TERMS AND CONDITIONS

This Membership lasts for up to five (5) years from the Membership Date. Not all benefits have the same duration please refer to the individual benefit sections for further details as to the duration of coverage. During the Membership Term, You, the Member, are entitled to the listed benefits, subject to the terms and conditions outlined herein.

WHAT YOU MUST DO TO KEEP THIS MEMBERSHIP IN EFFECT

You, as the owner of the Vehicle and Member under this Membership, are required to maintain physical damage insurance on the Covered Vehicle for the full duration of the Membership Term. Additionally, You must make every effort to maintain the Covered Vehicle in accordance with the manufacturer’s recommendations and take every reasonable precaution to avoid damage to the Covered Vehicle.

WHAT BENEFITS DOES THIS MEMBERSHIP OFFER

During the Membership Term, the following coverage is afforded to You to protect the value of the Covered Vehicle:

For the first year, twelve (12) months from the Membership Date, of this Membership:

SECTION I – Covered Collision: If the Covered Vehicle is involved in a Covered Collision, which is not determined to be a Constructive Total Loss, and You are responsible for out-of-pocket expenses for the repair of the Covered Vehicle, We will provide You with up to a five hundred dollar ($500) discount towards these repairs, and/or for immediate expenses derived from the covered event.

SECTION II – Constructive Total Loss: If the Covered Vehicle is declared a Constructive Total Loss, We will provide You with a Vehicle Replacement Discount up to one thousand dollars ($1,000) towards the cost of Replacement Vehicle of equal or greater value.

For the full duration of the Remaining Financing Term, stated above, not to exceed sixty (60) months from the Membership Date, or until such time as the Finance Contract has been satisfied:

SECTION III – Monthly Loan/Lease Payment: If the Covered Vehicle is required to be out of Your Care, Custody, or Control for more than seven (7) consecutive days, due to a Covered Service Event, We will reimburse You for a percentage of Your Monthly Loan/Lease Payment, up to 300% percent or up to three (3) consecutive months. Maximum of three (3) requests for benefits, not to exceed $7,500.00, for the 60-month term.

Each benefit, including conditions, limitations, and exclusions, are more fully described on the following pages of this Membership.

THE PURCHASE OF THIS MEMBERSHIP IS NOT REQUIRED TO EITHER PURCHASE YOUR COVERED VEHICLE OR TO OBTAIN FINANCING. THIS IS NOT A VEHICLE LIABILITY INSURANCE CONTRACT. THIS IS NOT AN AUTOMOBILE PHYSICAL DAMAGE INSURANCE CONTRACT. IN ORDER FOR THIS MEMBERSHIP TO BECOME EFFECTIVE IT MUST BE REGISTERED WITH THE ADMINISTRATOR.

The headings contained in this Membership are for convenience only and shall not be interpreted to limit or otherwise affect the provisions of this Membership.

DEFINITIONS

Actual Cash Value: The retail value for a vehicle as determined by the NADA valuation guide or equivalent market valuation method.

Administrator, Obligor, We, Us or Our: DriveSmart Auto Care Inc

Collision Repair: Repairs that are required as the result of an accident or upset involving the Covered Vehicle, regardless of fault.

Commercial Use: Includes use of the Covered Vehicle for a business in any manner including, without limitation, taxi, police car or other emergency vehicle, hauling, construction (other than driving to and from work), pick-up and delivery service, daily rentals, carry passengers for hire, snow plowing and company carpool use or business travel when the Covered Vehicle is used by more than one driver.

Constructive Total Loss: A loss in which the Covered Vehicle has been declared a total loss or unrecovered theft by the Primary Insurance Carrier.

Covered Collision: An event whereby the Covered Vehicle, while under Your control, comes into direct contact with another vehicle or object and damage results, excepting for a Constructive Total Loss, and the liable party’s collision insurance provides coverage for such damage.

Covered Service Event: The Covered Vehicle is out of Your Care, Custody or Control for the purposes of: Collision Repair, Vandalism, or Mechanical Breakdown, as specified in the repair order or other supporting documentation. (A Constructive Total Loss is not considered a Covered Service Event)

Covered Vehicle: The automobile described on the Declarations Page under the COVERED VEHICLE INFORMATION section, with a vehicle purchase price of no more than one hundred and twenty-five thousand dollars ($125,000) and no less than five thousand dollars ($5,000) and a gross vehicle weight rating (GVWR) of less than fifteen thousand (15,000) pounds.

