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[CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AS INDICATED BY AN * AND SEPARATELY FILED WITH THE
COMMISSION]
Exhibit 10.26
General Motors
November 18, 1997
Mr. Xxxxx Xxxxx
Senior Vice President - Strategic Services
Automotive Rental Group
Republic Industries, Inc.
000 X. X. 6th Street
Ft. Lauderdale, FL 33301
Dear Xx. Xxxxx:
This letter will confirm the agreement ("Agreement") reached between National
Car Rental System, Inc.("National") and General Motors ("GM") regarding
National's purchase or lease of GM vehicles for model year 1998. The details of
this Agreement are as follows:
1998 MODEL YEAR
1. National will purchase or lease from GM dealers of their choice * 1998
MODEL GM VEHICLES under the terms and conditions of GM's 1998 Model Year
Daily Rental Purchase Program (refer ATTACHMENT 1). National has agreed to
purchase these GM vehicles in a mix which includes a considerable number of
GM's higher priced models and which represents a higher percentage of these
units than National otherwise would purchase. The agreed mix of units is as
follows:
Metro * Park Avenue *
Prizm * DeVille *
Cavalier * Catera *
Sunfire * Aurora *
Grand Am * Camaro/Firebird *
Skylark * Venture *
Achieva * Trans Sport *
Malibu * Silhouette *
Century * Astro van *
Lumina * Safari van *
Monte Carlo * S-10 pickup/Sonoma *
Grand Prix * Blazer *
Intrigue * Xxxxx *
Regal * Bravada *
Bonneville * Full Size Van *
LeSabre * ------
Eighty Eight * Total Units *
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2. National agrees that in all advertising and promotional materials which
National undertakes for the 1998 Model Year (September 1, 1997 through
August 31, 1998), National will feature only General Motors products where
any vehicle is featured or promoted. During the term of this Agreement,
National agrees to allow such space and include such tag lines as is in
accordance with the customer of the trade and industry.
3. In exchange for this Agreement to purchase, promote and service the number
of 1998 models and in a vehicle mix satisfactory to GM, as described in
Paragraph 1, GM will provide National with * in addition to any incentives
due under the terms and conditions of GM's 1998 Model Year Daily Rental
Purchase Program.
4. The pro rata portion of the sum described in Paragraph 3, will be paid to
National by the 25th day of the month following vehicle delivery and
receipt of a diskette/electronic media transmission by GM provided GM
receives National's diskette/electronic media transmission by the last
business day of the month. A diskette/electronic media transmission
received after the last business day of the month will be paid by the 25th
of the following month. This diskette/electronic media transmission must
include VIN numbers on the portion of * delivered in the preceding month
and not covered in previous payments. ATTACHMENT 2 details data
transmission and record format requirements and should be used when
reporting vehicle acquisitions. The report of vehicle acquisitions should
be transmitted by EDS Elite to the GM Auction Sales and Remarketing
Department or diskettes sent to the following address:
Attention: X. X. Xxxxxx, Director - Finance
NAO Fleet Operations
MC 000-000-000
00000 Xxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
In the event that National does not purchase or lease the agreed number of
vehicles at the agreed mix, all payments made to National as described in
Paragraph 4 by General Motors will be reimbursed to GM on demand subject to
Paragraph 5.
5. All volume and mix requirements are subject to reasonable minor adjustments
based upon mutual agreement between the parties when the exact
circumstances faced by both parties are known at the time of vehicle
delivery. It is understood that these adjustments may require National to
purchase a comparably priced mix of product.
In the event that either party cannot fulfill any terms of this Agreement
due to events beyond its control, such as acts of God, labor disputes, and
severe economic downturns, the parties will enter negotiations with the
intent of allowing both to continue business without substantial penalty.
6. National agrees to provide to GM, at the beginning of each month, a
schedule of anticipated purchases of 1998 model year vehicles (model year
fleet plan) by division and car line, by month and model year. National
also agrees to provide to GM, at the end of each month, a schedule of 1997
and 1998 model vehicle returns by vehicle size (e.g., economy, midsize,
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etc.) by month of the 1997 and 1998 calendar years. Receipt of the
information described in this paragraph is an additional condition * in
this Agreement.
7. National agrees to retain any documents or records relevant to vehicles
purchased under this Agreement or any GM program and/or claims submitted
for payment under this Agreement or any other GM program for two years
after the close of the program. National agrees to permit any designated
representative of GM to examine, audit and take copies of any accounts and
records National is to maintain under this Agreement. National agrees to
make such accounts and records readily available at its facilities during
regular business hours. GM agrees to furnish National with a list of any
reproduced records.
8. This agreement is confidential and proprietary information of General
Motors and is intended for the sole use by GM and National. Failure to
maintain confidentiality of the terms of this agreement may result in loss
of Fleet Authorization privileges with regard to future purchases.
