent of Ulysses L. Bridgeman, Jr.*
        99.2             Consent of Rodman Drake.*
        99.3             Consent of James C. Spira.*
        99.4             Consent of Louis Salvatore.*
        99.5             Consent of Margaret Milner Richardson.*

*       Previously filed.
**      Portions of Exhibit 10.5 have been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities
Act of 1933, as amended.

                           II-3
Table of Contents

Item 17.     Undertakings.

       The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting
agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt
delivery to each purchaser.

       Insofar as indemnification for liabilities arising out of the Securities Act of 1933 (the ―Act‖) may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the
successful defense in any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such issue.

      The undersigned Registrant hereby undertakes that:

        (1) For purposes of determining any liability under the Act, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Act shall be deemed to be part of this Registration Statement as of the time it was
declared effective.

       (2) For the purpose of determining any liability under the Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.

                                                                  II-4
Table of Contents

                                                          SIGNATURES

       Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Amendment
No. 5 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Township of
Parsippany, State of New Jersey, on June 18, 2004.

                                                                               JACKSON HEWITT TAX SERVICE INC.

                                                                               By:     / S / M ICHAEL D. L ISTER

                                                                                       Name: Michael D. Lister
                                                                                       Title: President and Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 5 to the Registration Statement has been
signed by the following persons in the capacities and on the dates indicated.
                    Signature                                                  Title                                    Date



/ S / M ICHAEL D. L ISTER                          Chairman, President and Chief Executive Officer                 June 18, 2004
                                                     (Principal executive officer)
Michael D. Lister

/ S / M ARK L. H EIMBOUCH                          Chief Financial Officer and Director                            June 18, 2004
                                                     (Principal financial officer and principal accounting
                                                     officer)
Mark L. Heimbouch

                                                                II-5
Table of Contents

                                                         EXHIBIT INDEX
 Exhibit No.                                                            Description

         1.1           Form of Underwriting Agreement.
         3.1           Form of Amended and Restated Certificate of Incorporation.*
         3.2           Form of Amended and Restated By-laws.*
         4.1           Form of Common Stock Certificate.*
         4.2           Form of Rights Plan.*
         5.1           Opinion and Consent of Skadden, Arps, Slate, Meagher & Flom LLP.*
        10.1           Form of Employment Agreement between Jackson Hewitt Tax Service Inc. and Michael D. Lister.*
        10.2           Form of Employment Agreement between Jackson Hewitt Tax Service Inc. and Mark L. Heimbouch.*
        10.3           Form of Transitional Agreement among Cendant Corporation, Cendant Operations, Inc. and Jackson
                         Hewitt Tax Service Inc.*
        10.4           Refund Anticipation Loan Program Agreement between Jackson Hewitt Inc. and Santa Barbara Bank &
                         Trust, dated May 5, 2004 (including exhibits).
        10.5           Amended and Restated Program Agreement between Jackson Hewitt Inc., Household Tax Masters Inc.
                         and Beneficial Franchise Company Inc., dated as of January 1, 2003.**
        10.6           Form of Credit Agreement among Jackson Hewitt Tax Service Inc., as Parent, Jackson Hewitt Inc., as
                         Borrower, the Lenders named therein and JPMorgan Chase Bank, as Administrative Agent.
        10.7           Leasing Operations Supplier Agreement (Products and/or Services) between Jackson Hewitt Inc. and
                         Wal-Mart Stores, Inc., dated April 8, 2004.*
       10.8            Form of Franchise Agreement.*
       10.9            2004 Equity and Incentive Plan.*
      10.10            Employee Stock Purchase Plan.*
      10.11            Form of Settlement Agreement between Jackson Hewitt Inc. and the Settling Plaintiff.*
      10.12            Form of Settlement Agreement between Jackson Hewitt Inc. and the Settling Franchisee.*
      10.13            Form of Note Purchase Agreement relating to the Notes.
      10.14            Letter Agreement for Steven L. Barnett.*
      10.15            Letter Agreement for Richard P. Enchura.*
      10.16            Letter Agreement for Perb B. Fortner.*
      10.17            Letter Agreement for William A. Scavone.*
      10.18            Letter Agreement for Jeanmarie Cooney.*
      10.19            Non-employee Directors Deferred Compensation Plan.
       21.1            Subsidiaries of the Registrant.*
       23.1            Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
       23.2            Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1).*
       24.1            Power of Attorney.*
       99.1            Consent of Ulysses L. Bridgeman, Jr.*
       99.2            Consent of Rodman Drake.*
       99.3            Consent of James C. Spira.*
       99.4            Consent of Louis Salvatore.*
       99.5            Consent of Margaret Milner Richardson.*

*    Previously filed.
**   Portions of Exhibit 10.5 have been omitted pursuant to a request for confidential treatment under Rule 406 under the
     Securities Act of 1933, as amended.
                                                                                                                          Exhibit 1.1


                                               Jackson Hewitt Tax Service Inc.
                                                           Common Stock

                                                    (par value, $0.01 per share)



                                                     Underwriting Agreement


                                                                                                                      June [   ], 2004

Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004

and

J.P. Morgan Securities Inc.
277 Park Avenue, 8 Floor
                     th


New York, New York 10172

As representatives of the several Underwriters
named in Schedule I hereto


Ladies and Gentlemen:

        Cendant Finance Holding Corporation, a Delaware corporation (the ―Selling Stockholder‖), the sole stockholder of Jackson
Hewitt Tax Service Inc., a Delaware corporation (the ―Company‖), proposes, subject to the terms and conditions stated herein, to
sell to the Underwriters named in Schedule I hereto (the ―Underwriters‖) an aggregate of 37,500,000 shares of Common Stock
(―Stock‖) of the Company, and, at the election of the Underwriters, the Company proposes, subject to the terms and conditions
stated herein, to issue and sell up to 5,625,000. additional shares of Stock. The aggregate of 37,500,000 shares to be sold by the
Selling Stockholder is herein called the ―Firm Shares‖ and the aggregate of 5,625,000 additional shares to be sold by the
Company is herein called the ―Optional Shares.‖ The Firm Shares and the Optional Shares that the Underwriters elect to purchase
pursuant to Section 2 hereof are herein collectively called the ―Shares‖.

       As part of the offering contemplated by this Agreement, Citigroup Global Markets Inc. has agreed to reserve out of the
Shares set forth opposite its name on the Schedule I to this Agreement, up to 1,875,000 shares, for sale to the Company’s
employees, officers, directors and franchisees (collectively, ―Participants‖), as set forth in the Prospectus (as defined below) under
the caption ―Underwriting‖ (the ―Directed Share Program‖). The Shares to be sold by Citigroup Global Markets Inc. pursuant to the
Directed Share Program (the ―Directed Shares‖) will be sold by Citigroup Global Markets Inc. pursuant to this Agreement at the
public offering price. Any Directed Shares not orally confirmed for purchase by any Participants by 8:00 A.M. New York City time
on the business day following the date on which this Agreement is executed will be offered to the public by Citigroup Global
Markets Inc. as set forth in the Prospectus.
        Simultaneously with the closing of the offering described above, the Company will enter into a new revolving credit facility
with a syndicate of financial institutions. The revolving credit facility will provide for borrowings of up to $100.0 million and will have
a five-year maturity. The Company also intends to issue $175.0 million aggregate principal amount of notes to a limited group of
institutional investors concurrently with the closing of this offering. These transactions are collectively referred to herein as the
―Refinancings.‖

      1. (a) The Company represents and warrants to, and agrees with, each of the Underwriters that:

             (i) A registration statement on Form S-1 (File No. 333-113593) (the ―Initial Registration Statement‖) in respect of the
      Shares has been filed with the Securities and Exchange Commission (the ―Commission‖); the Initial Registration Statement
      and any post-effective amendment thereto, each in the form heretofore delivered to you, and, excluding exhibits thereto, to
      you for each of the other Underwriters, have been declared effective by the Commission in such form; other than a
      registration statement, if any, increasing the size of the offering (a ―Rule 462(b) Registration Statement‖), filed pursuant to
      Rule 462(b) under the Securities Act of 1933, as amended (the ―Act‖), which became effective upon filing, no other
      document with respect to the Initial Registration Statement has heretofore been filed with the Commission; and no stop
      order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or the Rule
      462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or threatened
      by the Commission (any preliminary prospectus included in the Initial Registration Statement or filed with the Commission
      pursuant to Rule 424(a) of the rules and regulations of the Commission under the Act is hereinafter called a ―Preliminary
      Prospectus‖; the various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any,
      including all exhibits thereto and including the information contained in the form of final prospectus filed with the
      Commission pursuant to Rule 424(b) under the Act in accordance with Section 6(a) hereof and deemed by virtue of Rule
      430A under the Act to be part of the Initial Registration Statement at the time it was declared effective, each as amended at
      the time such part of the Initial Registration Statement became effective or such part of the Rule 462(b) Registration
      Statement, if any, became or hereafter becomes effective, are hereinafter collectively called the ―Registration Statement‖;
      and such final prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is hereinafter called the
      ―Prospectus‖);

             (ii) No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission,
      and each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the
      Act and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact
      or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the
      circumstances under which they were made, not misleading; provided , however , that this representation and warranty
      shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing
      to the Company by an Underwriter through Goldman, Sachs & Co. expressly for use therein;
       (iii) The Registration Statement conforms, and the Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading; provided , however , that this representation
and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Goldman, Sachs & Co. expressly for use therein;

    (iv) Jackson Hewitt Inc., Tax Services of America, Inc. and Hewfant, Inc. are the only significant subsidiaries of the
Company as defined by Rule 1-02 of Regulation S-X as promulgated by the Commission (the ―Significant Subsidiaries‖).

       (v) Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial
statements included in the Prospectus any material loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been any change in the capital stock (other than
exercises of options contemplated by the Prospectus) or long-term debt of the Company or any of its Significant
Subsidiaries or any material adverse change, or any development that would reasonably be expected to involve a
prospective material adverse change, in or affecting the general affairs, management, consolidated financial position,
stockholders’ equity or results of operations of the Company and its subsidiaries taken as a whole, otherwise than as set
forth or contemplated in the Prospectus;

      (vi) The Company and its subsidiaries have good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as would not have a material adverse effect on the general affairs,
management, consolidated financial position, stockholders’ equity or results of operations of the Company and its
subsidiaries, taken as a whole, in each case, whether current or future (a ―Material Adverse Effect‖); and any real property
and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its subsidiaries;

       (vii) The Company has been duly incorporated and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, or is subject to no material liability or disability by reason of the failure to be so qualified in
any such jurisdiction; and each Significant Subsidiary of the Company has been duly incorporated and is validly existing as
a corporation in good standing (to the extent such concept exists) under the laws of its jurisdiction of incorporation;
       (viii) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and
conform to the description of the Stock contained in the Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and
(except for directors’ qualifying shares) are owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;

      (ix) The Firm Shares have been duly and validly issued and are fully paid and non-assessable and conform to the
description of the Stock contained in the Prospectus and the unissued Optional Shares to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly authorized and, when issued and delivered against
payment therefor as provided herein, will be duly and validly issued and fully paid and non-assessable and will conform to
the description of the Stock contained in the Prospectus;

        (x) The issue and sale of the Optional Shares and the compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated, including, without limitation, the Refinancings,
will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, (x)
any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, (y) the provisions of the Certificate of Incorporation or By-laws of
the Company or (z) any statute or any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their properties, except, in the case of clauses (x) and (z),
for such conflicts, breaches, violations or defaults that would not have a Material Adverse Effect, affect the validity of the
Shares, or affect the consummation of the transactions herein contemplated or the performance by the Company of its
obligations hereunder; and no consent, approval, authorization, order, registration or qualification of or with any such court
or governmental agency or body is required for sale of the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Shares by the Underwriters;

        (xi) Neither the Company nor any of its subsidiaries is in violation of its Certificate of Incorporation or By-laws or in
default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any
of its properties may be bound other than such defaults as would not, individually or in the aggregate, have a Material
Adverse Effect or have a material adverse effect on the consummation of the transactions contemplated herein or the
performance by the Company of its obligations hereunder;
       (xii) Other than as disclosed in the Prospectus, there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its subsidiaries, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect and, to the Company’s knowledge, no such proceedings are
threatened by governmental authorities or threatened by others;

       (xiii) Neither the Company nor any Significant Subsidiary is, or will after the application of any proceeds received
from the sale of the Optional Shares, be, an ―Investment company,‖ as such term is defined in the Investment Company Act
of 1940, as amended (the Investment Company Act‖);

         (xiv) Neither the Company nor any of its affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075, Florida Statutes;

      (xv) Deloitte & Touche LLP, who have certified certain financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules and regulations of the Commission thereunder;

        (xvi) The Company and each of its subsidiaries has filed all foreign, federal, state and local tax returns that are
required to be filed or has requested extensions thereof and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except where the
failure to file, request an extension or make a payment would not have a Material Adverse Effect;

        (xvii) The Company or its subsidiaries own, possess or have other rights to use or can acquire on reasonable terms,
adequate material patents, trademarks, trade names, service marks, service names, copyrights and other proprietary
intellectual property (collectively, ―Intellectual Property‖) necessary to carry out the business now operated by them, except
where the failure to own or possess, or to be able to acquire, such Intellectual Property would not have a Material Adverse
Effect; and the Company has not received any notice from any person of infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or any trade secrets, proprietary information, inventions, know-how,
processes and procedures owned or used or licensed to the Company, which infringement or conflict, individually or in the
aggregate, would have a Material Adverse Effect;

       (xviii) The Company and its subsidiaries have all necessary consents, authorizations, approvals, orders, certificates
and permits of and from, and have made all declarations and filings with, all federal, state, local, foreign and other
governmental authorities, all self-regulatory organizations and all courts and other tribunals, to own, lease, license and use
their properties and assets and to conduct their business in the manner in which it is described or contemplated in the
Prospectus, with such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect;

       (xix) The Company carries, or is covered by, insurance as is customary for companies similarly situated and engaged
in similar businesses in similar industries, except where the failure to carry, or be covered by, such insurance would not
have a Material Adverse Effect;

       (xx) There are no contracts, agreements or understandings between the Company or any of its subsidiaries and any
person granting such person the right to require the Company or any of its subsidiaries to file a registration statement under
the Act with respect to any securities of the Company or any of its subsidiaries or to include any securities of the Company
or any of its subsidiaries with the Shares registered pursuant to the Registration Statement, except as otherwise disclosed
in the Prospectus;
       (xxi) There are no contracts or documents required to be described in the Registration Statement or to be filed as
exhibits thereto which are not so described or filed as required;

      (xxii) No labor disturbance by the employees of the Company exists or, to the knowledge of the Company, is
imminent which might be expected to have a material adverse effect on the business, financial condition, results of
operations or prospects of the Company;

      (xxiii) The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific
authorizations; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability; (C) access to assets is permitted only in
accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences;
and

       (xxiv) There is and has been no failure on the part of the Company and any of the Company’s directors or officers, in
their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith to the extent applicable to the Company.

        (xxv) The statements set forth in the Prospectus under the caption ―Description of Capital Stock‖, insofar as they
purport to constitute a summary of the terms of the Stock and under the captions ―Risk Factors—Provisions in our charter
documents and Delaware law may delay or prevent our acquisition by a third party‖, ―Business-Franchise Operations-The
Franchise Agreement‖, ―Business-Regulation‖, ―Management-Employment Agreements‖, ―Shares Eligible for Future Sale‖,
and ―Underwriting‖, insofar as they purport to describe the provisions of the laws and documents referred to therein, are, in
light of the circumstances under which they were made, accurate, complete and fair in all material respects;

       (xxvi) The Company has not offered, or caused the Underwriters to offer, Securities to any person pursuant to the
Directed Share Program with the specific intent to unlawfully influence (i) a customer or supplier of the Company to alter the
customer’s or supplier’s level or type of business with the Company, or (ii) a trade journalist or publication to write or publish
favorable information about the Company or its products.

(b) The Selling Stockholder represents and warrants to, and agrees with, each of the Underwriters and the Company that:

      (i) All consents, approvals, authorizations and orders necessary for the execution and delivery by the Selling
Stockholder of this Agreement and for the sale and delivery of the Shares to be sold by the Selling Stockholder hereunder,
have been obtained; and the Selling Stockholder has full right, power and authority to enter into this Agreement and to sell,
assign, transfer and deliver the Shares to be sold by the Selling Stockholder hereunder;

       (ii) The sale of the Shares to be sold by the Selling Stockholder hereunder and the compliance by the Selling
Stockholder with all of the provisions of this Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a
default under,
     any statute, indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Selling
     Stockholder is a party or by which the Selling Stockholder is bound or to which any of the property or assets of the Selling
     Stockholder is subject in any material respect, nor will such action result in any violation of the provisions of its Certificate of
     Incorporation or By-laws of the Selling Stockholder or any statute or any order, rule or regulation of any court or
     governmental agency or body having jurisdiction over the Selling Stockholder or the property of the Selling Stockholder;

            (iii) The Selling Stockholder has, and immediately prior to the First Time of Delivery (as defined in Section 5 hereof)
      the Selling Stockholder will have, good and valid title to the Shares to be sold by the Selling Stockholder hereunder, free
      and clear of all liens, encumbrances, equities or claims; and, upon delivery of such Shares and payment therefor pursuant
      hereto, good and valid title to such Shares, free and clear of all liens, encumbrances, equities or claims, will pass to the
      several Underwriters;

             (iv) The Selling Stockholder has not taken and will not take, directly or indirectly, any action which is designed to or
      which has constituted or which might reasonably be expected to cause or result in stabilization or manipulation of the price
      of any security of the Company to facilitate the sale or resale of the Shares;

             (v) All information furnished by the Selling Stockholder in writing expressly for use in the Registration Statement, any
      Preliminary Prospectus, the Prospectus or any amendment or supplement thereto (which the parties agree consists only of
      information specifically relating to the Selling Stockholder under the caption ―Principal and Selling Stockholder‖) did not at
      the time they became effective or were filed with the Commission, and will not at the time they become effective or are filed
      with the Commission, as the case may be, contain any untrue statement of a material fact or omit to state any material fact
      required to be stated therein or necessary to make the statements therein not misleading;

            (vi) To its knowledge, none of the representations and warranties of the Company herein are incorrect in any material
      respect; and

              (vii) In order to document the Underwriters’ compliance with the reporting and withholding provisions of the Tax
      Equity and Fiscal Responsibility Act of 1982 with respect to the transactions herein contemplated, the Selling Stockholder
      will deliver to you prior to or at the First Time of Delivery (as hereinafter defined) a properly completed and executed United
      States Treasury Department Form W-9 (or other applicable form or statement specified by Treasury Department regulations
      in lieu thereof).

        2. Subject to the terms and conditions herein set forth, (a) the Selling Stockholder agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Selling Stockholder, at a
purchase price per share of $           , the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto and (b) in the event and to the extent that the Underwriters shall exercise the election to purchase Optional Shares as
provided below, the Company agrees to sell to each of the Underwriters, and each of the Underwriters agree, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth in clause (a) of this Section 2, that portion of the
number of Optional Shares as to which such election shall have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying such number of Optional Shares by a fraction the numerator of which is the maximum
number of Optional Shares which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in
Schedule I hereto and the denominator of which is the maximum number of Optional Shares that all of the Underwriters are
entitled to purchase hereunder.
       The Company hereby grants to the Underwriters the right to purchase at their election up to 5,625,000 Optional Shares, at
the purchase price per share set forth in clause (a) of this Section 2 for the sole purpose of covering sales of shares in excess of
the number of Firm Shares, provided that the purchase price per Optional Share shall be reduced by an amount per share equal
to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Optional
Shares. Any such election to purchase Optional Shares may be exercised only by written notice from you to the Company, given
within a period of 30 calendar days after the date of this Agreement and setting forth the aggregate number of Optional Shares to
be purchased and the date on which such Optional Shares are to be delivered, as determined by you but in no event earlier than
the First Time of Delivery (as defined in Section 5 hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.

      3. Each of the Company and the Selling Stockholder hereby confirms its engagement of Goldman, Sachs & Co. as, and
Goldman, Sachs & Co. hereby confirms its agreement with the Company to render services as, a ―qualified independent
underwriter‖ within the meaning of Rule 2720(b)(15) of the National Association of Securities Dealers, Inc. (the ―NASD‖) with
respect to the offering and sale of the Stock. Goldman, Sachs & Co., in its capacity as qualified independent underwriter and not
otherwise, is referred to herein as the ―QIU‖. As compensation for the services of the QIU hereunder, the Selling Stockholder
agrees to pay the QIU $1,000 on the Closing Date.

       4. Upon authorization by you of the release of the Firm Shares, the several Underwriters propose to offer the Firm Shares
for sale upon the terms and conditions set forth in the Prospectus.

       5. (i) The Firm Shares to be purchased by each Underwriter hereunder shall be delivered by the Selling Stockholder to the
Representatives for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account specified by the Selling Stockholder, as their interests may
appear, to the Representative at least forty-eight hours in advance. The certificates for the Firm Shares shall be duly indorsed or
accompanied by duly executed stock powers so as to validly transfer title to the Representatives for the account of the
Underwriters. The Company shall (x) cause its transfer agent to reissue such Firm Shares in definitive form, and in such
authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours’ prior
notice to the Company; and (y) cause the certificates representing the Firm Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined below) with respect thereto at the office of Goldman,
Sachs & Co., 85 Broad Street, New York, New York 10004 (the ―Designated Office‖).

      (ii) The Optional Shares to be purchased by each Underwriter hereunder, in definitive form, and in such authorized
denominations and registered in such names as the Representatives may request upon at least forty-eight hours’ prior notice to
the Company shall be delivered by or on behalf of the Company to the Representatives for the account of such Underwriter,
against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to
the account specified by the Company, as their interests may appear, to the Representative at least forty-eight hours in advance.
The Company will cause the certificates representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect thereto at the Designated Office.
       The time and date of such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m., New York time,
on                   , 2004 or such other time and date as the Representatives and the Selling Stockholder may agree upon in
writing, and, with respect to the Optional Shares, 9:30 a.m., New York time, on the date specified by the Representatives in the
written notice given by the Representatives of the Underwriters’ election to purchase such Optional Shares, or such other time and
date as the Representatives and the Company may agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the ―First Time of Delivery,‖ such time and date for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the ―Second Time of Delivery,‖ and each such time and date for delivery is herein called a ―Time of Delivery.‖

       (b) The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 8
hereof, including the cross receipt for the Shares and any additional documents requested by the Underwriters pursuant to
Section 8(m) hereof will be delivered at the offices of Kirkland & Ellis LLP, 153 East 53 Street, New York, New York 10022 (the
                                                                                           rd


―Closing Location‖), and the Shares will be delivered at the Designated Office, all at such Time of Delivery. A meeting will be held
at the Closing Location at 3:00 p.m., New York City time, on the New York Business Day next preceding such Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by
the parties hereto. For the purposes of this Section 5, ―New York Business Day‖ shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or
executive order to close.

      6. The Company agrees with each of the Underwriters:

              (a) To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under
      the Act not later than the Commission’s close of business on the second business day following the execution and delivery
      of this Agreement, or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Act; to make no
      further amendment or any supplement to the Registration Statement or Prospectus which shall be disapproved by you
      promptly after reasonable notice thereof; to advise you, promptly after it receives notice thereof, of the time when any
      amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any
      amended Prospectus has been filed and to furnish you with copies thereof; to advise you, promptly after it receives notice
      thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any
      Preliminary Prospectus or prospectus, of the suspension of the qualification of the Shares for offering or sale in any
      jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for
      the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event
      of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or
      prospectus or suspending any such qualification, promptly to use its best efforts to obtain the withdrawal of such order;

             (b) Promptly from time to time to take such action as you may reasonably request to qualify the Shares for offering
      and sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit
      the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the
      distribution of the Shares, provided that in connection therewith the Company shall not be required to qualify as a foreign
      corporation or to file a general consent to service of process in any jurisdiction;
       (c) Prior to 10:00 A.M., New York City time, on the New York Business Day next succeeding the date of this
Agreement and from time to time, to furnish the Underwriter with written and electronic copies of the Prospectus in New
York City in such quantities as you may reasonably request, and, if the delivery of a prospectus is required at any time prior
to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the
Shares and if at such time any events shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be necessary during such period to amend or supplement the
Prospectus in order to comply with the Act, to notify you and upon your request to prepare and furnish without charge to
each Underwriter and to any dealer in securities as many written and electronic copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is required to deliver a prospectus in connection with sales
of any of the Shares at any time nine months or more after the time of issue of the Prospectus, upon your request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as many written and electronic copies as you may
request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;

       (d) To make generally available to its securityholders as soon as practicable, but in any event not later than eighteen
months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings
statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158);

       (e) During the period beginning from the date hereof and continuing to and including the date 180 days after the date
of the Prospectus, not to offer, sell, contract to sell or otherwise dispose of, except as provided hereunder, any securities of
the Company that are substantially similar to the Shares, including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive, Stock or any such substantially similar securities other than (i)
pursuant to any employee stock option plan, stock ownership plan or dividend reinvestment plan of the Company in effect
on the date of this Agreement and described in the prospectus, (ii) pursuant to any non-employee director option plan, stock
ownership plan or dividend reinvestment plan of the Company in effect on the date of this Agreement and described in the
prospectus, (iii) the issuance of Common Stock upon the conversion of securities or the exchange of warrants outstanding
on the date of this Agreement and described in the prospectus or (iv) Common Stock issued as consideration in connection
with acquisitions, provided that, the aggregate amount of such Common Stock issued shall not exceed 5% of the shares of
Common Stock outstanding immediately prior to the first such issuance, subject to proportionate adjustment in the event of
a stock split, recombination or reclassification of the Common Stock;

      (f) To furnish to its stockholders as soon as practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders’ equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as practicable after the end of each of the first
     three quarters of each fiscal year (beginning with the fiscal quarter ending after the effective date of the Registration
     Statement), to make available to its stockholders consolidated summary financial information of the Company and its
     subsidiaries for such quarter in reasonable detail;

             (g) During a period of two years from the effective date of the Registration Statement, to furnish to you copies of all
      reports or other communications (financial or other) furnished to stockholders, and to deliver to you (i) as soon as they are
      available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities
      exchange on which any class of securities of the Company is listed, other than such reports and financial statements that
      are publicly available on the Commission’s EDGAR system; and (ii) such additional information concerning the business
      and financial condition of the Company as you may from time to time reasonably request (such financial statements to be
      on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated in reports
      furnished to its stockholders generally or to the Commission);

           (h) To use the net proceeds received by it from the sale of the Optional Shares pursuant to this Agreement in the
      manner specified in the Prospectus under the caption ―Use of Proceeds‖;

            (i) To use its reasonable best efforts to list, subject, as the case may be, to notice of issuance the Shares on the New
      York Stock Exchange (the ―Exchange‖);

            (j) To file with the Commission such information on Form 10-Q of Form 10-K as may be required by Rule 463 under
      the Act; and

             (k) If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b) Registration Statement with
      the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and
      the Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement
      or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act; and

             (l) Upon the reasonable request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter an
      electronic version of the Company’s trademarks, service marks and corporate logo for use on the website, if any, operated
      by such Underwriter for the purpose of facilitating the on-line offering of the Shares (the ―License‖); provided, however , that
      the License shall be used solely for the purpose described above, is granted without any fee and may not be assigned or
      transferred.

      7. The Company and the Selling Stockholder, jointly and severally, covenant and agree with one another and with the
several Underwriters that

       (a) the Company and the Selling Stockholder will pay or cause to be paid a pro rata share (based on the number of Shares
to be sold by the Company and the Selling Stockholder hereunder) the following: (i) the fees, disbursements and expenses of the
Company’s counsel and accountants in connection with the registration of the Shares under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus
and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii)
the cost of printing or producing any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum, closing
documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and
delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares for offering and sale under state
securities laws as provided in Section 6(b) hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey; (iv) all fees and expenses in connection with listing
the Shares on the New York Stock Exchange; and (v) the filing fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, securing any required review by the NASD of the terms of the sale of the Shares;

       (b) the Company will pay or cause to be paid: (i) the cost of preparing stock certificates; (ii) the cost and charges of any
transfer agent or registrar; and (iii) all other costs and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section 7;

      (c) the Selling Stockholder will pay or cause to be paid all costs and expenses incident to the performance of the Selling
Stockholder’s obligations hereunder which are not otherwise specifically provided for in this Section 7, including (i) any fees and
expenses of counsel for the Selling Stockholder and (ii) all expenses and taxes incident to the sale and delivery of the Shares to
be sold by the Selling Stockholder to the Underwriters hereunder; and

       (d) the Company will pay or cause to be paid (i) all fees and disbursements of counsel incurred by the Underwriters in
connection with the Directed Share Program, (ii) all costs and expenses incurred by the Underwriters in connection with the
printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of copies of
the Directed Share Program material and (iii) all stamp duties, similar taxes or duties or other taxes, if any, incurred by the
Underwriters in connection with the Directed Share Program.

        In connection with clause (c)(iii) of the preceding sentence, Goldman, Sachs & Co. agrees to pay New York State stock
transfer tax, and the Selling Stockholder agrees to reimburse Goldman, Sachs & Co. for associated carrying costs if such tax
payment is not rebated on the day of payment and for any portion of such tax payment not rebated. It is understood, however, that
the Company shall bear, and the Selling Stockholder shall not be required to pay or to reimburse the Company for, the cost of any
other matters not directly relating to the sale and purchase of the Shares pursuant to this Agreement, and that, except as provided
in this Section 7, and Sections 9 and 12 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and any advertising expenses connected with any
offers they may make.

      Furthermore, the Company covenants with Citigroup Global Markets Inc. and each of the other Underwriters that the
Company will comply with all applicable securities and other applicable laws, rules and regulations in each foreign jurisdiction in
which the Directed Shares are offered in connection with the Directed Share Program.

       8. The obligations of the Underwriters hereunder, as to the Shares to be delivered at each Time of Delivery, shall be
subject, in their discretion, to the condition that all representations and warranties and other statements of the Company and of the
Selling Stockholder herein are, at and as of such Time of Delivery, true and correct, the condition that the Company and the
Selling Stockholder shall have performed all of its and their obligations hereunder theretofore to be performed, and the following
additional conditions:

            (a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time
      period prescribed for such filing by the rules and regulations under
the Act and in accordance with Section 6(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no
stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to your reasonable satisfaction;

       (b) Kirkland & Ellis LLP, counsel for the Underwriters, shall have furnished to you such written opinion reasonably
 acceptable to you, and such counsel shall have received such papers and information as they may reasonably request to
 enable them to pass upon such matters;

        (c) Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for the Company, shall have furnished to you their
 written opinion dated such Time of Delivery in substantially the form attached hereto as Annex II(a);

       (d) In-house counsel for the Selling Stockholder shall have furnished to you its written opinion, dated the First Time of
 Delivery, in substantially the form attached hereto as Annex II(b)(1) and Skadden, Arps, Slate, Meagher & Flom LLP,
 special counsel for the Selling Stockholder, shall have furnished to you their written opinion, dated the First Time of
 Delivery, in substantially the form attached hereto as Annex II(b)(2);

         (e) Piper Rudnick LLP, special counsel for Jackson Hewitt Inc. and Hewfant, Inc., shall have furnished to you its
 written opinions, each dated the First Time of Delivery, in substantially the forms attached hereto as Annex II(c) and Annex
 II(d), respectively;

        (f) On the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time,
 on the effective date of any post-effective amendment to the Registration Statement filed subsequent to the date of this
 Agreement and also at each Time of Delivery, Deloitte & Touche LLP shall have furnished to you a letter or letters, dated
 the respective dates of delivery thereof, in form and substance satisfactory to you, to the effect set forth in Annex I hereto
 (the executed copy of the letter delivered prior to the execution of this Agreement is attached as Annex I(a) hereto and a
 draft of the form of letter to be delivered on the effective date of any post-effective amendment to the Registration
 Statement and as of each Time of Delivery is attached as Annex I(b) hereto);

        (g) (i) Neither the Company nor any of its subsidiaries shall have sustained since the date of the latest audited
 financial statements included in the Prospectus any loss or interference with its business from fire, explosion, flood or other
 calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree,
 otherwise than as set forth or contemplated in the Prospectus, and (ii) since the respective dates as of which information is
 given in the Prospectus there shall not have been any change in the capital stock (other than as set forth in the Prospectus)
 or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development involving a
 prospective material adverse change, in or affecting the general affairs, management, consolidated financial position,
 stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole, otherwise than as set
 forth or contemplated in the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in the
 judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the
 public offering or the delivery of the Shares being delivered at such Time of Delivery on the terms and in the manner
 contemplated in the Prospectus;
             (h) On or after the date hereof (i) no downgrading shall have occurred in the rating accorded the Company’s debt
      securities, if any, by any ―nationally recognized statistical rating organization,‖ as that term is defined by the Commission for
      purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall have publicly announced that it has under
      surveillance or review, with possible negative implications, its rating, if any, of any of the Company’s debt securities;

              (i) On or after the date hereof there shall not have occurred any of the following: (i) a suspension or material limitation
      in trading in securities generally on the New York Stock Exchange; (ii) a suspension or material limitation in trading in the
      Company’s securities on the New York Stock Exchange; (iii) a general moratorium on commercial banking activities
      declared by either Federal or New York State authorities or a material disruption in commercial banking or securities
      settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States
      or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or crisis
      or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event
      specified in clause (iv) or (v) in the judgment of the Representatives makes it impracticable or inadvisable to proceed with
      the public offering or the delivery of the Shares being delivered at such Time of Delivery on the terms and in the manner
      contemplated in the Prospectus;

            (j) The Shares at such Time of Delivery shall have been duly listed, subject, if applicable, to notice of issuance, on
      the Exchange;

              (k) The Company shall have obtained and delivered to the Underwriters executed copies of an agreement from each
      party listed on Schedule II hereto (and to be in effect for the time period specified), substantially to the effect set forth in
      Section 6(e) hereof in form and substance satisfactory to you;

            (l) The Company shall have complied with the provisions of Section 6(c) hereof with respect to the furnishing of
      prospectuses on the New York Business Day next succeeding the date of this Agreement; and

             (m) The Company and the Selling Stockholder shall have furnished or caused to be furnished to you at such Time of
      Delivery certificates of officers of the Company and of the Selling Stockholder, respectively, satisfactory to you as to the
      accuracy of the representations and warranties of the Company and the Selling Stockholder, respectively, herein at and as
      of such Time of Delivery, as to the performance by the Company and the Selling Stockholder of all of their respective
      obligations hereunder to be performed at or prior to such Time of Delivery, and as to such other matters as you may
      reasonably request, and the Company shall have furnished or caused to be furnished certificates as to the matters set forth
      in subsections (a) and (g) of this Section 8.