CPR for Cars™ Benefit Amount: The monetary amount for which You will be reimbursed, based on the number of days in which the Covered Vehicle is out of Your Care, Custody, or Control, as listed in the schedule located in WHAT DOES THIS MEMBERSHIP COVER – SECTION III.

Finance Contract: The financing agreement, loan agreement, retail installment contract, or lease agreement for the purchase or lease of the Covered Vehicle for which You are financially responsible to make equal monthly payments on a specific date each calendar month.

Lender: Financial institution identified on the Declarations Page under the LENDER/FINANCING INFORMATION section.

Mechanical Breakdown: A Covered Vehicle experiences failure of a part or parts under normal wear and it can no longer perform its function as designed.

Member, You, or Your: The registered owner of the Covered Vehicle and recipient of this Membership as identified on the Declarations Page under the MEMBER INFORMATION section.

Membership: This document which outlines the terms, conditions, exclusions, and limitations as they pertain to the Membership Plan.

Monthly Loan/Lease Payment: The fixed payment listed in Your Finance Contract, made by You to the Lender.

Primary Insurance Carrier: The insurance company that: (1) is secured by You to provided vehicle collision insurance coverage on the Covered Vehicle; or (2) provides liability coverage to any person who has caused collision damage to Your Covered Vehicle for which that person is legally liable; or (3) any other company providing You coverage protecting Your interest in the Covered Vehicle, contingent upon failure or absence of Your primary carrier coverage.

Replacement Vehicle: The automobile purchased or leased to replace the Covered Vehicle.

Seller: The distributor of this Membership identified on the Declarations Page under the MEMBERSHIP PROVIDER INFORMATION section.

Term or Membership Term: Regarding SECTION I and SECTION II one (1) year from the Membership Date on the Declarations Page. Regarding SECTION III until the Finance Contract has been satisfied, not to exceed sixty (60) months from the Membership Date on the Declarations Page.

Vandalism: An act of malicious mischief that results in damage to the Covered Vehicle for which a police report has been filed and the vehicle is undrivable.

Vehicle Replacement Discount: The amount discounted to You by Us, towards the purchase or lease of a Replacement Vehicle.

Your Care, Custody, or Control: The Covered Vehicle was voluntarily released by You to another party and the party has assumed temporary possession of the Covered Vehicle, for the sole purpose of a Covered Service Event as defined in this Membership.

LIMITATION OF LIABILITY

The Obligor’s maximum liability for this Membership, is limited to seven thousand five hundred dollars ($7,500). Each Covered Event may specify additional limitations and these limitations will be considered the maximum liability for Us regarding that benefit. Unless required by state law, We shall not be held liable for incidental, consequential or punitive damages. We shall have no other liability or obligation of any nature whatsoever arising from this Membership unless otherwise required by state law.

HOW LONG DOES THIS MEMBERSHIP LAST

This Membership begins on the Membership Date listed on the Declarations Page under the COVERED VEHICLE INFORMATION section and continues, without lapse, for the full length of the Membership Term.

HOW TO REQUEST BENEFITS UNDER THIS MEMBERSHIP

In the event You need to request a benefit under this Membership, refer to the applicable benefit section, under the WHAT DOES THIS MEMBERSHIP COVER section, for specific instructions on how to proceed. For additional instruction You may contact the Administrator.

WHAT ARE OUR OBLIGATIONS UNDER THIS MEMBERSHIP

In the event that You request benefits under this Membership, and follow all the instructions for the applicable benefit, under the WHAT DOES THIS MEMBERSHIP COVER section, We will, make every effort to, satisfy any amounts owed to You under this Membership within a reasonable time frame, not to exceed sixty (60) days, from the completion of the benefit request process.

The Administrator reserves the right to inspect for liability or may request estimates for repair and/or photographs of the damage to determine the validity of the request. The Administrator shall notify You within ten (10) business days of processing the request, whether the request will be allowed or denied and if denied, the specific reasons for the denial.

