EXHIBIT 10.17
VEHICLE INSPECTION & DIGITAL IMAGE
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SERVICE AGREEMENT
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THIS AGREEMENT is entered into by and between Integrated Warranty
Services, Inc. ('Company"), with offices at ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and Auto-By-Tel Marketing Corporation ("ABT"), with offices
at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS, ABT provides an Internet-based marketing program for the
retail sale of preowned motor vehicles by motor vehicle dealers who are
subscribing customers of ABT (the "Subscribing Dealers"): and
WHEREAS, ABT wishes to engage the services of Company as an
independent contractor to perform inspections and create digital images of motor
vehicles in connection with the ABT Program, defined below;
NOW THEREFORE, in consideration of the mutual promises made and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby agree as follows:
1. DEFINITIONS
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1.1 ABT PROGRAM: ABT's Internet-based marketing program for the retail
sale of prearranged motor vehicles.
1.2 ABT SOFTWARE: ABT's proprietary software used to electronically
transmit to ABT motor vehicle images and Vehicle Profiles.
1.3 Competitor OF ABT: A person (hereinafter, "Provider") engaged in
marketing, receiving electronic purchase requests for and facilitating the sale
of preowned private passenger motor vehicles over the Internet exclusively for
and on behalf of the used car departments of new car franchise motor vehicle
dealers that:
1.3.1 own and maintain such vehicles in their dealer inventory;
1.3.2 enter into a paid subscription for such services with the
Provider;
1.3.3 use computer hardware and proprietary software installed at the
dealer location and purchased or leased through the Provider to periodically
input and upload to the Provider's server digitized images and a description
of such vehicles.
[*] Confidential treatment has been requested with respect to certain portions
of this agreement.
1.4 COVERED DEALERS: All Subscribing Dealers within the United States
that participate in the ABT Program at any time during the term of this
Agreement
1.5 DEALER CONTACT: The person designated by a Covered Dealer, and
reported to Company by ABT, as the primary point of contact with Company's
designated Field Specialist.
1.6 FIELD SPECIALIST: An employee or independent contractor of
Company who is used by Company to perform inspections and create digital
images of motor vehicles. Each Field Specialist used by Company to perform
inspections and create digital images of motor vehicles hereunder shall have:
(a) a current ASE certification; or (b) at least twenty (20) years of general
mechanical and auto body experience.
1.7 VEHICLE ELIGIBILITY STANDARDS: ABT's minimum standards for a motor
vehicle's eligibility for the ABT Program. These standards are as follows: (a)
the odometer reading cannot exceed 75,000 miles; (b) there can be no obvious
body damage apparent from a visual walk-around inspection; and (c) there can be
no body or suspension modifications, such as lowered or raised suspension,
aftermarket flarings, roof conversions (other than aftermarket sunroofs), or
conversions to four wheel drive.
1.8 VEHICLE PROFILE: A description of each of the motor vehicles to
be inspected and digitally photographed by a Field Specialist, including the
motor vehicle's year, make, model, accessories, options, and mileage, all
prepared in accordance with the ABT guidelines then in effect for inclusion in
the ABT Program.
2. RIGHTS AND DUTIES OF COMPANY
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2.1 Overview of Services: Company will assign a Field Specialist to
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each Covered Dealer. For each of his or her assigned Covered Dealers, the
Field Specialist will call the Dealer Contact to establish a mutually
convenient time for an initial appointment for the performance of the
inspection and digital imaging services described in Section 2.2. In
preparation for the appointment, the Field Specialist will instruct the
Covered Dealer to prepare a Vehicle Profile for each of the motor vehicles
that the Covered Dealer wishes to be included in the ABT Program (the "Subject
Vehicle").
2.1.1 Upon arriving at the Covered Dealer, the Field Specialist
will introduce himself or herself to the Dealer Contact, and request the
location of the Subject Vehicles. Based on the number of Subject Vehicles, the
Field Specialist and the Covered Dealer contact will mutually agree upon the
time that they will meet later that day to complete the data entry and
transmission process, described in Section 2.3.