       9. (a) The Company and the Selling Stockholder, jointly and severally, will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act
or otherwise, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim promptly upon request, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading (―Losses‖); provided, however, that
the Company and the Selling Stockholder shall not be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in reliance
upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives
expressly for use therein; provided further, that with respect to any untrue statement or omission of material fact made in any
Preliminary Prospectus, the indemnity agreement contained in this Section 9(a) shall not (i) inure to the benefit of any Underwriter
from whom the person asserting any such loss, claim, damage or liability of such Underwriter occurs under the circumstance
where it shall have been determined by a court of competent jurisdiction by final and nonappealable judgment that (w) the
Company had previously furnished copies of the Prospectus to the Representatives, (x) delivery of the Prospectus was required
by the Act to be made to such person, (y) the untrue statement or omission of a material fact contained in the Preliminary
Prospectus was corrected in the Prospectus and (z) there was not sent or given to such person, at or prior to the written
confirmation of the sale of such securities to such person, a copy of the Prospectus or (ii) apply to any of the information contained
in the last paragraph on page 90 of the Preliminary Prospectus and the first four paragraphs on page 91 of the Preliminary
Prospectus or the same language in the Prospectus. Notwithstanding the provisions of this Section 9(a), (i) if the Underwriters
exercise their option to purchase Optional Shares pursuant to this Agreement, the Company shall be first responsible under this
Section 9 for any Losses of up to the amount of the proceeds of the sale of such Optional Shares and (ii) the aggregate liability of
the Selling Stockholder under this Section 9 shall not exceed an amount equal to the initial offering price of the Shares as set forth
on the front cover page of the Prospectus multiplied by the number of Firm Shares.

         (b) The Company agrees to indemnify and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending
any such action or claim promptly upon request, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact included in the
supplement or prospectus wrapper material distributed in the United States in connection with the reservation and sale of the
Directed Shares to eligible employees, directors, officers and franchisees of the Company or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the statement therein, when considered in
conjunction with the Prospectus or any applicable Preliminary Prospectus, not misleading; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission made in any supplement or prospectus wrapper
material in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the
Representatives expressly for use therein.

       (c) The Company agrees to indemnify and hold harmless Citigroup Global Markets Inc., the directors, officers, employees
and agents of Citigroup Global Markets Inc. and each person, who controls Citigroup Global Markets Inc. within the meaning of
either the Act or the Exchange Act
(―Citigroup Entities‖), from and against any and all losses, claims, damages and liabilities to which they may become subject under
the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise (including, without
limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim),
insofar as such losses, claims damages or liabilities (or actions in respect thereof) (i) caused by the failure of any Participant to
pay for and accept delivery of the securities which immediately following the Effective Date of the Registration Statement, were
subject to a properly confirmed agreement to purchase or (ii) related to, arising out of, or in connection with the Directed Share
Program, except that this clause (ii) shall not apply to the extent that such loss, claim, damage or liability is finally judicially
determined to have resulted primarily from the gross negligence or willful misconduct of the Citigroup Entities.

       (d) Each Underwriter will indemnify and hold harmless the Company and the Selling Stockholder against any losses,
claims, damages or liabilities to which the Company or the Selling Stockholder may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the statements therein, not misleading, in each
case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company and the Selling Stockholder for any legal or other
expenses reasonably incurred by the Company or the Selling Stockholder in connection with investigating or defending any such
action or claim promptly upon request.

        (e) Promptly after receipt by an indemnified party under subsection (a), (b), (c) or (d) above of notice of the commencement
of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In
case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense thereof, with a single counsel (in addition to local
counsel) reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any
legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or
not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party. Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to Section 9(c) hereof in respect of such action or proceeding, then in addition to such separate
firm for the indemnified parties, the indemnifying party shall be liable for the reasonable fees and expenses of not more than one
separate firm (in addition to any local counsel) for Citigroup Global Markets Inc., the directors, officers, employees and agents of
Citigroup Global Markets Inc., and all persons, if any, who control Citigroup Global Markets Inc. within the meaning of either the
Act or the Exchange Act for the defense of any losses, claims, damages and liabilities arising out of the Directed Share Program.

         (f) If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party
under subsection (a), (b), (c) or (d) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholder on the one hand and the Underwriters on the other from
the offering of the Shares. If, however, the allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required under subsection (e) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company and the Selling Stockholder on the one hand and the
Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by
the Company and the Selling Stockholder on the one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting expenses) received by the Company and the Selling
Stockholder bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholder on the one hand or the Underwriters on the other and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company,
the Selling Stockholder and the Underwriters agree that it would not be just and equitable if contributions pursuant to this
subsection (f) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (f).
The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (f) shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of
this subsection (f), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this
subsection (f) to contribute are several in proportion to their respective underwriting obligations and not joint.
      (g) The obligations of the Company and the Selling Stockholder under this Section 9 shall be in addition to any liability
which the Company and the Selling Stockholder may otherwise have and shall extend, upon the same terms and conditions, to
each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this
Section 9 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company (including any person who, with his or her consent, is
named in the Registration Statement as about to become a director of the Company) and to each person, if any, who controls the
Company or the Selling Stockholder within the meaning of the Act.

       10. (a) The Company and the Selling Stockholder, jointly and severally, will indemnify and hold harmless Goldman, Sachs
& Co., in its capacity as QIU, against any losses, claims, damages or liabilities, joint or several, to which the QIU may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or any amendment or supplement thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any
act or omission to act or any alleged act or omission to act by Goldman, Sachs & Co. as QIU in connection with any transaction
contemplated by this Agreement or undertaken in preparing for the purchase, sale and delivery of the Shares, except as to this
clause (iii) to the extent that any such loss, claim, damage or liability results from the gross negligence or bad faith of Goldman,
Sachs & Co. in performing the services as QIU, and will reimburse the QIU for any legal or other expenses reasonably incurred by
the QIU in connection with investigating or defending any such action or claim as such expenses are incurred.

        (b) Promptly after receipt by the QIU under subsection (a) above of notice of the commencement of any action, the QIU
shall, if a claim in respect thereof is to be made against the Company under such subsection, notify the Company in writing of the
commencement thereof; but the omission so to notify the Company shall not relieve it from any liability which it may have to the
QIU otherwise than under such subsection. In case any such action shall be brought against the QIU and it shall notify the
Company of the commencement thereof, the Company shall be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to the QIU (who
shall not, except with the consent of the QIU, be counsel to the Company), and, after notice from the indemnifying party to the QIU
of its election so to assume the defense thereof, the indemnifying party shall not be liable to the QIU under such subsection for
any legal expenses of other counsel or any other expenses, in each case subsequently incurred by the QIU, in connection with the
defense thereof other than reasonable costs of investigation. The Company shall not, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the QIU is
an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional
release of the QIU from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of QIU.
         (c) If the indemnification provided for in this Section 10 is unavailable to or insufficient to hold harmless Goldman, Sachs &
Co., in its capacity as QIU, under subsection (a) above in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then the Company shall contribute to the amount paid or payable by the QIU as a result of
such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the QIU on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by applicable law or if the QIU failed to give the notice
required under subsection (b) above, then the Company shall contribute to such amount paid or payable by the QIU in such
proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand
and the QIU on the other in connection with the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the QIU on the other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company, as set forth in the table on the cover page of the
Prospectus, bear to the fee payable to the QIU pursuant to Section 3 hereof. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company on the one hand or the QIU on the other and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company
and the QIU agree that it would not be just and equitable if contributions pursuant to this subsection (c) were determined by pro
rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above
in this subsection (c). The amount paid or payable by the QIU as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (c) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.

      (d) The obligations of the Company under this Section 10 shall be in addition to any liability which the Company may
otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the QIU within the
meaning of the Act.

        11. (a) If any Underwriter shall default in its obligation to purchase the Shares which it has agreed to purchase hereunder at
a Time of Delivery, you may in your discretion arrange for you or another party or other parties to purchase such Shares on the
terms contained herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such
Shares, then the Company and the Selling Stockholder shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to you to purchase such Shares on such terms. In the event that, within the
respective prescribed periods, you notify the Company and the Selling Stockholder that you have so arranged for the purchase of
such Shares, or the Company and the Selling Stockholder notify you that they have so arranged for the purchase of such Shares,
you or the Company and the Selling Stockholder shall have the right to postpone such Time of Delivery for a period of not more
than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be made necessary. The term ―Underwriter‖ as used
in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
             (b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or
      Underwriters by you and the Company and the Selling Stockholder as provided in subsection (a) above, the aggregate
      number of such Shares which remains unpurchased does not exceed one-eleventh of the aggregate number of all the
      Shares to be purchased at such Time of Delivery, then the Company and the Selling Stockholder shall have the right to
      require each non-defaulting Underwriter to purchase the number of Shares which such Underwriter agreed to purchase
      hereunder at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata
      share (based on the number of Shares which such Underwriter agreed to purchase hereunder) of the Shares of such
      defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a
      defaulting Underwriter from liability for its default.

             (c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or
      Underwriters by you and the Company and the Selling Stockholder as provided in subsection (a) above, the aggregate
      number of such Shares which remains unpurchased exceeds one-eleventh of the aggregate number of all of the Shares to
      be purchased at such Time of Delivery, or if the Company and the Selling Stockholder shall not exercise the right described
      in subsection (b) above to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or
      Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations of the Underwriters to
      purchase and of the Company to sell the Optional Shares) shall thereupon terminate, without liability on the part of any
      non-defaulting Underwriter or the Company or the Selling Stockholder, except for the expenses to be borne by the
      Company and the Selling Stockholder and the Underwriters as provided in Section 7 hereof and the indemnity and
      contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its
      default.

        12. The respective indemnities, agreements, representations, warranties and other statements of the Company, the Selling
Stockholder and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company, or the Selling Stockholder,
or any officer or director or controlling person of the Company, or any controlling person of the Selling Stockholder, and shall
survive delivery of and payment for the Shares.

        13. If this Agreement shall be terminated pursuant to Section 11 hereof, neither the Company nor the Selling Stockholder
shall then be under any liability to any Underwriter except as provided in Sections 7, 9 and 10 hereof; but, if for any other reason
any Shares are not delivered by or on behalf of the Company and the Selling Stockholder as provided herein, the Company and
the Selling Stockholder pro rata (based on the number of Shares to be sold by the Company and the Selling Stockholder
hereunder) will reimburse the Underwriters through you for all out-of-pocket expenses approved in writing by you, including fees
and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery
of the Shares not so delivered, but the Company and the Selling Stockholder shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered except as provided in Sections 6 and 8 hereof.

      14. In all dealings hereunder, you shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you jointly or by
Goldman, Sachs & Co. and J.P. Morgan Securities on behalf of you, as representatives.
       All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered
or sent by mail, telex or facsimile transmission to you as the Representatives in care of Goldman, Sachs & Co., 85 Broad Street,
New York, New York 10004, Attention: Registration Department; if to the Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to counsel for the Selling Stockholder at its address set forth in Schedule III hereto; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: General Counsel; provided, however, that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its
Underwriters’ Questionnaire or telex constituting such Questionnaire, which address will be supplied to the Company or the
Selling Stockholder by you on request. Any such statements, requests, notices or agreements shall take effect upon receipt
thereof.

       15. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and the Selling
Stockholder and, to the extent provided in Sections 9 and 11 hereof, the officers and directors of the Company and each person
who controls the Company, the Selling Stockholder or any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.

    16. Time shall be of the essence of this Agreement. As used herein, the term ―business day‖ shall mean any day when the
Commission’s office in Washington, D.C. is open for business.

      17. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

      18. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

       19. The Company and the Selling Stockholder are authorized, subject to applicable law, to disclose any and all aspects of
this potential transaction that are necessary to support any U.S. federal income tax benefits expected to be claimed with respect
to such transaction, and all materials of any kind (including tax opinions and other tax analyses) related to those benefits, without
the Underwriters imposing any limitation of any kind.
        If the foregoing is in accordance with your understanding, please sign and return to us counterparts hereof, one for the
Company, the Selling Stockholder and each of the Representatives and one for each Counsel and the Custodian, and upon the
acceptance hereof by you on behalf of each of the Underwriters this letter and such acceptance hereof shall constitute a binding
agreement among each of the Underwriters, the Company and the Selling Stockholder. It is understood that your acceptance of
this letter on behalf of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form
of which shall be submitted to the Company and the Selling Stockholder for examination, upon request, but without warranty on
your part as to the authority of the signers thereof.


                                                                               Very truly yours,
                                                                               Jackson Hewitt Tax Service Inc.

                                                                                By:

                                                                                      Name:
                                                                                      Title:

                                                                               Cendant Finance Holding Corporation

                                                                               By:

                                                                                      Name:
                                                                                      Title:

Accepted as of the date hereof:


Goldman, Sachs & Co.

By:

       (Goldman, Sachs & Co.)

J.P. Morgan Securities Inc.

By:

       (J.P. Morgan Securities Inc.)
On behalf of each of the Underwriters
                                                     SCHEDULE I
                                                                                    Number of Optional
                                                                                      Shares to be
                                                                  Total Number of     Purchased if
                                                                   Firm Shares to    Maximum Option
                          Underwriter                              be Purchased         Exercised

Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Banc of America Securities LLC
Citigroup Global Markets Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Credit Suisse First Boston LLC
Blaylock & Partners, L.P.
CIBC World Markets Corp.
Lehman Brothers Inc.
Total
                                                      SCHEDULE II

Each director and officer of the Company (180 days)

Certain employees of the Company (90 days)
                                      SCHEDULE III

Address of Selling Stockholder:

Cendant Finance Holding Corporation
c/o Cendant Corporation
9 West 57th Street
New York, New York 10021
Attention: Eric J. Bock, Esq.
Facsimile: (212) 413-1922
                                                                                                                                  Exhibit 10.4

                                                                                                                              Execution Copy

                                                        PROGRAM AGREEMENT

THIS REFUND ANTICIPATION LOAN AGREEMENT (“Agreement”) is made as of this 5th day of May, 2004 by and between Santa
Barbara Bank & Trust (“SBBT”), a division of Pacific Capital Bank, N.A., a national banking association, with its principal office at 5770
Oberlin Drive, San Diego, CA, and Jackson Hewitt Inc. (“JHI”) , a Virginia corporation, with its principal office at 7 Sylvan Way, Parsippany,
NJ 07054.

                                                                 RECITALS

WHEREAS, JHI provides income tax return preparation, electronic filing and related services to customers through independently owned and
operated franchisees (“Franchisees”) as well as through stores owned by Tax Services of America, Inc., a Delaware corporation and a wholly
owned subsidiary of JHI (“TSA”; and, together with Franchisees, “electronic return originators” or “EROs ”); and

WHEREAS, SBBT offers loans based on a customer’s anticipated federal income tax refund ( “refund anticipation loans” or “RALs” ),
derivative RAL products such as Money Now loans, and products based upon a customer’s actual federal or state income tax refund,
                                              SM


including Accelerated Check Refunds ( “ACRs” ) and Assisted Direct Deposits (“ ADDs ”; and, together with RALs, Money Now loans and
ACRs, and such other products as the parties agree shall be offered hereunder, “ Bank Products” ); and

WHEREAS, SBBT desires to provide Bank Products to customers of certain EROs designated by JHI from time to time, and JHI desires that
SBBT provide such services, on the terms and subject to the conditions hereinafter set forth (the “Program” ).

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:

                                                       TERMS AND CONDITIONS

1.   ERO Participation.

SBBT and JHI agree to offer the Program to those EROs designated by JHI from time to time. JHI shall cause participating EROs to enter into
separate agreements with SBBT, on an annual basis, in substantially the form attached hereto as Exhibit A, with such changes thereto as the
parties, from time to time, shall agree (the “SBBT Bank Product Agreement”) and to offer Bank Products to customers of such EROs (
“Customers” ) in accordance with the terms thereof. SBBT and JHI agree that Exhibit A shall be added to this Agreement subsequent to the
execution of this Agreement and shall be in a form substantially similar to the SSBT bank product agreement used by the EROs for the tax year
immediately prior to the date of execution of this Agreement.

2.   Limited Exclusivity.

     2.1. ERO participation . No ERO that is accepted to and participating in the Program during any year of the Term shall be permitted
          to accept applications for Bank Products (or products substantially similar thereto) during the same year on behalf of any financial
          institution other than SBBT without the prior written approval of SBBT. EROs found to be participating at once in both the
          Program and a competing bank product program may be terminated by SBBT from the Program.

     2.2   ERO Designation . Within each year of the Term, JHI agrees that it shall not designate EROs registered with SBBT in the prior
           year to another lending institution unless (i) (A) By


                                                                      1
         September 1, JHI has advised SBBT of issues affecting historic or prospective Program performance (including, without limitation,
         regulatory or legislative matters, performance issues, lack of customer service and support or inability to process the volume of
         business) and (B) within 30 days following such notice, SBBT has not offered a solution thereto to the mutual satisfaction of SBBT
         and JHI or (ii) SBBT shall have failed to offer and provide any new financial products or services relating to tax return filing similar
         to the existing Bank Products or products that may be under development by JHI (each, a “New Bank Product”) in accordance with
         Exhibit C hereto.

3.   Products and Pricing.

     3.1. Product Offering .

          (a)   Products Generally . SBBT shall offer to JHI and provide to Customers, on the terms and subject to the conditions
                hereinafter set forth, the following financial products and services, and such other products and services as the parties may,
                from time to time develop:

                (i)     “ Refund Anticipation Loan ” or “ RAL ” shall mean a loan to a Customer based upon the Customer’s anticipated
                        federal income tax return refund and in an amount equal to such anticipated refund (as identified in IRS Form 8453),
                        subject to any limitations that may be imposed thereon due to the application of certain underwriting criteria or other
                        factors deemed relevant by SBBT, after consultation with JHI.

                (ii)    “ Money Now loan” means an advance of a portion of a Customer’s expected RAL made to a Customer on the same
                        day that the Customer’s federal income tax return is filed with the IRS.

                (iii)    “ Accelerated Check Refund” or “ACR” shall mean a non-loan financial product through which a Customer’s
                         federal and/or state income tax refund (as identified in IRS Form 8453 and any applicable state tax form,
                         respectively) is deposited into an account established by SBBT and disbursed, net of authorized fees and charges, to
                         the Customer.

                (iv) “ Assisted Direct Deposit” or “ADD” shall mean a non-loan financial product through which a Customer’s federal
                     and/or state income tax refund (as identified in IRS Form 8453 and any applicable state tax form, respectively) is
                     deposited into an account established by SBBT and disbursed, net of authorized fees and charges and via an automated
                     clearing house credit (“ACH”) to the Customer’s designated bank account. Except as otherwise noted, all references
                     hereafter in this Agreement to ACRs shall also include ADDs.

          (b)   State Products . SBBT shall provide ACR and ADD services to all Customers requesting the same with respect to all states
                whose taxing authority accepts state income tax returns electronically and disburses refund amounts via direct deposit.

          (c)   Product Development . SBBT and JHI may, from time to time, develop and provide to EROs additional products for sale
                to Customers. The description of such additional products and the terms and conditions governing their offer shall be set
                forth in separate agreements attached as Exhibits to this Agreement.

                                                                       2
     3.2. Bank Product Pricing . Bank Product pricing and terms shall be determined annually by SBBT in consultation with JHI and such
          fees and terms shall be set forth in Exhibit B (the terms of which are hereby incorporated by reference herein and made a part
          hereof) and on the Bank Product Application for the then current year. Bank Product pricing shall be set forth in writing and shall
          be agreed to by the parties no later than November 1st preceding each tax season. SBBT shall charge Customers a handling fee
          (“Handling Fee”) for each Bank Product, and shall also charge RAL Customers a finance charge (the “Finance Charge”), which
          shall be a fixed percentage of the RAL amount, and may be subject to minimum and maximum limitations.

4.   Revenue Sharing.

     4.1. Revenue Sharing; ERO Incentives . SBBT shall share Handling Fees with, and shall pay an additional fixed RAL rebate to, JHI
          in accordance with the terms set forth in Exhibit C. If JHI elects in any year to offer EROs an incentive program designed to
          encourage ERO sales of Bank Products, then (i) JHI shall give notice thereof to SBBT no later than November 1st of the
          immediately preceding year (which notice shall specify the amount of such incentive and the timing of such payments), and (ii)
          SBBT shall facilitate payment of such incentives on behalf of JHI by depositing funds in the amounts and at the times dictated by
          JHI directly into the ERO’s bank account via an ACH direct deposit. All ERO incentive compensation, if any, shall be paid from
          and shall not exceed, JHI’s share of Handling Fees. Such payments in this Section 4.1 shall not be paid in jurisdictions that the
          parties agree prohibit such payment.

     4.2. Revenue Sharing; Finance Charge and Prior Year Debt Collections . SBBT shall share the Finance Charge and collections of
          prior year RAL debts with JHI in accordance with terms, and subject to the conditions, set forth in Exhibit C. Except as specifically
          described in Exhibit C, SBBT shall bear the risk of loss for all loans and loan advances made in connection with the Program. Such
          payments in this Section 4.2 shall not be paid in such jursisdictions that the parties agree prohibit such payment.

5.   RAL Eligibility.

The parties agree that only those Customers whose federal income tax returns are filed electronically and who are entitled to a federal income
tax refund shall be eligible to receive a RAL. A Customer who meets the foregoing requirements shall nevertheless be subject to underwriting
criteria developed by SBBT, after consultation with JHI, pursuant to Section 7.5. Notwithstanding the foregoing, if SBBT receives current
information from a reliable credit reporting agency or other reliable source that a Customer’s income tax refund may be subject to attachment,
delay or offset, then SBBT may deny such Customer a RAL.

6.   JHI„s Obligations and Procedures.

     6.1. Preparation and Filing of Returns. JHI shall cause EROs participating in the Program to prepare and/or collect and file with the
          appropriate taxing authorities federal and state income tax returns for Customers, and EROs shall be solely responsible for any
          liability arising out of such preparation or filing.

     6.2. Application Process. JHI shall cause participating EROs to require that each Customer requesting a Bank Product (i) complete and
          sign an application in a form developed by SBBT and reviewed by JHI prior to each tax season (the “Application” ), which
          application may also include a loan agreement (the “Loan Agreement” ) and a disclosure statement meeting the requirements of
          the federal Truth-in-Lending Act (the “Disclosure Statement” ), and (ii) is given a copy of any and all disclosures required to be
          provided pursuant to applicable State or local law ( “State Disclosure Documents” ). The Application shall include, among other
          things, a request for certain information and certifications, as well as an authorization, signed

                                                                       3
     by the Customer, to (A) use the tax return information for the application process in accordance with Section 301.7216-3(b) of the
     U.S. Treasury Department regulations and (B) allow SBBT to repay any delinquent RAL or Money Now loan with the proceeds of
     the Bank Product obtained pursuant to the Application. Participating EROs shall be responsible, pursuant to the terms of the SBBT
     Bank Product Agreement, for ensuring that the Application is complete and accurately reflects all material information received
     from the Customer, including social security number(s); provided, however, that the ERO shall in no event be held responsible for
     false or inaccurate information provided by Customers.

6.3. Completion of IRS Form 8453. In connection with each Application, JHI shall cause each participating ERO to complete IRS
     Form 8453 and the direct deposit designation in the electronic portion of the Customer’s federal (and state, if applicable) income
     tax return which shall include information provided by SBBT (such as the applicable SBBT check routing number and Customer
     account number) and shall name SBBT as the financial institution. The forms shall be signed by an employee of the ERO and by
     the Customer, and shall also indicate that the account is a checking account and that the source is “other”. JHI shall cause the same
     information to be contained in the appropriate data field as part of the income tax return electronically filed by the ERO.

6.4. Customer Copies. JHI shall cause the ERO to provide to each Customer a signed copy of the Application, Loan Agreement and
     Disclosure Statement (which may be combined into one form), signed IRS Form 8453 or similar form, together with any other
     agreements or documents that SBBT reasonably may require, as identified to and reviewed by JHI prior to each tax season;
     provided that SBBT shall be solely responsible for the form and content of all of the aforementioned documents and for their
     compliance with applicable laws, rules and regulations ( “Applicable Law” ).

6.5. Retention and Handling of Documents .

     (a)     Retention. JHI shall cause each ERO to retain a copy of the signed Application, Loan Agreement and Disclosure Statement,
             State Disclosure Documents, if any, as well as a copy of the federal and state income tax returns, in the Customer’s file
             maintained by them for a period of three years following the preparation and filing thereof (after which time such
             documents may be discarded). At the reasonable request of SBBT, JHI shall cause EROs to deliver to SBBT a copy of any
             Application.

     (b)     Tax Returns . For fraud detection, underwriting and collection purposes, JHI shall provide to SBBT electronic copies of
             each 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 SBBT.

6.6. Transmission of Customer Information. After JHI has transmitted the Customer’s income tax return to the Internal Revenue
     Service ( “IRS” ) and received from the IRS acknowledgment of its acceptance thereof and the debt indicator relating thereto (to
     the extent provided) as described by Chapter 3 of the IRS e-file Handbook for Authorized IRS e-file Providers of Individual
     Income Tax Returns (Publication 1345, including Rev. Proc. 2000-31), as the same may be amended from time to time (the
     “Notification”) , JHI shall electronically transmit to SBBT all data required to be extracted from the IRS transmission file and the
     Application in accordance with SBBT’s Refund Anticipation Loan File Layouts and Specifications (“Specifications”), which shall
     be provided to JHI no later than the November 1 immediately preceding each tax season and shall be incorporated herein by
     reference, together with information, if any, received in the Notification. JHI shall not transmit any Application information for a
     Money Now loan which does not also make application for a

                                                                 4
    RAL. Notwithstanding the foregoing, if SBBT shall notify JHI (as described in Section 7.1) that it is no longer accepting
    Applications from an ERO, then JHI shall immediately halt all transmissions to SBBT in respect of such ERO. In the event it no
    longer becomes feasible to process Applications in the manner specified in this Section 6.6 due to circumstances beyond the control
    of the parties, then the parties shall endeavor in good faith to take all commercially reasonable actions necessary to promptly
    modify the Program so as to resolve the problems.

6.7. Check Disbursements; Lost Checks; Check Reconciliations .

     (a)   Check Disbursements. If a Customer has chosen an SBBT cashier’s check as the method of disbursement, then upon
           receipt of notice from SBBT that it has approved a Customer’s RAL Application, or that the IRS has funded a Customer’s
           ACR, JHI shall transmit a check print authorization to the ERO to permit the ERO to print a disbursement check from the
           consecutively numbered blank check stock supplied to it by SBBT. Such check shall evidence the amount of the RAL,
           Money Now loan or ACR, less all fees and charges authorized by the Customer to be deducted therefrom, and shall bear an
           imprint of the facsimile signature of an authorized SBBT signatory as provided by SBBT.

     (b)   Lost Checks. If a Customer notifies an ERO that a check disbursed by it has become lost, or that he or she has not received
           a check mailed by SBBT within 14 days, then JHI shall cause the ERO to notify SBBT immediately to stop payment
           thereon and to issue a new check and an indemnifying bond, to be completed by Customer, in a form satisfactory to SBBT.

     (c)   Check Reconciliations. JHI shall immediately transmit to SBBT a check reconciliation file, the content and layout of which
           are described in the Specifications, with respect to each check as to which it has received from the ERO confirmation that
           the check was printed.

6.8. Data Processing Systems .

     (a)   SBBT Communications. During the Term, JHI shall develop, maintain and operate data processing systems and programs
           that are capable of electronically transmitting and receiving all information, records and file formats required by the
           Specifications. Except as limited by Section 14 hereof, JHI shall be responsible for any losses directly attributable to the
           failure of JHI’s data processing systems and programs to electronically transmit and receive records and files in accordance
           with the requirements set forth in the Specifications.

     (b)   Electronic Filing Software. JHI shall distribute to each participating ERO its proprietary electronic filing software,
           ProFiler , which shall (i) enable the ERO to prepare accurately and electronically file returns to the IRS through JHI and
                    ®


           (ii) accurately populate the Truth-in-Lending Act Disclosure Statement,applicable State Disclosure Documents and
           Applications based upon information input by the tax preparer.

     (c)   Check Writing Software. JHI shall distribute to each participating ERO a check writing program, which program shall
           permit (i) checks to be written only in the name of the proper Customer and only in the amount approved by SBBT, (ii) the
           printing of the Disclosure Statement (the text of which shall have been prepared by SBBT and reviewed by JHI) on a
           perforated stub of the SBBT blank check form, and (iii ) the printing of additional disbursement checks in the event that
           additional funds are received and owing to the Customer.

                                                               5
          (d)     SBBT Review . SBBT shall review and approve all software developed by JHI for use in connection with the performance
                  of this Agreement, including software that is embedded in, or otherwise is utilized in connection with, ProFiler. SBBT shall
                  perform no fewer than 30 test transmissions on or before December 1 preceding each tax season during the Term to ensure
                                                                                         st


                  accuracy and functionality of all such software.

     6.9. Collection Assistance. At the reasonable request of SBBT, and subject to Applicable Law, JHI shall provide reasonable assistance
          to SBBT in the collection of past due RALs. Such assistance may include providing updated addresses and phone numbers for
          Customers, to the extent permitted by law.

7.   SBBT‟s Obligations and Procedures.

     7.1. Processing of Applications. SBBT shall, on each day during the Term, process Applications and provide Bank Products with
          respect thereto for all Applications received electronically in accordance with SBBT’s underwriting criteria in effect at that time (as
          the same may be amended from time to time by the mutual consent of the parties) and in accordance with industry standards;
          provided that SBBT shall use commercially reasonable efforts to process (i) Money Now Applications within three minutes of
          receipt of such Application from JHI and (ii) RAL Applications within two hours (or, if a credit bureau is employed to evaluate the
          creditworthiness of a RAL applicant, then within eight hours) after having received from JHI an acknowledgment of the due filing
          of the related tax return, together with a corresponding debt indicator, as received from the IRS. Notwithstanding the foregoing,
          SBBT shall not accept any Applications at any time if SBBT (i) receives notification from the IRS that the ERO is under
          investigation, (ii) reasonably suspects fraudulent activity originating through the ERO, or (iii) considers loan delinquencies on
          RALs originating through the ERO to be unacceptable, in its reasonable discretion. SBBT shall be responsible for decisions made
          by it to approve or deny loan Applications, including, without limitation, the provision to applicants of adverse action notices or
          other notices required by Applicable Law.

     7.2. Disbursement/Check Print Authorizations. SBBT shall promptly communicate disbursement authorizations to JHI (i)
          immediately upon approval of a Money Now loan or RAL or (ii) upon receipt of and immediately after processing IRS or state
          refund pre-note files to the extent such practice does not violate any applicable bank regulations. State funding shall be released by
          SBBT no later than the effective date designated by the applicable state taxing authority. SBBT shall be responsible for all
          disbursement/check authorizations issued by it, including losses incurred as a result of its issuance of duplicate or multiple check
          print authorizations or checks issued by SBBT in error or with information inconsistent with the information in the disbursement
          request received from JHI.