This Membership must be registered with the Administrator to be considered valid. Failure by the Seller to register this Membership with the Administrator may release the Administrator from some or all of its obligations. In the event that this Membership is not registered with the Administrator, at the time of Your request for a benefit, We will make every reasonable effort to remedy the situation without impacting the validity of Your request. In the event that We are unable to remedy the situation, We may, at our sole discretion, offer to You a one-time settlement, not to exceed the actual value of the benefit.

WHAT WE ARE NOT OBLIGATED TO UNDER THIS MEMBERSHIP

The Administrator, shall not have any obligation to:

1. File any claim with any party, including Your or a third party’s Primary Insurance Carrier.
2. Offer to You any opinion, amateur or professional, on the validity of any value, estimated or actual, regarding duration, cost, or goods, associated with any benefit request made under this Membership, other than the values provided by a professional company qualified to determine such values.
3. Assist You in obtaining, any or all, documentation required to file or proceed with a claim or benefit request.
4. Make or offer any warranty of merchantability or warranty of fitness for any particular purpose under this Membership.

Any requirement defined in this Membership that is expressly disclaimed above shall be considered solely Your responsibility. Your failure to perform any responsibility under this Membership may impact your ability to collect any amounts offered under this Membership.

WHAT DOES THIS MEMBERSHIP COVER

The sum of all benefits paid under this Membership shall not exceed seven thousand five hundred dollars ($7,500)

THE FOLLOWING BENEFITS ARE OFFERED IN CONJUNCTION WITH THIS MEMBERSHIP

SECTION I – Covered Collision: If the Covered Vehicle is involved in a Covered Collision for which You incurred expenses beyond those covered by the liable party’s Primary Insurance Carrier, We, where allowed by State law, will discount an amount equivalent to Your expenses to repair the Covered Vehicle, up to five hundred dollars ($500), for the repairs performed and/or for immediate expenses derived from the Covered Event. This benefit shall apply only to insurance claims:

• resulting from a Covered Collision in which the cost to repair the Covered Vehicle exceeds five hundred dollars ($500), and
• provided the liable party’s collision insurance company pays the balance of the claim.

This Membership is limited to the issuance of one (1) benefit under this Covered Collision section during the Membership Term.

How to Request a Benefit: You must notify the Administrator within five (5) days after the Covered Collision has been reported to Your Primary Insurance Carrier, and submit the following documents to the Administrator within thirty (30) days of the primary insurance settlement for the Covered Collision:

1. A copy of this Membership.
2. A copy of the complete collision repair order.
3. A copy of Your collision insurance policy, including the Declarations Page, as issued by Your Primary Insurance Carrier.
4. A copy of the Insurance Settlement check from the liable party’s Primary Insurance Carrier.
5. Written documentation from the liable party’s Primary Insurance Carrier substantiating the type of loss, the date of loss, and the date the claim was filed.

SECTION II – Constructive Total Loss: If the Covered Vehicle is declared a Constructive Total Loss, during the Membership Term, We will provide you with a Vehicle Replacement Discount, up to one thousand dollars ($1,000) towards the purchase or lease of a Replacement Vehicle, which has an Actual Cash Value that is greater than or equal to that of the Covered Vehicle and can be applied at the Dealership of Your choice.

This Membership is limited to the issuance of one (1) benefit under this Constructive Total Loss section during the Membership Term.

How to Request a Benefit: You must report the Constructive Total Loss to law enforcement within twenty-four (24) hours. Additionally, You must provide the Administrator with the following items within sixty (60) days of payment from the Primary Insurance Carrier:

1. A valid Membership ID Number at the time of the event.
2. A copy of the Covered Vehicle’s and the Replacement Vehicle’s bill of sale.
3. A copy of the police report.
4. A copy of the Replacement Vehicle’s loan/lease contract, if applicable.
5. Verification from the primary insurance carrier substantiating the date and cause of the Constructive Total Loss and net loss amount, with proof of its payment.
6. A copy of Your Driver’s License, valid at the time of the event.

SECTION III – Monthly Loan/Lease Payment: If the Covered Vehicle is required to be out of Your Care, Custody, or Control for more than seven (7) consecutive days, due to a Covered Service Event, We will reimburse You for a percentage of Your Monthly Loan/Lease Payment, up to 300% percent or up to three (3) consecutive months. Maximum of three (3) requests for benefits, not to exceed $7,500.00, for the 60-month term.