2.1.2 The Field Specialist will establish a schedule with the
Dealer Contact for future appointments. The basis for scheduled appointments
will be the Covered Dealers preowned motor vehicle turnover rate, which will
be periodically monitored by the assigned Field Specialist
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2.2 Inspection & Digital Image Services. During each scheduled
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appointment with a Covered Dealer, the Field Specialist will perform a brief
inspection of each Subject Vehicle to help monitor compliance with the Vehicle
Eligibility Standards. During the inspection, the Field Specialist will also
note any obvious inaccuracies in the Vehicle Profile. The parties acknowledge,
however, that the Field Specialist and Company shall not be responsible for the
accuracy of the Vehicle Profiles, it being the sole responsibility of the
Covered Dealer to ensure such accuracy. If a Subject Vehicle appears to meet
the Vehicle Eligibility Standards, the Field Specialist will create one digital
image of the Subject Vehicle at the front 3/4 angle of the right side of the
vehicle. If the Field Specialist determines that a Subject Vehicle does not
meet the Vehicle Eligibility Standards, the Field Specialist will not create the
digital Image.
2.3 Data Entry & Transmission Services. After finishing the
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inspection and digital imaging process for all of the Subject Vehicles, the
Field Specialist will identify to the Dealer Contract which Subject Vehicles
failed to meet the Eligibility Standards, and any obvious inaccuracies in the
Vehicle Profiles. The Field Specialist will then download into the ABT
Software the digital images of the Subject Vehicles inspected pursuant to
Section 2.2 that appear to meet the Vehicle Eligibility Standards, and link
each such Subject Vehicle's digital image with the appropriate Vehicle
Profile. The Dealer Contact will be solely responsible for entering into the
ABT Software and correcting, where necessary, the Vehicle Profiles. However,
if requested by the Dealer Contact, the Field Specialist will assist the
Dealer Contact in using the ABT Software on the first two visits to a Covered
Dealer to help ensure compliance with the ABT Program requirements.
2.4 System Set Up. If requested by ABT or any Dealer, the Field
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Specialist will unpackage, connect and initially boot-up the hardware supplied
to the Dealer by ABT pursuant to Section 3.3, in consideration for the
applicable charge set forth in Schedule 1.
2.5 Exclusive Provision of Services. During the term of this
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Agreement, Company will not provide the services described in this Section 2 to
any Competitor of ABT.
3. RIGHTS AND DUTIES OF ABT
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3.1 Required Information. ABT shall provide to Company each Covered
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Dealer's name, address, telephone number, name of the Dealer Contact, and such
other information regarding each Covered Dealer as Company may require in order
to perform the services described in this Agreement. As Additional Subscribing
Dealers become Covered Dealers, ABT shall promptly send to Company the
information required by this Section.
3.2 Training. At no charge to Company or its Field Specialists, ABT
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will train each Dealer Contact and Field Specialist in the use of the ABT
Software, preparation of Vehicle Profiles, and desired procedures for entering
and transmitting data as described in Section 2.3.
3.3 Hardware & Software. ABT will ensure that each Covered Dealer
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has the ABT Software, any other required software, and all hardware and
transmission capabilities necessary to perform the data entry and transmission
described in Section 2.3. Except as provided in Section 2.4,
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[*] Confidential Treatment Requested
prior to each Field Specialist initial appointment with each Covered Dealer, ABT
will ensure that the foregoing components are properly installed, integrated,
and configured, and that the system has been tested and is capable of performing
the data entry and transmission described in Section 2.3. ABT shall be
responsible for the installation of all required software, prior to deliver of
the hardware to a Covered Dealer.
3.4 Payment of Fees. In consideration for the services rendered by
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Company hereunder, ABT shall pay to Company the fees specified in Schedule 1,
when and as required by Section 4.2.
3.5 Exclusive Use of Services. During the term of this Agreement, ABT
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shall use Company as ABT exclusive provider of all motor vehicle inspection and
digital imaging services for all Covered Dealers.
4. ACCOUNTING & REPORTING
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4.1 Monthly Accounting Statement. Within fifteen (15) days
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following the end of each of Company's fiscal months during the term of this
Agreement, Company shall provide to ABT a written statement which shall detail
the services provided to ABT for such month, and the associated charges,
calculated in accordance with Schedule 1 (the "Monthly Accounting Statement").