     7.3. Establishment of Accounts; Availability of Funds .

          (a)     SBBT shall establish and maintain at SBBT a segregated account for the benefit of Customers (each, a “Deposit Account”
                  ), which account shall conform to the requirements of 12 C.F.R. 330.5 so as to afford Customers FDIC insurance with
                  respect to such Deposit Accounts. Upon notification to JHI that a RAL has been approved or that an ACR has been funded,
                  SBBT shall transfer the amount of the RAL or the refund, respectively, to the Deposit Account. All disbursements to
                  Customers shall be drawn on the Deposit Account and shall be paid promptly upon presentment. SBBT shall make all
                  disbursements in the manner elected by the Customer, as set forth in the Application and Loan Agreement. SBBT shall have
                  the right to offset against the Deposit Account all fees and charges authorized by the

                                                                       6
            Customer to be paid to SBBT, JHI or EROs pursuant to his Application for a Bank Product in an amount up to the amount of
            the Bank Product.

     (b)    Upon notification to JHI that an ADD has been funded, SBBT shall transfer funds via an automated clearing house credit (
            “ACH” ) into the account designated for receipt thereof by the Customer. If the ACH transfer is not successful, then SBBT
            shall disburse the refund to the Customer via a check printed by the Customer’s ERO or mailed directly by SBBT.

     (c)    SBBT shall have sufficient funds available at all times to pay all disbursements authorized by SBBT under the several
            SBBT Bank Product Agreements.

7.4. Deduction of Additional Charges; Timing and Order of Disbursements .

     (a)    SBBT shall, upon receipt of a Customer’s disbursement reconciliation record from JHI, remit on the next succeeding
            business day directly by way of an ACH credit to the appropriate JHI bank account (identified to SBBT in writing by JHI),
            all additional fees and charges owing to JHI hereunder.

     (b)    SBBT shall remit payment to each ERO of all fees and charges authorized by Customers to be paid to such ERO (including,
            without limitation, tax preparation, Gold Guarantee and other fees) in accordance with the applicable SBBT Bank Product
            Agreement between such ERO and SBBT.

     (c)    All Bank Product disbursements shall be made to the Customer net of all authorized fees, deductions or charges. If SBBT
            receives a state tax refund before the IRS tax refund, then any and all JHI or ERO fees may be deducted from the state
            refund prior to disbursement to the Customer. If an IRS or state tax refund deposit is received in an amount less than
            anticipated, then disbursements will be made in the following order: first, to cover the Handling Fee and Finance Charge;
            second, to cover JHI fees; third, to cover ERO fees; fourth, to pay any outstanding RAL obligations the Customer may have;
            and fifth, to pay the Customer disbursement. SBBT’s portion of the Handling fee shall be disbursed first. If an Application
            is denied and the IRS funds a direct deposit, then SBBT’s fee shall be adjusted to remove the Finance Charge indicated on
            the Application and to reflect the appropriate prevailing ACR Handling Fee, listed on Exhibit B.

     (d)    If the Customer’s refund received from the IRS exceeds the total amount owed pursuant to the RAL, or if after a RAL is
            denied, the return is accepted by the IRS and a direct deposit is made to the Deposit Account, then SBBT shall send a
            disbursement authorization record in the amount of the excess or the deposit, respectively (after adjusting for and posting
            fees), to JHI. If the refund is less than the amount anticipated, then SBBT shall notify the ERO and the Customer of such
            shortfall, and demand prompt payment to SBBT of the outstanding amount.

7.5. Establishment of Fees and Underwriting Criteria. The fees and underwriting criteria for the Program shall be developed each
     year by SBBT in consultation with JHI, and may be subject to modification from time to time as mutually agreed by the parties.
     The fees and underwriting criteria must be commercially reasonable, based on the best information available that year including
     IRS prior-year funding trends, competitive product offerings and Customer and ERO behavior, and set forth in writing and agreed
     to by the parties no later than November 1 preceding each tax season during the Term. Agreement by either party shall not be
                                                st


     unreasonably withheld.

                                                                 7
     7.6.   Development of Forms/Materials. SBBT shall develop reasonable program protocols for the offering, marketing, receipt and
            processing of Applications, the making of loans and the delivery of Bank Product proceeds (“ Program Protocols” ) and shall
            create and distribute to JHI for its prior review forms to be used by participating EROs of each of the following: the Application,
            Loan Agreement, Disclosure Statement, and disbursement checks. SBBT may create solicitation, marketing and promotional
            materials relating to the Program, each of which shall be subject to JHI’s prior review. SBBT shall provide such assistance as
            JHI reasonably may request in connection with the preparation and dissemination to Customers of State Disclosure Documents.
            SBBT covenants and agrees that the Program Protocols and all documents and materials provided by it hereunder (including,
            without limitation, the Application, Loan Agreements, Disclosure Statements, disbursement checks, solicitation materials and
            marketing and promotional materials) shall comply with Applicable Law.

     7.7.   Screening. SBBT shall pre-screen the Jackson Hewitt Customer base, using the underwriting criteria established pursuant to
            Section 7.5 or any other criteria reasonably requested by JHI, for the purpose of enabling JHI to distribute solicitation materials
            regarding pre-approved Bank Products to Customers. SBBT shall provide to JHI the text of any disclosures required by
            Applicable Law to be provided to Customers with respect to such prescreening. The results of such screening process shall be
            set forth in an electronic file and shall be presented in such form as JHI shall determine. Responsibility for the cost of activities
            undertaken pursuant to this Section 7.7 shall be determined by the mutual agreement of the parties.

     7.8.   Check Stock. SBBT shall provide and distribute to each participating ERO the necessary check stock to participate in the
            Program, and shall promptly replenish such stock upon the ERO’s request at no charge, unless the ERO requests overnight
            delivery (in which case the ERO shall pay for such delivery).

     7.9.   Reports. SBBT shall provide weekly reports to JHI describing all ACH transmissions from the IRS to SBBT and all paid items,
            and covering such other matters and in such form as JHI reasonably may request. SBBT covenants and agrees that each such
            report will be true, correct and complete in all respects.

     7.10. Additional Products. Upon terms to be agreed by the parties, SBBT shall facilitate the offering of such additional products as
           JHI and SBBT may develop or as Customers are offered in other Jackson Hewitt Tax Service offices that are not participating
                                                                                                               ®


           in the Program, unless the offering of such products is prohibited by law.

     7.11. Loan Denial Notice. SBBT shall send a proper loan denial notice under the Equal Credit Opportunity Act, Regulation B and
           other Applicable Laws to each applicant whose loan request was declined by SBBT.

8.   Representations, Warranties and Covenants.

     8.1    Each party represents and warrants to the other that (i) it is a corporation or national banking association in good standing under
            the laws of its jurisdiction of incorporation or formation and is duly qualified to transact business in each jurisdiction in which
            the operation of its business or the ownership of its properties requires such qualification (except where the failure to so qualify
            would not have a material adverse effect on its business); (ii) its execution and delivery of this Agreement does not and will not
            violate its Certificate of Incorporation or charter or breach or constitute a default under any agreement or arrangement to which
            it is a party; (iii) it has the legal right to enter into and perform its obligations hereunder; (iv) its execution and delivery hereof
            has been duly authorized by all necessary corporate action on its part and this Agreement constitutes its legal and binding
            agreement, enforceable against it in

                                                                       8
            accordance with its terms; and (v) its Marks do not infringe upon the intellectual property rights of any third party.

     8.2.   SBBT covenants to and agrees with JHI that it shall comply with all Applicable Laws, rules and regulations in connection with
            the offer and sale of Bank Products and the performance of its obligations under this Agreement. Without limiting the foregoing,
            SBBT covenants and agrees that its evaluation and processing of Applications, its provision and documentation of loans, the
            fees charged by it for such loans and its activities involving the collection of outstanding RALs shall comply with all applicable
            state and federal laws, rules and regulations, including, without limitation, the Truth-In-Lending Act (15 U.S.C. Sec 1601-1667),
            the Equal Credit Opportunity Act (15 U.S.C. Sec. 1691-1691f), the Electronic Fund Transfer Act (15 U.S.C. 1693, et seq.) and
            other applicable provisions of the Consumer Credit Protection Act (15 U.S.C Sec. 1601).

     8.3.   Each party further covenants to and agrees with the other that it shall fulfill its obligations hereunder in a diligent and timely
            fashion, consistent with the best practices in the industry; that all hardware, software, processes and procedures each party uses
            in providing the services hereunder are owned or properly licensed to such party and will not violate the trademark or copyright
            rights, right of publicity or privacy of, or constitute libel or slander against, or involve plagiarism or violate any other rights of,
            any person or entity and that such party’s use of them will comply with all Applicable Laws; that all processing systems,
            software and hardware, and policies or procedures used by each party and all rules and protocols covering such party’s
            employees, agents and independent contractors providing services hereunder, contain protections and security enhancements,
            consistent with industry standards, and provide safeguards and system protections, consistent with industry standards, to prevent
            hacking, viruses, security breaches, loss of data, any breach of the Gramm-Leach-Bliley Act and applicable regulations
            promulgated thereunder, any breach of the confidentiality provisions hereof, identity theft and fraud against JHI and Customers
            effecting transactions contemplated by this Agreement.

     8.4.   JHI covenants to and agrees with SBBT that it shall comply with all applicable Program Protocols and Applicable Law in
            connection with the performance by it of its obligations under this Agreement. JHI shall comply in all material respects, and
            shall instruct EROs to comply, with all Program Protocols provided by SBBT in advance of each tax season concerning the
            preparation and processing of Applications, including the Specifications.

9.   Term and Termination.

     9.1.   Term. This Agreement shall effective as of the date hereof, and shall continue until August 1, 2008. (the “Term”).

     9.2    Termination by Either Party. Either party may at its option terminate this Agreement upon ten (10) days’ prior written notice
            if (i) the other party has materially breached any of the terms hereof and has failed to cure such breach within such ten-day
            period; or (ii) the continued operation of the Program or the electronic filing program is no longer commercially feasible,
            practical or profitable due to legal or regulatory determinations, enactments or interpretations or significant external events or
            occurrences beyond the control of the terminating party; provided, however, that in the case of clause (ii), the parties shall first
            mutually endeavor in good faith to modify the Program in a manner resolving the problems caused by legal, regulatory or
            external events or occurrences. In addition, either party may terminate this Agreement, immediately upon notice to the other,
            upon (x) the filing by or against the other party of any petition in bankruptcy or for reorganization or debt consolidation under
            the federal bankruptcy laws or under comparable law; (y) the other party’s

                                                                       9
              making of an assignment of all or substantially all of its assets for the benefit of creditors; or (z) application of the other party for
              the appointment of a receiver or trustee of its assets.

       9.3.   Termination by JHI. JHI may terminate this Agreement immediately after a good faith discussion as to alternatives if SBBT’s
              processing systems are not available for any reason (including any Force Majeure Event, as defined in Section 15.2) for five (5)
              consecutive days or more during any tax season, or for 30 consecutive days or more during any other time.

10.    Ownership of Loans.

The parties agree that SBBT will be the sole owner of the loans made under the Program. In addition, SBBT shall have the authority to transfer
or assign such loans at any time, provided that SBBT shall continue to be liable for any violation of law of such transferee or assignee. Without
limiting the foregoing, (i) any such transfer or assignment (a) shall comply with all Applicable Laws, rules and regulations, and (b) shall not
cause SBBT to breach any of its representations or obligations hereunder, and (ii) the transferee or asignee shall (a) represent, warrant and
covenant to comply with all Applicable Laws, rules and regulations in the servicing and collection of such loans, (b) agree to provide customer
service at a level at least as high as that offered by SBBT and (c) demonstrate to SBBT’s reasonable satisfaction the ability to comply with such
representations, warranties and covenants.

11.    Marketing and Other Materials.

       11.1. Review . Each party shall have the right to review and approve all marketing materials used to promote the Program that
             reference the names, trademarks, service marks, trade names, service names or logos of such party ( “Marks” ); provided that
             such review shall be conducted promptly (in all events within two weeks of receipt thereof) and approval shall not be
             unreasonably withheld.

       11.2. License. During the Term and subject to the terms and conditions of this Agreement, each party grants to the other a
             non-exclusive, non-assignable right and license to use, reproduce and display its Marks, solely in connection with the marketing,
             making and processing of Bank Products to Customers in connection with the Program. Neither party shall adopt or use, or seek
             to register, without the other party’s prior written consent, any variation of such other party’s Marks, or any mark similar thereto
             or likely to be confused therewith. Any and all goodwill arising from either party’s use of the Marks of the other shall inure
             solely to the benefit of such other party, and neither during nor after the termination or expiration of this Agreement shall either
             party assert any claim to the other party’s Marks or associated goodwill. Neither party shall use the Marks of the other for any
             purpose except those specifically set forth herein. All rights in and to the Marks of a party which are not specifically granted to
             the other herein shall remain with such party.

       11.3. Marketing and Other Expenses. JHI agrees, in connection with the operation of the Program, to: (i) conduct such advertising;
             (ii) prepare forms and other written materials; (iii) cause its offices to be equipped with computer equipment and hardware; (iv)
             develop or acquire software; (v) maintain personnel and (vi) train such personnel and EROs with respect to the Program
             Protocols; and (vii) incur other expenses, in each case as reasonably necessary to advertise and accommodate the making of
             Bank Products to Customers and at its expense, except that SBBT shall be obligated on a yearly basis to reimburse JHI for the
             foregoing expenses, within 30 days following the receipt of an invoice therefor from JHI, to the extent set forth on Exhibit D
             hereto.


                                                                         10
12.   Confidential Information.

      12.1. Confidentiality Rights of the Parties. Both parties hereto understand that implementation and operation of the Program
            involves the use of certain systems, computer programs, marketing, product development, risk management, strategy data and
            other information, including business information and trade secrets (“Proprietary Information”) that are proprietary to the
            respective parties. Each party shall safeguard all Proprietary Information made available to it by the other party, taking
            reasonable precautions to withhold the same from disclosure to the same extent that it would safeguard its own confidential
            information and data. Such Proprietary Information shall not include information which is (i) shown to have been known by the
            receiving party prior to disclosure to it by the other party, (ii) generally known to others engaged in the same trade or business as
            the furnishing party, (iii) available to the public through no act or omission by the receiving party or its representatives or
            professional advisors, or (iv) which is rightfully obtained by the receiving party from third parties (other than professional
            advisors or other representatives) without restriction of confidentiality. In addition to the foregoing, SBBT specifically agrees
            not to make copies of or to disclose to any other person or firm, other than to employees of SBBT who need-to know such
            information in order to perform SBBT’s obligations under this Agreement and who have agreed to be bound by this Article 12,
            any Proprietary Information (including, without limitation, the names of EROs or Customers or any other identifying
            information obtained through its relationship with JHI as set forth in this Agreement) for any purpose other than performing its
            obligations hereunder. The foregoing sentence shall not preclude SBBT from using its own records of loans which were
            declined under the Program as reference material in the event any Customer whose Application was declined subsequently
            applies directly to SBBT for a loan.

      12.2. Privacy . No party shall make any unauthorized disclosure of or use any personal information of individual consumers which it
            receives from the other party or on the other party’s behalf other than to carry out the purposes for which such information is
            received, and each party shall comply, to the extent applicable, with the requirements of the implementing regulations of Title V
            of the Gramm-Leach Bliley Act of 1999, specifically including, 16 Code of Federal Regulations, Chapter I, Subchapter C, Part
            313.11 and 313.13. SBBT and JHI shall each adopt and maintain a comprehensive privacy policy with respect to its handling of
            the personal information of individual Customers submitted by such Customers to JHI. JHI’s and SBBT’s privacy policy shall
            be available on its Internet web sites and each shall comply with the provisions of such privacy policy.

13.   Indemnification.

      13.1. Indemnification by JHI . JHI shall indemnify, defend and hold harmless SBBT and its officers, directors and employees from
            and against any and all expenses and costs (including reasonable attorney’s fees and court costs) or liabilities (including
            amounts paid in settlement) incurred by SBBT in connection with any third party claim, dispute, controversy or litigation arising
            out of or resulting from (i) JHI’s violation or alleged violation of Applicable Law; (ii) any breach by JHI of any representation,
            warranty, covenant or agreement hereunder or (iii) the negligence or willful misconduct of JHI in connection with the
            performance by it of its obligations under this Agreement.

      13.2. Indemnification by SBBT. SBBT shall indemnify, defend and hold harmless JHI, its affiliates, and their respective officers,
            directors, employees and agents, from and against any and all expenses and costs (including reasonable attorney’s fees and court
            costs), or liabilities incurred by any of them in connection with any third party claim, dispute, controversy or litigation arising
            out of or resulting from (i) the Program Protocols; (ii) the offer and sale of Bank Products hereunder (excluding any acts or
            omissions by the ERO with respect to such

                                                                      11
             offer and sale); (iii) any violation or alleged violation of Applicable Law (including, without limitation, the Truth in Lending Act
             or any regulation of the Federal Reserve Board or other applicable federal or state banking or consumer finance laws or
             regulations) by SBBT, the Bank Products or the Program Protocols, (iv) any breach by SBBT of any representation, warranty,
             covenant or agreement hereunder; or (v) the negligence or wilful misconduct of SBBT in connection with the performance by it
             of its obligations under this Agreement.

      13.3. Procedures . The indemnitee shall promptly notify the indemnitor in writing of any claim that may be the subject of
            indemnification under this Article 13, and shall promptly tender to the indemnitor sole control of the defense and any settlement
            thereof; provided, however, that the failure of an indemnitee to so notify the indemnitor shall not relieve the indemnitor of its
            indemnification obligations hereunder to the extent that such failure does not actually prejudice the indemnitor with respect to
            such claim; and provided, further that the indemnitor shall not compromise or settle any claim or action without the prior
            approval of the indemnitee. The indemnitee shall have the right (but not the obligation) to defend such action or proceeding by
            retaining attorneys of its own selection to represent it at the indemnitor’s reasonable expense; provided that the indemnitor shall
            in all events have the right to participate in such defense; and provided further that the indemnitee shall not compromise or settle
            any such claim or action without the prior approval of the indemnitor.

14.   Limitation of Liability.

      14.1. Consequential Damages. No party will be liable to the other party for incidental, special, indirect or consequential damage, or
            loss of profits, income, use or other benefits, arising out of or in connection with the performance of its obligations under this
            Agreement or any failure of such performance; unless such damage or loss is subject to the indemnification provisions of this
            Agreement or arises from that party’s gross negligence or willful misconduct.

      14.2. Force Majeure . Notwithstanding any other provision herein to the contrary, either party shall be excused from performance
            hereunder for failure to perform any of the obligations if (i) such failure to perform occurs by reason of any of the following
            events (“Force Majeure Events”): act of God, fire, flood, storm, earthquake, tidal wave, communications failure, sabotage, war,
            military operation, terrorist attack, national emergency, mechanical or electrical breakdown, general failure of the postal or
            banking system, civil commotion, strikes, or the order, requisition, request or recommendation of any governmental agency or
            acting governmental authority, or either party’s compliance therewith or government proration, regulation, or priority, or any
            other similar cause beyond either party’s reasonable control and (ii) such Force Majeure Event is beyond such party’s
            reasonable control. The party excused from performance shall be excused from performance (i) only after notice from the party
            whose performance is impaired, (ii) only during the continuance of the Force Majeure Event and (iii) only for so long as such
            party continues to take reasonable steps to mitigate the effect of the Force Majeure Event and to substantially perform despite
            the occurrence of the Force Majeure Event. The party whose performance is not impaired may terminate this Agreement upon
            five (5) consecutive days’ notice during any tax season or upon thirty (30) consecutive days’ notice at any other time, effective
            immediately upon written notice to such party.

15.   Commitment to Negotiation; Mediation and Arbitration of Disputes.

      15.1   Negotiation. Except with respect to either party’s wrongful use of the Marks of the other party for which the aggrieved party
             may seek injunctive or such other relief as such aggrieved party may deem appropriate, or litigation brought against JHI by third
             parties, neither party shall institute any proceeding in any court or administrative agency or any arbitration to resolve a dispute
             between the parties before that party has sought to resolve the dispute through direct negotiation with the other party. If the
             dispute is not resolved within three weeks after a

                                                                      12
              demand for direct negotiation, the parties shall then attempt to resolve the dispute through mediation and/or arbitration as
              provided in this Article 15.

       15.2. Scope of Arbitration . Except for either party’s wrongful use of the Marks for which the aggrieved party may seek injunctive or
             such other relief as such aggrieved party may deem appropriate, or litigation brought against JHI by third parties, all
             controversies, disputes or claims between JHI and SBBT (and any owners, guarantors, affiliates and employees of SBBT, if
             applicable, but in no event shall any of such owners, guarantors, affiliates and employees be deemed third-party beneficiaries of
             this Agreement), arising out of or related to: (i) this Agreement or any other related agreement between JHI and SBBT, or any
             provision of any such agreements; (ii) the relationship of the parties; (iii) the validity of this Agreement or any other related
             agreement between JHI and SBBT or any provision of any such agreements; or (iv) any problem arising from the undertakings
             hereunder, will be submitted for mediation, as set forth below in Section 15(c) and, in the event mediation is not demanded by
             either party or does not result in a resolution of the dispute, for binding arbitration to the New York, New York office of the
             American Arbitration Association on demand of either party. SBBT agrees to cause its owners, guarantors, affiliates and
             employees of SBBT reasonably likely to be involved in such controversies, disputes and claims to agree to be bound by the
             provisions of Sections 15.2, 15.3, 15.4, 15.5 and 15.6 hereof.

Such arbitration proceeding will be conducted in New York, New York and will be heard by a panel of three arbitrators in accordance with the
then current Commercial Arbitration Rules of the American Arbitration Association, provided that the Federal Rules of Evidence shall be
applicable to the arbitration hearing and any evidence obtained for or presented at the hearing and that the arbitrators shall be attorneys familiar
with the Federal Rules of Evidence. All other matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et
seq.) and not by any state arbitration law.

The decision and award of the arbitrators will be binding and conclusive upon both JHI and SBBT, and enforceable in any court of competent
jurisdiction. The arbitrators have the right, in their discretion, to award or include in the award any lawfully appropriate relief (including,
punitive damages) and to assess costs or expenses to one or both parties and may award attorneys’ fees and legal costs to the prevailing party as
part of such award, provided that the arbitrator will not have the right to declare any Mark generic or otherwise invalid.

JHI and SBBT agree to be bound by the provisions of any limitation on the period of time in which claims must be brought under Applicable
Law or this Agreement, whichever expires earlier. JHI and SBBT further agree that, in connection with any such arbitration proceeding, each
must submit or file any claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil
Procedure) within the same proceeding as the claim to which it relates. Any such claim which is not submitted or filed as described above will
be forever barred.

Each party agrees that arbitration will be conducted on an individual, not a class-wide, basis, and that an arbitration proceeding between JHI
and SBBT may not be consolidated with any other arbitration proceeding between JHI and any other person, corporation, limited liability
company or partnership, provided that JHI or SBBT may consolidate any arbitration proceeding commenced under this Section 15.2 with any
arbitration proceeding commenced by JHI or SBBT under any other agreement executed in connection herewith.

Notwithstanding anything to the contrary contained in this Section, JHI and SBBT shall each have the right in a proper case to obtain
temporary restraining orders and temporary or preliminary injunctive relief from a court of competent jurisdiction; provided, however, that JHI
or SBBT must contemporaneously submit the dispute for arbitration on the merits as provided herein and the submission to the court shall not
waive the right to arbitration.

                                                                         13
       15.3. Mediation . If a dispute is not resolved by direct negotiation, as provided hereinabove, either party may demand mediation. In
             the event mediation is demanded, it shall take place with a mediator to be agreed upon by the parties. In the event the parties are
             unable to agree upon a mediator, one will be appointed by the AAA. The mediation will take place in New York, New York, or
             such other place as the parties may agree. A demand for mediation will not preclude a party from filing a demand for arbitration,
             but the parties will agree to a stay of any arbitration proceedings for a period of a minimum of three months from the date
             mediation is demanded to permit the mediation to take place.

       15.4. Governing Law . All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.).
             Except to the extent governed by the Federal Arbitration Act, the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C.
             §§1051 et seq.), or other federal law, this Agreement and all claims arising from the relationship between JHI and SBBT will be
             governed by the laws of the state of New York without regard to its conflict of laws principles.

       15.5. Consent to Jurisdiction . Each party agrees that the other party may institute any action against it (which is not required to be
             arbitrated hereunder) and any action to confirm or to enforce an arbitration award hereunder in any state or federal court of
             competent jurisdiction located in the city of New York, state of New York and irrevocably submits to the jurisdiction of such
             courts and waives any objection it may have to either the jurisdiction of or venue in such courts.

       15.6. Waiver of Jury Trial . JHI and SBBT irrevocably waive trial by jury in any action, proceeding or counterclaim, whether at law
             or in equity, brought by either of them against the other.

16.    No Joint Venture.

This Agreement or any acts pursuant hereto shall not constitute a joint venture or create a partnership, agency or employment relationship
between the parties. Except as expressly provided in this Agreement, no party shall have, or hold itself out as having, any right, power or
authority to act or create any obligation, express or implied, on behalf of the other.

17.    Audit Rights of JHI.

During the Term and for a period of one year thereafter, SBBT shall (a) maintain reasonably adequate books and records with respect to any
fees or compensation to be provided to JHI hereunder and otherwise with respect to its obligations hereunder; (b) upon reasonable written
request, provide access to such books and records to JHI and its authorized agents (including, but not limited to, its auditors); and (c) cooperate
with, and provide to, JHI and such agents such assistance as they reasonably may require. JHI shall pay for the expenses associated with the
conduct of such audit, provided that if such audit reveals an underpayment by SBBT of more than five percent (5%) of any amount due
hereunder, then SBBT shall, promptly upon JHI’s request, tender the amount of such underpayment to JHI and reimburse JHI for such audit
expenses.

18.    Survival.

Upon the expiration or termination of this Agreement in accordance with the provisions of Section 9, no party shall remain liable to the other,
except with respect to Sections 4.1 and 4.2 (to the extent JHI’s right to receive payment has acrrued), 6.5(a), 12.1, 12.2, 13.1, 13.2, 13.3, 14.1,
14.2, and Articles 15, 17, this Article 18, and Article 19, all of which shall survive the expiration and termination hereof.

                                                                         14
19.   Miscellaneous.

      19.1. Assignment . This Agreement is binding on, and shall inure to the benefit of, the parties hereto and their respective successors
            and permitted assigns. Neither party may assign its rights or obligations under this Agreement (other than in the context of a
            change in control of a party) without the prior written consent of the other party.

      19.2. Notices . Any notice permitted or required hereunder shall be in writing and shall be deemed to have been given (i) on the date
            of delivery if delivery of a legible copy was made personally or by facsimile transmission or (ii) on the second business day
            after the date on which mailed by registered mail, certified mail, return receipt requested, addressed to the party for whom
            intended at the address set forth below or such other address, notice of which is given herein.

             If t o SBBT:

                    Santa Barbara Bank & Trust
                    5770 Oberlin Drive
                    San Diego, CA 92121
                    Attn: Rich Turner
                          Senior Vice President/RAL Program Director

             If to JHI:

                    Jackson Hewitt Inc.
                    7 Sylvan Way
                    Parsippany, NJ 07054
                    Attn: Bill San Giacomo
                          Vice President—Bank Products

             with a copy to:

                    Jackson Hewitt Inc.
                    7 Sylvan Way
                    Parsippany, NJ 07054
                    Attn: Steven L. Barnett, Esq.
                          General Counsel

      19.3. Severability; Construction. The parties agree that if any provision of this Agreement shall be determined by any court of
            competent jurisdiction to be void or otherwise unenforceable, then such determination shall not affect any other provision of this
            Agreement, all of which other provisions shall remain in effect. If any provision were capable of two constructions, one of
            which would render the provision valid and the other invalid, then the provision shall have the meaning that renders it valid. In
            the event that any provision hereof pertaining to fees, commissions or underwriting criteria is held to be invalid, then the parties
            shall endeavor in good faith the redesign the Program or the terms thereof in a manner consistent with the intent and economic
            effect of this Agreement.

      19.4. Waiver. No waiver of any breach of this Agreement shall be effective unless in writing and signed by an authorized
            representative of the waiving party. The waiver of any breach hereof shall not operate or be construed as a waiver of any other
            or subsequent breach.

      19.5. Integration; Subordination of JHI Obligations . It is expressly understood and agreed that, upon execution and delivery of
            this Agreement by all parties hereto, that certain Refund Anticipation Loan Transmitter Agreement, dated as of September 9,
            2002 and amended as of November 14, 2003, by and between the parties shall be terminated and of no further force

                                                                      15
         and effect, except that the payment obligations set forth in Exhibit B thereto (to the extent they have accrued as of the date
         hereof) and each of the other provisions described in Section 18 thereof shall survive such termination. This Agreement,
         together with the Exhibits hereto and all agreements or documents related hereto or delivered hereunder (including, without
         limitation, the Holiday Express Loan Agreement) (collectively, “Related Agreements”) express fully the entire
         understanding and agreement of the parties concerning the subject matter hereof, and all prior understandings or commitments
         of any kind, whether oral or written, concerning such subject matter are hereby superseded (other than those obligations
         which, by their terms and nature, survive termination or expiration).Whenever it states in this Agreement that JHI shall cause
         the EROs to perform any act or do any thing, and such performance is also required of the ERO by the terms of the SBBT
         Bank Product Agreement by and between the ERO and SBBT, the provisions of the SBBT Bank Product Agreement shall
         control and JHI’s obligations shall be subordinate to the obligations of the ERO.

19.6.    Amendment. This Agreement may not be amended or modified other than by a written agreement executed by both parties.

19.7.    Headings . Headings used in this Agreement are for convenience of reference only and do not define, interpret, describe the
         scope of or otherwise affect any provision hereof.

19.8.    Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and
         all of which, taken together, shall be deemed one and the same instrument.

19.9.    Further Assurances. From time to time following the execution of this Agreement, each party agrees to do such things and
         execute and deliver such documents as may reasonably be necessary to effectuate the intent and purposes of this Agreement.

19.10.   No Third Party Beneficiaries . This Agreement has been made for the sole benefit of SBBT and JHI and is not intended to,
         and shall not, confer any benefit or rights upon, nor may it be enforced by, any other person.

19.11.   Publicity; Disclosure . Neither party shall issue any press release relating to this Agreement without the prior consent of the
         other party. Each party hereto shall be permitted to disclose this Agreement to the extent such party determines that such
         disclosures is required by applicable law.

                                                               16
      IN WITNESS WHEREOF, this Agreement has been executed and delivered by a duly authorized officer of each party as of the date set
forth above.

SANTA BARBARA BANK & TRUST,                                               JACKSON HEWITT, INC.,
a National Banking Association                                            a Virginia corporation

By:    /s/   Richard H. Turner                                            B     /s/   Bill San Giacomo
                                                                          y
       Richard H. Turner                                                        Bill San Giacomo
       Senior Vice President, RAL Program Director                              Vice President—Bank Products

                                                                   17
                                                    Exhibit B
                                                       to
                                           Program Agreement Between
                                Santa Barbara Bank & Trust and Jackson Hewitt Inc.
                                                     Pricing and Loan Ranges
                                                  Santa Barbara Bank & Trust
                                                          May 5, 2004
     1.1.     I. Refund Anticipation Loan “RAL”



                    LOAN AMOUNT RANGES                                                         SBBT Finance Charge

                   RAL Loan Amount Between:
                   Sum of All Fees + $1 - $7,000                                                  3.00% of Loan
                           Minimum Fee                                                                 $10
                           Maximum Fee                                                                 $75
                Surcharge on RALs if EIC is claimed                                                    $10

                   Money Now loans up to $700
                                ®
                                                                                                        $30



     II. Accelerated Check Refund “ACR”/Assisted Direct Deposit “ADD”



                            All Amounts:                                                                $25



     III. Federal Tax Refund Limit


                    Minimum Refund Amount:                                                      Sum of All Fees + $1
                  Maximum Refund Amount - ACR:                                                       $999,999
                  Maximum Refund Amount - RAL:                                                        $9,999


Product features and pricing are subject to change at the discretion of Santa Barbara Bank & Trust with reasonable advance notice to Jackson
Hewitt.

                                                                     1
                                                    Exhibit C
                                                       to
                                               Program Agreement
                                                    Between
                                Santa Barbara Bank & Trust and Jackson Hewitt Inc.
                                                   May 5, 2004

I. Source of fees

     1. SBBT shall collect the following handling fees (“Handling Fees”) on Bank Products originating from EROs:

                    $25 per funded ACR or RAL
                    $10 per funded State ACR
                    $30 per funded Money Now loan
                                             SM




A funded Bank Product is one with respect to which SBBT receives all or part of the Customer’s expected refund from the IRS or state taxing
authority sufficient to pay the applicable Handling Fee.

