Penske Mover Contract March, 1997
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Penske Auto Center, located at 3270 West Big Beaver Rd, Suite 130, Troy,
Michigan 48084, agrees to purchase and Service Business Systems with offices
located at 11415 West I-70 Frontage Road North, Wheat Ridge, Colorado 80033
(hereinafter called "SBS") agrees to provide Marketing Services (hereinafter
called "Services") as may be required by Penske Auto Center (PAC) during the
period of this Agreement and under the terms and conditions set forth herein.
Term of Agreement
The term of the agreement for the PTL Mover Program ends April 30, 1998.
This agreement may be extended by PAC upon 60 days prior written notice from
the end of any term of this agreement for one or more additional years and
the price per piece will be mutually agreed upon by SBS and PAC but in no
event will exceed current pricing plus mutually agreed upon inflation
adjustments, subject to equal or greater volumes. Upon such renewal, if any,
SBS will not charge PAC an additional set-up fee or other similar charges.
Description of Services:
PTL Mover Customer Acquisition and Retention Program
Service Business Systems (SBS) shall provide Penske Auto Center with the
following services:
Database Management
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A computerized database will be updated through either a media transfer or
electronic download process is used to target potential PAC customers. The
data will be provided by Penske Truck Leasing (PTL) on a daily basis. The
information will include the full name and address of the customer, date of
move, and destination city and state. PTL is responsible for all costs
associated with the transfer of data to SBS.
Customer Communications
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The information provided by Penske Truck Leasing will be used to target those
customers by PAC. A generic letter will be mailed to the potential PAC
customer. The destination information will be used to determine which PAC
locations are nearest to customers' new place of residence.
The same letter will be utilized for all mailings. The letter is 8 1/2" x 11"
letterhead provided by PTL. The letter will be tri-folded and inserted into
a #10 envelope. The PAC logo and return address is pre-printed on the
envelope. The customized insert providing an offer to the customer will also
be inserted into the envelope. The insert will be approximately 2_" x 6", 2
color. The insert will list the nearest PAC location to the customers moving
destination.
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Program Reporting
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SBS will provide additional information as reasonably required by Penske Auto
Centers. SBS and PAC will jointly determine what the appropriate level of
reporting will be as the program progresses. A balanced scorecard will be
developed by SBS and PAC. The scorecard will include shared objectives with
common measures and company-specific objectives with shared measures. These
objectives and measures must be linked to the performance evaluations of the
appropriate parties.
The insert will be coded to provide tracking information. The accuracy of
the tracking information is dependent on the data capture at the point of
sale. The primary performance measure is response rate. Response rate is
determined by the number of customers who visit a PAC location compared to
the list of customers receiving the letter.
Customer Service
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SBS provides one Customer Service Representative devoted to the Penske Auto
Centers account. The Customer Service Representative is available from 7 a.m.
until 5 p.m. (MST) for store inquiries. The Customer Service Representative
is responsible for day-to-day account activities.
SBS maintains a toll-free number to assist Penske Auto Center as well as
Penske Truck Leasing in facilitating changes, database updates and answering
questions on an on-going basis. All inquiries are responded to by the end of
the next business day.SBS recommends a quarterly meeting between SBS and
Penske Auto Center to discuss past program results, current programs, and
future marketing initiatives.
Time Frame
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SBS can begin delivery of products and services outlined in this proposal
within 30 days of this agreement. The time frame is based on the cooperation
of all involved parties.
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Fee Structure
Any variation from the description of services required or the projected
volumes may impact the fees.
Program Costs
The PTL Mover program will be billed at a per piece rate of $ . The
pricing is based on an estimated volume of 8,000 pieces per month. PAC will
pay such invoice in accordance with the terms set forth below. The price
include postage costs. Some aspects of a particular project can not be
anticipated. In these cases a quote will be prepared for any work not
covered in the above price schedule.
Set-up Fee
The initial one-time set-up fee is $ . The fee covers program development,
data preparation and conversion, and internal custom programming. Other than
the price per piece and the set-up fee of $ , SBS will not charge PAC any
additional amount except as expressly provided under additional services
below, including any corporate overhead charges, postage charges or otherwise.
In the event that SBS cancels this agreement and there are fewer than 100
mailings in 1997, then SBS shall immediately refund to PAC an amount equal to
$ multiplied by the difference between the number of mailings and the
number of mailings actually made in 1997.
Mailing Frequency
The mailing frequency is daily. SBS will work with Penske Auto Centers to
determine the optimal mailing frequency for the program as the program
matures.
Prepaid Postage
SBS will require PAC to provide postage fees on a monthly basis. The amount
of the pre-paid postage is based on mutually-agreed upon estimated monthly
volumes multiplied by $ . By mutual agreement, PAC and SBS will
investigate alternatives to prepaid postage including EFT, a dedicated
postage account, or a declining balance program and would utilize the most
cost-effective method.
Additional Services
The services to be provided are all-inclusive. All additional services,
except for the PTL Mover Program, will only be rendered when approved in
advance by Roger S. Penske, Jr., Tim Findlay, or Dave Baptisti.