4.2 Payment of Fees. The amount set forth in the Monthly Accounting
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Statement shall be due and payable by ABT within thirty (30) days following
ABT's receipt of the Monthly Accounting Statement. On all amounts not paid to
Company by ABT when due, interest shall accrue at the lesser of a rate of [*]
per month, or the highest rate permitted by law, from the date due, until the
date paid to Company, provided that ABT has been given written notice of such
overdue amounts and such amounts remain unpaid for ten (10) days after receipt
of such notice.
4.3 Fee Increases. Company may increase its fees stated in Schedule
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1 by no more than [*] per year. At least thirty (30) days prior to any such fee
increase, Company shall provide to ABT a revised Schedule 1, detailing the new
fees.
5. CONFIDENTIALITY
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5.1 Definition. "CONFIDENTIAL INFORMATION" shall mean: (a)
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information regarding a party's financial condition, information systems,
business operations, plans or strategies, product information, and marketing
and distribution plans, methods, and techniques; (b) information that is
marked "confidential," "proprietary" or in like words, or that is summarized
in writing as confidential prior to or promptly after disclosure to the other
party; (c) any and all related research; (d) any and all designs, ideas,
concepts, and technology embodied therein; and (e) the provisions of this
Agreement. With respect to Company, "Confidential Information" shall include
the fees stated in Schedule 1. With respect to ABT, "Confidential Information"
shall include the digital images of motor vehicles and their related Vehicle
Profiles.
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[*] Confidential Treatment Requested
5.2 Exceptions. Information is not considered confidential or
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proprietary if it: (a) is or becomes generally available to the public other
than as a result of disclosure by the recipient, (b) was available to or
already known by the recipient on a non-confidential basis prior to its
disclosure by the other party; (c) is developed by the recipient independently
of any information acquired from the other party; (d) becomes available to the
recipient on a non-confidential basis from a third party, provided that the
recipient has no reason to know that the third party is or may be bound by a
confidentiality agreement with the disclosing party; or (e) is disclosed
pursuant to a court order or the requirement of any governmental authority.
5.3 Standard of Care. Each party will hold the other party's
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Confidential Information in confidence and will safeguard it in at least the
same manner as a prudent business person would safeguard his or her own
proprietary information and trade secrets. The party receiving Confidential
Information will not, and will not permit any of its officers, directors,
employees, or agents (collectively, "Agents") to, directly or indirectly,
report, publish, distribute, copy, disclose, or otherwise disseminate the
Confidential Information, or any portion thereof, to any third party, and will
not use, or permit any of its Agents to use, the Confidential Information, or
any portion thereof, for the benefit of itself, its Agents, or any third party
or for any purpose, except as expressly authorized in writing by the
disclosing party. Disclosure will be limited to those Agents who must examine
the Confidential Information in order to perform this Agreement.
5.4 Injunctive Relief. If either party or any or its Agents
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attempts to use or disclose any of the Confidential Information in
contravention of this Agreement, then in addition to other available remedies,
the other party shall have the right to injunctive relief entering any such
attempt, it being acknowledged that legal remedies are inadequate.
6. LIMITATIONS
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6.1 Limit of Liability. Company's annual, aggregate liability to
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ABT for any damages or losses related to this Agreement, from any cause
whatsoever, and regardless of the theory of recovery, including without
limitation, tort claims, and ABT's sole and exclusive remedy, will be limited
to the total amounts actually paid to Company by ABT hereunder during the
twelve (12) month period immediately preceding the date that the cause of action
arose.
6.2 Disclaimer of Warranties. COMPANY MAKES NO IMPLIED WARRANTIES
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WITH RESPECT TO THE SERVICES PROVIDED HEREUNDER, INCLUDING, WITHOUT
LIMITATION, THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
7. TERM-TERMINATION
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7.1 Effective Date. This Agreement shall commence on February 1,
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1997, and shall continue in effect until terminated as provided in this
Article.
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7.2 Termination Without Cause. At any time, this Agreement may be
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terminated by either party without cause by giving at least ninety (90) days
prior written notice to the other party.
7.3 Termination With Cause. This Agreement may be terminated
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immediately duties or obligations hereunder if, after receiving written notice
of such failure to discharge duties or obligations, such failure is not cured
to the reasonable satisfaction of the party sending notice within thirty (30)
days of the date of receipt of such notice.