      2. In addition to the applicable Handling Fee, a finance charge shall be charged to each Customer obtaining a RAL approved by SBBT.
The finance charge shall be a percentage (determined each year) of the total RAL dollar amount. SBBT shall, within one business day
following the receipt of the IRS direct deposit of the Customer’s refund, disburse to JHI $.75 of the finance charge associated with each RAL
approved by SBBT by ACH direct deposit to JHI’s bank account (as identified by JHI) or as otherwise directed (the “Finance Fee”). Except as
specifically set forth in Section II (C) below, SBBT shall bear sole responsibility for loan losses.

II. Disbursements

In consideration of the services provided by JHI under this Agreement, SBBT shall pay the following amounts to JHI, except in jurisdictions
that the parties agree prohibit such payment:

     A. Handling Fee Disbursements

     1.     The Handling Fee shall be disbursed pursuant to the following schedule:

          For each funded ACR and RAL:                             $7.20 to SBBT
                                                                   $17.80 to JHI
          For each funded State ACR:                               $5.00 to SBBT
                                                                   $5.00 to JHI

    2. The foregoing fees shall be disbursed within one business day following the receipt of the IRS direct deposit of the Customer’s refund.
Payments shall be made using ACH direct deposit to JHI’s bank account (as identified by JHI) or as otherwise directed.

                                                                      1
     B. RAL — Fixed Rebate

     1. SBBT shall pay an additional fixed rebate (the “RAL Fixed Rebate”) to JHI as follows:

                 For each funded RAL: $16.00 to JHI

    2. The foregoing fees shall be disbursed within one business day following the receipt of the IRS direct deposit of the Customer’s refund.
Payments shall be made using ACH direct deposit to JHI’s bank account (as identified by JHI) or as otherwise directed.

     C. RAL — Performance Adjustments

     1. For purposes of this Agreement, the following terms shall have the following meanings:

      “ Delinquency Amount ” means the total dollar value of all outstanding and unpaid RALs issued by SBBT pursuant to the Program in the
current calendar year.

      “ Loan Yield ” means with respect to any calendar year, the amount equal to the quotient of (i) the Yield Amount, divided by (ii) the total
dollar value of all RALs issued by SBBT pursuant to the Program in such calendar year.

      “ Loan Delinquency Rate ” means with respect to any calendar year, the amount equal to the quotient of (i) the Delinquency Amount,
divided by (ii) the total dollar value of all RALs issued by SBBT pursuant to the Program in such calendar year.

     “ Threshold Amount ” means with respect to any calendar year, one percent of the total dollar value of all RALs issued by SBBT
pursuant to the Program in such calendar year.

      “ Yield Amount ” means with respect to any calendar year, the amount equal to (i) the gross amount of all finance charges assessed by
SBBT in respect of SBBT approved RALs pursuant to the Program in such calendar year, minus (ii) an amount equal to the Finance Fee for
such calendar year plus $3.75 for each RAL included in the Finance Fee calculation.

       2. The parties agree that except as specifically provided for below in subparagraph (a) of this Section II.C.2, SBBT shall be shall be
entitled, after fulfillment of its payment obligations to JHI pursuant to the other provisions of this Exhibit C, to retain all other amounts earned
in connection with the Program. The parties agree that except as specifically provided for below in subparagraph (b) of this Section II.C.2,
SBBT shall be responsible for all loan losses. The parties further agree that notwithstanding the provisions of the preceding sentence, nothing
herein shall affect SBBT’s payment obligation to JHI or JHI’s right to receive from SBBT, the Handling Fee or RAL Fixed Rebate payments
set forth in paragraphs A and B of this Section II, JHI’s fixed share of the finance charge pursuant to Section I (2), or the fees set forth in
Section III of this Exhibit C.

          (a) Excess Loan Yield . With respect to each calendar year during the term of this Agreement, if the Loan Yield exceeds the Loan
     Delinquency Rate for a particular

                                                                          2
     calendar year, each measured as of December 31 of such calendar year, by more than 100 basis points, then SBBT shall pay to JHI 50%
     of the amount equal to the difference between (i) the Yield Amount and (ii) the sum of the Delinquency Amount and the Threshold
     Amount for such calendar year. Amounts, if any, payable to JHI pursuant to the preceding sentence shall be paid within five business
     days following December 31 of such calendar year.

           (b) Excessive Loan Delinquency . With respect to each calendar year during the term of this Agreement, if the Delinquency Amount
     exceeds the Yield Amount for a particular calendar year, each measured as of July 1 of such calendar year, then JHI and SBBT shall each
     fund 50% of the amount equal to the difference between the Delinquency Amount and the Yield Amount for such calendar year within
     five business days following such date. In such event, all amounts recovered by SBBT between July 1 and December 31 of such calendar
     year, with respect to RALs issued in such calendar year, calculated as of December 31 of such calendar year, shall be shared equally
     between the parties and paid to JHI within five business days following such December 31st; provided, however, that the amount payable
     to JHI pursuant to this sentence shall not exceed the amounts payable by JHI pursuant to the immediately preceding sentence.

III. Prior and Current Year Loans

     SBBT shall cooperate with other RAL issuing banks to require the collection of outstanding RALs it originated in prior years in
connection with the Program to the extent those collection efforts do not violate law.

      Notwithstanding any provision herein to the contrary, the amount of any outstanding RALs that is collected by or paid to SBBT during
calendar year 2005 that was originated during or prior to the 2004 filing season shall be deposited into a collection account and disbursed by
SBBT on the last business day of each month as follows: 65% to JHI and 35% to SBBT; provided, however, that for the 2005 filing season JHI
shall not receive less than an amount equal to the product of $2.00 multiplied by the number of RALs issued by SBBT pursuant to the Program
in 2005. For calendar years subsequent to 2005, such RALs collected by or paid to SBBT shall be disbursed by SBBT as follows: 65% to JHI
and 35% to SBBT.

     With respect to each calendar year during the term of this Agreement commencing with the 2006 filing season, SBBT shall pay to JHI an
amount (the “Additional Amount”) equal to the product of $2.00 multiplied by the number of RALs issued by SBBT pursuant to the Program
during such calendar year (the “Measurement Year”); provided that one of the two following tests shall be met before any payment shall be
made to JHI:

      (a) the Loan Yield for such Measurement Year exceeds the Loan Delinquency Rate for such Measurement Year by at least 50 basis points
as of April 30th of such Measurement Year; or

      (b) the Loan Yield for such Measurement Year exceeds the Loan Delinquency Rate for such Measurement Year by at least 60 basis
points as of December 31 of such Measurement Year.


     In the event both of the tests set forth in (a) and (b) are not met, JHI shall also be entitled to the Additional Amount if: the Loan Yield for
such Measurement Year exceeds the Loan Delinquency Rate for such Measurement Year by at least 60 basis points measured as of any date
through

                                                                         3
December 31 of the year next succeeding such Measurement Year, after taking into account any and all collections made by or paid to SBBT in
such next succeeding year through such date with respect to the RALs issued by SBBT in such Measurement Year.

     In addition to the foregoing, provided that an Additional Amount is otherwise earned for a Measurement Year in accordance with above,
then with respect to such Additional Amount and such Measurement Year, if an amount equal to 25% of the total amount of RALs issued in the
calendar year immediately preceding such Measurement Year and collected by or paid to SBBT in such Measurement Year (the “Cross
Collection Amount”) is greater than such Additional Amount for such Measurement Year, then SBBT shall pay to JHI the Cross Collection
Amount in lieu of the Additional Amount, or the difference between such Cross Collection Amount and such Additional Amount if such
Additional Amount has previously been paid. SBBT shall disburse such funds to JHI within five business days of the December 31 of the year
in which the first of the above three tests is met.

IV. Right of First Refusal for New Bank Products .


JHI shall offer SBBT a right of first refusal to develop and/or provide New Bank Products. JHI shall be permitted to develop, independently or
in connection with a third party, new products/services or programs, in its discretion. With respect to New Bank Products that are similar to
existing Bank Products, such New Bank Product must be in response to a party determining that the continuation of such existing Bank Product
is reasonably likely to be detrimental to a party hereto due to legislative, regulatory or other legal issues. Upon delivery by JHI to SBBT of a
request for a New Bank Product, SBBT shall have thirty (30) business days to respond to any such offer, stating its intention to provide or not
provide the requested New Bank Product. If SBBT agrees to provide the New Bank Product, then JHI and SBBT will negotiate in good faith to
mutually agree on an acceptable time frame for development, testing and implementation of the New Bank Product, including costs and fees of
the New Bank Product. If the parties do not reach such mutual agreement within thirty days of SBBT agreeing to provide such New Bank
Product or SBBT does not respond within the original thirty (30) day period, then JHI shall be permitted to delete EROs from this Agreement
and, if it determines to do so, arrange for such EROs to align with another bank or other vendor for all of the EROs tax related financial product
needs.

                                                                        4
                                                    Exhibit D
                                                       to
                                               Program Agreement
                                                    Between
                                Santa Barbara Bank & Trust and Jackson Hewitt Inc.
                                                   May 5, 2004


SBBT’s obligation to reimburse JHI for expenses incurred by it in connection with the activities described in Section 11.3 of this Agreement
shall be subject to a yearly maximum limitation, as described on this Exhibit D which may be amended on a yearly basis pursuant to the mutual
agreement of both parties.



Aggregate Maximum Limitation : $3.6 million

                                                                      1
                                            Exhibit 10.6




        CREDIT AGREEMENT

               dated as of

             June     , 2004

                 among

JACKSON HEWITT TAX SERVICE INC.,
           as Parent,

       JACKSON HEWITT INC.,
            as Borrower,

   THE LENDERS PARTY HERETO

                    and

      JPMORGAN CHASE BANK,
        as Administrative Agent



    J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Sole Lead Arranger
                                                  TABLE OF CONTENTS

                                                                               Page



                                                         ARTICLE I

                                                         Definitions

Section 1.01   Defined Terms.                                                    1
Section 1.02   Classification of Loans and Borrowings.                          18
Section 1.03   Terms Generally.                                                 18
Section 1.04   Accounting Terms; GAAP.                                          18

                                                         ARTICLE II

                                                         The Credits

Section 2.01   Commitments                                                      19
Section 2.02   Loans and Borrowings                                             19
Section 2.03   Requests for Borrowings                                          19
Section 2.04   Letters of Credit                                                20
Section 2.05   Funding of Borrowings                                            24
Section 2.06   Interest Elections                                               25
Section 2.07   Termination and Reduction of Commitments                         26
Section 2.08   Repayment of Loans; Evidence of Debt                             26
Section 2.09   Prepayment of Loans                                              27
Section 2.10   Fees                                                             27
Section 2.11   Interest                                                         29
Section 2.12   Alternate Rate of Interest                                       29
Section 2.13   Increased Costs                                                  30
Section 2.14   Break Funding Payments                                           31
Section 2.15   Taxes                                                            31
Section 2.16   Payments Generally; Pro Rata Treatment; Sharing of Set-offs      33
Section 2.17   Mitigation Obligations; Replacement of Lenders                   35

                                                         ARTICLE III

                                              Representations and Warranties

Section 3.01   Organization; Powers                                             36
Section 3.02   Authorization; Enforceability                                    36
Section 3.03   Governmental Approvals; No Conflicts                             36
Section 3.04   Financial Condition; No Material Adverse Change                  36
Section 3.05   Properties                                                       36
Section 3.06   Litigation and Environmental Matters                             37
Section 3.07   Compliance with Laws and Agreements; No Default                  37
Section 3.08   Investment and Holding Company Status                            37

                                                             -i-
Section 3.09   Taxes                                                        38
Section 3.10   ERISA                                                        38
Section 3.11   Solvency                                                     38
Section 3.12   Use of Proceeds                                              38
Section 3.13   Margin Regulations                                           38
Section 3.14   Disclosure                                                   38

                                                      ARTICLE IV

                                                        Conditions

Section 4.01   Effective Date                                               39
Section 4.02   Each Credit Event                                            41

                                                       ARTICLE V

                                                  Affirmative Covenants

Section 5.01   Financial Statements; Ratings Change and Other Information   42
Section 5.02   Notices of Material Events                                   43
Section 5.03   Existence; Conduct of Business                               43
Section 5.04   Payment of Obligations                                       44
Section 5.05   Maintenance of Properties; Insurance                         44
Section 5.06   Books and Records; Inspection Rights                         44
Section 5.07   Compliance with Laws and Contracts                           44
Section 5.08   Compliance with Environmental Laws                           44
Section 5.09   Use of Proceeds                                              44
Section 5.10   New Material Subsidiaries                                    45

                                                      ARTICLE VI

                                                   Negative Covenants

Section 6.01   Maximum Consolidated Leverage Ratio                          45
Section 6.02   Minimum Consolidated Fixed Charge Coverage Ratio             45
Section 6.03   Indebtedness                                                 46
Section 6.04   Liens                                                        47
Section 6.05   Fundamental Changes                                          47
Section 6.06   Investments, Loans, Advances, Guarantees and Acquisitions    48
Section 6.07   Hedging Agreements                                           49
Section 6.08   Restricted Payments                                          49
Section 6.09   Transactions with Affiliates                                 50
Section 6.10   Restrictive Agreements                                       50
Section 6.11   Transactions with Franchisees                                50
Section 6.12   Sale and Leasebacks                                          50
Section 6.13   Accounting Changes                                           51

                                                           - ii -
                                                             ARTICLE VII

                                                            Events of Default

ARTICLE VII            Events of Default                                            51

                                                             ARTICLE VIII

                                                        The Administrative Agent

ARTICLE VIII           The Administrative Agent                                     53

                                                              ARTICLE IX

                                                             Miscellaneous

Section 9.01           Notices                                                      55
Section 9.02           Waivers; Amendments                                          56
Section 9.03           Expenses; Indemnity; Damage Waiver                           57
Section 9.04           Successors and Assigns                                       58
Section 9.05           Survival                                                     61
Section 9.06           Counterparts; Integration; Effectiveness                     62
Section 9.07           Severability                                                 62
Section 9.08           Right of Setoff                                              62
Section 9.09           Governing Law; Jurisdiction; Consent to Service of Process   62
Section 9.10           WAIVER OF JURY TRIAL                                         63
Section 9.11           Headings                                                     63
Section 9.12           Confidentiality                                              63
Section 9.13           Interest Rate Limitation                                     64
Section 9.14           USA Patriot Act                                              64

SCHEDULES:

Schedule 2.01 — Commitments
Schedule 6.03 — Existing Indebtedness
Schedule 6.04 — Existing Liens
Schedule 6.06 — Existing Investments
Schedule 6.09 — Transactions with Affiliates
Schedule 6.10 — Existing Restrictions

EXHIBITS:

Exhibit A — Form of Assignment and Assumption
Exhibit B — Form of Guarantee
Exhibit C-1 — Form of Opinion of Borrower’s Counsel
Exhibit C-2 — Form of Opinion of Piper Rudnick LLP

                                                                  - iii -
      CREDIT AGREEMENT dated as of June       , 2004, among JACKSON HEWITT TAX SERVICE INC., a Delaware corporation (the “
Parent ”), JACKSON HEWITT INC., a Virginia corporation (the “ Borrower ”), the LENDERS from time to time party hereto (the “ Lenders
”), and JPMORGAN CHASE BANK, as Administrative Agent (as amended, restated, supplemented or otherwise modified, the “ Agreement
”). The parties hereto agree as follows.

                                                                    ARTICLE I

                                                                    Definitions

     Section 1.01 Defined Terms .

     As used in this Agreement, the following terms have the meanings specified below:

      “ ABR ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Alternate Base Rate.

     “ Acquisition ” means (a) an investment (through the acquisition of Equity Interests or otherwise) by the Parent or any Subsidiary of the
Parent in any other Person pursuant to which such Person shall become a Subsidiary of the Parent or shall be merged with or into the Parent or
any Subsidiary of the Parent, or (b) the acquisition (by purchase, merger, consolidation or otherwise) by the Parent or any Subsidiary of the
Parent of the assets of any Person which constitute all or substantially all of the assets of such Person, any division or line of business of such
Person or any other properties or assets of such Person other than in the ordinary course of business.

    “ Adjusted LIBO Rate ” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next / 16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
                                   1




     “ Administrative Agent ” means JPMorgan Chase Bank, in its capacity as administrative agent for the Lenders hereunder.

     “ Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

      “ Affiliate ” means, with respect to any Person, any other Person which, directly or indirectly, controls, is controlled by or is under
common control with such Person. A Person shall be deemed to be “controlled by” any other Person if such other Person possesses, directly or
indirectly, power (a) to vote 10% or more of the securities (on a fully diluted basis) of such Person having ordinary voting power for the
election of directors or managing general partners; or (b) to direct or cause the direction of the management and policies of such Person
whether by contract or otherwise. It is understood and agreed that no officer or director of the Parent, the Borrower or any of their respective
Subsidiaries in such capacity or any Franchisee in such
capacity shall be deemed to be an Affiliate of the Parent, the Borrower or any of their respective Subsidiaries.

      “ Alternate Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus ½ of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.

     “ Applicable Percentage ” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s
Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments
most recently in effect, giving effect to any assignments.

     “ Applicable Rate ” means, for any day, (a) with respect to any ABR Loan, 0.25% per annum and (b) with respect to any Eurodollar
Loan, 1.25% per annum.

     “ Approved Fund ” has the meaning assigned to such term in Section 9.04.

      “ Assessment Rate ” means, for any day, the annual assessment rate in effect on such day that is payable by a member of the Bank
Insurance Fund classified as “well-capitalized” and within supervisory subgroup “B” (or a comparable successor risk classification) within the
meaning of 12 C.F.R. Part 327 (or any successor provision) to the Federal Deposit Insurance Corporation for insurance by such Corporation of
time deposits made in dollars at the offices of such member in the United States; provided that if, as a result of any change in any law, rule or
regulation, it is no longer possible to determine the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall
be determined by the Administrative Agent to be representative of the cost of such insurance to the Lenders.

      “ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any
party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form
approved by the Administrative Agent.

      “ Availability Period ” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the
date of termination of the Commitments.

     “ Base CD Rate ” means the sum of (a) the Three-Month Secondary CD Rate multiplied by the Statutory Reserve Rate plus (b) the
Assessment Rate.

     “ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.

     “ Borrower ” means Jackson Hewitt Inc., a Virginia corporation.

     “ Borrowing ” means Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to
which a single Interest Period is in effect.

                                                                       -2-
     “ Borrowing Request ” means a request by the Borrower for a Borrowing in accordance with Section 2.03.

      “ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized
or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “ Business Day ” shall also
exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

     “ Calculation Date ” means the last day of each fiscal quarter of the Borrower.

      “ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.

      “ Change in Control ” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect
on the date hereof), of Equity Interests representing more than 30% of the aggregate ordinary voting power represented by the issued and
outstanding Equity Interests of the Parent; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the
Parent by Persons who were neither (i) nominated by the board of directors of the Parent nor (ii) appointed by directors so nominated; or (c) the
failure of the Parent to own directly or indirectly 100% of the issued and outstanding Equity Interests of the Borrower.

      “ Change in Law ” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule
or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance
by any Lender or the Issuing Bank (or, for purposes of Section 2.13(b), by any lending office of such Lender or by such Lender’s or the Issuing
Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.

     “ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

      “ Commitment ” means, with respect to each Lender, the commitment of such Lender to make Loans and to acquire participations in
Letters of Credit hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure
hereunder, as such commitment may be (a) increased pursuant to Section 2.01(b), (b) reduced from time to time pursuant to Section 2.07 and
(c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each
Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender shall have assumed
its Commitment, as applicable. The initial aggregate amount of the Lenders’ Commitments is $100,000,000.

                                                                      -3-
     “ Commitment Letter ” means the Senior Credit Facility Commitment Letter dated as of April 22, 2004 from the Administrative Agent
and JP Morgan Securities Inc. to, and accepted and agreed to by, the Borrower.

      “ Confidential Information ” means information concerning each of the Parent, the Borrower or their respective Affiliates which is
non-public, confidential or proprietary in nature, or any information that is marked or designated confidential by or on behalf of the Borrower,
which is furnished to any Lender by the Borrower or any of its Affiliates directly or through the Administrative Agent in connection with this
Agreement or the transactions contemplated hereby (at any time on, before or after the date hereof) together with all analysis, compilations or
other materials prepared by any Lender or its respective directors, officers, employees, agents, auditors, consultants or advisors which contain
or otherwise reflect such information.

      “ Consolidated EBITDA ” means, for any period, Consolidated Net Income (excluding any consolidated net income resulting from any
Office Acquisition or Franchisee Expansion occurring during such period) after eliminating extraordinary gains and losses, and unusual items,
plus, without duplication, (a) taxes, (b) depreciation and amortization, (c) Consolidated Interest Expense, (d) other non-cash charges, (e) any
amount attributable to any non-recurring item including the Litigation Settlement, but excluding any cash payments made in such period with
respect to any non-recurring item, in the case of clauses (a) through (e) to the extent deducted for the computation of consolidated net income
for such period, and (f)(1) if any Office Acquisition occurred during such period, the product of (A) the amount of the total revenues of such
Office for the most recently completed period of four consecutive calendar quarters prior to the date of such Office Acquisition, and (B) the
average EBITDA Margin attributable to all Office Acquisitions made by the Borrower during the fiscal year preceding the year in which such
Office Acquisition occurred; and (2) if any Franchisee Expansion occurred during such period, the product of (A) the royalty rate currently in
effect for such Franchisee under the applicable franchise agreement and (B) the amount of the total revenue of such Office for the most recently
completed period of four consecutive calendar quarters prior to the date of such Franchisee Expansion; provided that the aggregate amount
included in Consolidated EBITDA pursuant to clause (f) shall not exceed 5% of Consolidated EBITDA calculated without giving effect to
clause (f).

      In addition to, and, without limitation of the foregoing, for purposes of this definition, “Consolidated EBITDA” shall be calculated on the
Calculation Date after giving effect on a pro forma basis for the period of such calculation to any EBITDA attributable to the assets which are
the subject of an Acquisition (other than any Office Acquisition or Franchisee Expansion) during the Four Quarter Period, as if such
Acquisition occurred on the first day of such Four Quarter Period.

      “ Consolidated Fixed Charges ” means, for any period, the sum of (a) Consolidated Interest Expense for such period and (b) regular
quarterly dividends paid during such period in respect of the Parent’s common stock. On any Calculation Date, the Consolidated Fixed Charge
Coverage Ratio will be calculated after giving effect on a pro forma basis for the applicable Four Quarter Period to the incurrence of any
Covenant Indebtedness in connection with an Office Acquisition, Franchisee Expansion or other Acquisition. For purposes of determining
“Consolidated Fixed Charges,” (1) interest on outstanding Covenant Indebtedness determined on

                                                                      -4-
a fluctuating basis as of the Calculation Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed
rate per annum equal to the rate of interest on such Covenant Indebtedness in effect on the Calculation Date; (2) if interest on a Covenant
Indebtedness outstanding on the Calculation Date may optionally be determined at an interest rate based upon a factor of a prime or similar
rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Calculation Date shall be deemed to have been in
effect during the Four Quarter Period; and (3) notwithstanding clause (1) above, interest on Covenant Indebtedness determined on a fluctuating
basis, to the extent such interest is covered by interest rate protection agreements, shall be deemed to accrue at the rate per annum resulting
after giving effect to the operation of such agreement.

     “ Consolidated Fixed Charge Coverage Ratio ” means, for a Four Quarter Period, the ratio of Consolidated EBITDA for the Four Quarter
Period to Consolidated Fixed Charges for the Four Quarter Period.

     “ Consolidated Indebtedness ” means, as of any date of determination, the total Covenant Indebtedness of the Parent and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.

      “ Consolidated Interest Expense ” means, for any period, the sum, for the Parent and its consolidated Subsidiaries (determined in
accordance with GAAP), of all interest in respect of Covenant Indebtedness (including, without limitation, the interest component of any
payments in respect of Capital Lease obligations but excluding any capitalized financing costs) accrued during such period (whether or not
actually paid during such period).

     “ Consolidated Leverage Ratio ” means, at any Calculation Date, the ratio of (a) Consolidated Indebtedness as of such date to (b)
Consolidated EBITDA for the Four Quarter Period ending as of such Calculation Date.

     “ Consolidated Net Income ” shall mean, for any period, the net income (or loss) of the Parent and its consolidated Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.

     “ Consolidated Net Tangible Assets ” means, as of any date of determination, Consolidated Total Assets after deducting “Goodwill” and
“Other Intangibles-Net” (or equivalent line item or items) as shown on the consolidated balance sheet of the Parent and its Subsidiaries for the
most recently ended fiscal quarter.

     “ Consolidated Net Worth ” means, as of any date of determination, all items which in conformity with GAAP would be included under
stockholders’ equity on a consolidated balance sheet of the Parent and its Subsidiaries at such date.

     “ Consolidated Total Assets ” means, as of any date of determination, the total assets of the Parent and its Subsidiaries determined on a
consolidated basis in accordance with GAAP.

     “ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to

                                                                        -5-
exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.

     “ Covenant Indebtedness ” means, with respect to any Person, without duplication,

           (i) its liabilities for borrowed money;

          (ii) its liabilities for the deferred purchase price of property acquired by such Person (excluding (a) accounts payable arising in the
     ordinary course of business and (b) to the extent the payment thereof is contingent, the deferred purchase price of property acquired by
     such Person, but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any
     such property);

           (iii) Capital Lease Obligations;

          (iv) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has
     assumed or otherwise become liable for such liabilities);

         (v) its redemption obligations in respect of Disqualified Stock to the extent payable with cash or other consideration (except
     common stock or equity securities); and

          (vi) any Guarantee of such Person with respect to liabilities of a type described in any clause (i) through (vi) hereof, excluding
     Franchisee Advance Payments made in connection with programs created by a Credit Party for the general benefit of the franchisee
     system.

Covenant Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (i) through (v) to the
extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under
GAAP. Covenant Indebtedness of any Person shall exclude all liabilities of such Person for the Litigation Settlement and the Development
Advance Notes.

      “ Credit Documents ” means the Credit Agreement, the Parent Guarantee, the Subsidiary Guarantee, any notes issued hereunder, the Fee
Letter and any amendment, waiver or extension of such documents or any other documents which are mutually agreed by the Borrower and the
Administrative Agent to constitute “Credit Documents.”

     “ Credit Parties ” means the Parent, the Borrower and each of the Subsidiary Guarantors.

     “ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless
cured or waived, become an Event of Default.

                                                                       -6-
      “ Disclosed Matters ” means public filings with the Securities and Exchange Commission made by the Parent or any Credit Party as filed
on or prior to the Effective Date.

      “ Disqualified Capital Stock ” means mandatorily redeemable preferred stock with mandatory sinking fund or redemption payments prior
to the maturity date of the Senior Unsecured Notes.

     “ dollars ” or “ $ ” refers to lawful money of the United States of America.

     “ EBITDA Margin ” means, with respect to any Office, for any period, the quotient of the Office Acquisition EBITDA with respect to
such Office for such period divided by the total revenues (as determined in accordance with GAAP) of such Office for such period.

     “ Effective Date ” means, subject to the satisfaction (or waiver in accordance with Section 9.02) of the conditions set forth in Section 4.01
hereof, the third Business Day following the execution of the underwriting agreement to be entered into in connection with the Parent Initial
Public Offering or such other Business Day thereafter on or prior to                     , 2004 which may be agreed to by the Borrower and the
Lenders.

     “ Environmental Laws ” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

      “ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

      “ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.

     “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

      “ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.

                                                                       -7-
      “ ERISA Event ” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect
to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated
funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section
412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of
any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or
any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.

      “ Eurodollar ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

     “ Event of Default ” has the meaning assigned to such term in Article VII.

     “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

      “ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment
to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the
United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of any
Lender (other than an assignee pursuant to a request by the Borrower under Section 2.17(b)), any withholding tax that is imposed on amounts
payable to such Lender at the time such Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to
such Lender’s failure to comply with Section 2.15(e); provided , however , that Excluded Taxes shall not include in the case of the designation
of a new lending office or an assignment, withholding taxes solely to the extent that the Lender effecting such assignment or designating such
new lending office was entitled, immediately prior to the time of such assignment or designation of such new lending office, to receive
additional amounts from the Borrower with respect to the applicable withholding tax imposed on Lender (or such assignee) pursuant to Section
2.15(a) as a result of such assignment or designation.

     “ Facility Fee Rate ” means, for any day, 0.25% per annum.

      “ Federal Funds Effective Rate ” means, for any day, the weighted average (rounded upwards, if necessary, to the next   1
                                                                                                                                  / 100 of 1%) of
the rates on overnight Federal funds

                                                                     -8-
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded
upwards, if necessary, to the next / 100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from
                                   1


three Federal funds brokers of recognized standing selected by it.

    “ Fee Letter ” means that certain letter agreement dated of even date herewith that sets forth the amount of fees to be paid to the
Administrative Agent by the Borrower and the time of such payments.

     “ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Parent.

      “ Foreign Lender ” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located.
For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.

     “ Four Quarter Period ” means, as of any Calculation Date, the period of four complete consecutive fiscal quarters ended on such
Calculation Date.

     “ Franchisee ” means a Person (other than the Borrower or a Subsidiary) that owns and operates a Borrower-licensed Office.

     “ Franchisee Advance Payments ” means advances made from time to time by any Credit Party to third parties on behalf of or for the
benefit of Franchisees.

      “ Franchisee Expansion ” means the issuance of a development advance note or other similar financings to Franchisees by the Borrower
or any Subsidiary.

     “ GAAP ” means generally accepted accounting principles in the United States of America.

      “ Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

      “ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner,
whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the

                                                                        -9-
payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so
as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter
of guaranty issued to support such Indebtedness or obligation; provided , that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business.

      “ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

     “ Hedging Agreement ” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest rate, currency exchange rate or commodity price hedging arrangement.

       “ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to
deposits or advances made on behalf of such Person by third parties that are payable by such Person, excluding that portion of any
Development Advance Note that is recorded as a liability on the balance sheet of the Credit Parties, (b) all obligations of such Person evidenced
by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements
relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services
excluding to the extent the payment thereof is contingent, the deferred purchase price of property acquired by such Person), (e) all Indebtedness
of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by such
Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person
as an account party in respect of letters of credit and letters of guaranty and (i) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances; provided that, in each of the foregoing clauses (a) through (i), undisputed accounts payable incurred in the
ordinary course of business that are not more than 180 days past due shall be excluded. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable
therefore as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefore.

     “ Indemnified Taxes ” means Taxes other than Excluded Taxes and Other Taxes.

     “ Index Debt ” means senior, unsecured, long-term indebtedness for borrowed money of the Borrower that is not guaranteed by any other
Person or subject to any other credit enhancement.

                                                                        - 10 -
      “ Information Memorandum ” means the Confidential Information Memorandum dated April 22, 2004 relating to the Parent, Borrower
and the Transactions.

     “ Interest Election Request ” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.06.

      “ Interest Payment Date ” means (a) with respect to any ABR Loan, the last day of each March, June, September and December, and (b)
with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months’ duration after the first day of such Interest Period.

       “ Interest Period ” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided ,
that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing
that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.

      “ Issuing Bank ” means JPMorgan Chase Bank, in its capacity as the issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.04(i). The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by
such Affiliate.

     “ LC Disbursement ” means a payment made by the Issuing Bank pursuant to a Letter of Credit.

      “ LC Exposure ” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC
Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

     “ Lenders ” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an
Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

     “ Letter of Credit ” means any letter of credit issued pursuant to this Agreement.

                                                                      - 11 -
      “ LIBO Rate ” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Page 3750 of the Dow
Jones Market Service (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate
quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time
for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable
to such Interest Period. In the event that such rate is not available at such time for any reason, then the “ LIBO Rate ” with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate (rounded upwards, if necessary, to the next / 16 of 1%) at which dollar deposits
                                                                                                              1


of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

      “ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the
case of securities, any purchase option, call or similar right of a third party with respect to such securities.

      “ Litigation Settlement ” means the settlement in July 2003 of the lawsuit filed against the Borrower by 154 of its franchisees on August
27, 2002.

     “ Loans ” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

      “ Material Adverse Effect ” means a material adverse effect on (a) the business, operations, property, or condition (financial or otherwise)
of the Parent and the Subsidiaries taken as a whole, (b) the ability of the Parent, and the respective Subsidiaries, taken as a whole, to perform
their obligations under the Credit Documents or (c) the validity or enforceability of any of the Credit Documents or the rights or remedies of
the Administrative Agent and the Lenders thereunder.

     “ Material Indebtedness ” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more
Hedging Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $3,000,000. For
purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at such time.

     “ Material Subsidiary ” means each Subsidiary of Parent other than Subsidiaries that, in the aggregate, account for no more than 5% of
Consolidated Total Assets, 5% of Consolidated Net Worth or 5% of the consolidated revenues of the Parent.

                                                                       - 12 -
     “ Maturity Date ” means the fifth anniversary of the Effective Date.