Days out of Your Care, Custody, or Control / CPR for Cars™ Benefit Amount**

Seven (7) to Fifteen(15) Days / 50% of Your Monthly Loan/Lease Payment

Sixteen (16) to Thirty (30) Days / 100% of Your Monthly Loan/Lease Payment

Thirty-One (31) to Sixty (60) Days / 200% of Your Monthly Loan/Lease Payment

Sixty-One (61) or more Days / 300% of Your Monthly Loan/Lease Payment

**At no point shall the CPR for Cars™ Benefit Amount exceed the total cost of the repair order.

This Membership is limited to the issuance of three (3) benefits under this Monthly Loan/Lease Payment section during the Membership Term.

How to Request a Benefit: In the event that You need to request a benefit under this Membership, You must provide the following documents to the Administrator within thirty (30) days of the completion of the repair:

1. A valid Membership ID Number at the time of the event.
2. A copy of Your Finance Contract showing the Covered Vehicle and the terms of the contract including the inception date, Lender, and the Monthly Loan/Lease Payment.
3. A copy of the repair order for the Covered Service Event, showing the date the repair was started and the date the repair was completed, as well as an itemized list of the services performed.
4. A copy of Your Driver’s License, valid at the time of the event.
5. Any additional reasonable documentation requested by the Administrator.

HOW TO CANCEL OR TRANSFER THIS MEMBERSHIP

Cancellation:

By You: Provided that no benefit has been issued under this Membership, You may cancel this Membership by submitting a written request to the Administrator including a copy of this Membership. During the first 45 days from the membership date, We will refund You a pro rata refund of the Membership purchase price, based on the length of the Membership Term remaining, less a twenty-five dollar ($25) cancellation fee (unless other state regulations apply). In the event that any benefit(s) have been issued under this Membership, the full amount of such benefit shall be deducted from the refund due.

By Us: We may only cancel this Membership, if the Covered Vehicle does not qualify for coverage, or for material misrepresentation, or fraud by You. If We cancel this Membership, We will refund You 100% of the Membership purchase price and notice outlining the specific nature of reason for cancellation will be mailed to You.

The validity of the Membership will cease no more than five (5) days from the postmark date of such notice.

Transfer: This Membership is not transferable and any change of ownership of the Covered Vehicle shall terminate this Membership.

HOW TO DISPUTE A BENEFIT REQUEST

Both the Obligor and You agree that, prior to taking any formal legal action, all disputes and controversies of every kind and nature arising out of this Membership shall be submitted to arbitration administered by the American Arbitration Association (AAA), in accordance with its rules for such cases then in effect, and any judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The prevailing party shall be entitled to an award of reasonable attorneys’ fees as well as costs and fees of arbitration. Either party may request that the award of the arbitrator be accompanied by a reasoned opinion.

WHAT THIS MEMBERSHIP DOES NOT COVER

The coverage afforded under this Membership does not apply to:

General Exclusions:

1. Any Membership not registered with the Administrator.
2. Any incidental or consequential loss or damage whatsoever, including but not limited to: loss of use; damage or injury to person or property; rental car, travel or accommodation expenses; or any other expense that does not directly relate to the coverage provided by this Membership.
3. Any loss for which there was no physical damage insurance in place on the Covered Vehicle at the time of the loss.
4. The Covered Vehicle being used for Commercial Use, snow plowing, competition, or speed events.
5. Any benefits requested arising from conditions that existed prior to inception of or after the expiration of the Membership Term.
6. The Covered Vehicle being modified from the manufacturer’s original specifications regardless of when the modifications were made.
7. Any Membership obtained or benefit requested, through misrepresentation of material facts or fraud.
8. Any loss that occurs outside of the United States, its territories, or possessions.
9. Any loss that occurs prior to or after the expiration of the MembershipTerm.
10. Any loss, damage, or delay in repairs resulting from, but not limited to, manufacturer defect, war, whether or not declared, invasion, civil war, insurrection, rebellion or revolution, nuclear reaction, radioactive contamination, national disasters, state emergencies, any and all power surge or outage events, acts of God.
11. Any loss resulting directly or indirectly from any dishonest, fraudulent, illegal, or criminal act by You or anyone acting on Your behalf, whether acting alone or in collusion with others; or due to conversion, secretion, or embezzlement by any person in lawful possession of the Covered Vehicle.
12. Any amount in excess of the maximum liability or stated limitations in each coverage section of this Membership.
13. Any Covered Vehicle for which the purchase price is less than five thousand dollars ($5,000) or greater than one hundred twenty-five thousand dollars ($125,000).
14. Any Covered Vehicle with a salvage, rebuilt or branded title.
15. Any of the following vehicles or vehicle types: any vehicle having a gross vehicle weight rating in excess of fifteen thousand (15,000) pounds; exotic or one off vehicle, including, but not limited to: Alfa Romeo, Alpina, Ascari, Avanti, Bugatti Noble, Pagini, Panoz, Saleen, Spyker, TVR, Daewoo, Bentley, Lamborghini, Lotus, Maserati, Ferrari, Rolls Royce; recreation vehicle; cargo van; limousine; taxi; bus; vehicle used for rental or in a fleet; box, dump, flat bed, semi cab, towing or utility trucks; or a vehicle which has been classified as a “lemon” and has not been corrected.
16. Any Membership for which the Term exceeds sixty (60) months.

In addition to everything listed above in the section entitled General Exclusions, the following are not covered by this Membership with respect to:

SECTION I – Covered Collision:

1. Any loss for non-collision repair work or where the loss does not qualify as a Covered Collision.
2. Any loss where the collision insurance claim is filed: (a) under a name other than the Member’s name; (b) for a vehicle other than the Covered Vehicle.
3. Any loss where the total cost to repair the Covered Vehicle is less than five hundred dollars ($500) or the Member had no out-of-pocket expenses.
4. Any expense that is not directly related to the physical repair of the Covered Vehicle.
5. Any loss where the Administrator has not received the required documentation within thirty (30) days of the primary insurance settlement dispersal; or
6. Any loss in which the repairs were not performed at a facility licensed to perform such repairs or make such determinations as to cost, duration, or value in conjunction with a benefit request.

In addition to everything listed above in the section entitled General Exclusions, the following are not covered by this Membership with respect to:

SECTION II – Constructive Total Loss:

1. Any loss that is not deemed a Constructive Total Loss.
2. Any loss where the Administrator has not received the required documentation within sixty (60) days of the primary insurance settlement dispersal; or
3. Any Replacement Vehicle which has an Actual Cash Value less than that of the Covered Vehicle.

In addition to everything listed above in the section entitled General Exclusions, the following are not covered by this Membership with respect to:

SECTION III – Monthly Loan/Lease Payment:

1. Any service event that does not qualify as a Covered Service Event under this Membership.
2. Any Covered Service Event not performed by a facility licensed to perform such repairs or make such determinations as to cost, duration, or value in conjunction with a benefit request.
3. Any repair which the manufacturer’s guidelines suggest such repair duration will be in excess of seven (7) days.
4. Any event resulting in temporary loss of use due to lack of fuel (gasoline or electric charge).
5. Any Covered Service Event where the required documentation was not supplied to the Administrator within thirty (30) days of completion of the repair.
6. Any Covered Service Event which does not require the Covered Vehicle to remain out of Your Care, Custody, or Control, for the duration of the Covered Service Event, even if You choose to allow the Covered Vehicle to remain out of Your Care, Custody, or Control for the duration of such event.
7. Any delay in repairs to the Covered Vehicle caused by:

• You receive possession of the Covered Vehicle after the repair is completed including but not limited to any completed repairs that are not to Your satisfaction.
• Confiscation or repossession of the Covered Vehicle.
• Parts being unavailable outside of the body/mechanical repair facility’s control including but not limited to loss of shipment or parts that are no longer manufactured.
• Any intentional acts by You, including a misstatement or misrepresentation of facts; or
• Any service event after which three (3) separate CPR for Cars™ Benefit Amounts have already been covered under this Membership.

SEVERABILITY

If any provision, or portion thereof, of this Membership is, or becomes, invalid under any applicable statute or rule of law, it is to be deemed stricken and the rest of this Membership shall remain in full force and effect.