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Exhibit 10.25
[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]
General Motors
November 18, 1997
Mr. Xxxxx Xxxxx
Senior Vice President - Strategic Services
Automotive Rental Group
Republic Industries, Inc.
000 X. X. 0xx Xxxxxx
Xx. Xxxxxxxxxx, XX 00000
Dear Xx. Xxxxx:
This letter will confirm the agreement ("Agreement") reached between Alamo Rent
A Car, Inc. ("Alamo") and General Motors ("GM") regarding Alamo's purchase or
lease of GM vehicles for model year 1998 through model year 2000.
The details of this Agreement are as follows:
1998 MODEL YEAR
1. Alamo will purchase or lease from GM dealers of their choice a * model GM
vehicles under the terms and conditions of GM's 1998 Model Year Daily
Rental Purchase Program (refer ATTACHMENT 1). Alamo 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 Alamo otherwise would purchase. The agreed mix of units is as
follows:
Metro * Intrigue *
Cavalier * Bonneville *
Cavalier Cvt. * LeSabre *
Sunfire * DeVille *
Sunfire Cvt. * Venture *
Grand Am * Trans Sport *
Skylark * Astro van *
Achieva * Safari van *
Malibu * Blazer *
Century * Xxxxx *
Lumina * Bravada *
Monte Carlo * Full Size Van *
Grand Prix * Prizm *
------
Total Units *
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2. Alamo agrees that in all advertising and promotional materials which Alamo
undertakes for the 1998 Model Year (September 1, 1997 through August 31,
0000), Xxxxx will feature only General Motors products where any vehicle is
featured or promoted. During the term of this Agreement, Alamo 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 Alamo with * in addition to any incentives due
under the terms and conditions of GM's 1998 Model Year Daily Rental
Purchase Program.
Performance objectives (first time inspection, disposal loss targets,
mileage penalties, etc.) will be mutually agreed upon and discussed under
separate cover.
4. The pro rata portion of the sum described in Paragraph 3, will be paid to
Alamo by the 25th day of the month following vehicle delivery and receipt
of a diskette/electronic media transmission by GM provided GM receives
Alamo'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 Alamo does not purchase or lease the agreed number of
vehicles at the agreed mix, all payments made to Alamo as described in
Paragraph 4 by General Motors will be reimbursed to GM on demand subject to
Paragraph 6.
5. GM agrees to make the sum earned, as described in Paragraph 3, available to
Alamo through GM's Electronic Funds Transfer (EFT) Payment System;
otherwise GM will mail a paper check to Alamo on the due date stated in
Paragraph 4. The provisions of GM's EFT system will allow funds to be
available to Alamo three (3) calendar days from the time period specified
in Paragraph 4. If the electronic fund payment date is a non-banking day,
the electronic funds transfer will occur the following banking day. For
example, if the payment date is Wednesday, the 25th of the month, the
electronic fund payment date would normally be scheduled for Saturday, the
28th. However, the electronic fund transfer will be made on Monday,
assuming Monday is a banking day. "Banking Day", for the purposes of this
Agreement, shall mean the day in which both
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GM's originating bank and Alamo's Depository Institution shall be available
to transmit and receive electronic fund transfers.
6. 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 Alamo 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.
7. Alamo 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. Alamo 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, etc.) by
month of the 1997 and 1998 calendar years. Receipt of the information
described in this paragraph is an additional condition of payment of the
amounts discussed in this Agreement.
8. Alamo 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. Alamo agrees to permit any designated
representative of GM to examine, audit and take copies of any accounts and
records Alamo is to maintain under this Agreement. Alamo agrees to make
such accounts and records readily available at its facilities during
regular business hours. GM agrees to furnish Alamo with a list of any
reproduced records.
GM agrees to assist Alamo in vehicle financing by providing the following at the
request of Alamo:
a. *
b. GM agrees to execute an amendment to the General Motors Corporation
Repurchase Agreement dated August 22, 1994, as amended from time to
time, in order to clarify that GM's obligations thereunder will be
applicable to 1998 through 2000 model year vehicles. The terms of the
GM Daily Rental Purchase Guidelines and the GM National Fleet Purchase
Program Guidelines for the 1998 model year will be incorporated into
the amendment.
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MODEL YEARS 1999 THROUGH 2000
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This letter will also confirm the Agreement reached between Alamo and GM
regarding Alamo's purchase or lease GM vehicles for model year 1999 through
model year 2000. The details of this Agreement are as follows:
9. GM agrees to commit to Alamo the availability of the 100% Vehicle Purchase
Program through model year 2000.
10. GM agrees to extend the terms and conditions of GM's 1998 Model Year Daily
Rental Fleet Program (refer ATTACHMENT 1) for model year 1999 through model
year 2000.
GM reserves the right to place "new" models (as defined by GM) on any of
the four (4) 1998 my repurchase percentage tiers or create a new tier.
Additionally, GM also reserves the right to shift vehicles only to higher
percentage tiers, (e.g. shift from repurchase tier 1 to tier 2, thus
lowering Alamo's vehicle depreciation cost).
Notwithstanding the above items, should GM alter the terms and conditions of its
vehicle purchase program, then Alamo would be granted the option of choosing
which program is more beneficial to its business.
11. GM agrees that Alamo may purchase or lease from GM dealers of its choice a
* during each model year of this Agreement. GM and Alamo agree that the
vehicle mix and production timing provided in future model years must be
mutually satisfactory to both parties.
12. Alamo agrees to maintain a minimum GM share penetration of 51%. The 51% GM
share penetration can be measured as a percent of acquisitions or as a
percent of fleet months. Further, during the term of this Agreement, Alamo
agrees that all advertising and promotional materials which Alamo
undertakes for future model years, Alamo will feature only General Motors
products where any vehicle is featured or promoted. Accordingly, Alamo
agrees to allow such space and include such tag lines as in accordance
the custom of the trade and industry. In exchange, GM will provide Alamo
* incentives due under the terms and conditions of GM's Model Year Daily
Rental Fleet Programs, if any are available.
13. This agreement is confidential and proprietary of General Motors and is
intended for the sole use by GM and Alamo. 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.
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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. Xxx 000000
Xxxxxxx, XX 00000-0000
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.
E. Failure 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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1998 MY DAILY RENTAL PURCHASE PROGRAM GUIDELINES
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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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