      “ Memorandum ” shall mean (i) a Private Placement Memorandum, dated April      , 2004 together with the Appendices thereto,
including Amendment No. 2 to the Borrower’s Registration Statement on Form S-1 and (ii) a supplement to such Placement Memorandum,
dated May    , 2004 including the Appendix thereto consisting of Amendment No. 3 to the Borrower’s Registration Statement on Form S-1.

     “ Moody’s ” means Moody’s Investors Service, Inc.

     “ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

     “ Notes Offering ” means the issuance of the Senior Unsecured Notes pursuant to a private placement on the Effective Date.

      “ Note Purchase Agreement ” shall mean the Note Purchase Agreement dated as of                       , 2004 by and among the Borrower
and the purchasers of the Senior Unsecured Notes.

     “ Office ” means a business that provides tax return preparation and other related services.

      “ Office Acquisition ” means the purchase (whether through the purchase of an Office or an Acquisition) by the Borrower or a Subsidiary
of an operating Office from a third party.

      “ Office Acquisition EBITDA ” means, for any Office Acquisition for any period, consolidated net income (determined in accordance
with GAAP) of such Office for such period after eliminating extraordinary gains and losses, and unusual items, plus, without duplication, (a)
taxes, (b) depreciation and amortization, (c) interest expense, (d) other non-cash charges and (e) any amount attributable to any non-recurring
item, but excluding any cash payments made in such period with respect to any non-recurring item, in the case of clauses (a) through (e) to the
extent deducted for the computation of consolidated net income for such period.

      “ Other Taxes ” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this
Agreement.

     “ Parent ” shall mean Jackson Hewitt Tax Service Inc., a Delaware Corporation.

      “ Parent Guarantee ” means a guarantee by the Parent of the obligations of Borrower under the Credit Documents, in the form attached
hereto as Exhibit B .

      “ Parent Initial Public Offering ” means the registered public offering on the Effective Date by Cendant Corporation of its entire common
stock ownership in the Parent.

                                                                     - 13 -
     “ Participant ” has the meaning set forth in Section 9.04.

      “ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar
functions.

      “ Permitted Acquisition ” means any Acquisition (other than an Office Acquisition or Franchisee Expansion) by the Parent or any
Subsidiary of the Parent; provided, that immediately after giving effect to such Acquisition, the Parent shall be in pro forma compliance with
Section 5.10, Section 6.01, Section 6.02 and Section 6.05(b) and either (i) if such Acquisition is pursuant to clause (a) of the definition of
“Acquisition,” then, immediately following such Acquisition, such Person is a consolidated Subsidiary of the Parent or (ii) if such acquisition is
pursuant to clause (b) of the definition of “Acquisition,” then, immediately following such Acquisition, such assets, division, line of business or
other properties or assets are owned by the Parent or a consolidated Subsidiary of the Parent.

     “ Permitted Encumbrances ” means:

           (a) Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.04;

           (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary
     course of business and securing obligations that are not overdue by more than 60 days or are being contested in compliance with Section
     5.04;

           (c) pledges and deposits made in connection with workers’ compensation, unemployment insurance and other social security laws
     or regulations;

          (d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance
     bonds and other obligations of a like nature, in each case in the ordinary course of business;

           (e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

          (f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the
     ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected
     property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

            (g) customary rights of set-off upon deposit accounts and securities accounts of cash in favor of banks or other depositary
     institutions and other securities intermediaries;

           (h) Liens in the nature of licenses that arise in the ordinary course of business; and

                                                                       - 14 -
           (i) any call or similar rights in the nature of a right of first offer or a first refusal right of a third party that is an investor in a joint
     venture or a Subsidiary of the Parent in the case of Equity Interests issued by such joint venture or Subsidiary and any call or similar
     rights on any nominee, trust or directors’ qualifying shares or similar arrangements designed to satisfy requirements of applicable laws in
     the case of Equity Interests issued by such joint venture or Subsidiary;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

     “ Permitted Investments ” means:

           (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of
     America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America),
     in each case maturing within one year from the date of acquisition thereof;

          (b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of
     acquisition, the highest credit rating obtainable from S&P or from Moody’s;

           (c) investments in certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of
     acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office
     of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and
     surplus and undivided profits of not less than $500,000,000;

           (d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and
     entered into with a financial institution satisfying the criteria described in clause (c) above; and

          (e) money market funds that (i) (A) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the
     Investment Company Act of 1940, or (B) are rated AAA by S&P and Aaa by Moody’s and (ii) have portfolio assets of at least
     $5,000,000,000.

    “ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.

      “ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

                                                                         - 15 -
      “ Prime Rate ” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.

     “ Register ” has the meaning set forth in Section 9.04.

     “ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person’s Affiliates.

    “ Required Lenders ” means, at any time, Lenders having Revolving Credit Exposures and unused Commitments representing more than
50% of the sum of the total Revolving Credit Exposures and unused Commitments at such time.

     “ Responsible Officer ” means the chief executive officer, any vice president, or any Financial Officer of the Borrower.

      “ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity
Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the
Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or any Subsidiary.

     “ Revolving Credit Exposure ” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such
Lender’s Loans and its LC Exposure at such time.

     “ S&P ” means Standard & Poor’s.

      “ Senior Unsecured Notes ” means the Series A and Series B Guaranteed Senior Floating Rate Notes issued by the Borrower on the
Effective Date in an aggregate amount not to exceed $175,000,000.

     “ Sole Lead Arranger ” means JPMorgan Securities Inc.

      “ Solvent ” means with respect to any Person as of any date of determination, that, as of such date, (a) the fair value of the assets of such
Person is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person, (b) such Person is able to
pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital. In computing the
amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (in each
case as interpreted in accordance with fraudulent conveyance, bankruptcy, insolvency and similar laws and other applicable requirements of
law.)

                                                                        - 16 -
      “ Statutory Reserve Rate ” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of
which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject (a) with respect to the
Base CD Rate, for new negotiable nonpersonal time deposits in dollars of over $100,000 with maturities approximately equal to three months
and (b) with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D
of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall
be adjusted automatically on and as of the effective date of any change in any reserve percentage.

       “ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as
of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.

     “ Subsidiary ” means any subsidiary of the Parent.

     “ Subsidiary Guarantee ” means a guarantee by a Subsidiary Guarantor of the obligations of the Borrower under the Credit Documents to
which the Borrower is a party in the form attached hereto as Exhibit B .

      “ Subsidiary Guarantor ” means a Subsidiary of the Parent that is a “United States Person” (as such term is defined in Section 7701(a)(30)
of the Code) and that is party to the Subsidiary Guarantee.

    “ Taxes ” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.

     “ Three-Month Secondary CD Rate ” means, for any day, the secondary market rate for three-month certificates of deposit reported as
being in effect on such day (or, if such day is not a Business Day, the next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New York (which rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for three-month certificates of deposit of major money centers banks
in New York City received at approximately

                                                                      - 17 -
10:00 a.m., New York City time, on such day (or, if such day is not a Business Day, on the next preceding Business Day) by the Administrative
Agent from three negotiable certificate of deposit dealers of recognized standing selected by it.

      “ Transactions ” means the execution, delivery and performance by the Borrower and its Subsidiaries, as applicable, of this Agreement
and the other Credit Documents, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.

    “ Type ”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans
comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

      “ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

       Section 1.02 Classification of Loans and Borrowings . For purposes of this Agreement, Loans may be classified and referred to by Type (
e.g. , a “Eurodollar Loan”). Borrowings also may be classified and referred to by Type ( e.g. , a “Eurodollar Borrowing”).

       Section 1.03 Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the
same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof,
(d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to
any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

       Section 1.04 Accounting Terms; GAAP . Except as otherwise expressly provided herein, all terms of an accounting or financial nature
shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent
that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP
or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in
GAAP or in the

                                                                      - 18 -
application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change
shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

                                                                  ARTICLE II

                                                                   The Credits

     Section 2.01 Loan Commitments . Subject to the terms and conditions set forth herein, each Lender agrees to make Loans to the Borrower
from time to time during the Availability Period in an aggregate principal amount that will not result in (a) such Lender’s Revolving Credit
Exposure exceeding such Lender’s Commitment or (b) the total Revolving Credit Exposures exceeding the total Commitments. Within the
foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay or repay and reborrow Loans.

     Section 2.02 Loans and Borrowings .

     (a) Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective
Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make
Loans as required.

      (b) Subject to Section 2.13, each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement.

      (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is
an integral multiple of $1,000,000 and not less than $3,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of $1,000,000 and not less than $3,000,000; provided that an ABR Borrowing may be in an
aggregate amount that is equal to the entire unused balance of the total Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.04(e). Borrowings of more than one Type may be outstanding at the same time; provided that there
shall not at any time be more than a total of ten (10) Eurodollar Borrowings outstanding.

      (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

      Section 2.03 Requests for Borrowings . To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 12:00 Noon, New York City time, three (3) Business Days before the

                                                                      - 19 -
date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 12:00 Noon, New York City time, on the date of the
proposed Borrowing; provided that any such notice of an ABR Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.04(e) may be given not later than 12:00 Noon, New York City time, on the date of the proposed Borrowing. Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance with Section 2.02:

           (i) the aggregate amount of the requested Borrowing;

           (ii) the date of such Borrowing, which shall be a Business Day;

           (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

           (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated
     by the definition of the term “Interest Period”; and

           (v) the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the
     requirements of Section 2.05.

      If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one
month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise
each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

     Section 2.04 Letters of Credit .

       (a) General . Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit for its own
account, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the
Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any
form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank
relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

      (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions . To request the issuance of a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter

                                                                      - 20 -
of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary
to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the Borrower also shall submit a letter of credit
application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit. Each Letter of Credit shall be subject to
ISP 98. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the LC Exposure shall not exceed $10,000,000 and (ii) the total Revolving Credit Exposures shall not exceed the total
Commitments.

      (c) Expiration Date . Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension);
provided that any Letter of Credit with a one-year term may provide for the renewal thereof of additional one-year periods (which shall in no
event extend beyond the date referred to in this paragraph (c)) and (ii) the date that is five Business Days prior to the Maturity Date.

      (d) Participations . By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender
hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate
amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Applicable Percentage of
each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this
Section, or of any reimbursement payment required to be refunded to the Borrower for any reason. Each Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or Event of Default or reduction or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.

      (e) Reimbursement . In the case of any draft presented under a Letter of Credit which is required to be paid at any time on or before the
Maturity Date and provided that the conditions specified in Section 4.02 are then satisfied, and subject to the limitations as to the aggregate
principal amount of ABR Loans set forth in Section 2.01(a), but notwithstanding the limitations as to the time of funding of a Borrowing set
forth in Section 2.05(a) and as to the time of notice of a proposed Borrowing set forth in Section 2.03, payment by the Issuing Bank of such
draft shall constitute an ABR Loan hereunder, and interest shall accrue from the date the Issuing Bank makes such payment, which ABR Loan,
upon and to the extent that a Lender shall have made reimbursement to the Issuing Bank pursuant to Section 2.23(d), shall constitute such

                                                                         - 21 -
Lender’s ABR Loan hereunder. If any draft is presented under a Letter of Credit and (i) the conditions specified in Section 4.02 are not satisfied
or (ii) if the Commitments have been terminated, then the Borrower will, upon demand by the Administrative Agent or the Issuing Bank, pay to
the Issuing Bank, in immediately available funds, the full amount of such draft. If the Borrower fails to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof
and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent
its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.05 with respect to Loans
made by such Lender (and Section 2.05 shall apply, mutatis mutandis , to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative
Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the
Issuing Bank as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse the Issuing Bank for any
LC Disbursement (other than the funding of ABR Loans as contemplated above) shall not constitute a Loan and shall not relieve the Borrower
of its obligation to reimburse such LC Disbursement.

      (f) Obligations Absolute . The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or
provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect
or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not strictly comply with the terms of such Letter of Credit (unless such draft or other
document fails to substantially comply with the terms of such Letter of Credit), or (iv) any other event or circumstance whatsoever, whether or
not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a
right of setoff against, the Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of
their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or
any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of
which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing
Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent

                                                                        - 22 -
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Issuing Bank may either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such Letter of Credit.

      (g) Disbursement Procedures . The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower
by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Bank and the Lenders with respect to any such LC Disbursement.

      (h) Interim Interest . If the Issuing Bank shall make any LC Disbursement the payment by the Issuing Bank of which does not constitute
an ABR Loan pursuant to Section 2.04(e), then the unpaid amount thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum equal to 2% per
annum in excess of the Alternate Base Rate plus the Applicable Rate. Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse
the Issuing Bank shall be for the account of such Lender to the extent of such payment.

      (i) Replacement of the Issuing Bank . The Issuing Bank may be replaced at any time by written agreement among the Borrower, the
Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any
such replacement of the Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued
for the account of the replaced Issuing Bank pursuant to Section 2.10(b). From and after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this
Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

     (j) Cash Collateralization . If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall
deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in
Permitted

                                                                       - 23 -
Investments equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such
cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other
notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of Article VII. Such
deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this
Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such deposits, which investments shall be made in Permitted Investments and at
the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest
or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent
to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been
accelerated, be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrower within three Business Days after all Events of Default have been cured or waived.

     Section 2.05 Funding of Borrowings .

      (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so
received, in like funds, to an account of the Borrower maintained with the Administrative Agent in New York City and designated by the
Borrower in the applicable Borrowing Request; provided that ABR Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.04(e) shall be remitted by the Administrative Agent to the Issuing Bank.

      (b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable
Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made
available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Borrower, the interest rate applicable to

                                                                      - 24 -
ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in
such Borrowing.

     Section 2.06 Interest Elections .

       (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefore,
all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing.

      (b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the
time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from
such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower.

     (c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

           (i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different
     portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant
     to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

           (ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

           (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

           (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such
     election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be
deemed to have selected an Interest Period of one month’s duration.

                                                                      - 25 -
     (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof
and of such Lender’s portion of each resulting Borrowing.

      (e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if a Default or an Event of Default has occurred and
is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as a Default or an
Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid,
each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

     Section 2.07 Termination and Reduction of Commitments .

     (a) Unless previously terminated, the Commitments shall terminate on the Maturity Date.

     (b) The Borrower may at any time terminate, or from time to time reduce, the Commitments; provided that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of $5,000,000 and (ii) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.09, the Revolving Credit
Exposures would exceed the total Commitments.

      (c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of
this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective
date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice
delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by
the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities or receipt of proceeds from other sources,
in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if
such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall
be made ratably among the Lenders in accordance with their respective Commitments.

     Section 2.08 Repayment of Loans; Evidence of Debt .

      (a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Loan on the Maturity Date.

      (b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower
to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.

                                                                      - 26 -
      (c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type
thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account
of the Lenders and each Lender’s share thereof.

      (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of
this Agreement.

      (e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute
and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

     Section 2.09 Prepayment of Loans .

      (a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with paragraph (b) of this Section.

       (b) The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of prepayment or
(ii) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion
thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the
Commitments as contemplated by Section 2.07, then such notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.07. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.11.

     Section 2.10 Fees .

                                                                     - 27 -
      (a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a facility fee, which shall accrue at the
Facility Fee Rate on the daily amount of the Commitment of such Lender (whether used or unused) during the period from and including the
Effective Date to but excluding the date on which such Commitment terminates; provided that, if such Lender continues to have any Revolving
Credit Exposure after its Commitment terminates, then such facility fee shall continue to accrue on the daily amount of such Lender’s
Revolving Credit Exposure from and including the date on which its Commitment terminates to but excluding the date on which such Lender
ceases to have any Revolving Credit Exposure. Accrued facility fees shall be payable in arrears on the last day of March, June, September and
December of each year and on the date on which the Commitments terminate, commencing on the first such date to occur after the date hereof;
provided that any facility fees accruing after the date on which the Commitments terminate shall be payable on demand. All facility fees shall
be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding
the last day).

       (b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to Eurodollar
Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s
Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which
shall accrue at the rate or rates per annum separately agreed upon between the Borrower and the Issuing Bank on the average daily amount of
the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC
Exposure, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of March, June, September
and December of each year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after
the Effective Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing
after the date on which the Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this
paragraph shall be payable within ten (10) days after demand. All participation fees and fronting fees shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

      (c) The Borrower agrees to pay the Administrative Agent for its own account fees in the amounts and at the times set forth in the Fee
Letter.

      (d) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the
Issuing Bank, in the case of fees payable to it) for distribution, in the case of facility fees and participation fees, to the Lenders. Fees paid shall
not be refundable under any circumstances.

                                                                         - 28 -
     Section 2.11 Interest .

     (a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.

     (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus the Applicable Rate.

      (c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, to the
extent permitted by applicable law, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any
Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other
amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section.

      (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the
Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the Availability Period), accrued interest
on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion
of any Eurodollar Loan prior to the end of the current Interest Period therefore, accrued interest on such Loan shall be payable on the effective
date of such conversion.

       (e) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days
in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate and Adjusted LIBO Rate shall be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.

     Section 2.12 Alternate Rate of Interest .

     If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

    (a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate, as applicable, for such Interest Period; or

      (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;

                                                                      - 29 -
then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar
Borrowing shall be ineffective and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing; provided that if the circumstances giving rise to such notice affect only one Type of Borrowings, then the other Type of
Borrowings shall be permitted.

     Section 2.13 Increased Costs .

     (a) If any Change in Law shall:

          (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the
     account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
     Bank; or

          (ii) impose on any Lender or the Issuing Bank or the London interbank market any other condition affecting this Agreement or
     Eurodollar Loans or Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or
maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder
(whether of principal, interest or otherwise), then the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction
suffered.

      (b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding
company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the
Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s
policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy) by an amount deemed by
such Lender in good faith to be material, then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding
company for any such reduction suffered.

     (c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing
Bank or its holding company, as

                                                                     - 30 -
the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered by such Lender or Issuing Bank in good faith to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the
amount shown as due on any such certificate within 10 days after receipt thereof.

       (d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to
compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the
date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefore; provided further that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period
of retroactive effect thereof.

       (e) Notwithstanding anything to the contrary contained in this Section 2.13, Section 2.15 shall govern exclusively any increased costs
relating to Taxes resulting from any Change in Law.

      Section 2.14 Break Funding Payments . In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day
of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(b) and is revoked in
accordance therewith) or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower pursuant to Section 2.17, then, in any such event, the Borrower shall compensate each Lender for the loss,
cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal
amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period therefore (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for
dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt
thereof.

     Section 2.15 Taxes .

                                                                       -31-
      (a) Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be)
receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

     (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

      (c) If the IRS or other Governmental Authority of the United States or other jurisdiction asserts a claim against the Administrative Agent,
a Lender or the Issuing Bank that the full amount of Indemnified Taxes or Other Taxes have not been paid, the Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Bank, within ten (10) days after written demand therefor, for the full amount of any such
Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or with respect to
any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted
on or attributable to amounts payable under this Section) and any penalties, interest and reasonable out-of-pocket expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate (along with a copy of the applicable documents from the IRS or other governmental authority of the
United States or other jurisdiction that asserts such claim) as to the amount of such payment or liability delivered to the Borrower by a Lender
or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent
manifest error.

     (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the
Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the
Administrative Agent.

      (e) Any Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate. Without limiting the foregoing, each Lender shall, at the time such Lender becomes a party to this Agreement
(or thereafter as reasonably requested by Borrower), execute and deliver to the Borrower and Administrative Agent (i) if it is not a “United
States Person” (as such term is defined in Section 7701(a)(30) of the Code), two original copies (or more as the Borrower or the Administrative
Agent shall reasonably request) of the

                                                                      -32-
applicable Internal Revenue Service form W-8 or other applicable form, certificate or document prescribed by the United States Internal
Revenue Service certifying as to such Lender’s entitlement to exemption from, or entitlement to a reduced rate of, withholding or deduction of
Taxes, and (ii) if it is a “United States Person” (as such term is defined in Section 7701(a)(30) of the Code), two original copies (or more as the
Borrower or the Administrative Agent shall reasonably request) of Internal Revenue Service Form W-9 (or substitute or successor form). Each
Lender that is not a “United States Person” (as such term is defined in Section 7701(a)(30) of the Code) claiming exemption from withholding
tax pursuant to its portfolio interest exception shall execute and deliver to the Borrower and Administrative Agent (i) a statement of the Lender,
signed under penalty of perjury, that it is not (A) a “bank” as described in Section 881(c)(3)(A) of the Code, (B) a 10% shareholder of a
Borrower (within the meaning of Section 871(h)(3)(B) of the Code), or (C) a controlled foreign corporation related to a Borro wer within the
meaning of Section 864(d)(4) of the Code, and (ii) two properly completed and executed copies of IRS Form W-8BEN.

       (f) If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as
to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section
2.15, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section 2.15 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to
such refund); provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or
such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This
Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information
relating to its taxes which it deems confidential) to the Borrower or any other Person.

     Section 2.16 Payments Generally; Pro Rata Treatment; Sharing of Set-offs .

       (a) The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of
LC Disbursements, or of amounts payable under Section 2.13, 2.14 or 2.15, or otherwise) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at its offices at 270 Park Avenue, New York, New York, except
payments to be made directly to the Issuing Bank as expressly provided herein and except that payments pursuant to Sections 2.13, 2.14, 2.15
and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon

                                                                       -33-
shall be payable for the period of such extension. All payments hereunder shall be made in dollars.

      (b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and
fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties,
and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.

      (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations
in LC Disbursements of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements;
provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this
paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which
the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of
set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.

      (d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the
date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined

                                                                       -34-
by the Administrative Agent in accordance with banking industry rules on interbank compensation.

      (e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(d) or (e), 2.05(b) or 2.16(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid.

     Section 2.17 Mitigation Obligations; Replacement of Lenders .

      (a) If any Lender requests compensation under Section 2.13, or if the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 2.15, then such Lender shall use reasonable efforts to designate
a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.13 or 2.15, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense
and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by
any Lender in connection with any such designation or assignment.

        (b) If any Lender requests compensation under Section 2.13, or if the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 2.15, or if any Lender defaults in its obligation to fund Loans
hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests,
rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent,
which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal
of its Loans and participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from
the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and
(iii) in the case of any such assignment resulting from a claim for compensation under Section 2.13 or payments required to be made pursuant
to Section 2.15, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.

                                                                       -35-
                                                                    ARTICLE III

                                                          Representations and Warranties

      Each of the Borrower and Parent represents and warrants to the Lenders that:

      Section 3.01 Organization; Powers . Each of the Parent, Borrower and their respective Material Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business
as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

      Section 3.02 Authorization; Enforceability . The Transactions are within the corporate powers of each of the Parent, the Borrower and
each of their respective Subsidiaries and have been duly authorized by all necessary corporate and, if required, stockholder action. This
Agreement and each other Credit Document has been duly executed and delivered by each of the Parent, the Borrower and each of their
respective Subsidiaries party hereto or thereto and constitutes a legal, valid and binding obligation of each of the Parent, the Borrower and each
of their respective Subsidiaries party thereto or thereto, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

       Section 3.03 Governmental Approvals; No Conflicts . The Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (b)
will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Parent, the Borrower or any of
their respective Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any material indenture,
material agreement or other material instrument binding upon the Parent, the Borrower or any of their respective Subsidiaries or its assets, and
(d) will not result in the creation or imposition of any Lien on any asset of the Parent, the Borrower or any of their respective Subsidiaries.

      Section 3.04 Financial Condition; No Material Adverse Change .

      (a) The Parent has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and
cash flows as of and for the fiscal years ended April 30, 2003 and April 30, 2004, respectively, reported on by Deloitte & Touche LLP,
independent public accountants. Such financial statements present fairly, in all material respects, the financial position and results of operations
and cash flows of the Parent and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP.

      (b) Since April 30, 2004, no events and conditions have occurred that have had, or would reasonably be expected to have, a material
adverse effect on the business, operations, property or condition (financial or otherwise), of the Parent and its consolidated Subsidiaries, taken
as a whole.

      Section 3.05 Properties .

     (a) Each of the Parent, the Borrower and their respective Subsidiaries has good title to, or valid leasehold interests in, all its real and
personal property material to its

                                                                         -36-
business free and clear of any Liens, except liens permitted under Section 6.04 and minor defects in title that do not interfere with its ability to
conduct its business as currently conducted or to utilize such properties for their intended purposes.

      (b) Each of the Parent, the Borrower and their respective Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights,
patents and other intellectual property material to its business, and the use thereof by the Parent, the Borrower and their respective Subsidiaries
does not infringe upon the rights of any other Person except for such infringements that, the effect of which individually or in the aggregate,
could not reasonably be expected to have a material adverse effect on the business of the Parent, the Borrower and their respective Subsidiaries,
taken as a whole.

     Section 3.06 Litigation and Environmental Matters .

       (a) Other than to the extent disclosed in the Disclosed Matters, there are no material actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Parent, the
Borrower or any of their respective Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination that, individually or
in the aggregate, could reasonably be expected to have a material adverse effect on the business of Parent and its Subsidiaries, taken as a whole,
or (ii) that involve this Agreement or the Transactions.

       (b) Neither the Parent, the Borrower nor any of their respective Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required under any Environmental Law the failure of which could
reasonably be expected to have a material adverse effect on the business of Parent and its Subsidiaries taken as a whole, (ii) has become subject
to any Environmental Liability that, individually or in the aggregate, could reasonably be expected to have a material adverse effect on the
business of the Parent and its Subsidiaries taken as a whole, (iii) has received notice of any claim with respect to any Environmental Liability
that, individually or in the aggregate, could reasonably be expected to have a material adverse effect on the business of the Parent and its
Subsidiaries, taken as a whole or (iv) knows of any basis for any Environmental Liability that, individually or in the aggregate, could
reasonably be expected to have a material adverse impact on the business of the Parent and its consolidated Subsidiaries, taken as a whole.

     Section 3.07 Compliance with Laws and Agreements; No Default . Each of the Parent, the Borrower and their respective Subsidiaries is
in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.

      Section 3.08 Investment and Holding Company Status . Neither the Parent, the Borrower nor any of their respective Subsidiaries is (a) an
“investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a “holding company” as
defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935.

                                                                        -37-
      Section 3.09 Taxes . Each of the Parent, the Borrower and their respective Subsidiaries has timely filed or caused to be filed all Tax
returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes
that are being contested in good faith by appropriate proceedings and for which the Parent, the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material
Adverse Effect.

      Section 3.10 ERISA . No ERISA event has occurred or is reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The
present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more
than $10,000,000 the fair market value of the assets of all such underfunded Plans.

     Section 3.11 Solvency . Each of the Borrower and the Parent is and the Credit Parties, taken as a whole, are Solvent.

      Section 3.12 Use of Proceeds . The proceeds of the Loans and Letters of Credit that have been disbursed to or on behalf of the Borrower
have not been used by any Credit Party for purposes other than to finance the working capital needs, acquisitions, or general corporate purposes
of the Parent, the Borrower and their respective Subsidiaries.

      Section 3.13 Margin Regulations . No Credit Party is engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U of the Federal Reserve Board), and no proceeds of any Loan or Letter of Credit will
be used by any Credit Party to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying
any such margin stock in contravention of Regulation T, U or X of the Federal Reserve Board.

       Section 3.14 Disclosure . The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to
which it, the Parent, or any of their respective Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. As of the Effective Date, the Information Memorandum furnished by the
Borrower to the Administrative Agent when, taken as a whole, does not contain any material misstatement of fact or omits to state any material
fact necessary to make the statement therein, in the light of the circumstances under which they were made, not misleading provided that, with
respect to projected financial information the Parent and the Borrower represent only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time; provided further , that, with respect to general industry information provided by public
or third party sources, the Parent and the Borrower represent only to the best of their knowledge. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) when, taken as a whole,
contains any material misstatement of fact or omits to state any material fact

                                                                        -38-
necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Parent and the Borrower represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time; provided , further , that, with respect to general industry information provided by
public or third party sources, the Parent and the Borrower represent only to the best of their knowledge. The Credit Parties have delivered to the
Administrative Agent certain projections relating to the Parent and its consolidated Subsidiaries and has included certain projections in
documents or materials that have been delivered to the Administrative Agent. All such projections prepared by or on behalf of the Parent, the
Borrower or their respective Subsidiaries are based on good faith estimates and assumptions believed to be reasonable at the time made
provided , however , that the Parent, the Borrower or their respective Subsidiaries make no representation or warranty that such assumptions
will prove in the future to be accurate or that the Parent, the Borrower or their respective Subsidiaries will achieve the financial results reflected
in such projections.

                                                                   ARTICLE IV

                                                                     Conditions

      Section 4.01 Effective Date . The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder
shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

     (a) Credit Documents . The Administrative Agent shall have received from each party hereto or thereto a counterpart of this Agreement
and each of the other Credit Documents, each executed and delivered by such party.

      (b) Opinion of Counsel . The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative
Agent and the Lenders and dated the Effective Date) of (i) Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Parent and Tax
Services of America, Inc., substantially in the form of Exhibit C-1 and (ii) Piper Rudnick LLP, counsel for the Borrower and Hewfant, Inc.
substantially in the form of Exhibit C-2 .

       (c) Corporate Documents for the Credit Parties . The Administrative Agent shall have received, with copies for each of the Lenders, a
certificate of the Secretary or an Assistant Secretary of each Credit Party dated the Effective Date and certifying (i) that attached thereto is a
true and complete copy of the certificate of incorporation and by-laws of such Credit Party as in effect on the Effective Date, (ii) that attached
thereto is a true and complete copy of resolutions adopted by the Board of Directors of such Credit Party authorizing the borrowings hereunder
(in the case of the Borrower) and the execution, delivery and performance in accordance with their respective terms of each Credit Document
to which such Credit Party is a party, (iii) as to the incumbency and specimen signature of each officer of such Credit Party executing this
Agreement or any other document delivered by it in connection herewith (such certificate to contain a certification by another officer of such
Credit Party as to the incumbency and signature of the officer signing the certificate referred to in this paragraph (c) and (iv) with

                                                                        -39-
respect to the Borrower, that attached thereto are true and complete copies of the Related Transaction Documents (other than the Credit
Documents).

     (d) Financial Statements . The Administrative Agent and the Lenders shall have received audited consolidated financial statements of the
Parent for the fiscal year ending April 30, 2004 acceptable to such Administrative Agent or Lender in its sole discretion.

      (e) Solvency Certificate . The Administrative Agent shall have received, with copies for each of the Lenders, a certificate of a Financial
Officer of the Parent stating that each of the Parent and the Borrower is, and the Credit Parties, taken as a whole, are Solvent after giving effect
to the initial loans and Letters of Credit and the payment of all estimated legal, accounting and other fees related hereto and thereto.

      (f) No Material Adverse Effect . The Administrative Agent shall be satisfied that, since the date of the most recent audited financial
statements of the Parent and its Subsidiaries, no events or conditions shall have occurred that have had, or could reasonably be expected to
have, a Material Adverse Effect.

     (g) Payment of Fees and Expenses . The Administrative Agent shall be satisfied that all amounts due and payable to the Administrative
Agent, the Sole Lead Arranger and the other Lenders pursuant hereto or with regard to the transactions contemplated hereby (including,
without limitation, the fees required to be paid pursuant to that certain fee letter dated as of April 22, 2004 among the Parent, the
Administrative Agent and the Sole Lead Arranger) have been or are simultaneously being paid.

      (h) Commitment Letter . Each of the terms and conditions set forth in the Commitment Letter shall have been satisfied or waived in
writing by the Administrative Agent.

      (i) No Default . At the time of and immediately after giving effect to the Loans, no Default or Event of Default shall have occurred and be
continuing.

      (j) Representations and Warranties . The representations and warranties of the Borrower set forth in this Agreement shall be true and
correct in all material respects (except to the extent such representations and warranties are otherwise qualified by materiality in which case
they shall be true and correct in all respects) on and as of the Effective Date (unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all material respects as of such earlier date).

      (k) Senior Unsecured Notes . The Senior Unsecured Notes shall have been issued contemporaneously with the execution and delivery of
the Credit Document in amounts and on terms reasonably satisfactory to the Administrative Agent.

    (l) Initial Public Offering . The Parent Initial Public Offering shall have occurred in amounts and on terms reasonably satisfactory to the
Administrative Agent.

    (m) Approvals . All Governmental Authority and material third party consents or approvals necessary, or in the discretion of the
Administrative Agent, advisable in connection

                                                                         -40-
with the Transactions and the continuing operations of the Parent, the Borrower and their respective Subsidiaries shall have been obtained and
be in full force and effect.

     (n) Litigation . No litigation by any Person shall be pending or, to either the Parent’s or the Borrower’s knowledge, threatened with
respect to the Transaction or any documentation executed in connection therewith or which the Administrative Agent or the Lenders shall
determine would reasonably be expected to have a Material Adverse Effect.

     (o) Officer’s Certificate . The Administrative Agent shall have received, with copies for each of the Lenders, a certificate of a
Responsible Officer of the Borrower to the effect that the conditions set forth in Section 4.01 have been satisfied.

     (p) Other Documents . The Administrative Agent shall have received such other documents and certificates as the Administrative Agent
may reasonably require.