On behalf of the General Motors' Car and Truck Divisions, I would like to
express my appreciation for your business and hope this Agreement will continue
to strengthen our business relationship.
Please return a copy of this letter acknowledging your agreement to the above.
Very truly yours,
/s/ Xxxxxxx X. Xxx
-----------------------------
Xxxxxxx X. Xxx
Executive Director
Fleet Operations
/s/ Xxxxx Xxxxx
--------------------------------
Acknowledged and Agreed
National Car Rental System, Inc.
Date: 11/25/97
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1998 MY DAILY RENTAL PURCHASE PROGRAM GUIDELINES
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Attachment 1 - Part 1 of 2
GENERAL MOTORS CORPORATION
1998 MY DAILY RENTAL PURCHASE PROGRAM GUIDELINES
1. PROGRAM NAME AND NUMBER:
1998 Model Year Daily Rental Purchase Program for Daily Rental
Operators - Program No. 98-02.
2. PROGRAM DESCRIPTION:
To provide General Motors dealers certain purchase information on
selected 1998 model year passenger cars and light duty trucks sold and
delivered by GM dealers to qualified daily rental operators and
eligible for purchase by General Motors in accordance with the
guidelines herein.
3. PROGRAM ALLOWANCES:
The purchase amount shall be calculated as a percent of dealer invoice
including freight. The purchase percentage varies month by month and is
determined by the month the vehicle is RETURNED TO AND ACCEPTED BY
GENERAL MOTORS in accordance with GM Auction Guidelines.
- Vehicles are assigned into one of the four tier groups. (Refer
Attachment "A" for tier composition and Attachment "B" for
respective tier monthly purchase percentage)
- The daily purchase rate equals the change in the monthly rate
divided by the number of calendar days for that month.
- Depreciation from capitalized cost will be based on specific
purchase percentages of dealer invoice, scaled by vehicle
assignment into one of four tier groups. Purchase percentages
vary by month of return to and acceptance by GM
(out-of-service date as described in Attachment "B").
- In-service date shall be five (5) days following the
expiration in-transit date as shown on the factory invoice.
- Out-of-service date shall be the date the vehicle is returned
to an approved GM turn-in site provided the rental company
meets all program parameters and completes the sign-off
procedures.
Damage allowance varies by return and acceptance date. (Refer
Attachment "B")
Vehicles are not eligible for Preferred Equipment Group (P.E.G.)/Option
Group discounts.
The following models are not eligible: Corvette, Astro and Safari
CargoVans, Van Conversions (including Hi-Cube and Stepvan), and Full
Size Cargo Vans.
Vehicles delivered from dealer inventory are NOT eligible for
enrollment in the 1998 Daily Rental Purchase Program.
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1998 MY DAILY RENTAL PURCHASE PROGRAM GUIDELINES
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Dealers will receive seven (7) additional days following the expiration
of transit time before the invoice is due for payment, in lieu of
interest credit days. Vehicle payment is due upon delivery to the fleet
customer (if prior to invoice interest commencement date). By providing
this additional allowance, interest reimbursements WILL NOT BE MADE for
vehicles arriving one (1) to seven (7) days after the expiration of
transit time. Vehicles arriving more than ten (10) days after the
interest commencement date are eligible for reimbursement under the GM
In-Transit Credit Program.
4. DELIVERY/ORDER/IN-SERVICE/PRODUCTION PERIOD:
Order - beginning with announcement of the 1998 model year program and
ending when dealers are notified that 1998 model year orders are no
longer being accepted.
Production, Delivery, In-Service - 1998 model year.
IMPORTANT - Acceptance of an order on any vehicle line does not
constitute a commitment to build or to build in a requested time frame.
Minimum In-Service Period - None.
Maximum In-Service Period - 24 months or July 31, 2000 (which ever
occurs first).
Mileage Requirements:
- No maximum mileage limitations.
- Excess mileage penalty of $0.07 per mile over maximum free
mileage levels that vary by month. (Refer Attachment "B")
All units to be purchased by General Motors Corporation under this
program must be returned and accepted by July 31, 2000. NON-RETURNED
VEHICLES MUST REMAIN IN SERVICE A MINIMUM OF SIX (6) MONTHS (180 DAYS)
FROM IN-SERVICE DATE AS NOTED ON PAGE 1 OF THESE PROGRAM GUIDELINES. GM
reserves the right to audit the rental company to ensure compliance
with the minimum six (6) month in-service requirement. Frame, fire
and/or water damaged vehicles which are ineligible for purchase have no
minimum in-service period. Documentation on these vehicles must be
retained on file for audit purposes.
5. ELIGIBLE MODELS/REQUIRED OPTIONS AND/OR ORDER TYPES:
All new and unused 1998 General Motors models, specified on Attachment
"A", with required minimum factory installed equipment levels specified
on Attachment "C" and processing options ordered for qualified daily
rental operators for use as daily rental vehicles and delivered by GM
dealers. (Refer to 10A).
