1
CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
EXHIBIT 10.7
ADVERTISING AGREEMENT
This Agreement is made this _____day of _____, 1997 by and between Ford
Motor Company, a Delaware corporation ("Ford"), and Budget Rent A Car
Corporation and its wholly owned subsidiary Budget Rent A Car Systems, Inc.,
each of which is a Delaware corporation (collectively "Budget").
WHEREAS Ford and Budget desire to set forth the terms and conditions
whereby Budget shall carry out Promotional Programs designed to promote the use
and rental of Ford Vehicles at Budget Locations.
Ford and Budget agree as follows:
1. Term of Agreement. The term of this Agreement will commence on
September 1, 1997, and, subject to earlier termination as hereinafter provided,
will continue until August 31, 2007.
2. Definitions. The terms set forth below shall have the following
meanings:
Acquire -- to obtain, by purchase or lease, new and unused Vehicles for
daily rental service, support of daily rental service operations, or Budget
corporate vehicles at Budget Locations.
Acquisition -- the act of acquiring new and unused Vehicles.
Affiliate -- with respect to any corporation, any other corporation,
directly or indirectly, controlling, controlled by, or under common control with
such corporation. With respect to Budget, "Affiliate" includes, without
limitation, Team Rental Group, Inc., and its subsidiaries, but specifically
excludes Budget Licensees. For purposes of this definition and Paragraph 10(b),
"control" (including "controlling," "controlled by," and "under common control
with") shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a corporation, whether
through the ownership of voting securities, by contract or otherwise.
Budget Corporate Location -- a Budget Location that is owned,
controlled or operated by Budget or a Budget Affiliate.
Budget Licensee -- any legal entity not controlled by Budget or a
Budget Affiliate that is authorized by Budget or a Budget Affiliate or another
Budget Licensee to conduct a business under any trademark of Budget in the
United States.
Budget Location -- a place or geographic area in the United States
where Budget, a Budget Affiliate or a Budget Licensee now or hereafter conducts
a Vehicle daily rental business under any trademark owned or used by Budget.
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CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
CPI -- the United States Department of Labor's Bureau of Labor
Statistics Revised Consumer Price Index for All Urban Consumers, or the
successor of such Index.
Ford Vehicles -- in any Model Year, those new and unused current Model
Year Vehicles (e.g., 1998 models placed in daily rental service at Budget
Locations during the 1998 Model Year), prior Model Year Vehicles (e.g., 1997
models placed in daily rental service at Budget Locations during the 1997 Model
Year), and subsequent Model Year Vehicles (e.g., 1999 models placed in daily
rental service at Budget Locations during the 1999 Model Year), sold by Ford to
its franchised dealers or Ford Motor Credit Company and in turn sold or leased
for use at Budge Locations during the Model Year, but specifically excluding
vehicle sold under the "Mazda" name or "Jaguar" name.
Ford Vehicle Share -- the percentage, considered at the end of each
Model Year, that new and unused Ford Vehicles represent of all Vehicle
Acquisitions during such Model Year.
Model Year - - each period of 12 Months from and including September 1
to and including the next following August 31. Each Model Year shall be referred
to by the calendar year next following the commencement of the Model Year. For
example, the 1998 Model Year shall commence on September 1, 1997, and end on
August 31, 1998.
Promotional Programs -- programs carried out by Budget or its
Affiliates, subject to the terms and conditions of this Agreement, that feature
Ford Vehicles and promote the rental thereof at Budget Locations. Such programs
shall include, without limitation, major media or other advertising, direct mail
solicitations, catalogue covers, point of rental materials, recorded telephone
responses to calls from prospective vehicle renters, and such other activities
as Budget may perform to promote Ford products in the Budget system and such
other programs as Ford and Budget shall agree upon from time to time.
Vehicle -- any new an unused passenger car or van or truck.
Vehicle Acquisitions -- in any Model Year, all current Model Year
Vehicles, prior Model Year Vehicles, and subsequent Model Year Vehicles Acquired
by Budget, a Budget Affiliate or a Budget Licensee.