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Payment Terms and Conditions
SBS will invoice PAC directly for all Services provided under the terms and
conditions of this agreement. Upon request, SBS will provide verifications
of all completed mailings. This verification will be in the form of receipts
and reports provided by the USPS.
Invoices are prepared monthly. Terms of payment are net thirty (30) days
from the date of invoice. Payments not received within 30 days are subject
to an interest rate of 1.5% per month. Payments not received within 60 days
constitute a material breach of this agreement.
Price Protection
Pricing will be firm through the term of the contract, with the exception
that SBS will be entitled to increase the pricing in the event of changes
initiated by PAC or postal or paper costs increase at any time during the
term of this agreement. Increases in paper or postage costs would affect PAC
pricing on a direct pass-through basis with no additional charges for
corporate overhead or similar charges.
Conflict of Interest
Each party, in performing its obligations under this agreement, shall
establish and maintain appropriate business standards, procedures and controls
including those necessary to avoid any real or apparent impropriety or adverse
impact on the interest of the other party. Each party shall review with
reasonable frequency during the term of the agreement, such business standards
and procedures including, without limitation, those related to the activities
of its employees and agents in their relations with other party's employees,
agents and representatives, and other third parties.
Governing Law
The validity and interpretation of this agreement and the legal obligation of
the parties to it shall be governed by the laws of the State of Colorado,
unless otherwise agreed in writing by representatives of PAC and SBS at the
time of the order.
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Notices
All notices pertaining to this Agreement shall be in writing, addressed to
the party for whom intended at the address set forth below or at such other
address as may be furnished by such party in writing and shall be deemed
given on the date of mailing.
The address of PAC is: The address of SBS is:
Penske Auto Center Service Business Systems
Attn:Roger S. Penske, Jr. Attn: Don Warriner
3270 W. Big Beaver Rd. 11415 West I-70 Frontage Road N.
Suite 130 Wheat Ridge, CO 80033
Troy, MI 48084
Indemnity
SBS agrees to indemnify and hold harmless PAC, its officers, employees and
agents with respect to any damages, claims or losses arising out of SBS's
nonperformance or misperformance of its obligations under this agreement.
PAC agrees to indemnify and hold harmless SBS, its officers, employees and
agents with respect to any damages, claims or losses arising out of PAC's
nonperformance or misperformance of its obligations under this agreement and
for any alleged trademark infringement or infringement of any intellectual
property of third parties. PAC also agrees to indemnify SBS against any and
all losses regarding any dispute over the ownership of information contained
in the database between PAC and its employees/contractors.
Confidentiality
SBS shall hold all customer and client information obtained from PAC, its
officers, employees or agents in strict confidence. SBS acknowledges that
all such information is confidential and proprietary to PAC. SBS agrees not
to divulge this information without prior written permission of PAC.
Information obtained in the performance of this agreement is to be used only
in connection with providing Services under this agreement. SBS, however,
shall be permitted to disclose said information to its employees and vendors
as reasonably necessary to provide the Services described herein, provided
that SBS takes steps to ensure that its employees and vendors keep said
information confidential. This provision shall survive any termination of
this agreement.
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Non-exclusive
PAC acknowledges that SBS is in the business of providing information services
and database marketing services to the automotive markets. SBS will continue
to provide said services to its current customers, which include major and
independent oil companies, automobile dealerships and other local and regional
automotive service providers. For the duration of this agreement, SBS will
not provide customer acquisition services as outlined in this agreement to
other direct automotive full-service national competitors of PAC, including
but not limited to WalMart, Montgomery Wards, Target, and Pep Boys, without
prior written approval from PAC. For the duration of this agreement, SBS can
provide customer follow-up services to other direct automotive full-service
national competitors of PAC. Without limiting the nature of SBS's
confidentiality obligations set forth in the immediately preceding paragraph,
in the event of a conflict between this paragraph and the immediately
preceding paragraph, the terms of the immediately preceding paragraph shall
control.
Cancellation
Without Cause: Either party is entitled to terminate this contract by
providing written notice to the other of such termination with at least sixty
(60) days advance notice.
With Cause: The breach of the terms of this contract by either party,
provided such breach is not cured within seven (7) days following notification
(or reasonable action taken to correct such a breach within a reasonable time
period) by the other party, shall entitle such other party to terminate this
contract.
Upon any cancellation of this agreement, SBS agrees return to PAC within
fifteen (15) days of the date of notice of cancellation any and all
information obtained by SBS under the terms of this agreement, including
without limitation the then current database.
Separability
The invalidity or unenforceability of any of the terms, covenants or
conditions contained in this agreement shall not render invalid or
unenforceable any of the other terms, covenants or conditions of this
contract.
If the foregoing is in accordance with your understanding of our agreement,
please sign both copies in the space provided and return one copy to this
office.
Agreed and Accepted Agreed and Accepted
Penske Auto Centers, Inc. Service Business Systems
By: By:
Title: Title:
Date: Date:
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