EXHIBIT 10.3
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this "Agreement"), dated as of
March 19, 2003 (the "Effective Date"), is made by and among DealerTrack
Holdings, Inc. ("DealerTrack"), Credit Online, Inc. ("COL"), DealerTrack, Inc.
("DT"), First American Credit Management Solutions, Inc. ("CMSI") and First
American Real Estate Solutions, LLC ("First American"). CMSI and First American
are each referred to herein individually as a "Seller" and collectively as the
"Sellers." DealerTrack, DT and the Sellers are referred to herein individually
as a "Party" and collectively as the "Parties."
R E C I T A L S
A. DealerTrack, CMSI, COL and The First American Corporation have
entered into a Stock Purchase Agreement, dated as of January 30, 2003 (the
"Stock Purchase Agreement"; capitalized terms used in this Agreement and not
defined herein shall have the meanings assigned to them in the Stock Purchase
Agreement), providing for the purchase by DealerTrack of all of the issued and
outstanding capital stock of COL held by CMSI;
B. DealerTrack desires that the Sellers render certain services
(as described herein) to DT and/or COL, as applicable, on an interim basis. The
Sellers are willing to perform such services on the terms and subject to the
conditions set forth herein; and
C. CMSI desires that DealerTrack render certain services (as
described herein) to CMSI, as applicable, on an interim basis. DealerTrack is
willing to perform such services on the terms and subject to the conditions set
forth herein.
A G R E E M E N T
In connection with the consummation of the transactions contemplated
by the Stock Purchase Agreement and in consideration of the premises and the
respective covenants and obligations set forth herein and therein the Parties
agree as follows:
1. Services.
(a) For the period commencing on the Effective Date through the
applicable Term (as hereinafter defined), the Sellers shall provide to DT and
COL the services described in Exhibit A through Exhibit G attached hereto and
incorporated herein by this reference (individually and collectively, the "CMSI
Services"). Except as otherwise noted on the applicable Exhibit, the CMSI
Services shall be of the type and at the level of use and quality provided by
the Sellers to COL as of the Closing Date and the CMSI Services shall be
provided in a manner that is not discriminatory as compared to other businesses
of Sellers.
(b) For the period commencing on the Effective Date through the
applicable Term (as hereinafter defined), DT shall provide to CMSI the services
described in Exhibit H attached hereto and incorporated herein by this reference
(individually and collectively, the "DT Services"). Except as otherwise noted on
Exhibit H, the DT Services shall be of the type and at the level of use and
quality provided by COL to CMSI as of the Closing Date and the DT Services shall
be provided
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in a manner that is not discriminatory as compared to other businesses of
DealerTrack and its Subsidiaries.
2. Term.
(a) The Term of this Agreement shall commence on the Effective
Date. The Parties acknowledge that the purpose of this Agreement is to provide
(a) the CMSI Services to DT and COL on an interim basis and (b) the DT Services
to CMSI for the time period described in Section 2(c) below. After the Effective
Date, the Parties shall use commercially reasonable efforts to allow DT and COL
to transition off the CMSI Services as promptly as reasonably practicable but in
no case later than the expiration of the applicable Term.
(b) DealerTrack may terminate this Agreement with respect to any
or all of the CMSI Services upon 30 days' prior written notice to CMSI. CMSI may
terminate this Agreement with respect to any or all of the CMSI Services upon 30
days' prior written notice to DealerTrack at any time after August 19, 2004.
Unless this Agreement is earlier terminated in accordance with its terms, each
CMSI Service shall terminate on the date set forth in a written notice to CMSI
from DealerTrack delivered in accordance with the applicable Exhibit (each such
date, the "Term" for such CMSI Service).