3. Promotional Programs.
(a) Subject to the terms and conditions hereof, Budget shall,
and shall cause its Affiliates, during each Model Year,
(i) to carry out Promotional Programs;
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CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
(ii) to perform surveys and services as may be
mutually agreed to from time to time by Ford
and Budget;
(iii) Meet with Ford's Budget Account Manager at
least once each quarter, and more often if
deemed mutually desirable, to communicate
Budget's plans for Promotional Programs
for the following quarter; and
(iv) Send to Ford in January and July of each
year beginning in January 1998, a detailed
report of the Promotional Programs
implemented by Budget during the preceding
six month period so that Ford may determine
whether it has received promotional value
commensurate with the consideration payable
hereunder. Such reports shall be signed by a
Senior Vice President or above of Budget and
shall state the amount spent by Budget in
the preceding six month period. If such
Promotional Programs are reasonably deemed
by Ford to be unsatisfactory and Ford so
notifies Budget, Budget shall make such
changes in future Promotional Programs as
are mutually agreeable to both Ford and
Budget.
(b) With respect to Budget Licensees, during each
Model Year Budget shall communicate its promotional activities
pursuant to this Paragraph with such Licensees and shall
distribute information about such activities to them. Budget
shall promote such activities to Budget Licensees in
substantially the same manner and to the same extent that
Budget has historically promoted such promotional activities
with Budget Licensees. The parties understand that Budget
and Budget Affiliates do not control the types of promotional
activities at Budget Locations not owned or operated by Budget
or its Affiliates.
4. Criteria for Promotional Programs. Promotional Programs shall meet
the following the criteria:
(a) they shall be published, placed or controlled by
Budget or a Budget Affiliate; and
(b) they shall use or contain the name of a Ford Vehicle
or refer by name to Ford Motor Company at least once
with an influence value
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CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
and with a prominence that is reasonably satisfactory to Ford;
and
(c) they shall, where feasible, use or contain a pictorial
representation of a Ford Vehicle (furnished by Ford from time
to time in accordance with Paragraph 9 hereof) with an
influence value and with a prominence reasonably satisfactory
to Ford; and
(d) they shall not, except as Ford may consent in advance, contain
any pictorial representation, trade name or endorsement of, or
testimonial to, any Vehicle other than a Ford Vehicle, or any
reference by name to any Vehicle manufacturer other than Ford
or one of its Affiliates, provided that Vehicles other than
Ford Vehicles may be mentioned or pictured in a Promotional
Program with Ford's consent if the non-Ford Vehicle is of a
kind for which, at the time, there is no comparable Ford
Vehicle.
5. Base Payments for Promotional Programs.
(a) Except as provided in Paragraph 5(c) below, in
consideration of the Promotional Programs and the other services
provided by Budget, Ford will pay to Budget, in equal quarterly
installments on the first day of September, December, March and
June of each Model Year, a "Base Amount" for each of the 1998, 1999,
2000, 2001 and 2002 Model Years as follows: $24,080,000.00 in the
1998 Model Year; and, an amount in subsequent Model Years computed as
follows (and rounded to the nearest $100,000);
(i) for the 1999 Model Year, an amount equal to
$24,080,000 multiplied by: (A) a fraction, the numerator of
which shall be the CPI for April of 1998 and the denominator
of which shall be the CPI for April 1997, or (B) XXX,
whichever is smaller;
(ii) for the 2000 Model Year, an amount equal to the
1999 Model Year Base Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 1999 and the
denominator of which shall be the CPI for April 1998, or
(B) XXX whichever is smaller;
(iii) for the 2001 Model Year, an amount equal to
2000 Model Year Base Amount multiplied by (A) a fraction, the
numerator
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CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
or which shall be the CPI for April 2000 and the denominator
of which shall be the CPI for April 1999, or (B) XXX,
whichever is smaller; and
(iv) for the 2002 Model Year, an amount equal to the
2001 Model Year Base Amount multiplied by: (A) a fraction,
the numerator of which shall be the CPI for April 2001 and
the denominator of which shall be the CPI for April 2000, or
(B) XXX, whichever is smaller.