7.4 Termination (or Failure to Pay. Company may terminate this
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Agreement immediately upon written notice should ABT fail to pay any amount
due and owing Company, when and as required by this Agreement provided that
ABT has been given ten (10) days prior written notice of the amount due and the
intent to terminate under this Section.
7.5 Bankruptcy. Insolvency, etc. Either party may terminate this
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Agreement immediately upon receipt of written notice by the other party if: (a)
the other party commences a voluntary case or other proceeding under any
bankruptcy or insolvency law, or seeks the appointment of a trustee, receiver,
liquidator, custodian, or similar official of all or any substantial part of its
property; (b) an involuntary case or other preceding under any bankruptcy or
insolvency law seeking the appointment of a trustee, receiver, liquidator,
custodian, or similar official for all or any substantial part of the other
party's property, is commenced against the other party, and the other party
consents to any relief requested, or such proceeding is not stayed or discharged
within thirty (30) days; or (c) the other party makes a general assignment for
the benefit of creditors or fails generally to pay its debts as they become due.
8. RIGHTS AFTER TERMINATION
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8.1 Final Monthly Accounting Statement. A final Monthly Accounting
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Statement shall be sent to ABT within thirty (30) days after the end of the last
Company fiscal month for which services are performed by Company hereunder. ABT
shall pay the amount specified therein when and as required by Section 4.2.
8.2 Return of Confidential Information. Upon the effective date of
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termination of this Agreement, each party shall cease all use of the other
party's Confidential Information, and shall return to the other party all such
Confidential information in its possession. Within thirty (30) days after
termination of this Agreement for any reason.
9. DISPUTES
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9.1 Dispute Resolution Process. If any dispute arises in connection
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with this Agreement and is not resolved in the normal course of business, the
parties will resolve the dispute, not by litigation or other judicial means,
but through a Dispute Resolution Process consisting of a progression of the
following: (a) direct negotiations between the project managers or other
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designated personnel; (b) negotiations at the senior executive level; (c)
mediation; and (d) binding arbitration.
9.2 Initiation of Process. Either party may initiate the Dispute
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Resolution Process by delivering written notice to the other party. Thereafter,
the parties shall mutually develop and agree upon the specific procedures and
guidelines which shall govern the Dispute Resolution Procedures. Except as
otherwise agreed by the parties, any mediation or arbitration proceedings shall
be conducted in accordance with the applicable rules of the American Arbitration
Association, as then in effect. The arbitrators shall have no authority to
award exemplary or punitive damages.
9.3 Equitable Relief. Nothing herein shall prohibit either party from
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seeking a temporary restraining order, preliminary injunction or other equitable
relief from a court of competent jurisdiction if, in its judgement, such action
is necessary to avoid irreparable damage or to preserve the status quo.
10. MISCELLANEOUS PROVISIONS
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10.1 Notices. All notices which are requited to be in writing shall
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be effective when received, and shall be delivered personally, by overnight
courier, or by certified U.S. mail, return receipt requested, to the parties
at the addresses listed below. Any notice of change of address will be
effective only upon receipt.
If to Company: President
Integrated Warranty Services, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: General Counsel, Law Department
Progressive Casualty Insurance Company
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If to ABT: President
Auto-By-Tel Marketing Corporation
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10.12 Waiver. No waiver or modification of this Agreement or of any
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covenant condition, or limitation herein contained shall be valid unless agreed
to in a writing that expressly refers to this Agreement and is signed by both
parties. No evidence of any waiver or modification shall be offered or received
in evidence in any mediation, arbitration, or litigation proceeding between the
parties arising out of or affecting this Agreement, or the rights or obligations
of any party hereunder, unless such waiver or modification is in writing and
duly executed as aforesaid. The provisions of this Section may not be waived
except as herein set forth. The failure to insist upon strict compliance
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with any of the terms, covenants, or conditions hereof shall not be deemed a
waiver of such terms, covenants, or conditions. No waiver or relinquishment of
any right or power hereunder, at any one or more times, shall be deemed a waiver
or relinquishment of such right or power at any other time or times.