(c) DealerTrack may terminate this Agreement with respect to any
or all of the DT Services upon 180 days' prior written notice to CMSI. Unless
this Agreement is earlier terminated in accordance with its terms, the DT
Services provided with respect to each agreement referenced on Exhibit H shall
terminate upon the expiration of the current term (including any automatic
renewals) of each such agreement or upon the earlier termination thereof;
provided that, in each case CMSI shall provide 30 days' prior written notice of
such expiration or termination, as applicable (each such date, the "Term" for
such DT Services).
(d) Notwithstanding anything to the contrary contained herein, no
termination of this Agreement shall affect the obligations of the Parties to
make payments due hereunder.
3. Compensation.
(a) As compensation for providing the CMSI Services, DealerTrack
shall pay the applicable Seller the fees and amounts set forth on the applicable
Exhibit. DealerTrack shall also pay the reasonable out-of-pocket expenses of the
Sellers in providing the CMSI Services; provided however that any single item of
expense in excess of $1,000 or any item that would put the monthly expense total
in excess of $5,000 must be approved by DealerTrack prior to incurrence of such
cost.
(b) As compensation for providing the DT Services, CMSI shall pay
DealerTrack the fees and amounts set forth on Exhibit H. CMSI shall also pay the
reasonable out-of-pocket expenses of DealerTrack in providing the DT Services;
provided, however that any single item of expense in excess of $1,000 or any
item that would put the monthly expense total in excess of $5,000 must be
approved by CMSI prior to incurrence of such cost.
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4. Invoicing.
(a) The Sellers shall invoice DealerTrack for the CMSI Services on
a monthly basis pursuant to invoices reasonably detailing the CMSI Services
provided during such period and the price thereof. Unless such amounts are
disputed in good faith by DealerTrack pursuant to Section 5(a), (i) all payments
in respect of CMSI Services set forth on Exhibit D and Exhibit G shall be due
and payable in arrears 30 days from and after the date of the applicable invoice
and (ii) all payments in respect of all CMSI Services except those set forth on
Exhibit D and Exhibit G shall be invoiced in advance and shall be due and
payable 15 days from and after the date of the applicable invoice (the "CSMI
Advance Invoices"). Payments owed by CMSI to COL in the aggregate amount of
$83,861.69 shall be credited against amounts owing by DealerTrack for CMSI
Services hereunder by crediting one third of such amount during each of the
first three months following the Effective Date. Unless disputed in good faith
by DealerTrack pursuant to Section 5(a), any amounts due but not paid by
DealerTrack within 30 days from and after the date of any invoice shall bear
interest at the rate of 8% per annum until the overdue amount plus the
applicable interest is paid in full.
(b) DealerTrack shall invoice CMSI for the DT Services on a
monthly basis pursuant to invoices reasonably detailing the DT Services provided
during such period and the price thereof. Unless such amounts are disputed in
good faith by CMSI pursuant to Section 5(b), (i) all payments in respect of DT
Services set forth on Section 2(c), (d) and (e) of Exhibit H shall be due and
payable in arrears 30 days from and after the date of the applicable invoice and
(ii) all payments in respect of all DT Services set forth on Sections 2(a) and
(b) of Exhibit H shall be invoiced in advance and shall be due and payable 15
days from and after the date of the applicable invoice (the "DT Advance
Invoices"). Unless disputed in good faith by CMSI pursuant to Section 5(b), any
amounts due but not paid by CMSI within 30 days from and after the date of any
invoice shall bear interest at the rate of 8% per annum until the overdue amount
plus the applicable interest is paid in full.
5. Disputes.
(a) If DealerTrack disputes in good faith any charge set forth in
an invoice, DealerTrack shall notify CMSI in writing within 20 days after
receipt of such invoice (or 10 days in the case of CSMI Advance Invoices). The
Parties shall promptly attempt to resolve any such dispute. If any Party
determines that the dispute cannot be resolved in a mutually agreeable manner,
the dispute shall be resolved in accordance with the provisions of Section 19.
