Expense Reduction Services Agreement
Automotive Dealership Engagement
This Expense Reduction Services Agreement (the “Agreement”) is entered into by SNH and Client. SNH and Client may each be called a “Party” and together the “Parties.” In exchange for the mutual promises below, the Parties agree as follows.
1. ENGAGEMENT AND SCOPE
Client engages SNH Expense Reduction to review all eligible third-party operating expenses and related financial opportunities across the Covered Locations. SNH Expense Reduction may analyze invoices, contracts, usage, pricing, service levels, credits, rebates, refunds, duplicate charges, billing errors, vendor compliance, and available market benchmarks.
1.1 Eligible Expense Categories.
The engagement includes any lawful and commercially reasonable dealership expense category, including technology and software, DMS/CRM, advertising and marketing, merchant processing, telecom, insurance and benefits, utilities, waste, uniforms, office and janitorial services, parts and shop supplies, lubricants, shipping, data services, credit bureau and vehicle-history services, banking fees, facility services, and other vendor expenses identified by SNH and approved for action by Client.
1.2 Excluded Matters.
Unless added in writing, the Services exclude legal, tax, accounting, investment, insurance-brokerage, and regulated professional advice; employee layoffs or compensation changes; OEM-mandated pricing that cannot be modified; and any initiative documented by Client as actively underway before SNH first identifies it.
1.3 No Authority to Bind Client.
SNH may communicate and negotiate with vendors only after Client authorizes the applicable category or vendor. SNH may not sign a vendor agreement, terminate a vendor, commit funds, or otherwise bind Client. Client retains final approval over every recommendation.
2. SERVICES
SNH will use commercially reasonable efforts to collect and analyze spend data, identify opportunities, present recommendations, support negotiations or sourcing, assist implementation, and validate realized Savings. SNH does not guarantee that any particular amount of Savings will be found or realized.
3. CLIENT RESPONSIBILITIES
Client will provide timely, complete, and accurate information reasonably requested by SNH, including at least twelve months of invoices and available contracts, usage records, vendor contacts, and relevant general-ledger or accounts-payable data. Client will designate an authorized contact, disclose known active cost-reduction projects, make decisions within a commercially reasonable time, and provide post-implementation invoices and records needed to verify Savings.
3.1 Data Access.
Client authorizes SNH to receive relevant information directly from Client’s vendors when Client provides written authorization. Client remains responsible for obtaining any required affiliate, employee, consumer, or third-party consent before sharing information.
4. SAVINGS AND BASELINE
“Savings” means the measurable reduction in Client’s actual or reasonably projected expense resulting from an opportunity first identified, negotiated, implemented, recovered, or materially advanced by SNH during the engagement. Savings may include lower unit prices or rates, avoided increases, eliminated or reduced services, corrected billing, credits, refunds, rebates, recovered overpayments, improved terms with measurable economic value, and comparable financial benefits.
4.1 Baseline.
The baseline will normally be the amount Client paid or was contractually committed to pay during the most recent representative twelve-month period before implementation, adjusted for changes in volume, mix, locations, taxes, pass-through government charges, and other factors necessary for an apples-to-apples comparison. If historical data is unavailable or unrepresentative, the Parties will use the best reasonable alternative documented by SNH, such as the existing contract rate, vendor quote, budgeted rate, or normalized run rate.
4.2 Calculation.
Recurring Savings will be calculated using actual post-implementation volume when available. One-time credits, refunds, and recoveries will be counted when received or applied. Avoided increases will equal the difference between the documented proposed amount and the final amount obtained. New purchases or materially changed services will be measured against the lowest documented comparable pre-SNH price or other mutually reasonable benchmark.
4.3 Exclusions.
Savings exclude sales and use taxes, government assessments, changes caused solely by reduced business volume or closed locations, and benefits from initiatives that Client documented as active before SNH identified the same opportunity. No amount will be counted twice.
4.4 Savings Statement.
SNH will provide a reasonable calculation and supporting detail. Client must notify SNH in writing of a specific good-faith dispute within fifteen days after receipt. Undisputed amounts remain payable. The Parties will work promptly to reconcile disputed calculations using available source records.
5. COMPENSATION AND PAYMENT
Client will pay SNH a performance fee equal to twenty percent (20%) of Savings for sixty (36) consecutive months beginning on the effective date of each implemented savings measure (the “Savings Period”). Each measure has its own Savings Period. SNH earns no performance fee for an evaluated opportunity that produces no Savings.
5.1 Invoicing.
SNH may invoice monthly for recurring Savings and promptly after Client receives a one-time credit, refund, rebate, recovery, or other financial benefit. Invoices are due within fifteen days after receipt. Overdue undisputed amounts accrue interest at a $50 minimum late fee or 1.5% whichever is greater per month or the maximum lawful rate.
5.2 Continuing Fee Obligation.
The performance fee applies throughout the full Savings Period for every measure implemented or substantially negotiated through SNH’s work, even if this Agreement later expires or is terminated, Client changes vendors, a contract is assigned, or substantially the same economic benefit is continued, renewed, replaced, extended, or moved to an affiliate or successor.