The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall
not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 3:00 p.m., New
York City time, on July 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such
time).

      Section 4.02 Each Credit Event . The obligation of each Lender to make a Loan, and of the Issuing Bank to issue, renew or extend any
Letter of Credit, is subject to the satisfaction of the following conditions:

      (a) The representations and warranties of the Parent and the Borrower set forth in this Agreement shall be true and correct in all material
respects (except to the extent such representations and warranties are otherwise qualified by materiality in which case they shall be true and
correct in all respects) on and as of the date of such Loan or the date of issuance, renewal or extension of such Letter of Credit, as applicable
(unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material
respects as of such earlier date).

      (b) At the time of and immediately after giving effect to such Loan or the issuance, renewal or extension of such Letter of Credit, as
applicable, no Default or Event of Default shall have occurred and be continuing.

Each Loan and each issuance, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.

                                                                  ARTICLE V

                                                             Affirmative Covenants

      Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder
shall have been paid in full and all Letters

                                                                      - 41 -
of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Parent and the Borrower covenants and
agrees with the Lenders that:

     Section 5.01 Financial Statements; Ratings Change and Other Information . The Borrower will furnish to the Administrative Agent and
each Lender:

      (a) within 90 days after the end of each fiscal year of the Parent, its audited consolidated balance sheet and related consolidated
statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form
the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or other independent public accountants of recognized
national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of
such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of
operations of the Parent and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied; provided that
delivery within the time period specified above of copies of the Parent’s Annual Report on Form 10-K for such fiscal year (together with the
Parent’s annual report to stockholders, if any, prepared pursuant to Rule 14-a-3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section
5.01(a);

      (b) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Parent, its unaudited consolidated
balance sheet and related unaudited consolidated statements of operations as of the end of and for such fiscal quarter and statements of cash
flows for the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results of operations of the Parent and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments; provided that delivery within
the time period specified above of copies of the Parent’s Quarterly Report on Form 10-Q prepared in accordance with the requirements therefor
and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 5.01(b);

     (c) on or before the date that is 45 days prior to the beginning of each fiscal year, financial projections of the Parent and its consolidated
Subsidiaries for such fiscal year;

       (d) concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer of the Parent
(i) certifying as to whether a Default or Event of Default has occurred and, if a Default or Event of Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Sections 6.01 and 6.02 and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date
of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;

                                                                       - 42 -
      (e) concurrently with any delivery of financial statements under clause (a) above, or promptly thereafter, a letter addressed to the board of
directors of the Parent from the accounting firm that reported on such financial statements stating that, in connection with the accounting firm’s
audits, nothing came to the attention of such firm that caused it to believe that the Parent failed to comply with Sections 6.01, 6.02 or 6.03
insofar as such Sections relate to financial and accounting matters, and that such accounting firm’s audit was not directed primarily toward
obtaining knowledge of noncompliance with such sections;

      (f) promptly after such filings become publicly available, electronic notice of the filing of all periodic and other reports and proxy
statements filed by the Parent or any Subsidiary with the Securities and Exchange Commission, or any Governmental Authority succeeding to
any or all of the functions of said Commission, or with any national securities exchange;

     (g) promptly after Moody’s or S&P shall have announced a change in the rating established or deemed to have been established for the
Index Debt, written notice of such rating change; and

      (h) promptly following any request therefore, such other information regarding the operations, business affairs and financial condition of
the Parent or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably
request.

      Section 5.02 Notices of Material Events . The Borrower will furnish to the Administrative Agent and each Lender prompt notice of the
following:

     (a) the occurrence of any Default or Event of Default;

      (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any Affiliate thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse
Effect;

     (c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and its Subsidiaries which could reasonably be expected to result in a Material Adverse Effect;
and

     (d) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be followed within five (5) Business Days by a statement of a Financial Officer or other
executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to
be taken with respect thereto.

     Section 5.03 Existence; Conduct of Business . Each of the Parent and the Borrower will, and will cause each of their respective Material
Subsidiaries to, do or cause to be

                                                                      - 43 -
done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of the business of the Parent and its Subsidiaries taken as a whole; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.05.

      Section 5.04 Payment of Obligations . Each of the Parent and the Borrower will, and will cause each of their respective Subsidiaries to,
pay its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the same shall become delinquent
or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Parent, the
Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to
make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

      Section 5.05 Maintenance of Properties; Insurance . Each of the Parent and the Borrower will, and will cause each of their respective
Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear
and tear excepted, and (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such
risks as are customarily maintained by companies engaged in the same or similar businesses.

       Section 5.06 Books and Records; Inspection Rights . Each of the Parent and the Borrower will, and will cause each of their respective
Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in
relation to its business and activities. Each of the Parent and the Borrower will, and will cause each of their respective Subsidiaries to, permit
any representatives designated by the Administrative Agent, upon reasonable prior notice, to visit and inspect its properties during regular
business hours, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably requested ( provided that reasonable access to such books and
records and properties shall be made available to the Lenders if an Event of Default has occurred and is continuing).

      Section 5.07 Compliance with Laws and Contracts . Each of the Parent and the Borrower will, and will cause each of their respective
Subsidiaries to, (i) comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property and (ii)
comply with the terms and conditions of each material contract, agreement and indenture to which it is a party, except, in each case, where the
failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

      Section 5.08 Compliance with Environmental Laws . Each of the Parent and the Borrower will, and will cause each of their respective
Subsidiaries to, comply in all material respects with all applicable Environmental Laws, the failure of which could reasonably be expected to
result in a Material Adverse Effect.

      Section 5.09 Use of Proceed . The proceeds of the Loans will be used only to finance the working capital needs, potential acquisitions and
for other general corporate purposes

                                                                       - 44 -
of the Borrower and its Subsidiaries in the ordinary course of business. No part of the proceeds of any Loan will be used by any Credit Party,
whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Boards, including Regulations T, U and
X. Letters of Credit will be issued only to support obligations incurred by the Parent and its Subsidiaries for general corporate purposes.

     Section 5.10 New Material Subsidiaries . Promptly and in any event within ten (10) Business Days following the (i) organization or
acquisition of any new Material Subsidiary or (ii) delivery of financial statements pursuant to Section 5.01 that indicate that a Subsidiary of the
Parent (other than the Borrower) not at such time a Subsidiary Guarantor is a Material Subsidiary, cause such Material Subsidiary (other than a
Subsidiary that is not a “United States Person”, as such term is defined in Section 7701(a)(30) of the Code) to execute and deliver a Subsidiary
Guarantee, together with such documents as the Administrative Agent may request evidencing corporate action taken to authorize such
execution and delivery and the incumbency and signatures of the officers of such Material Subsidiary.

                                                                       ARTICLE VI

                                                                   Negative Covenants

      Until (i) the Commitments have expired or terminated, (ii) the principal of and interest on each Loan and all fees payable hereunder have
been paid in full, (iii) all Letters of Credit have expired or terminated and (iv) all LC Disbursements have been reimbursed, each of the Parent
and the Borrower covenants and agrees with the Lenders that:

      Section 6.01 Maximum Consolidated Leverage Ratio . The Consolidated Leverage Ratio shall not, as determined as of the last day of
each fiscal quarter ending during the periods set forth below, exceed the maximum ratio set forth below opposite such period:
                                                                                                                              Maximum Consolidated
                                    Each Fiscal Quarter Ending During the Period                                                 Leverage Ratio

Effective Date through April 30, 2005                                                                                                  3.25 to 1.00
May 1, 2005 through April 30, 2006                                                                                                     3.00 to 1.00
May 1, 2006 through the Maturity Date                                                                                                  2.50 to 1.00

     Section 6.02 Minimum Consolidated Fixed Charge Coverage Ratio . The Consolidated Fixed Charge Coverage Ratio shall not, as
determined as of the last day of each fiscal quarter ending during the periods set forth below, be less than the minimum ratio set forth below
opposite such period:
                                                                                                                              Minimum Fixed Charge
                                    Each Fiscal Quarter Ending During the Period                                                 Coverage Ratio

Effective Date through April 30, 2006                                                                                                  3.00 to 1.00
May 1, 2006 through the Maturity Date                                                                                                  3.50 to 1.00

                                                                            - 45 -
      Section 6.03 Indebtedness . Each of the Parent and the Borrower will not, and will not permit any of their respective Subsidiaries to,
create, incur, assume or permit to exist any Indebtedness, except:

     (a) Indebtedness created hereunder;

      (b) Indebtedness existing on the date hereof, or as required to be incurred pursuant to a contractual obligation in existence on the date
hereof and, which in either case is set forth in Schedule 6.03, and extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof;

     (c) Indebtedness of the Parent to any Subsidiary and of any Subsidiary to the Parent or any other Subsidiary;

     (d) Guarantees by the Parent of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Parent or any other
Subsidiary (including, without limitation, the Guarantee by certain Subsidiaries of the Senior Unsecured Notes);

      (e) Indebtedness of the Parent or any Subsidiary incurred to finance the acquisition, construction or improvement of any assets, including
Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof; provided that (i) such Indebtedness is incurred prior to or within ninety (90) days after such acquisition
or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e)
shall not exceed $5,000,000 at any time outstanding;

     (f) Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that (i) such Indebtedness exists at the time such
Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii) the
aggregate principal amount of Indebtedness permitted by this clause (f) shall not exceed $5,000,000 at any time outstanding;

     (g) Indebtedness of the Parent or any Subsidiary as an account party in respect of letters of credit; provided that the aggregate amount of
Indebtedness permitted by this clause (g) shall not exceed $2,000,000 at any time outstanding;

     (h) other Indebtedness of the Parent or any Subsidiary not otherwise permitted in Section 6.03; provided that the aggregate principal
amount of Indebtedness permitted by this clause (h) at any time outstanding shall not exceed fifteen percent (15%) of Consolidated Net
Tangible Assets;

      (i) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary

                                                                      - 46 -
course of business; provided that such Indebtedness is extinguished within five (5) Business Days of incurrence; and

      (j) the Senior Unsecured Notes and at any time, to the extent that the Borrower has repaid all or a portion of the outstanding principal
amount of the Senior Unsecured Notes, additional Indebtedness of the Borrower on terms not materially more restrictive than this Agreement
(as determined in the reasonable judgment of the Administrative Agent) to the Senior Unsecured Notes the aggregate principal amount at any
time outstanding of which shall not exceed fifty percent (50%) of the principal amount of the Senior Unsecured Notes repaid at such time.

      Section 6.04 Liens . Each of the Parent and the Borrower will not, and will not permit any of their respective Subsidiaries to, create,
incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof, except:

     (a) Permitted Encumbrances;

       (b) any Lien on any property or asset of the Parent or any Subsidiary existing on the date hereof and set forth in Schedule 6.04; provided
that (i) such Lien shall not apply to any other property or asset of the Parent or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal
amount thereof;

      (c) any Lien existing on any property or asset prior to the acquisition thereof by the Parent or any Subsidiary or existing on any property
or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; provided that (i)
such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary             , as the case
may be, (ii) such Lien shall not apply to any other property or assets of the Parent or any Subsidiary and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding principal amount thereof;

      (d) Liens on assets acquired, constructed or improved by the Parent or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by clause (e) of Section 6.03, (ii) such security interests and the Indebtedness secured thereby are incurred prior to or
within ninety (90) days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby
does not exceed the cost of acquiring, constructing or improving such assets and (iv) such security interests shall not apply to any other
property or assets of the Parent or any Subsidiary; and

     (e) Liens not otherwise permitted hereunder which secure obligations not exceeding in the aggregate fifteen percent (15%) of
Consolidated Net Tangible Assets.

     Section 6.05 Fundamental Changes .
.

                                                                       - 47 -
      (a) Each of the Parent and the Borrower will not, and will not permit any Material Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all of its assets, or all or substantially all of the stock of any of its Subsidiaries (in each case, whether
now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no
Default or Event of Default shall have occurred and be continuing (i) any Person may merge into the Parent or the Borrower in a transaction in
which the Parent or the Borrower is the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary or any other Person in a
transaction in which the surviving entity is a Subsidiary, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the
Parent or the Borrower or to another Subsidiary and (iv) any Subsidiary may liquidate or dissolve if the Parent or the Borrower determines in
good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders;
provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be
permitted unless also permitted by Section 6.06.

      (b) The Parent and the Borrower will not, and will not permit any of their respective Subsidiaries to, engage in any business, if, as a
result, the general nature of the business of the Credit Parties taken as a whole, would be substantially changed from the general nature of the
business of the Credit Parties taken as a whole, on the Effective Date.

      Section 6.06 Investments, Loans, Advances, Guarantees and Acquisitions . Each of the Parent and the Borrower will not, and will not
permit any of their respective Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any capital stock, evidences of indebtedness or other securities (including any option, warrant
or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or
permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit (an “ Investment ”), except:

      (a) Permitted Investments;

     (b) Investments existing on the date hereof or required to be made pursuant to a contractual obligation in existence on the date hereof and
any extensions or renewals thereof, in either case as set forth in Schedule 6.06;

      (c) Investments by each of the Parent and the Borrower existing on the date hereof in the capital stock of their respective Subsidiaries;

      (d) Investments made by the Parent to any Subsidiary and made by any Subsidiary to the Parent or any other Subsidiary;

      (e) Guarantees constituting Indebtedness permitted by Section 6.03;

     (f) Investments in connection with pledges, deposits, payments or performance bonds made or given in the ordinary course of business in
connection with or to

                                                                          - 48 -
secure statutory, regulatory or similar obligations including obligations under insurance, health, disability, safety or environmental obligations;

     (g) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with
customers, suppliers or any other Person;

     (h) Investments received as part of a redemption or payment of or for, as a dividend on, or distribution in respect of other Investments
permitted by this Section 6.06;

      (i) Office Acquisitions and Franchisee Expansions;

      (j) Franchisee Advance Payments;

      (k) Investments in Franchisees;

      (l) Permitted Acquisitions;

      (m) Investments not otherwise permitted hereunder in an aggregate amount not to exceed $5,000,000 during the term of this Agreement;
and

     (n) Investments by the Parent or its Subsidiaries in accounts receivable owing to them, if created or acquired in the ordinary course of
business and payable in accordance with customary trade terms (including the dating of accounts receivable and extensions of payments in the
ordinary course of business).

       Section 6.07 Hedging Agreements . No Credit Party will enter into any Hedging Agreement except Hedging Agreements entered into in
the ordinary course of business to hedge or manage risks to which a Credit Party is exposed in the conduct of its business or the management of
its liabilities.

       Section 6.08 Restricted Payments . Each of the Borrower and the Parent will not, and will not permit any of their respective Subsidiaries
to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (a) the Parent may declare and pay
dividends with respect to its Equity Interests payable solely in additional shares of its common stock or warrants, options or other rights
entitling the holder thereof to purchase or acquire shares of its common stock, (b) Subsidiaries may declare and pay dividends ratably with
respect to their Equity Interests, (c) the Parent may make Restricted Payments pursuant to and in accordance with stock option plans or other
benefit plans for management or employees of the Parent, the Borrower and their respective Subsidiaries, (d) any Subsidiary may make
Restricted Payments to the Parent and the Borrower or any of their Subsidiaries, (e) the Parent may make Restricted Payments not otherwise
permitted hereunder in an aggregate amount since the Effective Date not to exceed 30% of Consolidated Net Income for the period
commencing on May 1, 2003 and ending on April 30 of the fiscal year preceding the year in which such Restricted Payment is made, on a
cumulative basis and (f) the Parent may use proceeds from the underwriters’ over-allotment option in the Parent Initial Public Offering for
repurchases of Equity Interests in the Parent.

                                                                       - 49 -
      Section 6.09 Transactions with Affiliates . Each of the Borrower and the Parent will not, and will not permit any of their respective
Subsidiaries to, sell, lease or otherwise transfer any material property or material assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other material transactions with, any of its Affiliates, except (a) except upon fair and reasonable
terms not materially less favorable to the Parent or such Subsidiary than could be obtained on an arm’s-length basis with a Person not an
Affiliate, (b) transactions between or among the Parent and its wholly-owned Subsidiaries not involving any other Affiliate, (c) any
Indebtedness permitted by Section 6.03(c), (d) any Restricted Payment permitted by Section 6.08, (e) transactions set forth on Schedule 6.09
and (f) the special dividend described in the Memorandum to be paid to Cendant on the Effective Date.

      Section 6.10 Restrictive Agreements . Each of the Borrower and the Parent will not, and will not permit any of their respective
Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of the Parent or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets,
or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay
loans or advances to the Parent or any other Subsidiary or to Guarantee Indebtedness of the Parent or any other Subsidiary; provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law, by this Agreement or the Note Purchase Agreement (or any
replacement thereof permitted pursuant to Section 6.03(j)), (ii) the foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of,
any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to
the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale
is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to
secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such
Indebtedness and (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment
thereof.

     Section 6.11 Transactions with Franchisees . Each of the Parent and the Borrower will not and will not, permit any of their respective
Subsidiaries to, engage in any material transactions with any Franchisee, except on such terms as are agreed to by an officer of the Parent or the
Borrower, as applicable, that in such officer’s reasonable business judgment, will provide economic benefit to the Parent or one of its
Subsidiaries.

       Section 6.12 Sale and Leasebacks . Each of the Parent and the Borrower will not and will not permit any of their respective Subsidiaries
to enter into any arrangement with any Person providing for the leasing by Parent or any Subsidiary of real or personal property that has been
or is to be sold or transferred by Parent or such Subsidiary to such Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such property or rental obligations of Parent or such Subsidiary unless such arrangement is entered
into in connection with the financing of the acquisition of such property through the proceeds of

                                                                        -50-
a Capital Lease Obligation permitted by Section 6.03(e) and the sale or transfer of such property occurs within thirty days following the
acquisition thereof by Parent or any of its Subsidiaries.

       Section 6.13 Accounting Changes . Each of the Parent and the Borrower will not and will not permit any of their respective Subsidiaries
to (i) make any material change in accounting principles or reporting practices, except as are made in conformity with GAAP and the Borrower
provides subsequent notice of such change to the Administrative Agent concurrently with any delivery of financial statements under Section
5.01(a) or Section 5.01(b) of this Agreement, or as are otherwise consented to by the Administrative Agent or (ii) change its fiscal year or
quarters or the method of determination thereof.

                                                                 ARTICLE VII

                                                                Events of Default

     If any of the following events (“ Events of Default ”) shall occur:

     (a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when
and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

      (b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a)
of this Article) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied
for a period of three (3) Business Days;

       (c) any representation or warranty made or deemed made by or on behalf of the Parent, the Borrower or any of their respective
Subsidiaries in or in connection with this Agreement or any amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any amendment or
modification hereof or waiver hereunder, shall prove to have been incorrect in any material respect when made or deemed made;

      (d) the Parent or the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.01 (other than
clauses (a), (b) and (c)), 5.02, 5.03 (with respect to the maintenance of the Parent’s or the Borrower’s legal existence only), 5.08 or 5.09 or in
Article VI;

      (e) the Parent or the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.01(a), (b) or
(c) or Section 5.07 and such failure shall continue unremedied for a period of five (5) Business Days;

      (f) the Parent, the Borrower or any of their respective Subsidiaries shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those specified in clause (a), (b), (d) or (e) of this Article), the Parent Guarantee, the Subsidiary
Guarantee or any other Credit Document, and such failure shall continue unremedied

                                                                       -51-
for a period of thirty (30) days after the Parent, the Borrower or any of their respective Subsidiaries obtains knowledge thereof;

      (g) the Parent, the Borrower or any of their respective Subsidiaries shall fail to make any payment (whether of principal or interest and
regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable;

       (h) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or
permits the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to
become due (after giving effect to applicable grace periods), or to require the prepayment, repurchase, redemption or defeasance thereof, prior
to its scheduled maturity; provided that this clause (h) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale
or transfer of the property or assets securing such Indebtedness;

       (i) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Parent, the Borrower or any Material Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Parent, the Borrower or any Material Subsidiary or for a substantial part of its assets, and, in
any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;

      (j) the Parent, the Borrower or any Material Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in
clause (i) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar
official for the Parent, the Borrower or any Material Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action
for the purpose of effecting any of the foregoing;

      (k) the Parent, the Borrower or any Material Subsidiary shall generally not pay its debts as they become due or shall admit in writing its
inability or failure to pay its debts as they become due;

      (l) one or more judgments for the payment of money in an aggregate amount (not paid or fully covered by insurance, as to which the
insurer has acknowledged coverage) in excess of $5,000,000 shall be rendered against the Borrower, any Subsidiary or any combination thereof
and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any such
judgment;

                                                                         -52-
      (m) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a Material Adverse Effect; or

     (n) a Change in Control shall occur;

      then, and in every such event (other than an event with respect to the Borrower described in clause (i) or (j) of this Article), and at any
time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice
to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case
any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans
so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived
by the Borrower; and in case of any event with respect to the Borrower described in clause (i) or (j) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.

                                                                ARTICLE VIII

                                                           The Administrative Agent

     Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms
hereof, together with such actions and powers as are reasonably incidental thereto.

     The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the
Administrative Agent hereunder.

      The Administrative Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality
of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or
Event of Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02), and (c) except as expressly set forth herein, the Administrative Agent

                                                                      -53-
shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default or Event of
Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection
with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

     The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person.
The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for
the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.

      The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

      Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent
may resign at any time by notifying the Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders shall
have the right, in consultation with the Borrower, provided that no Default and Event of Default has occurred and is continuing to appoint a
successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the
Issuing Bank, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent

                                                                       -54-
hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by
the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any
actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.

      Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder.

                                                                ARTICLE IX

                                                                Miscellaneous

     Section 9.01 Notices .

      (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b)
below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:

           (i) if to the Borrower or to the Parent, to the Borrower or the Parent at Jackson Hewitt Inc. or Jackson Hewitt Tax Service Inc., as
     applicable, 7 Sylvan Way, Parsippany, New Jersey 07054, Attention of Mark L. Heimbouch, Chief Financial Officer (Telecopy No. (973)
     496-2760) with a copy (which shall not constitute notice to Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York,
     NY 10036, Attn: James Douglas (Facsimile No: (917) 777-2868;

           (ii) if to the Administrative Agent, to JPMorgan Chase Bank, Loan and Agency Services Group, One Chase Manhattan Plaza, 8th
     Floor, New York, New York 10081, Attention of Trey Chavez (Telecopy No. (713) 750-2932), with a copy to JPMorgan Chase Bank,
     270 Park Avenue, New York 10017, Attention of [ ] (Telecopy No. [ ]) with a copy (which shall not constitute notice) to Kirkland &
     Ellis LLP, 200 East Randolph Drive, Chicago, Illinois 60601, Attention of Linda K. Myers, P.C., (Telecopy No. (312) 861-2200);

                                                                     -55-
          (iii) if to the Issuing Bank, to it at JPMorgan Chase Bank, Loan and Agency Services Group, One Chase Manhattan Plaza, 8th
     Floor, New York, New York 10081, Attention of Trey Chavez (Telecopy No. (713) 750-2932), with a copy to JPMorgan Chase Bank,
     270 Park Avenue, New York 10017, Attention of [ ] (Telecopy No. [ ]) with a copy (which shall not constitute notice) to Kirkland & Ellis
     LLP, 200 East Randolph Drive, Chicago, Illinois 60601, Attention of Linda K. Myers, P.C., (Telecopy No. (312) 861-2200); and

           (iv) if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

     (b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to
procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise
agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or communications.

      (c) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other
parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt.

      (d) All notices, requests and demands to or upon the respective parties hereto shall be deemed to have been duly given or made when
delivered, or, in the case of telecopy notice, when received.

     Section 9.02 Waivers; Amendment

       (a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps
to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and
remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom
shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a
Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default or Event of Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.

                                                                        -56-
      (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the
consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent
of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal
amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any
such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby,
(iv) change Section 2.16(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of
each Lender, or (v) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender; provided further that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent or the Issuing Bank hereunder without the prior written consent of the Administrative
Agent or the Issuing Bank, as the case may be.

     Section 9.03 Expenses; Indemnity; Damage Waiver .

       (a) The Borrower shall pay (i) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates, including the reasonable and documented fees, charges and disbursements of counsel for the Administrative Agent, in connection
with the syndication of the credit facilities provided for herein, the preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii)
all reasonable and documented out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable and documented out-of-pocket expenses
incurred by the Administrative Agent, the Issuing Bank or any Lender, including the reasonable and documented fees, charges and
disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or protection
of its rights in connection with this Agreement, including its rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including all such reasonable and documented out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

      (b) The Borrower shall indemnify the Administrative Agent, the Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including the reasonable and documented fees, charges and disbursements of any counsel
(including any additional counsel after notice to the Borrower of such retention) for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the

                                                                      -57-
parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment
under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or
any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory
and regardless of whether any Indemnitee is a party thereto; provided that (A) the Borrower shall not be liable for any settlement of any
proceeding effected without the Borrower’s written consent (such consent not to be unreasonably withheld) and (B) such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses resulted from the gross
negligence or willful misconduct of such Indemnitee.

      (c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent or the Issuing Bank
under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent or the Issuing Bank, as the case may
be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought)
of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent or the Issuing Bank in its capacity as such.

      (d) To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or
the use of the proceeds thereof.

     (e) All amounts due under this Section shall be payable not later than ten (10) days after written demand therefore.

     Section 9.04 Successors and Assign .

      (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the
Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the

                                                                        -58-
Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or
by reason of this Agreement.

      (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of:

                (A) the Borrower, provided that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a
           Lender or, if an Event of Default has occurred and is continuing, any other assignee;

                 (B) the Administrative Agent; and

                 (C) The Issuing Bank.

           (ii) Assignments shall be subject to the following additional conditions:

                  (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or to an Approved Fund, an assignment of the
           entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning
           Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment
           is delivered to the Administrative Agent) shall not be less than $1,000,000 unless each of the Borrower and the Administrative
           Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is
           continuing;

                 (B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and
           obligations under this Agreement;

                 (C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption,
           together with a processing and recordation fee of $3,500; and

                 (D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

           For the purposes of this Section 9.04(b), the term “ Approved Fund ” has the following meaning:

          “ Approved Fund ” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in
     bank loans and similar extensions of credit in the ordinary course of its business and that is

                                                                        -59-
     administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or
     manages a Lender.

            (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date
     specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by
     such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder
     shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement
     (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement,
     such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 9.03). Any
     assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be
     treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with
     paragraph (c) of this Section.

           (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of
     each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the
     Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time
     to time (the “Register”). The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the
     Administrative Agent, the Issuing Bank and the Lenders may treat each Person whose name is recorded in the Register pursuant to the
     terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be
     available for inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable
     prior notice.

           (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the
     assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and
     recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this
     Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the
     Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this
     paragraph.

      (c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent or the Issuing Bank, sell participations to one or
more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided

                                                                       -60-
that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders
shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification
or waiver described in the first proviso to Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of and subject to Sections 2.13, 2.14 and 2.15 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.16(c)
as though it were a Lender.

           (ii) A Participant shall not be entitled to receive any greater payment under Section 2.13, 2.14 or 2.15 than the applicable Lender
     would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such
     Participant is made with the Borrower’s prior written consent. A Participant shall not be entitled to the benefits of Section 2.15 unless the
     Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply
     with Section 2.15(e) as though it were a Lender.

       (d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this
Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

      Section 9.05 Survival . All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or
other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other
amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have
not expired or terminated. The provisions of Sections 2.13, 2.14, 2.15 and 9.03 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the repayment of

                                                                        -61-
the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision
hereof.

       Section 9.06 Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract
among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been
executed by the Parent, the Borrower, the Administrative Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

      Section 9.07 Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

      Section 9.08 Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations
may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.

      Section 9.09 Governing Law; Jurisdiction; Consent to Service of Process .

       (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York. The Borrower hereby
irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New
York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be
heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may

                                                                        -62-
be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this
Agreement against the Borrower or its properties in the courts of any jurisdiction.

      (b) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection
which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any
court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

      (c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in
this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

     Section 9.10 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

      Section 9.11 Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

      Section 9.12 Confidentiality . Neither the Administrative Agent, the Issuing Bank nor any Lender shall disclose the Confidential
Information or use, either directly or indirectly any of the Confidential Information except in concert with the Borrower and in connection with
this Agreement and the transactions contemplated hereby; provided that the Confidential Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential nature of such Confidential Information and who agree to be
bound by this Section of the Agreement, who need to know the Confidential Information for purposes related to this Agreement or any other
Credit Document or any transactions contemplated thereby or reasonably incidental to the administration of this Agreement or the other Credit
Documents, (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, provided that the Administrative Agent, the Issuing Bank or such Lender, as the case may be, shall request
confidential treatment

                                                                       -63-
of such Confidential Information to the extent permitted by applicable law and the Administrative Agent, the Issuing Bank or such Lender, as
the case may be, shall, to the extent permitted by applicable law, promptly inform the Borrower with respect thereto so that the Borrower may
seek appropriate protective relief to the extent permitted by applicable law, provided further that in the event that such protective remedy or
other remedy is not obtained, the Administrative Agent, the Issuing Bank or such Lender, as the case may be, shall furnish only that portion of
the Confidential Information that is legally required and shall disclose the Confidential Information in a manner reasonably designed to
preserve its confidential nature and shall cooperate with the Borrower’s counsel to enable the Borrower to attempt to obtain a protective order
or other reliable assurance that confidential treatment will be accorded to the Confidential Information, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the
enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with
the consent of the Borrower or (h) to the extent such Confidential Information (i) becomes publicly available other than as a result of a breach
of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source
other than the Borrower. Neither the Agent nor any Lender shall make any public announcement, advertisement, statement or communication
regarding the Borrower or any Related Parties or this Agreement or the transactions contemplated hereby without the prior written consent of
the Borrower. The obligations of the Agent and any Lender under this Section shall survive termination or expiration of this Agreement.

      Section 9.13 Interest Rate Limitation . Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any
Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “
Charges ”), shall exceed the maximum lawful rate (the “ Maximum Rate ”) which may be contracted for, charged, taken, received or reserved
by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together
with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would
have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest
and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefore) until
such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.

       Section 9.14 USA Patriot Act . Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”), it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the Act. In connection therewith, each Lender hereby agrees to provide only such information that

                                                                        -64-
is, in such Lender’s sole determination, required by the Act and to provide such information in a manner that is consistent with the
confidentiality provisions set forth in Section 9.12 hereto.

                                                                    *****

                                                                      -65-
      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.

                                                                                  JACKSON HEWITT TAX SERVICE INC.

                                                                                  By
                                                                                  Name:
                                                                                  Title:
                                                                                  Address:
                                                                                  Taxpayer ID Number:

                                                                                  JACKSON HEWITT INC.

                                                                                  By
                                                                                  Name:
                                                                                  Title:
                                                                                  Address:
                                                                                  Taxpayer ID Number:

                                                                                  JPMORGAN CHASE BANK, individually and as
                                                                                  Administrative Agent,

                                                                                  By
                                                                                  Name:
                                                                                  Title:

                                                                                  [OTHER BANKS]

                                                                                  By
                                                                                  Name:
                                                                                  Title:

                                                                  -S-1-
                                                                                        Exhibit 10.13

Draft of June 17, 2004




                                       Jackson Hewitt Tax Service Inc.

                                                    and

                                             Jackson Hewitt Inc.