(b) If CMSI disputes in good faith any charge set forth in an
invoice, CMSI shall notify DealerTrack in writing within 20 days after receipt
of such invoice (or 10 days in the case of DT Advance Invoices). The Parties
shall promptly attempt to resolve any such dispute. If any Party determines that
the dispute cannot be resolved in a mutually agreeable manner, the dispute shall
be resolved in accordance with the provisions of Section 19.
6. Force Majeure.
(a) Neither Seller shall have any obligation to provide CMSI
Services hereunder during a period in which it is prevented from doing so by any
act of God, fire, riot, sabotage, war, or
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act of any government or by other causes beyond the control of such Seller. Upon
claiming the benefit of this provision, the applicable Seller shall notify
DealerTrack promptly of the cause and attempt in good faith to resume
performance as soon as reasonably possible, and there shall be no charge for
CMSI Services not performed.
(b) DealerTrack shall not have any obligation to provide DT
Services hereunder during a period in which it is prevented from doing so by any
act of God, fire, riot, sabotage, war, or act of any government or by other
causes beyond the control of DealerTrack. Upon claiming the benefit of this
provision, DealerTrack shall notify CMSI promptly of the cause and attempt in
good faith to resume performance as soon as reasonably possible, and there shall
be no charge for DT Services not performed.
7. Indemnification. Subject to the terms of the Stock Purchase
Agreement, (i) DealerTrack, its stockholders, Subsidiaries and Affiliates,
sureties, any assignee permitted hereunder or successor thereof, and each
officer, director, employee and agent of each of the foregoing (the "DT
Indemnified Parties") shall be jointly and severally indemnified and held
harmless by the Sellers for any and all Losses (excluding consequential,
punitive and incidental damages) suffered or incurred by them, arising out of or
resulting directly or indirectly from the gross negligence or intentional
misconduct of either Seller in connection with the performance of this Agreement
or a breach of this Agreement, and (ii) the Sellers, their respective
stockholders, Subsidiaries and Affiliates, sureties, any assignee permitted
hereunder or successor thereof, and each officer, director, employee and agent
of each of the foregoing (the "Seller Indemnified Parties") shall be jointly and
severally indemnified and held harmless by DealerTrack, DT and COL for any and
all Losses (excluding consequential, punitive and incidental damages) suffered
or incurred by them, arising out of or resulting directly or indirectly from the
gross negligence or intentional misconduct of DealerTrack or any of its
Subsidiaries (including without limitation DT and COL) in connection with the
performance of this Agreement or a breach of this Agreement.
8. Relationship of the Parties. For purposes of this Agreement,
the Sellers, on the one hand, and DealerTrack, DT and COL, on the other, shall
be deemed to be independent contractors, and anything in this Agreement to the
contrary notwithstanding, nothing herein shall be deemed to constitute the
Parties as partners, joint ventures, co-owners, an association or an entity
separate and apart from each Party itself, nor shall this Agreement constitute
any Party an employee or agent, legal or otherwise, of any other Party for any
purposes whatsoever. No Party is authorized to make any statements or
representations on behalf of any other Party or in any way obligate any other
Party, except as expressly authorized in writing by such other Party.
