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Sample Business ContractsHome: Sample Business Contracts: CONFIDENTIAL TREATMENT
SECOND AMENDMENT TO TELEMATICS SERVICES AGREEMENT
This second amendment (Amendment) is entered into this 29th day of August, 2003, by and between ATX Technologies, Inc., a Texas corporation (“ATX”), and BMW of North America, LLC, a Delaware limited liability company (“BMW”), each of whom may hereinafter be referred to individually as a party or collectively as the parties.
WHEREAS, the parties entered into a Telematics Services Agreement (the “Agreement”) dated January 1, 2002, as amended by that First Amendment to Telematics Services Agreement dated January 30, 2003; and
WHEREAS, the parties now wish to further amend and modify certain terms of the Agreement;
NOW THEREFORE, for and in consideration of the foregoing, the mutual promises and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS. Any capitalized terms used herein and not otherwise defined herein shall have the same meaning assigned to them in the Agreement.
2. SURVIVAL. Except as otherwise expressly amended herein, all other terms and conditions of the Agreement shall remain in full force and effect.
3. BMW INDEMNIFICATION. Section 7.B. of the Agreement is hereby amended by deleting the word “or” following the semicolon at the end of subsection (2) and by adding the following verbiage at the end of section 7.B.:
“or (4) a BMW Center’s provisioning, provision errors, or lack of provisioning of Vehicles for Telematics Services.”
4. AMENDED EXHIBITS. Exhibits A, B and F to the Agreement, containing ATX Services, Services Bundling and Fees, and the BMW Assist Privacy Policy, respectively, are hereby amended by replacing each such Exhibit in its entirety with the new Exhibits A, B and F attached hereto.
Exhibit D to the Agreement, containing the form of Subscription Agreement is hereby amended by adding to it the Model Year 2004 form of Subscription Agreement attached hereto.
IN WITNESS WHEREOF, the parties have affixed their signatures, as of the date written above.
1 CONFIDENTIAL TREATMENT
Exhibit A ATX SERVICES
ATX will deliver Telematics Services to subscribers owning and/or leasing BMW vehicles equipped with a navigation system and the Akira Telematics Control Unit, as well as vehicles equipped with the Everest Telematics Control Unit.
ATX will support the development and porting of its services for registration, renewals and accessing at bmwusa.com/owner’s circle.
The following service description tables are for illustrative purposes only. The full description of service implementation and service delivery can be found in the BMW Operating Procedures.
The bundling of and fees for services are covered in Exhibit B that follows.
2 CONFIDENTIAL TREATMENT
Service Definition Safety and Convenience Services
***Confidential material redacted and filed separately with the Commission
3 CONFIDENTIAL TREATMENT
Additional Services
***Confidential material redacted and filed separately with the Commission
4 CONFIDENTIAL TREATMENT
***Confidential material redacted and filed separately with the Commission
5 CONFIDENTIAL TREATMENT
EXHIBIT B
This exhibit is intended to outline the bundling and fees for the services listed above. The service bundling is listed by hardware platform as service delivery relies on platform capabilities.
***Confidential material redacted and filed separately with the Commission
6 CONFIDENTIAL TREATMENT
SVT and RDU service availability to be determined
Definition of hardware platforms as used above:
Fees and Assumptions for above packages:
Safety and Convenience Package:
***/year/customer (***/ vehicle / month)
***Confidential material redacted and filed separately with the Commission
7 CONFIDENTIAL TREATMENT
Multi-year Service Fees (MP)
For all pre-paid service renewals or extensions, the customer’s credit card will be billed for the entire retail price in one amount on a weekly billing cycle at ATX after the customer agrees to the pre-pay service. ATX will remit the BMW share to BMW within 30 days after receipt of payment from the credit card clearing house.
BMW Paid Period Remaining (Safety & Convenience Service) Set up assumptions
Discount Rates at the Center
Renewal of Account by ATX Customer Care Example
If an account is renewed by an ATX representative after submission of the initial ESA, the customer is offered the current retail rates for 1, 2 or 3 additional years after the current paid period. ATX retains *** for 1 additional year, *** for 2 additional years or *** for 3 additional years. ATX then remits the balance to BMW NA. The BMW center will not be eligible for any available incentive. If still within the BMW-paid period, BMW pays *** per month to ATX for the remainder of period.
***Confidential material redacted and filed separately with the Commission
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Route guidance (RG)
BMW RG Product assumptions
Suggested Retail Price *** annually
One upfront annual price for unlimited usage
Suggested Retail Price of *** for 10 events per year
***Confidential material redacted and filed separately with the Commission
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Teleservice (TS):
General assumptions:
***/year/vehicle (Paid monthly ***/month/car)
Assumptions of Initial TeleService Implementation for Customer Relations
(Initial 9 months during 3rd party evaluation and roll out period)
Online (OP):
Online package fee includes existing content providers’ license fees, including those listed as “unknown” in the table included in Exhibit A for PIM and Online Services. This fee assumes annual billing (paid annually by the customer in advance each year, commencing with vehicle delivery and/or subscription to this service) and that the vehicle dials a 972 or other area code number, local to the ATX call center.