                         $175,000,000 Floating Rate Senior Notes due June [   ], 2009



                                         Note Purchase Agreement



                                         Dated as of June [   ], 2004
                                            T ABLE OF C ONTENTS
                                                                                        P
                                                                                        AG
S ECTION                                                      H EADING                   E

S ECTION 1.          A UTHORIZATION OF N OTES                                            1
     Section 1.1.    Description of Notes                                                1
     Section 1.2.    Note Interest Rate                                                  1
S ECTION 2.          S ALE AND P URCHASE OF N OTES                                       2
     Section 2.1.    Notes                                                               2
     Section 2.2.    Guaranty                                                            2
S ECTION 3.          C LOSING                                                            2
S ECTION 4.          C ONDITIONS TO C LOSING                                             3
     Section 4.1.    Representations and Warranties                                      3
     Section 4.2.    Performance; No Default                                             3
     Section 4.3.    Compliance Certificates                                             3
     Section 4.4.    Opinions of Counsel                                                 4
     Section 4.5.    Purchase Permitted by Applicable Law, Etc                           4
     Section 4.6.    Related Transactions                                                4
     Section 4.7.    Payment of Special Counsel Fees                                     5
     Section 4.8.    Private Placement Number                                            5
     Section 4.9.    Changes in Corporate Structure                                      5
     Section 4.10.   Subsidiary Guaranty                                                 5
     Section 4.11.   Proceedings and Documents                                           5
S ECTION 5.          R EPRESENTATIONS AND W ARRANTIES OF THE C OMPANY AND THE I SSUER    6
     Section 5.1.    Organization; Power and Authority                                   6
     Section 5.2.    Authorization, Etc                                                  6
     Section 5.3.    Disclosure                                                          6
     Section 5.4.    Organization and Ownership of Shares of Subsidiaries                7
     Section 5.5.    Financial Statements                                                7
     Section 5.6.    Compliance with Laws, Other Instruments, Etc                        7
     Section 5.7.    Governmental Authorizations, Etc                                    8
     Section 5.8.    Litigation; Observance of Statutes and Orders                       8
     Section 5.9.    Taxes                                                               8
     Section 5.10.   Title to Property; Leases                                           9
     Section 5.11.   Licenses, Permits, Etc                                              9
     Section 5.12.   Compliance with ERISA                                               9
     Section 5.13.   Private Offering by the Company                                    10
     Section 5.14.   Use of Proceeds; Margin Regulations                                10
     Section 5.15.   Existing Debt; Future Liens                                        11

                                                      -i-
    Section 5.16.   Foreign Assets Control Regulations, Etc                       11
    Section 5.17.   Status under Certain Statutes                                 11
    Section 5.18.   Environmental Matters                                         11
    Section 5.19.   Solvency                                                      12
S ECTION 6.         R EPRESENTATIONS OF THE P URCHASER                            12
    Section 6.1.    Purchase for Investment                                       12
    Section 6.2.    Source of Funds                                               12
S ECTION 7.         I NFORMATION AS TO C OMPANY                                   14
    Section 7.1.    Financial and Business Information                            14
    Section 7.2.    Officer’s Certificate                                         17
    Section 7.3.    Inspection                                                    17
S ECTION 8.         P AYMENT OF THE N OTES                                        18
    Section 8.1.    Required Payments                                             18
    Section 8.2.    Optional Prepayment of the Notes with LIBOR Breakage Amount   18
    Section 8.3.    Maturity; Surrender, Etc                                      19
    Section 8.4.    Purchase of Notes                                             19
    Section 8.5.    Change in Control                                             19
S ECTION 9.         A FFIRMATIVE C OVENANTS                                       21
    Section 9.1.    Compliance with Law                                           21
    Section 9.2.    Insurance                                                     21
    Section 9.3.    Maintenance of Properties                                     21
    Section 9.4.    Payment of Taxes and Claims                                   22
    Section 9.5.    Corporate Existence, Etc                                      22
    Section 9.6.    Additional Subsidiary Guarantors                              22
S ECTION 10.        N EGATIVE C OVENANTS                                          23
    Section 10.1.   Consolidated Leverage Ration                                  23
    Section 10.2.   Consolidated Fixed Charge Coverage Ratio                      23
    Section 10.3.   Limitation on Liens                                           23
    Section 10.4    Restricted Payments                                           25
    Section 10.5.   Sales of Assets                                               25
    Section 10.6.   Merger, Consolidation                                         26
    Section 10.7.   Nature of Business                                            27
    Section 10.8.   Transactions with Affiliates                                  27
    Section 10.9.   Subsidiaries                                                  27

                                                         -ii-
S ECTION 11.        G UARANTY BY THE C OMPANY                                                              27
    Section 11.1.   Guaranty by the Company                                                                27
    Section 11.2.   Guaranty of Payment and Performance                                                    28
    Section 11.3.   General Provisions Relating to Guaranty by the Company of Issuer’s Obligations under
                     this Agreement and the Note                                                           28
S ECTION 12.        E VENTS OF D EFAULT                                                                    33
S ECTION 13.        R EMEDIES ON D EFAULT , E TC                                                           35
    Section 13.1.   Acceleration                                                                           35
    Section 13.2.   Other Remedies                                                                         36
    Section 13.3.   Rescission                                                                             36
    Section 13.4.   No Waivers or Election of Remedies, Expenses, Etc                                      36
S ECTION 14.        R EGISTRATION ; E XCHANGE ; S UBSTITUTION OF N OTES                                    37
    Section 14.1.   Registration of Notes                                                                  37
    Section 14.2.   Transfer and Exchange of Notes                                                         37
    Section 14.3.   Replacement of Notes                                                                   38
S ECTION 15.        P AYMENTS ON N OTES                                                                    38
    Section 15.1.   Place of Payment                                                                       38
    Section 15.2.   Home Office Payment                                                                    38
S ECTION 16.        E XPENSES , E TC                                                                       39
    Section 16.1.   Transaction Expenses                                                                   39
    Section 16.2.   Survival                                                                               39
S ECTION 17.        S URVIVAL OF R EPRESENTATIONS AND W ARRANTIES ; E NTIRE A GREEMENT                     39
S ECTION 18.        A MENDMENT AND W AIVER                                                                 40
    Section 18.1.   Requirements                                                                           40
    Section 18.2.   Solicitation of Holders of Notes                                                       40
    Section 18.3.   Binding Effect, Etc                                                                    40
    Section 18.4.   Notes Held by Company, Issuer, Etc                                                     41
S ECTION 19.        N OTICES                                                                               41
S ECTION 20.        R EPRODUCTION OF D OCUMENTS                                                            41
S ECTION 21.        C ONFIDENTIAL I NFORMATION                                                             42

                                                   -iii-
S ECTION 22.        S UBSTITUTION OF P URCHASER            43
S ECTION 23.        M ISCELLANEOUS                         43
    Section 23.1.   Successors and Assigns                 43
    Section 23.2.   Payments Due on Non-Business Days      43
    Section 23.3.   Severability                           43
    Section 23.4.   Construction                           43
    Section 23.5.   Counterparts                           44
    Section 23.6.   Governing Law                          44

                                                    -iv-
S
CHEDULE      A    —   Information Relating To Purchasers
S
CHEDULE      B    —   Defined Terms
S
CHEDULE      5.
4                 —   Subsidiaries of the Company, Ownership of Subsidiary Stock
S
CHEDULE      10
.3                —   Existing Liens
E XHIBIT 1        —   Form of Floating Rate Senior Note due June [25], 2009
E XHIBIT 2.2      —   Subsidiary Guaranty
E                 —
XHIBIT   4.4(a        Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, Special Counsel to the Company and the
)                     Issuer
E
XHIBIT   4.4(b
)                 —   Form of Opinion of Piper Rudnick, LLP, Special Counsel to the Issuer
E
XHIBIT   4.4(c
)                 —   Form of Opinion of Chapman and Cutler LLP, Special Counsel for the Purchasers

                                                               -v-
                                                J ACKSON H EWITT T AX S ERVICE I NC .
                                                           7 S YLVAN W AY
                                                  P ARSIPPANY , N EW J ERSEY 07054
                                                                 AND

                                                        J ACKSON H EWITT I NC .
                                            C   / O J ACKSON H EWITT T AX S ERVICE I NC .
                                                            7 S YLVAN W AY
                                                   P ARSIPPANY , N EW J ERSEY 07054

                               $175,000,000 F LOATING R ATE S ENIOR N OTES DUE J UNE [25], 2009

                                                                                                                         Dated as of
                                                                                                                      June [21], 2004

T O THE P URCHASERS LISTED IN
       THE ATTACHED S CHEDULE A:

Ladies and Gentlemen:

      J ACKSON H EWITT T AX S ERVICE I NC ., a Delaware corporation (the “Company” ), and J ACKSON H EWITT I NC ., a Virginia
corporation (the “Issuer” ), hereby jointly and severally agree with the Purchasers listed in the attached Schedule A (the
“Purchasers” ) to this Note Purchase Agreement (this “Agreement” ) as follows:

S ECTION 1. A UTHORIZATION OF N OTES .

        Section 1.1. Description of Notes . The Issuer will authorize the issue and sale of $175,000,000 aggregate principal amount
of its Floating Rate Senior Notes due June [25], 2009 (the “Notes” ). The term “Notes” shall also include any such notes issued in
substitution therefor pursuant to Section 14 of this Agreement. The Notes shall be substantially in the form set out in Exhibit 1 with
such changes therefrom, if any, as may be approved by the Purchasers and the Issuer. Certain capitalized terms used in this
Agreement are defined in Schedule B; references to a ―Schedule‖ or an ―Exhibit‖ are, unless otherwise specified, to a Schedule or
an Exhibit attached to this Agreement.

      Section 1.2. Note Interest Rate.

      (i) The Notes shall bear interest (computed on the basis of a 360-day year and actual days elapsed) on the unpaid principal
thereof from the date of issuance at a floating rate equal to the Adjusted LIBOR Rate from time to time, payable quarterly on the
[twenty fifth] day of March, June, September and December, commencing on September [25], 2004, until such principal sum shall
have become due and payable (whether at maturity, upon notice of
prepayment or otherwise) (each such date being referred to herein as an “Interest Payment Date” ) and interest (so computed) on
any overdue principal and LIBOR Breakage Amount, if any, and, to the extent permitted by applicable law, on any overdue
interest, from the due date thereof (whether by acceleration or otherwise) at the Default Rate until paid.

       (ii) The Adjusted LIBOR Rate shall be determined by the Issuer, and notice thereof shall be given to the holders of the
Notes, within three Business Days after the beginning of each Interest Period, together with a copy of the relevant screen used for
the determination of LIBOR, a calculation of Adjusted LIBOR Rate for such Interest Period, the number of days in such Interest
Period, the date on which interest for such Interest Period will be paid and the amount of interest to be paid to each holder of
Notes on such date. In the event that the holders of more than 50% in aggregate principal amount of the outstanding Notes do not
concur with such determination by the Issuer, within ten Business Days after receipt by such holders of the notice delivered by the
Issuer pursuant to the immediately preceding sentence, such holders of the Notes shall provide notice to the Issuer, together with
a copy of the relevant screen used for the determination of LIBOR, a calculation of Adjusted LIBOR Rate for such Interest Period,
the number of days in such Interest Period, the date on which interest for such Interest Period will be paid and the amount of
interest to be paid to each holder of Notes on such date, and any such determination made by the holders of the Notes in
accordance with the provisions of this Agreement, shall be presumptively correct absent manifest error.

S ECTION 2. S ALE AND P URCHASE OF N OTES .

      Section 2.1. Notes. Subject to the terms and conditions of this Agreement, the Issuer will issue and sell to each Purchaser
and each Purchaser will purchase from the Issuer, at the Closing provided for in Section 3, Notes in the principal amount specified
opposite such Purchaser’s name in Schedule A at the purchase price of 100% of the principal amount thereof. The obligations of
each Purchaser hereunder are several and not joint obligations and each Purchaser shall have no obligation and no liability to any
Person for the performance or nonperformance by any other Purchaser hereunder.

       Section 2.2. Guaranty. The payment by the Issuer of all amounts due with respect to the Notes and the performance by the
Issuer of its obligations under this Agreement will be absolutely and unconditionally guaranteed by the Company pursuant to the
terms of this Agreement and the Subsidiary Guarantors pursuant to the Subsidiary Guaranty, which shall be substantially in the
form of Exhibit 2.2 attached hereto, and otherwise in accordance with Section 9.6 hereof.

S ECTION 3. C LOSING .

       The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the offices of Kirkland & Ellis LLP,
153 East 53 Street, New York, New York 10022 at 10:00 a.m. New York time, at a closing (the “Closing” ) on the fourth Business
            rd


Day following the execution of the underwriting agreement to be entered into in connection with the initial public offering ( “IPO” )
of the Company’s common stock, par value $0.01 per share (the “Common Stock” ), or

                                                                 -2-
on such other Business Day thereafter on or prior to July 7, 2004 as may be agreed upon by the Issuer, the Company and the
Purchasers. At the Closing, the Issuer will deliver to each Purchaser the Notes to be purchased by such Purchaser in the form of a
single Note (or such greater number of Notes in denominations of at least $100,000 as such Purchaser may reasonably request)
dated the date of the Closing and registered in such Purchaser’s name (or in the name of a nominee of such Purchaser), against
delivery by such Purchaser to the Issuer or its order of immediately available funds in the amount of the purchase price therefor by
wire transfer of immediately available funds for the account of the Issuer to Account Number 304 192 813, Account Name Jackson
Hewitt Inc., at JPMorgan Chase, ABA Number 021 000 021. If at the Closing the Issuer shall fail to tender such Notes to any
Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to any
Purchaser’s satisfaction, such Purchaser shall, at such Purchaser’s election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure or such nonfulfillment.

S ECTION 4. C ONDITIONS TO C LOSING .

       The obligation of each Purchaser to purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject
to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing, of the following conditions:

      Section 4.1. Representations and Warrantie s of the Company . (a) The representations and warranties of the Company
and the Issuer in this Agreement shall be correct when made and at the time of Closing.

     (b) Representations and Warranties of the Subsidiary Guarantors. The representations and warranties of the Subsidiary
Guarantors in the Subsidiary Guaranty shall be correct when made and at the time of Closing.

       Section 4.2. Performance; No Default . The Company and the Issuer shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed or complied with by the Company and the
Issuer prior to or at the Closing, and after giving effect to the issue and sale of the Notes (and the application of the proceeds
thereof as contemplated by Section 5.14), no Default or Event of Default shall have occurred and be continuing. Neither the
Company nor any Subsidiary shall have entered into any transaction since the date of the Memorandum that would have been
prohibited by Section 10, other than transactions disclosed in the Memorandum.

      Section 4.3. Compliance Certificates.

      (a) Officer’s Certificate of the Company. The Company shall have delivered to such Purchaser an Officer’s Certificate,
dated the date of the Closing, certifying that the conditions specified in Sections 4.1(a), 4.2 and 4.9 have been fulfilled.

                                                                 -3-
       (b) Secretary’s Certificate of the Company. The Company shall have delivered to such Purchaser a certificate certifying as
to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of this
Agreement.

      (c) Officer’s Certificate of the Issuer. The Issuer shall have delivered to such Purchaser an Officer’s Certificate, dated the
date of Closing, certifying that the conditions specified in Sections 4.1(a), 4.2 and 4.9 have been fulfilled.

       (d) Secretary’s Certificate of the Issuer. The Issuer shall have delivered to such Purchaser a certificate certifying as to the
resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and
this Agreement.

         (e) Officer’s Certificate of the Subsidiary Guarantors. Each Subsidiary Guarantor shall have delivered to such Purchaser an
Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Section 4.1(b) and 4.2 have been
fulfilled.

        (f) Secretary’s Certificate of the Subsidiary Guarantors. Each Subsidiary Guarantor shall have delivered to such Purchaser
a certificate certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization,
execution and delivery of the Subsidiary Guaranty.

       Section 4.4. Opinions of Counsel . Such Purchaser shall have received opinions addressed to such Purchaser, dated the
date of the Closing from (a) Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Company and the Issuer,
substantially in the form attached as Exhibit 4.4(a) (and the Company and the Issuer hereby instruct their counsel to deliver such
opinion to such Purchaser), (b) Piper Rudnick, LLP, special counsel to the Issuer, substantially in the form attached as Exhibit
4.4(b) (and the Issuer hereby instructs its counsel to deliver such opinion to such Purchaser), and (c) Chapman and Cutler LLP,
the Purchasers’ special counsel in connection with such transactions, substantially in the form set forth in Exhibit 4.4(c).

       Section 4.5. Purchase Permitted by Applicable Law, Etc . On the date of Closing, each purchase of Notes shall (a) be
permitted by the laws and regulations of each jurisdiction to which each Purchaser is subject, without recourse to provisions (such
as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation,
Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject any Purchaser to any tax,
penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date
hereof. If requested by any Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of
fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

       Section 4.6. Related Transactions . The Company and the Issuer, as the case may be, shall have (a) consummated the
sale of the entire principal amount of the Notes scheduled to be

                                                                  -4-
sold on the date of Closing pursuant to this Agreement, (b) consummated the IPO via the sale by Cendant Finance Holding
Corporation of substantially all of the Common Stock owned by Cendant Corporation and its affiliates (collectively, excluding the
Company and its Subsidiaries, ― Cendant ‖), and (c) executed and delivered the Bank Credit Agreement and such Bank Credit
Agreement shall provide for a revolving credit commitment of not less than $100,000,000.

       Section 4.7. Payment of Special Counsel Fees . Without limiting the provisions of Section 15.1, the Company and the
Issuer shall pay on the Closing, the reasonable fees, reasonable charges and reasonable disbursements of the Purchasers’
special counsel referred to in Section 4.4 to the extent reflected in a reasonably detailed statement of such counsel rendered to
the Company or the Issuer at least one Business Day prior to the Closing.

      Section 4.8. Private Placement Number . Special counsel to the Purchasers shall have obtained Private Placement Number
issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) for the Notes.

         Section 4.9. Changes in Corporate Structure . Neither the Company nor the Issuer shall have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.

      Section 4.10. Subsidiary Guaranty. The Subsidiary Guaranty shall have been duly authorized, executed and delivered by
each Subsidiary Guarantor, shall constitute the legal, valid and binding contract and agreement of each Subsidiary Guarantor
except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and such Purchaser shall have received a true, correct and
complete copy thereof.

      Section 4.11. Proceedings and Documents . All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to such transactions shall be reasonably satisfactory
to such Purchaser and such Purchaser’s special counsel, and such Purchaser and such Purchaser’s special counsel shall have
received all such counterpart originals or certified or other copies of such documents as such Purchaser or such Purchaser’s
special counsel may reasonably request.

       The obligation of the Issuer to issue and sell the Notes to the Purchasers at Closing is subject to the fulfillment to the
Issuer’s satisfaction, prior to or at the Closing, of the condition referred to in clause (b) of Section 4.6 hereof.

                                                                   -5-
S ECTION 5. R EPRESENTATIONS AND W ARRANTIES OF THE C OMPANY AND THE I SSUER .

      The Company and the Issuer jointly and severally represent and warrant to each Purchaser that:

        Section 5.1. Organization; Power and Authority . Each of the Company and the Issuer is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation
and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which
the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each of the Company and the Issuer has the corporate power and authority to own or hold under lease
the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and
deliver this Agreement and the Notes, as the case may be, and to perform the provisions hereof and thereof.

       Section 5.2. Authorization, Etc . This Agreement and the Notes have been duly authorized by all necessary corporate action
on the part of the Company and the Issuer, as the case may be, and this Agreement constitutes, and upon execution and delivery
thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company and of the
Issuer enforceable against the Issuer, as the case may be, in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

       Section 5.3. Disclosure . The Company, has authorized its agent, J.P. Morgan Securities Inc., to deliver to each Purchaser
a copy of (i) a Private Placement Memorandum, dated April 23, 2004, together with the Appendices thereto, including Amendment
No. 2 to the Company’s Registration Statement on Form S-1 (the “Placement Memorandum” ) and (ii) a supplement to such
Placement Memorandum, dated June             , 2004 including the Appendix thereto consisting of Amendment No. 5 to the
Company’s Registration Statement on Form S-1 (the Placement Memorandum as so supplemented is herein referred to as the
“Memorandum” ) which relate to the transactions contemplated hereby. The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of the Company and its Subsidiaries. This Agreement and the
Memorandum, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the circumstances under which they were made. Except as
disclosed in the Memorandum, since April 30, 2004, there has been no change in the financial condition, operations, business or
properties of the Company or any of its Subsidiaries except changes that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect. There is no fact known to the Company or the Issuer that could reasonably be
expected to have a Material Adverse Effect that has not been set forth herein or in the Memorandum. The Company was
incorporated on February 27, 2004, it issued and sold for $1.00 100 shares of Common Stock to Cendant in connection with its
organization and on March 1, 2004, all of the issued and outstanding shares of capital stock of the Issuer were transferred by
Cendant to the Company. On May 12, 2004, the Company distributed a stock

                                                                   -6-
dividend of 37,499,900shares of Common Stock to Cendant Finance Holding Corporation, which increased the aggregate number
of shares of Common Stock of the Company outstanding to 37,500,000 shares. As of the date hereof, the Company does not
have any Material amount of assets or liabilities other than such capital stock of the Issuer and, except as disclosed in the
Memorandum, immediately prior to the date of the Closing, the Company will not have any Material amount of assets or liabilities
other than such capital stock.

        Section 5.4. Organization and Ownership of Shares of Subsidiaries. (a) Schedule 5.4 contains (except as noted therein)
complete and correct lists of the Company’s Material Subsidiaries, showing, as to each such Subsidiary, the correct name thereof,
the jurisdiction of its organization, and the percentage of shares of each class of its capital stock outstanding owned by the
Company and each other Subsidiary. The Company’s directors and executive officers are listed in the Memorandum.

       (b) All of the outstanding shares of capital stock of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another
Subsidiary free and clear of any Lien (except Permitted Liens).

        (c) Each Subsidiary identified in Schedule 5.4 is a corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing
in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own
or hold under lease and to transact the business it transacts and proposes to transact.

       (d) No Material Subsidiary is a party to, or otherwise subject to, any legal restriction or any agreement (other than this
Agreement, and customary limitations imposed by corporate law statutes) restricting the ability of such Subsidiary to pay dividends
out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding
shares of capital stock or similar equity interests of such Subsidiary.

       Section 5.5. Financial Statements. The consolidated financial statements of the Company and its Subsidiaries and for the
three years ended April 30, 2004 are included in the Memorandum. All of said financial statements (including in each case the
related notes thereto) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries
as of the respective dates specified in such financial statements and the consolidated results of their operations and cash flows for
the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods
involved except as set forth in the notes thereto.

       Section 5.6. Compliance with Laws, Other Instruments, Etc . The execution, delivery and performance by the Company and
the Issuer, as the case may be, of this Agreement and the Notes will not (a) contravene, result in any breach of, or constitute a
default under, or result in the

                                                                   -7-
creation of any Lien in respect of any property of the Company or any Subsidiary under, any indenture, mortgage, deed of trust,
loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other material agreement or instrument to which
the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be
bound or affected, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary, or (c) violate any
provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary.
The offer and sale of the Notes in the manner provided in this Agreement will not have a Material Adverse Effect on the licenses
and permits required by the Company and its Subsidiaries to conduct business in the jurisdictions in which they currently conduct
their business.

       Section 5.7. Governmental Authorizations, Etc . Assuming the accuracy of the representations and warranties of the
Purchasers set forth herein and of J.P. Morgan Securities Inc. regarding the manner in which the Notes were offered and the
status of the offerees of the Notes under the Securities Act, no consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the
Company and the Issuer, as the case may be, of this Agreement or the Notes.

       Section 5.8. Litigation; Observance of Statutes and Orders . (a) There are no actions, suits or proceedings pending or, to
the knowledge of the Company or the Issuer, threatened against or affecting the Company or any Subsidiary or any property of
the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

        (b) Neither the Company nor any Subsidiary is in default under any term of any agreement or instrument to which it is a
party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in
violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

        Section 5.9. Taxes . The Company and its Subsidiaries have filed all tax returns that are required to have been filed in any
jurisdiction, except for tax returns the failure of which to file would not have a Material Adverse Effect, and have paid all taxes
shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets,
income or franchises, to the extent such taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (a) the amount of which is not individually or in the aggregate Material or (b) the
amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as the case may be, has established reserves in accordance with GAAP. Neither the
Company nor the Issuer knows of any basis for any other tax or assessment that could reasonably be expected to have a Material
Adverse Effect. The charges,

                                                                  -8-
accruals and reserves on the books of the Company and its Subsidiaries in respect of federal, state or other taxes for all fiscal
periods are adequate. The federal income tax liabilities of the Company and its Subsidiaries, or of the affiliated group of which the
Company and its Subsidiaries are members, as the case may be, have been determined by the Internal Revenue Service and
paid for all taxable years ended on or prior to December 31, 1997.

        Section 5.10. Title to Property; Leases . The Company and its Subsidiaries have good and sufficient title to their respective
properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited
balance sheet referred to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens, other than
Permitted Liens. All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect
in all material respects.

      Section 5.11. Licenses, Permits, Etc . (a) The Company and its Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, service marks, trademarks and trade names, or rights thereto, that individually or in
the aggregate are Material, without known conflict with the rights of others except for those conflicts, that, individually or in the
aggregate, could not have a Material Adverse Effect;

      (b) To the best knowledge of the Company or the Issuer, no financial product or service of the Company or any of its
Subsidiaries infringes in any Material respect any license, permit, franchise, authorization, patent, copyright, service mark,
trademark, trade name or other right owned by any other Person; and

     (c) To the best knowledge of the Company or the Issuer, there is no Material violation by any Person of any right of the
Company or any of its Subsidiaries with respect to any patent, copyright, service mark, trademark, trade name or other right
owned or used by the Company or any of its Subsidiaries.

         Section 5.12. Compliance with ERISA . (a) The Company and each ERISA Affiliate have operated and administered each
Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as
defined in Section 3 of ERISA) that has not been satisfied in full, and no event, transaction or condition has occurred or exists that
could reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the
imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to
Title I or IV of ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate Material.

      (b) The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans)
sponsored or maintained by the Company or its Subsidiaries, determined as of the end of such Plan’s most recently ended plan
year on the basis of the

                                                                  -9-
actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the
aggregate current value of the assets of such Plan allocable to such benefit liabilities. The term “benefit liabilities” has the meaning
specified in Section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified in Section 3 of
ERISA.

      (c) The Company and its ERISA Affiliates have not incurred any withdrawal liabilities (and are not subject to contingent
withdrawal liabilities) under Section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate
are Material.

        (d) The expected post-retirement benefit obligation (determined as of the last day of the Company’s most recently ended
fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to
continuation coverage mandated by Section 4980B of the Code) of the Company and its Subsidiaries is not Material.

      (e) The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of Section 406 of ERISA or in connection with which a tax could be imposed pursuant
to Section 4975(c)(1)(A)-(D) of the Code. The representation by the Company and the Issuer, as the case may be, in the first
sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of each Purchaser’s representation in
Section 6.2 as to the sources of the funds to be used to pay the purchase price of the Notes to be purchased by such Purchaser.

       Section 5.13. Private Offering by the Company . Neither the Company, the Issuer nor anyone acting on the their behalf has
offered the Notes or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached
or negotiated in respect thereof with, any Person other than 75 “Qualified Institutional Buyers,” as defined in Rule 144A under the
Securities Act and no more than two or three other institutional accredited investors, as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act, each of which has been offered the Notes in connection with a private sale for investment and not
through any form of general solicitation or general advertising. Neither the Company, the Issuer nor anyone acting on their behalf
has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5
of the Securities Act. The representations and warranties contained in this Section 5.13 are based in part on representations and
warranties received by the Company and the Issuer from J.P. Morgan Securities Inc. regarding the manner in which the Notes
were offered and the status of the offerees of the Notes under the Securities Act and the representations and warranties of the
Purchasers contained herein.

       Section 5.14. Use of Proceeds; Margin Regulations . The Issuer will apply the proceeds of the sale of the Notes to pay a
special dividend to the Company which will apply such proceeds to pay the cash portion of a special dividend from the Company
to Cendant. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of
buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the
Issuer in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of

                                                                 -10-
Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 1% of the value of the consolidated assets
of the Company and its Subsidiaries and the Company and the Issuer do not have any present intention that margin stock will
constitute more than 1% of the value of such assets. As used in this Section, the terms “margin stock” and “purpose of buying or
carrying” shall have the meanings assigned to them in said Regulation U.

      Section 5.15. Existing Debt; Future Liens . (a) Except as disclosed in the Memorandum, the Company and its Subsidiaries,
on a consolidated basis, do not, and as of the date of the Closing will not, have any outstanding Debt. Neither the Company nor
any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Debt of
the Company or such Subsidiary, and no event or condition exists with respect to any Debt of the Company or any Subsidiary,
that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Debt to
become due and payable before its stated maturity or before its regularly scheduled dates of payment.

       (b) Neither the Company nor any Subsidiary has agreed or consented to cause or permit in the future (upon the happening
of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted
by Section 10.3.

       Section 5.16. Foreign Assets Control Regulations, Etc . Neither the sale of the Notes by the Issuer hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of
the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto or is in violation of any federal statute or Presidential Executive Order, including without limitation Executive
Order 13224 66 Fed. Reg. 49079 (September 25, 2001) (Blocking Property and Prohibiting Transactions with Persons who
Commit, Threaten to Commit or Support Terrorism), or The USA Patriot Act.

       Section 5.17. Status under Certain Statute s. Neither the Company nor any Subsidiary is an ―investment company‖
registered or required to be registered under the Investment Company Act of 1940, as amended, or is subject to regulation under
the Public Utility Holding Company Act of 1935, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power
Act, as amended.

       Section 5.18. Environmental Matters . Neither the Company nor any Subsidiary has knowledge of any claim or has received
any notice of any claim, and no proceeding has been instituted raising any claim against the Company or any of its Subsidiaries or
any of their respective real properties now or formerly owned, leased or operated by any of them, or other assets, alleging
damage to the environment or any violation of any Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise disclosed to each Purchaser in writing:

             (a) neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or
      private, for violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way
      related to real properties or to other assets now or formerly owned, leased or operated by any of them or

                                                                  -11-
     their use, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect;

             (b) neither the Company nor any of its Subsidiaries has stored any Hazardous Materials on real properties now or
      formerly owned, leased or operated by any of them or has disposed of any Hazardous Materials in each case in a manner
      contrary to any Environmental Laws and in any manner that could reasonably be expected to result in a Material Adverse
      Effect; and

            (c) all buildings on all real properties now owned, leased or operated by the Company or any of its Subsidiaries are in
      compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result
      in a Material Adverse Effect.

       Section 5.19. Solvency. After giving effect to the sale of the Notes and the application of the proceeds thereof, (a) the fair
value of Company’s consolidated assets, or the Issuer’s consolidated assets, as the case may be, will be in excess of the total
amount of the Company’s liabilities, or the Issuer’s liabilities, as the case may be, including, without limitation, contingent
obligations, (b) each of the Company and the Issuer will be able to pay its debts as they mature, and (c) each of the Company and
the Issuer will not have unreasonably small capital to carry on its business.

S ECTION 6. R EPRESENTATIONS OF THE P URCHASER .

        Section 6.1. Purchase for Investment . Each Purchaser represents that it (i) is a ―Qualified Institutional Buyer‖ as defined in
Rule 144A under the Securities Act, and (ii) is purchasing the Notes for its own account or for one or more separate accounts
maintained by it or for the account of one or more pension or trust funds that also are Qualified Institutional Buyers and not with a
view to the distribution thereof, provided that the disposition of such Purchaser’s or such pension or trust funds’ property shall at
all times be within such Purchaser’s or such pension or trust funds’ control. Each Purchaser understands that the Notes have not
been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if
an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is
required by law, and that the Issuer is not required to register the Notes. Each Purchaser further represents and warrants that it
(a) will not sell, transfer or otherwise dispose of the Notes or any interest therein except in a transaction exempt from or not
subject to the registration requirements of the Securities Act, (b) was given the opportunity to access such information regarding
the Company, the Issuer and the Subsidiary Guarantors as it has requested and (c) was provided with the Memorandum. Each
Purchaser acknowledges that the Notes will bear a restrictive legend substantially in the form set forth in Exhibit 1.

                                                                  -12-
       Section 6.2. Source of Funds . Each Purchaser represents that at least one of the following statements is an accurate
representation as to each source of funds (a “Source” ) to be used by it to pay the purchase price of the Notes to be purchased by
it hereunder:

             (a) the Source is an ―insurance company general account‖ within the meaning of Department of Labor Prohibited
      Transaction Exemption ( “PTE” ) 95-60 (issued July 12, 1995) and there is no employee benefit plan, treating as a single
      plan all plans maintained by the same employer or employee organization, with respect to which the amount of the general
      account reserves and liabilities for all contracts held by or on behalf of such plan, exceeds ten percent (10%) of the total
      reserves and liabilities of such general account (exclusive of separate account liabilities) plus surplus, as set forth in the
      NAIC Annual Statement for such Purchaser most recently filed with such Purchaser’s state of domicile; or

            (b) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 (issued
      January 29, 1990), or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 (issued July 12, 1991)
      and, except as such Purchaser prior to the execution and delivery of this Agreement has disclosed to the Issuer in writing
      pursuant to this paragraph (b), no employee benefit plan or group of plans maintained by the same employer or employee
      organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective
      investment fund; or

             (c) the Source constitutes assets of an ―investment fund‖ (within the meaning of Part V of the QPAM Exemption)
      managed by a ―qualified professional asset manager‖ or ―QPAM‖ (within the meaning of Part V of the QPAM Exemption),
      no employee benefit plan’s assets that are included in such investment fund, when combined with the assets of all other
      employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section
      V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM,
      exceed 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption
      are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM (applying the definition of ―control‖ in
      Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Issuer and (i) the identity of such QPAM and (ii)
      the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the
      Issuer in writing pursuant to this paragraph (c) prior to the execution and delivery of this Agreement; or

             (d) the Source is a governmental plan; or

             (e) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more
      employee benefit plans, each of which prior to the execution and delivery of this Agreement has been identified to the
      Issuer in writing pursuant to this paragraph (e); or

           (f) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of
      ERISA; or

             (g) the Source is an insurance company separate account maintained solely in connection with the fixed contractual
      obligations of the insurance company under which

                                                                -13-
     the amounts payable, or credited, to any employee benefit plan (or its related trust) and to any participant or beneficiary of
     such plan (including any annuitant) are not affected in any manner by the investment performance of the separate account.

