Consulting Agreement - CarsDirect Inc., Michael L. Malamut and Ronald L. Frey Jr.
CONSULTING AGREEMENT
THIS AGREEMENT entered into this 1st day of April, 1999, between
CARSDIRECT, INC., a Delaware corporation, ("CarsDirect") having its principal
place of business at 4312 Woodman Ave. ("Companies") and MICHAEL L. MALAMUT AND
RONALD L. FREY, JR. (hereinafter referred to as the "Consultants"), whose
address is 4312 Woodman Avenue, Sherman Oaks, California 91423 with reference to
the following:
A. CarsDirect and Autoland, Inc., a California corporation
("Autoland"), entered into a Strategic Alliances and Services Agreement
dated as of April 1, 1999 ("Alliance").
B. The Alliance provides services to be rendered to CarsDirect by
Autoland and the consideration to be paid to Autoland therefor. The
Alliance also provides for the consideration to be paid to Consultants for
services to be rendered by them individually and this agreement sets forth
the services to be provided by Consultants for which the consideration to
them is payable.
NOW, THEREFORE, it is hereby agreed as follows:
1. Duties of Consultants.
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Each of Consultants shall, during the term of the Alliance and as an
independent contractor, provide CarsDirect with management and/or marketing
information, advice and assistance as may be reasonably requested by
CarsDirect. It is understood that Consultants are full time executives of
Autoland but will be rendering the consulting services hereunder during
their own spare time. With this is mind, CarsDirect will endeavor to
request the services of Consultants with sufficient notice such that they
can arrange their affairs so as to reasonably be able to render the
services requested on a part-time basis while not neglecting their other
full-time duties at Autoland. Consultants shall have full control of the
method and means utilized by Consultants in providing such consultation and
assistance.
2. Term of Agreement.
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This agreement shall terminate concurrently with the termination of
the Alliance.
3. Consulting Fee.
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Except with respect to expenses mentioned in 4 below, the sole and
exclusive compensation to Consultants for services rendered under this
Agreement shall be the stock in CarsDirect as provided in paragraph 6 of
the Alliance.
4. Expenses Incurred by Consultants.
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All expenses of Consultants reasonably incurred for the performance of
this Agreement shall be reimbursed to Consultant by CarsDirect upon
presentation of appropriate backup documentation.
5. Termination of Agreement.
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This Agreement shall be terminated before the end of its term on the
occurrence of any one of the following events:
(a) The willful breach of material obligations of Consultants
to CarsDirect under
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this Agreement.
(b) Conviction of a felony, whether or not related to this
Agreement, or conviction of a misdemeanor which either
materially interferes with Consultants' ability to perform
this Agreement or has a material detriment to the
reputation of CarsDirect.
(c) Causing substantial injury to the reputation of CarsDirect,
at the election of CarsDirect.
(d) Material breach of fiduciary duty to CarsDirect on the part
of Consultants or either of them, at the election of
CarsDirect.
(e) Material breach on the part of Autoland or the Alliance.
(f) Death or permanent disability of both Consultants.
Permanent Disability shall in this context mean illness or
injury to Consultants rendering them unable to render the
consulting services provided in this Agreement for a
continuous period of six (6) months.
6. Effect of Termination on Consulting Fee.
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In the event of the termination of this Agreement prior to the
completion of its term, Consultants shall be entitled to retain all
compensation received by them to the date thereof but shall be entitled to
no further compensation hereunder.
7. Determination of Controversies.
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Any controversy, dispute or claim arising out of the interpretation,
performance or breach of this Agreement shall be resolved by binding
arbitration, at the request of either party, in accordance with the rules
of the American Arbitration Association. The arbitrators shall apply
California substantive law and the California Evidence Code to the
proceeding. The arbitrators shall have the power to grant all legal and
equitable remedies and award compensatory damages provided by California
law, including the power to award punitive damages. The arbitrators shall
prepare in writing and provide to the parties an award including factual
findings and the reasons on which the decision is based. The arbitrators
shall not have the power to commit errors of law or legal reasoning, and
the award may be vacated or corrected pursuant to California Code of Civil
Procedure Sections 1286.2 for any such error. In any such arbitration
proceeding, discovery shall be permitted in accordance with CCP (S)
1283.05.
8. Attorneys Fees and Costs.
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Any action at law, in equity, or by way of arbitration to enforce or
interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys fees, costs and necessary disbursements in
addition to any other relief to which he may be entitled.
9. Consultants Not Agents.
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Consultants are not the agents or employees of CarsDirect and shall
have no authority to make any agreement or representation on behalf of
CarsDirect.
10. Notices.
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Any notices to be given hereunder by either party to the other may be
effected either by personal delivery in writing or by mail, registered or
certified, postage prepaid with return receipt requested. Mailed notices
shall be addressed to the parties and the addresses appearing in the
introductory paragraph to this Agreement, but each party may change his
address by written notice in accordance with this paragraph. Notices
delivered personally shall be deemed communicated as of actual receipt;
mailed notices shall be deemed communicated as of two (2) days after
mailing with respect to United States domestic mail and ten (10) days after
mailing with respect to notices mailed from foreign countries to addresses
in the United States.
11. Entire Agreement.
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This Agreement supersedes any and all other agreements either oral or
in writing, between the parties hereto with respect to consulting services
by the Consultants to CarsDirect and contains all of the covenants and
agreements between the parties with respect to such consulting services.
Each party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have been made
by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding. Any modification of
this Agreement will be effective only if it is in writing, signed by the
party to be charged.
12. Law Governing Agreement.
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This Agreement shall be governed by and construed in accordance with
the laws of California.
13. Partial Invalidity.
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If any provision of this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired
or invalidated in any way.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
CARSDIRECT, INC.
by /s/ SCOTT PAINTER
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___________, its President
CONSULTANTS
/s/ MICHAEL L. MALAMUT
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Michael L. Malamut
/s/ RONALD L. FREY, JR.
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Ronald L. Frey, Jr.
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