All qualified fleet orders for eligible models received from dealers
must contain a valid Fleet Order Type.
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1998 MY DAILY RENTAL PURCHASE PROGRAM GUIDELINES
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Ordering Instructions: All purchase orders must contain fleet
processing option VN9 and your customer UPC processing code. Vehicles
must be ordered with minimum option requirements specified on
Attachment "C".
Dealer must take full responsibility for including the proper
processing option on all orders. Should errors occur in the ordering of
vehicles, resulting in diversions or reinvoicing, the dealer may be
charged an administrative fee.
All qualified fleet orders for eligible models received from the dealer
MUST contain the Fleet Account Number (FAN) of record and account name.
The ordering entity is responsible for checking dealer order
acknowledgements to verify accuracy of order submitted.
Dealer orders currently on hand or in the system that qualify under
this program, unless they do not contain the appropriate processing
options, can be amended or canceled and reordered if they have not been
released to production. THIS IS THE ORDERING DEALER'S RESPONSIBILITY.
Fleet orders submitted with Fleet Processing Option VN9 and
incompatible retail incentive options will be rejected with an error
message.
Colors Not Eligible for Purchase - Refer Mandatory Optional Equipment.
Required Options - Processing Option VN9 and your customer assigned UPC
processing code must be ordered by the dealer on purchase vehicles to
be enrolled in the 1998 Model Year Daily Rental Purchase Program.
PROCESSING OPTION VN9 WILL PROVIDE A NET INVOICE - LESS HOLDBACK AND
ADVERTISING.
6. COMPATIBLE INCENTIVE/ALLOWANCE PROGRAMS:
Vehicles enrolled in the 1998 Model Year Daily Rental Purchase Program
are NOT eligible for any other fleet/retail program, including, but not
limited to, the Dealer Fleet Ordering Assistance Program (VQ), and any
General Motors Dealer Rent A Car program.
7. METHOD OF APPLICATION: Not Applicable.
8. METHOD OF PAYMENT:
Check to title holder or financial institution upon receipt and
clearance of proper paperwork at an approved GM turn-in site and
General Motors Corporation.
Purchase payment is made in the form of a check to the title holder or
financial institution at the address shown on the title, unless prior
arrangements are made.
The Payment Modification System (PMS) provides an effective method to
redirect purchase checks to lending institutions as co-payee with the
titled owner.
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1998 MY DAILY RENTAL PURCHASE PROGRAM GUIDELINES
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If a lender and a daily rental operator desire co-payee/redirection,
please direct requests for additional information in writing to:
NAO Dealer Accounting
Mail Code 000-000-000
P. O. Box 436014
Pontiac, MI 48343-6014
9. FINAL DATE FOR SUBMISSION OF APPLICATIONS AND RESOLUTION OF ALL
APPLICABLE REJECTS: Not Applicable
10. OTHER PROGRAM GUIDELINES:
A. This is the General Motors guideline regarding the definition
of a "rental" vehicle:
"The bona fide rental of a vehicle involving use and payment
by a customer on an hourly, daily, weekly or monthly basis.
Usage of any such vehicle(s) by a customer for a period of
four (4) consecutive months or longer shall be deemed to
constitute leasing and not rental and will make the vehicle
ineligible for purchase."
In the event a vehicle enrolled in the Daily Rental Purchase
Program is found to be on-rent (lease) to a customer in excess
of the above guideline, or if the customer consecutively rents
multiple enrolled vehicles for an aggregate term of four (4)
or more months, all vehicles involved in such transactions
will not be considered rental and will be ineligible for
purchase. IF NECESSARY, GENERAL MOTORS WILL AUDIT THE RENTAL
COMPANY TO ENSURE COMPLIANCE WITH THIS GUIDELINE.
B. All General Motors general guidelines and definition of terms
relative to incentive programs (refer to General Motors Dealer
Sales Allowance and Incentive Manual Articles 2 and 3) that
were supplied to your dealership apply to this program.
C. All eligible units must be delivered to the ultimate customer
through a General Motors dealership or a qualified drop-ship
location. Purchases or deliveries made through any other
entity or individual are ineligible for payment.
D. All deliveries to customers with a valid Fleet Account Number
(FAN) must be reported as fleet deliveries regardless of order
type.
X. Xxxxxxx to comply with these guidelines may result in the
dealer being disqualified for future participation in fleet
programs and terminations of dealer sales and service
agreement.
F. Orders not produced during the 1998 model production period
will be canceled. There are no provisions for dealers and/or
rental customers to receive any allowance for canceled orders.
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G. Capitalized cost shall be calculated at dealer cost of base
vehicle and optional equipment, plus freight, less Hawaii
excise tax and tire weight tax, if applicable.
H. General Motors reserves the right to cancel, amend, revise, or
revoke any program at any time based on its sole business
judgements. Final decisions in all matters relative to the
interpretation of any rule or phase of this activity rests
solely with General Motors.
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