9. Confidentiality. Except as expressly permitted by this
Agreement, DealerTrack, DT, COL and the Sellers agree that they and their
employees, directors, Subsidiaries, Affiliates, agents and subcontractors (a)
shall not disclose to, and shall prevent disclosure to, any third party of any
and all information and data received, generated, manipulated, stored,
transmitted or transformed pursuant to this Agreement (the "Confidential
Information"), (b) shall not use any Confidential Information except as
necessary for purposes of providing CMSI Services and DT Services, respectively,
under this Agreement in accordance herewith, (c) shall not disclose to, and
shall prevent disclosure to, any employee of any Confidential Information,
unless such employee has entered into a written agreement with obligations of
confidentially at least as protective of the
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Confidential Information as those set forth in this Agreement and (d) shall take
reasonable measures to maintain the confidentiality of all Confidential
Information in their possession or control, which shall in no event be less than
the measures they use to maintain confidentiality of their own information of
similar importance; provided that, Confidential Information shall not include
information that (i) is in or enters the public domain without breach of this
Agreement and through no breach of any confidentiality obligation, (ii) is
lawfully received by the disclosing Party from a third party without restriction
on disclosure and without breach of a nondisclosure obligation, (iii) was known
by the disclosing Party prior to receiving such information hereunder and
through no breach of any confidentiality obligation to the other Parties or (iv)
is developed independently by the disclosing Party without use of or reference
to any Confidential Information as evidenced by such Party's written records
contemporaneous with such development. Notwithstanding the foregoing, the
Parties may disclose Confidential Information to the extent required by a court
of competent jurisdiction or other Governmental Entity or otherwise as required
by applicable Law; provided, however that the disclosing Party shall use
commercially reasonable efforts to minimize such disclosure and shall provide
written notice of such disclosure and consult with and assist the other Parties
in obtaining a protective order prior to such disclosure.
10. Expenses, Taxes, Etc. Except as otherwise expressly provided
in this Agreement, each Party will pay all fees and expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby. Without
limiting the foregoing, (a) each Seller further acknowledges that, except as
expressly provided in this Agreement, it shall be solely responsible for payment
and satisfaction of all compensation, benefits, withholding and all other
employment-related liabilities and obligations relating to each employee of such
Seller providing CMSI Services hereunder and (b) DealerTrack, DT and COL each
further acknowledge that, except as expressly provided in this Agreement, it
shall be solely responsible for payment and satisfaction of all compensation,
benefits, withholding and all other employment-related liabilities and
obligations relating to each employee of such Party providing DT Services
hereunder.
11. Notices. All notices and other communications provided for
herein shall be in writing and shall be deemed to have been duly given when
delivered personally or sent by telex or telecopy or three (3) business days
after being mailed by registered or certified mail, return receipt requested,
postage prepaid, to the party to whom it is directed or one (1) business day
after being sent via a nationally recognized courier service for next business
day delivery, to the party to whom it is directed:
If to DealerTrack, DT or COL, to:
DealerTrack Holdings, Inc.
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Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
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O'Melveny & ▇▇▇▇▇ LLP
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to First American, to:
c/o The First American Corporation
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with a copy (which shall not constitute notice) to:
White & Case LLP
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If to CMSI, to:
Credit Management Solutions, Inc.
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with a copy (which shall not constitute notice) to each of:
The First American Corporation
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and
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White & Case LLP
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or for any Party, at such other address as such Party shall
have specified in writing to each of the others in accordance
with this Section 11.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but such counterparts
together shall constitute one and the same instrument.
13. Section Headings. The section headings of this Agreement are
for convenience of reference only and shall not be deemed to limit or affect any
of the provisions hereof.
14. Amendments; No Waivers.
(a) Any provision of this Agreement may be waived or amended if,
and only if, such amendment or waiver is in writing and signed by all of the
Parties.
(b) No failure by any Party hereto to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement, or
to exercise any right or remedy consequent upon a breach hereof, shall
constitute a waiver of any such breach or any other covenant, duty, agreement or
condition hereof.
15. Entire Agreement. This Agreement is the Transition Services
Agreement referred to in the Stock Purchase Agreement and constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the Parties or any of them with respect to the subject matter hereof.
This Agreement is delivered pursuant to the Stock Purchase Agreement.
16. Interpretation. When a reference is made in this Agreement to
Sections or Exhibits, such reference shall be to a Section or Exhibit to this
Agreement unless otherwise indicated. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by the
words "without limitation." The word "herein" and similar references mean,
except where a specific Section reference is expressly indicated, the entire
Agreement rather than any specific Section. Except as otherwise expressly
provided herein, all monetary amounts referenced in this Agreement shall mean
U.S. dollars.