***Confidential material redacted and filed separately with the Commission
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On-line content providers:
Content providers and licensors can be changed, subject to BMW approval, which will not be unreasonably withheld. Investigation and integration related to a change in content providers will involve technical and economic evaluation. Approval by both parties will include documentation of responsibility for development and licensing fees. The expectation is that if ATX suggests a change in existing ATX content providers, then ATX will bear development and ongoing licensing of costs. If BMW suggests a change in content providers, BMW will bear the development cost and the difference between the current and new provider’s licensing costs. BMW will bear the full costs of the new provider if ATX continues to owe fees to the previous provider related to BMW commitments.
***/year/customer (with personalization web site)
The usage and retention *** assumptions behind this price assume a personalization web site. The availability of the web site will affect frequency and duration of customer usage as well as customer retention rates.
(a) Usage Assumptions
Fees are based on the usage assumptions in the following table:
Fee assumptions for all packages contemplate accurate service selection by customers (e.g., “Emergency” vs. “Assist”) and above usage assumptions. The parties shall evaluate actual service selection accuracy and the usage history and its impact on the
***Confidential material redacted and filed separately with the Commission
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fee structure during the annual pricing review. The fees for the subsequent calendar year shall be mutually agreed upon by the parties, taking into consideration the current year’s service selection accuracy and usage history, as well as documented cost of services, which are designed to be reduced annually through ATX efforts to improve operating efficiencies, content/third party cost reductions and economies of scale.
Safety & Convenience Package Payments
Payments for services on vehicles that remain within the BMW-paid service period in the United States will be made monthly, based upon the total quantity of covered vehicles in service for the prior month. The payment per vehicle will be one twelfth of the current annual charge.
By the tenth of each month, BMW NA will provide ATX with a count of Akira and Everest-equipped vehicles delivered the prior month, as well as any vehicles removed from service. On the basis of such count less waived customers, ATX will calculate the running total of vehicles in BMW paid service and bill BMW NA accordingly. BMW shall make payment to ATX, in the manner requested by ATX, net 30 days. Each month, ATX will advise BMW of the total quantity of active Safety & Convenience Package subscribers, as well as the subscriber count by service expiration month.
Since Akira-equipped vehicles had been delivered to retail customers as early as January 15, 2001, prior to the formal initiation of service with ATX on January 1, 2002, BMW provided to ATX a list of the Akira-equipped vehicles (“legacy vehicles”) delivered to retail customers each month in 2001. These vehicles formed the basis of ATX’s first bill to BMW.
Customers will have the option to pre-pay for future annual renewals of the Safety & Convenience Package at the point of vehicle sale (POS). The Parties agree that at initial launch of the pre-paid Telematics Services, the customer will be required to pre-pay for future years of the Safety & Convenience Package with a credit card. BMW may establish other methods of customer payment after the program is launched. ATX agrees to work in good faith with BMW to establish other methods of customer payment, as BMW may deem appropriate. Since ATX receives payment, ATX shall retain its current agreed wholesale optional package fee for the entire year(s) and remit the balance of the retail price to BMW. ATX will advise BMW each month of the total quantity of active subscribers per optional package, as well as the subscriber count by service expiration months.
After the BMW or customer pre-paid period expires, ATX will be responsible for the solicitation and renewal of the Safety & Convenience Package with the current BMW owner. Renewal efforts shall be coordinated with BMW and shall be undertaken via the subscriber’s preferred communication format, e.g., postal mail, e-mail, and/or telephone. ATX will not contact customers while they are in the vehicle, via the telematic device and service to solicit renewals. ATX will bear the entire costs associated with renewal activities. ATX will bill customers annually for renewal charges. On a monthly basis and for each payment made by a customer, ATX shall retain the agreed upon wholesale service fees and remit the balance of the retail fee to BMW.
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Within 5 business days after the end of the month, all funds due to BMW (net of ATX fees) will be wired to a BMW account and all required reports will be provided electronically to BMW’s Finance & Administration department, program management and/or other groups reasonably necessary as required by BMW. This structure provides for the timely and clean transfer of funds, minimizes the number of wire transfers between companies and fulfills ATX’s requirement of payment prior to the rendering of services.
Customers will be solely responsible for the annual pre-payment of optional packages. The Parties agree that at initial launch of the Telematic Services, customer will be required to pay for the optional packages with a credit card. BMW may establish other methods of payment after the program is launched. ATX agrees to work in good faith with BMW to establish other methods of customer payment, as BMW may deem appropriate. ATX shall retain its current agreed wholesale optional package fee for the entire year and remit the balance of the retail fee to BMW. ATX will advise BMW each month of the total quantity of active subscribers per optional package, as well as the subscriber count by expiration month.
After the initial customer-paid period expires, ATX will be responsible for the solicitation and renewal of the optional package(s) with the current BMW owners. ATX will be responsible for maintaining a valid subscriber agreement with the customer. All costs associated with these activities will be borne in their entirety by ATX.
Within 5 business days after the end of the month all funds due to BMW (net of ATX fees) will be wired to a BMW account and all requested reports provided electronically to BMW’s Finance & Administration department, program management and other appropriate groups. This structure provides for the timely and clean transfer of funds, minimizes the number of wire transfers between companies and fulfills ATX’s requirement of payment prior to the rendering of services.
(b) In the event that BMW wishes to extend a free period of service of these optional packages to select customers, BMW shall pay ATX for these services on a monthly basis (one twelfth of the current wholesale rate) for the subject vehicles.
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