6. TERM AND TERMINATION
This Agreement begins on the Effective Date and continues for a three year period. Thereafter, this Agreement shall automatically renew for successive periods of twenty-four (24) months each (each, a “Renewal Term”), unless either party provides the other with written notice of its intent not to renew at least sixty (60) days prior to the end of the then-current Initial Term or Renewal Term. Either Party may terminate immediately for a material breach that remains uncured ten days after written notice, or immediately upon the other Party’s insolvency, unlawful conduct relating to the engagement, or material misuse of confidential information.
6.1 Effect of Termination.
Termination stops new project work but does not eliminate accrued payment obligations or the continuing performance fees described in Section 5.2. Within thirty days after termination, SNH will provide a list of measures subject to continuing fees, and Client will continue supplying records reasonably required to calculate those fees.
7. CONFIDENTIALITY AND DATA SECURITY
Each Party will protect the other Party’s nonpublic business, financial, technical, vendor, pricing, and customer information using at least reasonable care and will use it only for this engagement. Confidential Information excludes information that is public without breach, already lawfully known, independently developed, or lawfully obtained from another source. A Party may disclose information when legally required after giving prompt notice when permitted.
SNH will maintain reasonable administrative, technical, and physical safeguards appropriate to the information received. Client should not provide payment-card numbers, consumer credit reports, medical information, Social Security numbers, or other sensitive personal information unless the Parties first document a specific need and appropriate safeguards in writing.
8. VENDOR RELATIONSHIPS AND CONFLICTS
Client controls all vendor decisions.
9. INTELLECTUAL PROPERTY
Each Party retains ownership of its pre-existing materials, methods, data, and intellectual property. Client owns its records and vendor-specific deliverables prepared for Client after payment of applicable fees. SNH retains its benchmarking data, methodologies, templates, know-how, and de-identified or aggregated analyses, provided they do not identify Client or reveal Client’s Confidential Information.
10. WARRANTIES AND DISCLAIMER
Each Party represents that it has authority to enter into this Agreement. SNH warrants that it will perform the Services professionally and in accordance with applicable law. Except for these express promises, the Services are provided “as is,” and SNH disclaims implied warranties to the maximum extent permitted by law. Client is responsible for its business decisions and for legal, tax, accounting, regulatory, and operational review of recommendations before implementation.
11. LIMITATION OF LIABILITY
To the maximum extent permitted by law, neither Party will be liable for indirect, incidental, special, exemplary, punitive, or consequential damages, or for lost revenue, profits, goodwill, or data, arising from this Agreement. Except for Client’s payment obligations, a Party’s breach of confidentiality, fraud, willful misconduct, or liability that cannot legally be limited, each Party’s total aggregate liability will not exceed the fees paid or payable to SNH during the twelve months preceding the event giving rise to the claim.
12. INDEMNIFICATION
Each Party will defend and indemnify the other Party and its officers, directors, and employees from third-party claims, damages, and reasonable legal fees to the extent caused by the indemnifying Party’s gross negligence, willful misconduct, violation of law, or material breach of its confidentiality obligations. The indemnified Party must give prompt notice and reasonable cooperation, and the indemnifying Party may control the defense, provided no settlement admits wrongdoing or imposes nonmonetary obligations on the indemnified Party without consent.
13. RECORDS AND VERIFICATION
During each Savings Period and for two years afterward, Client will maintain records reasonably sufficient to verify Savings and SNH’s fees. No more than twice per calendar year, SNH may request relevant records or, on ten business days’ notice, have an independent accountant review only those records. SNH bears the review cost unless an underpayment exceeding five percent is found, in which case Client will pay the reasonable review cost and the underpayment.
14. DISPUTE RESOLUTION AND DELAWARE LAW
Before filing a lawsuit, an executive from each Party will meet by video or telephone and attempt in good faith to resolve the dispute for at least fifteen days after written notice. This Agreement is governed by Delaware law, without regard to conflict-of-law rules. The state and federal courts located in Wilmington, Delaware will have exclusive jurisdiction, and each Party consents to venue there. Either Party may seek temporary injunctive relief to protect confidential information or intellectual property.
15. GENERAL TERMS
Neither Party is the other’s employee, agent, partner, joint venturer, fiduciary, or franchisee. Neither Party may assign this Agreement without the other’s written consent, except to an affiliate or in connection with a merger, reorganization, or sale of substantially all relevant assets if the assignee assumes this Agreement. Notices must be sent by personal delivery, nationally recognized overnight courier, or email with confirmation to the addresses below. Neither Party is liable for delay caused by events beyond its reasonable control. If any provision is unenforceable, it will be modified only as necessary and the remainder will continue. Waivers must be written. Sections intended by their nature to survive will survive termination.
This Agreement, including Exhibit A and any signed amendment, is the complete agreement and replaces prior discussions about its subject matter. Any amendment must be in writing and signed by both Parties. Counterparts and electronic signatures are valid and enforceable to the same extent as originals.