If any Purchaser or any subsequent transferee of the Notes indicates that such Purchaser or such transferee is relying on any
representation contained in paragraph (b), (c) or (e) above, the Issuer shall deliver on the date of issuance of such Notes and on
the date of any applicable transfer a certificate, which shall either state that (i) it is neither a party in interest nor a ―disqualified
person‖ (as defined in Section 4975(e)(2) of the Code), with respect to any plan identified pursuant to paragraphs (b) or (e) above,
or (ii) with respect to any plan, identified pursuant to paragraph (c) above, neither it nor any ―affiliate‖ (as defined in Section V(c) of
the QPAM Exemption) has at such time, and during the immediately preceding one year, exercised the authority to appoint or
terminate said QPAM as manager of any plan identified in writing pursuant to paragraph (c) above or to negotiate the terms of
said QPAM’s management agreement on behalf of any such identified plan. As used in this Section 6.2, the terms “employee
benefit plan”, “governmental plan”, “party in interest” and “separate account” shall have the respective meanings assigned to such
terms in Section 3 of ERISA.

S ECTION 7. I NFORMATION AS TO C OMPANY .

      Section 7.1. Financial and Business Information . The Company shall deliver to each holder of Notes that is an Institutional
Investor:

          (a) Quarterly Statements — within 45 days after the end of each quarterly fiscal period in each fiscal year of the
      Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of,

                    (i) an unaudited consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter,
             and

                    (ii) unaudited consolidated statements of operations of the Company and its Subsidiaries as of the end of and
             for such fiscal quarter and statements of cash flows of the Company and its Subsidiaries for the then elapsed portion
             of the fiscal year ending with such quarter,

     setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, prepared
     in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as
     fairly presenting, in all material respects, the financial condition of the companies being reported on and their results of
     operations and cash flows, subject to changes resulting from normal, recurring year-end adjustments, provided that delivery
     within the time period specified above of copies of the Company’s Quarterly Report on Form 10-Q prepared in compliance
     with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the
     requirements of this Section 7.1(a);

                                                                   -14-
       (b) Annual Statements — within 90 days after the end of each fiscal year of the Company, duplicate copies of,

              (i) a consolidated balance sheet of the Company and its Subsidiaries, as at the end of such year, and

             (ii) consolidated statements of operations, stockholders’ equity and cash flows of the Company and its
       Subsidiaries as of the end of and for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, prepared in accordance with GAAP,
and accompanied by an opinion thereon of Deloitte & Touche LLP or other independent certified public accountants of
recognized national standing, which opinion shall state that such consolidated financial statements present fairly, in all
material respects, the financial condition of the companies being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP consistently applied, and that the examination of such accountants in
connection with such financial statements has been made in accordance with generally accepted auditing standards, and
that such audit provides a reasonable basis for such opinion in the circumstances, provided that the delivery within the time
period specified above of the Company’s Annual Report on Form 10-K for such fiscal year (together with the Company’s
annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with
the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(b);

        (c) SEC and Other Reports — promptly upon their becoming available, one copy of (i) each financial statement,
 report, notice or proxy statement sent by the Company or any Subsidiary to public securities holders generally, (ii) each
 regular or periodic report, each registration statement (without exhibits except as expressly requested by such holder), and
 each prospectus and all amendments thereto filed by the Company or any Subsidiary with the Securities and Exchange
 Commission containing information of a financial nature, and (iii) all press releases and other statements made available
 generally by the Company or any Subsidiary to the public concerning developments that are reasonably likely to have a
 Material Adverse Effect on the Company; provided that if any holder has indicated in writing to the Company that notices
 under this Section 7.1(c) may be delivered electronically, then such notices may be so delivered; provided , further , that
 copies of such electronic copies shall be delivered concurrently with the financial statements referred to in Section 7.1(a)
 and (b);

        (d) Notice of Default or Event of Default — promptly, and in any event within five Business Days after a Responsible
 Officer becomes aware of the existence of any Default or Event of Default or that any Person has given any notice or taken
 any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with
 respect to a claimed default of the type referred to in Section 12(f), a written notice specifying the nature and period of
 existence thereof and what action the Company is taking or proposes to take with respect thereto;

                                                          -15-
       (e) ERISA Matters — promptly, and in any event within five days after a Responsible Officer becomes aware of any
of the following, a written notice setting forth the nature thereof and the action, if any, that the Company, the Issuer or an
ERISA Affiliate proposes to take with respect thereto:

            (i) with respect to any Plan, any reportable event, as defined in Section 4043(b) of ERISA and the regulations
      thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date
      thereof; or

             (ii) the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of,
      proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any
      Plan, or the receipt by the Company, the Issuer or any ERISA Affiliate of a notice from a Multiemployer Plan that
      such action has been taken by the PBGC with respect to such Multiemployer Plan; or

             (iii) Any event, transaction or condition that could result in the incurrence of any liability by the Company, the
      Issuer or any ERISA Affiliate pursuant to Title I or IV of ERISA or the imposition of a penalty or excise tax under the
      provisions of the Code relating to employee benefit plans, or the imposition of any Lien on any of the rights,
      properties or assets of the Company, the Issuer or any ERISA Affiliate pursuant to Title I or IV of ERISA or such
      penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then
      existing, could reasonably be expected to have a Material Adverse Effect;

       (f) Notices from Governmental Authority — promptly, and in any event within 30 days of receipt thereof, copies of any
notice to the Company or any Subsidiary from any federal or state Governmental Authority relating to any order, ruling,
statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect;

       (g) Auditor’s Letter — concurrently with any delivery of financial statements under Section 7.1(b), or promptly
thereafter, a letter addressed to the board of directors of the Company from the accounting firm that reported on such
financial statements stating that, in connection with the accounting firm’s audits, nothing came to the attention of such firm
that caused it to believe that the Company failed to comply with Sections 10.1 or 10.2 insofar as such Sections relate to
financial and accounting matters, and that such accounting firm’s audit was not directed primarily toward obtaining
knowledge of noncompliance with such Sections;

                                                          -16-
             [(h) Projections — following the request of any Institutional Investor made prior to the commencement of any fiscal
      year, the Company shall provide such holder with financial projections of the Company and its consolidated Subsidiaries for
      such fiscal year concurrently with the delivery of the financial statements referred to in Section 7.1(b) (it being understood
      that the Company may obtain assurance from such holder that such information is subject to the confidentiality provisions
      set forth in Section 21 of this Agreement); and]

             (i) Requested Information — with reasonable promptness, such other data and information relating to the business,
      operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries or relating to the ability
      of the Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably
      requested in writing by any such holder of Notes.

      Section 7.2. Officer’s Certificate . Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a)
or Section 7.1(b) hereof shall be accompanied by a certificate of a Senior Financial Officer setting forth:

             (a) Covenant Compliance — the information (including reasonably detailed calculations) required in order to establish
      whether the Company was in compliance with the requirements of Section 10.1, Section 10.2, Section 10.3(m), Section
      10.5 and Section 10.9 hereof, inclusive, during the quarterly or annual period covered by the statements then being
      furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum
      amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the
      amount, ratio or percentage then in existence); and

              (b) Event of Default — a statement that such officer has reviewed the relevant terms hereof and has made, or
      caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its
      Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the
      date of the certificate and that such review shall not have disclosed the existence during such period of any condition or
      event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including, without
      limitation, any such event or condition resulting from the failure of the Company or any Subsidiary to comply with any
      Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken
      or proposes to take with respect thereto.

      Section 7.3. Inspection . The Company shall permit the representatives of each holder of Notes that is an Institutional
Investor:

             (a) No Default — if no Default or Event of Default then exists, at the expense of such holder and upon reasonable
      prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and
      accounts of the Company and its Subsidiaries with the Company’s officers, and (with the consent of the Company, which
      consent will not be unreasonably withheld) its independent public accountants, and (with the consent of the Company,
      which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each

                                                                  -17-
     Subsidiary, all at such reasonable times during normal business hours and as often as may be reasonably requested in
     writing; and

               (b) Default — if a Default or Event of Default then exists, at the expense of the Company, to visit and inspect any of
        the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records,
        reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and
        accounts with their respective officers and independent public accountants (and by this provision the Company authorizes
        said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and
        as often as may be requested.

S ECTION 8. P AYMENT OF THE N OTES .

        Section 8.1. Required Payments . The entire principal amount of the Notes shall become due and payable on June [25],
2009.

       Section 8.2. Optional Prepayment of the Notes with LIBOR Breakage Amount . (a) Subject to the last sentence of this
paragraph, the Issuer may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the
Notes, in an amount not less than $1,000,000 in the case of a partial prepayment, at 100% of the principal amount so prepaid,
plus the LIBOR Breakage Amount (unless the date specified for prepayment is a regularly scheduled Interest Payment Date). The
Issuer will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 20 Business
Days and not more than 60 days prior to the date fixed for such prepayment. Each such notice shall specify such date, the
aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each such Note held by such holder
to be prepaid (determined in accordance with Section 8.2(b)), and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid and shall state that the LIBOR Breakage Amount will be payable if such prepayment is not on
a regularly scheduled Interest Payment Date and that such holder is required to calculate such amount and submit such
calculation in reasonable detail to the Issuer not less than two Business Days prior to the date of prepayment. Notwithstanding the
foregoing, the Issuer may not prepay the Notes on or prior to June [25], 2005.

      (b) In the case of each partial prepayment of the Notes, the principal amount of the Notes to be prepaid shall be allocated
among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts
thereof.

       (c) The term “LIBOR Breakage Amount” shall mean any loss reasonably incurred by any holder of a Note in the
reemployment of the funds released by any prepayment of any Note. Each holder shall determine the LIBOR Breakage Amount
with respect to the principal amount of its Notes then being paid or prepaid by written notice to the Issuer setting forth such
determination in reasonable detail not less than two Business Days prior to the date of prepayment in the case of any prepayment
pursuant to Section 8.2(a) and not less than one Business Day in the case of any payment required by Section 13.1. Each such
determination shall be presumptively correct absent manifest error.

                                                                  -18-
         Section 8.3. Maturity; Surrender, Etc. In the case of each prepayment of Notes pursuant to this Section 8, the principal
amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together
with interest on such principal amount accrued to such date and the applicable LIBOR Breakage Amount, if any. From and after
such date, unless the Issuer shall fail to pay such principal amount when so due and payable, together with the interest and
LIBOR Breakage Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid
in full shall be surrendered to the Issuer and cancelled and shall not be reissued, and no Note shall be issued in lieu of any
prepaid principal amount of any Note.

      Section 8.4. Purchase of Notes . The Company and the Issuer will not and will not permit any Subsidiary of the Company to
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the Notes. The Issuer will promptly cancel all Notes
acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such Notes.

      Section 8.5. Change in Control.

       (a) Notice of Change in Control or Control Event. The Company will, within ten days after any Responsible Officer has
actual knowledge of the occurrence of any Change in Control or Control Event, give written notice of such Change in Control or
Control Event to each holder of Notes unless notice in respect of such Change in Control (or the Change in Control contemplated
by such Control Event) shall have been given pursuant to subparagraph (b) of this Section 8.5. If a Change in Control has
occurred, such notice shall contain and constitute an offer to prepay Notes as described in subparagraph (c) of this Section 8.5
and shall be accompanied by the certificate described in subparagraph (g) of this Section 8.5.

       (b) Condition to Company Action. The Company will not take any action that consummates or finalizes a Change in Control
unless (i) at least 20 days prior to such action it shall have given to each holder of Notes written notice containing and constituting
an offer to prepay Notes as described in subparagraph (c) of this Section 8.5, accompanied by the certificate described in
subparagraph (g) of this Section 8.5, and (ii) contemporaneously with such action, it prepays all Notes required to be prepaid in
accordance with this Section 8.5.

       (c) Offer to Prepay Notes. The offer to prepay Notes contemplated by subparagraphs (a) and (b) of this Section 8.5 shall be
an offer to prepay, in accordance with and subject to this Section 8.5, all, but not less than all, the Notes held by each holder (in
this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean
such beneficial owner) on a date specified in such offer (the “Proposed Prepayment Date” ). If such Proposed Prepayment Date is
in connection with an offer contemplated by subparagraph (a) of this Section 8.5, such date shall be not less than 20 days and not
more than 60 days after the date of such offer (if the Proposed Prepayment Date shall not be specified in such offer, the Proposed
Prepayment Date shall be the 30th day after the date of such offer).

                                                                 -19-
       (d) Acceptance/Rejection. A holder of Notes may accept the offer to prepay made pursuant to this Section 8.5 by causing a
notice of such acceptance to be delivered to the Company at least 5 days prior to the Proposed Prepayment Date. A failure by a
holder of Notes to respond to an offer to prepay made pursuant to this Section 8.5 shall be deemed to constitute a rejection of
such offer by such holder.

      (e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this Section 8.5 shall be at 100% of the principal
amount of such Notes together with interest on such Notes accrued to the date of prepayment. On the Business Day preceding
the date of prepayment, the Company shall deliver to each holder of Notes being prepaid a statement showing the amount due in
connection with such prepayment and setting forth the details of the computation of such amount. The prepayment shall be made
on the Proposed Prepayment Date except as provided in subparagraph (f) of this Section 8.5.

       (f) Deferral Pending Change in Control. The obligation of the Company to prepay Notes pursuant to the offers required by
subparagraph (c) and accepted in accordance with subparagraph (d) of this Section 8.5 is subject to the occurrence of the
Change in Control in respect of which such offers and acceptances shall have been made. In the event that such Change in
Control does not occur on the Proposed Prepayment Date in respect thereof, the prepayment shall be deferred until and shall be
made on the date on which such Change in Control occurs. The Company shall keep each holder of Notes reasonably and timely
informed of (i) any such deferral of the date of prepayment, (ii) the date on which such Change in Control and the prepayment are
expected to occur, and (iii) any determination by the Company that efforts to effect such Change in Control have ceased or been
abandoned (in which case the offers and acceptances made pursuant to this Section 8.5 in respect of such Change in Control
shall be deemed rescinded).

        (g) Officer’s Certificate. Each offer to prepay the Notes pursuant to this Section 8.5 shall be accompanied by a certificate,
executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying: (i) the Proposed Prepayment
Date; (ii) that such offer is made pursuant to this Section 8.5; (iii) the principal amount of each Note offered to be prepaid; (iv) the
interest that would be due on each Note offered to be prepaid, accrued to the Proposed Prepayment Date; (v) that the conditions
of this Section 8.5 have been fulfilled; (vi) in reasonable detail, the nature and date of the Change in Control; and (vii) that the
failure to respond to such offer of prepayment shall constitute a rejection of such offer.

       (h) “Change in Control” Defined. “Change in Control” means each and every issue, sale or other disposition of shares of
voting stock of the Company which results in any person (as such term is used in Section 13(d) and Section 14(d)(2) of the
Exchange Act) or related persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act), becoming
the ―beneficial owners‖ (as such term is used in Rule 13d-3 under the Exchange Act as in effect on the date of the Closing),
directly or indirectly, of more than 50% of the total voting power of all classes then outstanding of the Company’s voting stock, or if
such person acquires the right to elect a majority of the board of directors of the Company.

                                                                  -20-
      (i) ―Control Event‖ Defined. ―Control Event‖ means:

             (a) the execution by the Company or any of its Subsidiaries or Affiliates of any agreement or binding letter of intent
      with respect to any proposed transaction or event or series of transactions or events which, individually or in the aggregate,
      could reasonably be expected to result in a Change in Control;

           (b) the execution of any written agreement which, when fully performed by the parties thereto, would result in a
      Change in Control; or

             (c) the making of any written offer by any person (as such term is used in Section 13(d) and Section 14(d)(2) of the
      Exchange Act as in effect on the date of the Closing) or related persons constituting a group (as such term is used in Rule
      13d-5 under the Exchange Act as in effect on the date of the Closing) to the holders of the common stock of the Company,
      which offer, if accepted by the requisite number of holders, would result in a Change in Control unless such offer is rejected
      or expires pursuant to its terms prior to the date on which notice of such Change in Control is required to be delivered
      pursuant to Section 8.5(a).

S ECTION 9. A FFIRMATIVE C OVENANTS .

      The Company covenants that so long as any of the Notes are outstanding:

       Section 9.1. Compliance with Law . The Company will, and will cause each of its Subsidiaries to, comply with all laws,
ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, Environmental
Laws, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to
obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations could not,
individually or in the aggregate, have a Material Adverse Effect.

       Section 9.2. Insurance . The Company will, and will cause each of its Subsidiaries to, maintain, with financially sound and
reputable insurers, insurance with respect to their respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged
in the same or a similar business and similarly situated.

      Section 9.3. Maintenance of Properties . The Company will, and will cause each of its Subsidiaries to, maintain and keep, or
cause to be maintained and kept, their respective properties Material to the conduct of their respective businesses in good repair,
working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not prevent the Company or any Subsidiary from discontinuing the
operation and the maintenance of any of its properties if

                                                                 -21-
such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance could
not, individually or in the aggregate, have a Material Adverse Effect.

       Section 9.4. Payment of Taxes and Claims . The Company will, and will cause each of its Subsidiaries to, file all tax returns
required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all
other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of the
Company or any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax or assessment or
claims if (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or such Subsidiary has established reserves therefor in accordance with
GAAP on the books of the Company or such Subsidiary or (ii) the non-filing or nonpayment, as the case may be, of all such taxes
and assessments in the aggregate could not have a Material Adverse Effect.

         Section 9.5. Corporate Existence, Etc . Subject to Sections 10.5 and 10.6, the Company will at all times preserve and keep
in full force and effect its corporate existence, and will at all times preserve and keep in full force and effect the corporate
existence of each of its Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and all rights and
franchises Material to the conduct of the business of the Company and its Subsidiaries unless, in the good faith judgment of the
Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise
could not, individually or in the aggregate, have a Material Adverse Effect.

       Section 9.6. Additional Subsidiary Guarantors . The Company will cause each Domestic Subsidiary which is required by the
terms of the Bank Credit Agreement to become a party to, or otherwise guarantee, Debt outstanding under such Bank Credit
Agreement, to enter into the Subsidiary Guaranty and deliver to each of the holders of the Notes (concurrently with the incurrence
of any such obligation pursuant to such Bank Credit Agreement) the following items:

             (a) a joinder agreement in respect of the Subsidiary Guaranty;

            (b) a certificate signed by the President, a Vice President or another authorized Responsible Officer of the Company
      making representations and warranties to the effect of those contained in Sections 5.4, 5.6 and 5.7, with respect to such
      Subsidiary and the Subsidiary Guaranty, as applicable; and

            (c) an opinion of counsel (who may be in-house counsel for the Company) addressed to each of the holders of the
      Notes reasonably satisfactory to the Required Holders, to the effect that the Subsidiary Guaranty has been duly authorized,
      executed and delivered by such Subsidiary Guarantor and that the Subsidiary Guaranty constitutes the legal, valid and
      binding contract and agreement of such Subsidiary Guarantor enforceable in accordance with its terms, except as an
      enforcement of such terms may be limited by

                                                                -22-
     bankruptcy, insolvency, fraudulent conveyance and similar laws affecting the enforcement of creditors’ rights generally and
     by general equitable principles.

S ECTION 10. N EGATIVE C OVENANTS .

      The Company covenants that so long as any of the Notes are outstanding:

      Section 10.1. Consolidated Leverage Ratio. The Company will not permit:

             (a) the Consolidated Leverage Ratio to exceed (i) 3.25 to 1.00 on or prior to April 30, 2005, (ii) 3.00 to 1.00 on or
      after May 1, 2005 to and including April 30, 2006, and (iii) 2.50 to 1.00 on or after May 1, 2006; and

             (b) Priority Debt to exceed 15% of Consolidated Net Tangible Assets as of any Calculation Date.

     Section 10.2. Consolidated Fixed Charge Coverage Ratio. The Company will not permit the Consolidated Fixed Charge
Coverage Ratio to be less than (i) 3.00 to 1.00 on or prior to April 30, 2006, and (iii) 3.50 to 1.00 on or after May 1, 2006.

       Section 10.3. Limitation on Liens. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly
create, incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on or with respect to any
property or asset (including, without limitation, any document or instrument in respect of goods or accounts receivable) of the
Company or any such Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign
or otherwise convey any right to receive income or profits, except:

            (a) Liens for taxes, assessments or other governmental charges that are not yet due and payable or the payment of
      which is not at the time required by Section 9.4;

             (b) judgment liens in respect of judgments that do not constitute an Event of Default under clause (i) of Section 12;

             (c) Liens incidental to the conduct of business or the ownership of properties and assets (including landlords’,
      carriers’, warehousemen’s, mechanics’, materialmen’s and other similar Liens for sums not yet due and payable) and Liens
      to secure the performance of bids, tenders, leases, or trade contracts, or to secure statutory obligations (including
      obligations under workers compensation, unemployment insurance and other social security legislation), surety or appeal
      bonds or other Liens incurred in the ordinary course of business and not in connection with the borrowing of money;

             (d) leases or subleases granted to others, easements, rights-of-way, minor survey exceptions, restrictions and other
      similar charges or encumbrances, in each case incidental to the ownership of property or assets or the ordinary conduct of
      the business

                                                                 -23-
of the Company or any of its Subsidiaries, provided that such Liens do not, in the aggregate, materially detract from the value
of such property;

       (e) Liens securing Debt of a Subsidiary owed to the Company or to a Wholly-Owned Subsidiary;

       (f) Liens existing as of the date of Closing and reflected in Schedule 10.3;

        (g) Liens incurred after the date of Closing given to secure the payment of the purchase price incurred in connection
 with the acquisition, construction or improvement of property (other than accounts receivable or inventory) useful and
 intended to be used in carrying on the business of the Company or a Subsidiary, including Liens existing on such property
 at the time of acquisition or construction thereof, or Liens incurred within 180 days of such acquisition or the completion of
 such construction or improvement, provided that (i) the Lien shall attach solely to the property acquired, purchased,
 constructed or improved; (ii) at the time of acquisition, construction or improvement of such property, the aggregate amount
 remaining unpaid on all Debt secured by Liens on such property, whether or not assumed by the Company or a Subsidiary,
 shall not exceed the greater of (y) the cost of such acquisition, construction or improvement or (z) the Fair Market Value of
 such property (as determined in good faith by one or more officers of the Company to whom authority to enter into the
 transaction has been delegated by the board of directors of the Company); and (iii) at the time of such incurrence and after
 giving effect thereto, no Event of Default would exist;

        (h) any Lien existing on property of a Person immediately prior to its being consolidated with or merged into the
 Company or a Subsidiary or its becoming a Subsidiary, or any Lien existing on any property acquired by the Company or
 any Subsidiary at the time such property is so acquired (whether or not the Debt secured thereby shall have been
 assumed), provided that (i) no such Lien shall have been created or assumed in contemplation of such consolidation or
 merger or such Person’s becoming a Subsidiary or such acquisition of property, (ii) each such Lien shall extend solely to
 the item or items of property so acquired and, if required by the terms of the instrument originally creating such Lien, other
 property which is an improvement to or is acquired for specific use in connection with such acquired property, and (iii) at the
 time of such incurrence and after giving effect thereto, no Event of Default would exist;

         (i) any extensions, renewals or replacements of any Lien permitted by the preceding subparagraphs (f), (g), and (h)
 of this Section 10.3, provided that (i) no additional property shall be encumbered by such Liens, (ii) the unpaid principal
 amount of the Debt or other obligations secured thereby shall not be increased on or after the date of any extension,
 renewal or replacement (except to the extent of any premiums and other refinancing costs incurred in connection with such
 transaction);

       (j) customary rights of set off upon deposit accounts and securities accounts of cash in favor of banks or other
 depository institutions and other securities intermediaries;

                                                           -24-
            (k) Liens in the nature of licenses that arise in the ordinary course of business of the Company or any of its
      Subsidiaries;

              (l) any call or similar right in the nature of a right of first offer or a first refusal right of a third party that is an investor in
      a joint venture or a Subsidiary of the Company in the case of equity interests issued by such joint venture or qualifying
      shares or similar arrangements designed to satisfy requirements of applicable laws in the case of equity interests issued by
      a joint venture or Subsidiary so long as such call or similar right does not secure Debt of the Company or any Subsidiary;
      and

            (m) in addition to the Liens permitted by the preceding subparagraphs (a) through (1), inclusive, of this Section 10.3,
      Liens securing obligations of the Company or any Subsidiary, provided that the aggregate principal amount of obligations
      secured by Liens pursuant to this Section 10.3(m) shall not exceed the limitations set forth in Section 10.1(b).

       Section 10.4 Restricted Payments. The Company will not, and will not permit any of its Subsidiaries to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, except (a) the Company may declare and pay dividends with
respect to its Capital Stock payable solely in additional shares of its Common Stock or warrants, options or other rights entitling
the holder thereof to purchase or acquire shares of its Common Stock, (b) Subsidiaries may declare and pay dividends ratably
with respect to their Capital Stock, (c) the Company may make Restricted Payments pursuant to and in accordance with stock
option plans or other benefit plans for management or employees of the Company, the Issuer and their respective Subsidiaries,
(d) any Subsidiary may make Restricted Payments to the Company and the Issuer or any of their Subsidiaries, (e) the Company
may make Restricted Payments not otherwise permitted hereunder in an aggregate amount since the date of the Closing not to
exceed 30% of Consolidated Net Income for the period commencing on May 1, 2003 and ending on April 30 of the fiscal year
preceding the year in which such Restricted Payment is made, on a cumulative basis, (f) the Company may use proceeds from
the underwriters’ over-allotment option in the IPO for repurchases of Common Stock and (g) the Company may declare and pay
the Special Dividend. The Company will not, and will not permit any of its Subsidiaries to, at any time, declare or make, or incur
any liability to declare or make any Restricted Payment, unless immediately after giving effect to such action, no Default or Event
of Default would exist; provided that the payment of any dividend by the Company within 60 days after the date of declaration of
such dividend shall not be prohibited if at the date of declaration of such dividend there was no Default or Event of Default and
nothing in this sentence shall be deemed to prohibit the making of any Restricted Payments by any Subsidiary to the Company or
to any other Subsidiary.

       Section 10.5. Sales of Assets. The Company will not, and will not permit any Subsidiary to, sell, lease or otherwise dispose
of any assets of the Company and its Subsidiaries (including any such disposition of the equity interest of the Company or any
Subsidiary in another Subsidiary which arises through a merger or consolidation between such Subsidiary and any other Person)
in excess of the Threshold Amount (as defined below); provided, however, that the Company or any Subsidiary may sell, lease or
otherwise dispose of assets in excess of the Threshold Amount if such assets are sold in an arms length transaction and, at such
time and

                                                                       -25-
after giving effect thereto, no Event of Default shall have occurred and be continuing and an amount equal to the Net Proceeds
received from such sale, lease or other disposition shall be used within 365 days of such sale, lease or disposition, in any
combination:

            (1) to acquire productive assets (other than cash or cash equivalents) used or useful in carrying on the business of
      the Company and its Subsidiaries (including equity interests in entities which will become Subsidiaries); or

             (2) to prepay or retire Senior Debt of the Company and/or its Subsidiaries.

       As used in this Section 10.5, a sale, lease or other disposition of assets shall be deemed to be in excess of the “Threshold
Amount” of the assets of the Company and its Subsidiaries if the book value of such assets, when added to the book value of all
other assets sold, leased or otherwise disposed of by the Company and its Subsidiaries during the period of 12 consecutive
months ending on the date of such sale, lease or other disposition, exceeds 10% of the book value of Consolidated Total Assets,
determined as of the end of the fiscal quarter immediately preceding such sale, lease or other disposition; provided that there shall
be excluded from any determination of Threshold Amount (i) any sale, lease or disposition of assets in the ordinary course of
business of the Company and its Subsidiaries, (ii) any sale, lease or disposition of assets from the Company to any Subsidiary or
from any Subsidiary to the Company or a Subsidiary and (iii) the Special Dividend.

       Section 10.6. Merger, Consolidation. Neither the Company nor the Issuer will consolidate with or merge with any other
corporation or convey, transfer or lease substantially all of its assets in a single transaction or series of transactions to any Person;
provided that the foregoing restriction does not apply to the consolidation or merger of the Company or the Issuer, as the case
may be, with, or the conveyance, transfer or lease of substantially all of the assets of the Company or the Issuer, as the case may
be, in a single transaction or series of transactions to, any Person so long as:

             (a) the successor formed by such consolidation or the survivor of such merger or the Person that acquires by
      conveyance, transfer or lease substantially all of the assets of the Company or the Issuer as an entirety, as the case may
      be (the “Successor Corporation” ), shall be a solvent corporation organized and existing under the laws of the United States
      of America, any State thereof or the District of Columbia;

            (b) if the Company or the Issuer, as the case may be, is not the Successor Corporation, such corporation shall have
      executed and delivered to each holder of Notes its assumption of the due and punctual performance and observance of
      each covenant and condition of this Agreement and, in the case of any successor to the Issuer, the Notes (pursuant to such
      agreements and instruments as shall be reasonably satisfactory to the Required Holders), and the Company shall have
      caused to be delivered to each holder of Notes an opinion of nationally recognized outside counsel, to the effect that all
      agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the
      terms hereof;

                                                                  -26-
             (c) the Company or any such Successor Corporation would be in compliance with Sections 10.1 and 10.2 on a pro
      forma basis for the Four Quarter Period ending immediately prior to such merger or consolidation and after giving effect
      thereto; and

             (d) immediately after giving effect to such transaction no Default or Event of Default would exist.

       Section 10.7. Nature of Business . The Company will not, and will not permit any Subsidiary to, engage in any business, if,
as a result, the general nature of the business of the Company and its Subsidiaries, when taken as a whole, would be
substantially changed from the general nature of the business of the Company and its Subsidiaries, when taken as a whole, on
the date of this Agreement.

       Section 10.8. Transactions with Affiliates . The Company will not and will not permit any Subsidiary to enter into directly or
indirectly any Material transaction or Material group of related transactions (including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or another
Subsidiary), except upon fair and reasonable terms not Materially less favorable to the Company or such Subsidiary than would
be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate. Notwithstanding the foregoing, the
provisions set forth in the immediately preceding sentence will not apply to: (i) the Special Dividend, (ii) transactions with Affiliates
solely in their capacity as holders of Debt or Capital Stock of the Company or any of its Subsidiaries, where such Affiliates are
treated no more favorably than holders of such Debt or such Capital Stock generally; and (iii) any agreement disclosed in the
Memorandum as in effect as of the date of the Closing or any amendment thereto or any transaction contemplated thereby
(including pursuant to any amendment thereto) in any replacement agreement thereto so long as any such amendment or
replacement agreement is not more disadvantageous to the holders of the Notes in any material respect than the original
agreement as in effect on the date of the Closing.

       Section 10.9. Subsidiaries . The Company will not at any time permit more than (i) 5% of Consolidated Total Assets, (ii) 5%
of Consolidated Net Worth, or (iii) 5% of consolidated revenues of the Company and its Subsidiaries to be held by, or attributable
to, Subsidiaries which are not the Issuer and the Subsidiary Guarantors. The Company will not at any time, directly or indirectly,
own less than 95% of the voting stock or other voting equity interest in the Issuer and each Material Subsidiary. The Company will
not permit any Subsidiary, other than a Domestic Subsidiary, to become a co-obligor or to guarantee Debt under the Bank Credit
Agreement.

S ECTION 11. G UARANTY B Y T HE C OMPANY .

       Section 11.1. Guaranty by the Company. The Company does hereby irrevocably, absolutely and unconditionally guarantee
unto the holders: (1) the full and prompt payment of the principal of, LIBOR Breakage Amount, if any, and interest on the Notes
from time to time outstanding, as and when such payments shall become due and payable, whether by lapse of time, upon
redemption or prepayment, by extension or by acceleration or declaration or otherwise (including (to the extent legally
enforceable) interest due on overdue payments of principal,

                                                                  -27-
LIBOR Breakage Amount, if any, and interest) in Federal or other immediately available funds of the United States of America
which at the time of payment or demand therefor shall be legal tender for the payment of public and private debts, (2) the full and
prompt performance and observance by the Issuer of each and all of the obligations, covenants and agreements required to be
performed or owed by the Issuer under the terms of the Notes and this Agreement and (3) the full and prompt payment, upon
demand by any holder, of all costs and expenses, legal or otherwise (including reasonable attorneys’ fees), if any, as shall have
been expended or incurred in the protection or enforcement of any rights, privileges or liabilities in favor of the holders under or in
respect of the Notes, this Agreement or in any action in connection therewith and in each and every case irrespective of the
validity, regularity, or enforcement of any of the Notes or this Agreement or any of the terms thereof or any other like circumstance
or circumstances.

        Section 11.2. Guaranty of Payment and Performance. This is a guarantee of payment and performance and the Company
hereby waives, to the fullest extent permitted by law, any right to require tha