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York (without regard
to the choice of law provisions thereof).
18. Severability. If it is determined by a court of competent
jurisdiction that any provision of this Agreement is invalid under applicable
law, such provision shall be ineffective only
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to the extent of such invalidity, without invalidating the remainder of this
Agreement.
19. JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO AND
ACCEPTS FOR ITSELF AND ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF AND SERVICE OF PROCESS PURSUANT TO THE LAWS OF THE
STATE OF NEW YORK AND THE RULES OF ITS COURTS, WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY ARISING UNDER
OR OUT OF IN RESPECT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED
DOCUMENT OR OBLIGATION. EACH PARTY FURTHER IRREVOCABLY DESIGNATES AND APPOINTS
THE INDIVIDUAL IDENTIFIED IN OR PURSUANT TO SECTION 11 HEREOF TO RECEIVE NOTICES
ON ITS BEHALF, AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL PROCESS IN
ANY SUCH ACTION BEFORE ANY BODY, SUCH SERVICE BEING HEREBY ACKNOWLEDGED TO BE
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO
SERVED SHALL BE MAILED BY REGISTERED MAIL TO EACH PARTY AT ITS ADDRESS PROVIDED
IN SECTION 11. IF ANY AGENT SO APPOINTED REFUSES TO ACCEPT SERVICE, THE
DESIGNATING PARTY HEREBY AGREES THAT SERVICE OF PROCESS SUFFICIENT FOR PERSONAL
JURISDICTION IN ANY ACTION AGAINST IT IN THE APPLICABLE JURISDICTION MAY BE MADE
BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS
PROVIDED IN SECTION 11. EACH PARTY HEREBY ACKNOWLEDGES THAT SUCH SERVICE SHALL
BE EFFECTIVE AND BINDING IN EVERY RESPECT. NOTHING HEREIN SHALL AFFECT THE RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
OF ANY PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST THE OTHER PARTY IN ANY
OTHER JURISDICTION.
20. Specific Performance. The Sellers hereby acknowledges that
DealerTrack, DT, and COL would be irreparably damaged and would not have an
adequate remedy at law for money damages in the event that either Seller fail to
provide the Services described herein in breach of this Agreement or in the
event that any Seller breaches the confidentiality provisions set forth in
Section 9, and therefore each Seller agrees that in the event that DealerTrack,
DT and/or COL seeks specific performance of the Sellers' obligations hereunder,
neither Seller will object to such remedy on the grounds that money damages
would be an adequate remedy.
21. Assignment. This Agreement may not be assigned, by operation
of law or otherwise, without the consent of all of the Parties, such consent not
to be unreasonably withheld; provided that DealerTrack, DT, COL, First American
and/or CMSI may assign its rights hereunder to any entity acquiring all or
substantially all of its assets.
22. No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the Parties and their permitted assigns and nothing herein expressed
or implied shall give or be construed to give to any Person, other than the
Parties and such assigns, any legal or equitable rights hereunder.
23. Survival. The provisions of Sections 3, 4, 5, 7, 8, 9, 10, 11,
17, 18 19, 20 (only to the extent relating to the confidentiality provisions of
this Agreement) and this Section 23
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shall survive the termination, for any reason, of this Agreement. Any payments
due under this Agreement with respect to any period prior to its termination
shall be made notwithstanding the termination of this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date first set forth above.
DEALERTRACK HOLDINGS, INC.
By:____________________________________
Name:
Title:
DEALERTRACK, INC.
By:____________________________________
Name:
Title:
CREDIT ONLINE, INC.
By:____________________________________
Name:
Title:
FIRST AMERICAN CREDIT MANAGEMENT
SOLUTIONS, INC.
By:____________________________________
Name:
Title:
FIRST AMERICAN REAL ESTATE SOLUTIONS, LLC
By:____________________________________
Name:
Title:
S-1