10.3 Severability. Any provision of this Agreement determined to be
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invalid or unenforceable by a court, board, or tribunal of competent
jurisdiction (hereinafter referred to as "Court") shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as if
such provisions written in a manner acceptable to such Court or, if such
provision is found to be totally unacceptable to such Court in any form, then as
if such invalid provisions were omitted altogether.
10.4 Entire Agreement. This Agreement embodies the entire
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understanding between the parties regarding the subject matter hereof. All
prior or contemporaneous correspondence, proposals, offers, conversations, or
memoranda relating to the subject matter hereof, are merged in and replaced by
this Agreement, and are t any force or effect whatsoever. No change,
alteration, or modification hereof may be made except in a writing that
expressly refers to this Agreement and is signed by both parties. This
Agreement supersedes any previous agreements between the parties relating to
the subject matter hereof.
10.5 Independent Contractor. Company's relationship under this
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Agreement to ABT is, and shall remain at all times, that of independent
contractor. Neither party is responsible for the debts and liabilities of the
other. Nothing shall be deemed to create any form of principal-agent
relationship, partnership, or joint venture between the parties. Neither party
shall have any participation in, by way of management or otherwise, the
operations of the other, other than as provided for in this Agreement, and
nothing shall be deemed to create or recognize any relationship other than
that which is expressly described herein.
10.6 Binding Effect/Assignability. This Agreement shall be binding
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upon and shall inure to the benefit of the parties and their respective
successors and permitted assigns. Neither this Agreement nor any rights or
duties hereunder may be assigned or delegated by either party without the
prior consent in writing of the other party. Each party shall provide to the
other party such information relating to any permitted assignments or
delegations hereunder, as reasonably requested by the other party.
10.7 Force Majeure. Neither party shall be deemed to be in default
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of any provision of this Agreement for any failure in performance resulting
from acts or events beyond the reasonable control of such party. For purposes
of this Agreement such acts shall include, without limitation, acts of God,
civil or military authority, civil disturbance, war, strikes, fires, or other
catastrophes, or any other force majeure event beyond the party's reasonable
control.
10.8 Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be an original, but all of which together
shall constitute but one and the same instrument.
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10.9 Governing Law. This Agreement is entered into and shall be
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governed by the laws of the State of California.
10.10 Captions. The captions contained in this Agreement are for
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purposes of organization only and do not constitute a part of the Agreement.
10.11 Survival. The provisions of Sections 5.0 (Confidentiality), 6.0
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(Limitations), 8.0 (Rights After Termination), and 9.0 (Disputes) shall survive
the termination of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their duly authorized representatives, effective as of the lst day of
February, 1997.
AUTO-BY-TEL MARKETING INTEGRATED WARRANTY
CORPORATION SERVICES,INC.
By: By:
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Name: Name:
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Title: Title:
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SCHEDULE 1
SERVICE FEES
This Schedule is attached to and forms a part of the Vehicle
Inspection & Digital Image Service Agreement between Integrated Warranty
Services, Inc. ("Company") and Auto-By-Tel Marketing Corporation ("ABT"), dated
February 1, 1997 (the "Agreement"). Words or phrases that are capitalized, but
not defined in this Schedule shall have the meaning ascribed to them in the
Agreement.
1. Fees for the services provided by Company under the Agreement shall be each
visit to a Covered Dealer by a Field Specialist, based on the number of
Subject Vehicles for which services are performed by the Field Specialist
during such visit. For each such visit, the applicable fee shall be the
greater of [*] or the Service Fee per motor vehicle determined from the
following table:
Number of Subject Vehicles Service Fee per Subject
Inspected per Covered Vehicle per Covered
Dealer Visit Dealer Visit
1 - 49 [*]
50 - 74 [*]
75 - 99 [*]
100 or more [*]
2. In addition to the foregoing Service Fees, ABT shall pay to Company
a. [*] for each computer system set up by a Field Specialist pursuant to
Section 2.4; and
b. [*] per mile for each mile traveled by the Field Specialist per
Covered Dealer visit over the first [*] miles.
Effective Date of Schedule: February 1, 1997.
Accepted and agreed:
AUTO-BY-TEL MARKETING INTEGRATED WARRANTY
CORPORATION SERVICES,INC.
By: By:
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Name: Name:
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Title: Title:
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[*] Confidential Treatment Requested