Using the formulas above, Ford shall calculate the amounts of the
quarterly and total annual Base Amounts due under this Paragraph for
the 1998 Model Year and each subsequent Model Year to and including the
2002 Model Year. This calculation shall be communicated to Budget by
June 1 of each applicable Model Year or within 30 days of the
publication of the CPI for April of the appropriate year, whichever is
later.
(b) Before March 1, 2002, Ford and Budget shall negotiate in
good faith to determine the Base Amounts or Base Amount calculations
for the 2003, 2004, 2005, 2006 and 2007 Model Years, including whether
such 2003-2007 Base Amounts should be greater than, less than or equal
to prior Model Year Base amounts taking into account all relevant
factors, including then prevailing economic and competitive conditions,
costs of Promotional Programs, the existence of other promotional
program agreements between Ford and other daily rental companies and
the prior payments made hereunder. If, by June 1, 2002, and after good
faith negotiations, the parties cannot agree upon a mutually acceptable
Base Amount for the subject Model Years, then the Base Amount for the
2003-2007 Model Years shall be the amounts calculated as follows:
(i) for the 2003 Model Year, an amount equal to the
2002 Model Year Base Amount plus XXX of the 2002 Model Year
Base Amount multiplied by: (A) a fraction, the numerator of
which shall be the CPI for April 2002 and the denominator of
which shall be the CPI for April 2001, or (B) XXX, whichever
is smaller;
(ii) for the 2004 Model Year, an amount equal to the
2003 Model Year Base Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 2003 and
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CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
the denominator of which shall be the CPI for April 2002, or
(B) XXX, whichever is smaller;
(iii)for the 2005 Model Year, an amount equal to 2004
Model Year Base Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 2004 and the
denominator of which shall be the CPI for April 2003, or
(B) XXX, whichever is smaller;
(iv) for the 2006 Model Year, an amount equal to the
2005 Model Year Base Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 2005 and the
denominator of which shall be the CPI for April 2004, or
(B) XXX, whichever is smaller, and
(v) for the 2007 Model Year, an amount equal to the
2006 Model Year Base Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 2006 and the
denominator of which shall be the CPI for April 2005, or (B)
XXX, whichever is smaller;
(c) As it is the express purpose and intent of this Agreement
to promote the use of Ford Vehicles at Budget Locations and to feature
Ford Vehicles in Budget's U.S. fleet, it is the understanding of the
parties hereto that, during each Model Year, Ford will not be required
to pay Budget the Base Amount described in Paragraph 5(a) above if the
Ford Vehicle Share in such Model year is not at least 55%: provided,
however, that Ford will be required to pay the Base Amount in the event
that the failure to achieve a Ford Vehicle Share of 55% was solely
attributable to Ford's failure to make Ford Vehicles available for
Acquisition in sufficient quantities to achieve a Ford Vehicle Share of
55%. Notwithstanding the preceding sentence, if Ford's failure to
allocate sufficient quantities of Ford Vehicles is caused by a
production disruption of more than one year due to (a) a shortage or
curtailment of material, labor, transportation, or utility service; (b)
any labor or production difficulty; (c) any governmental action; or (d)
any cause beyond the reasonable control of Ford, then the parties will
negotiate in good faith to reduce the Base Amount by amounts reflective
of the nature and extent of the production disruption and the Ford
Vehicle Share actually achieved.
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CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
6. Increased Payments for Promotional Programs.
(a) In support of Budget's efforts to promote the use of Ford
Vehicles at Budget Locations and in support of the Promotional
Programs to increase rental demand for Ford Vehicles, Ford
will pay Budget the amounts listed in the following schedule,
based upon increases in the Ford Vehicle Share (in addition
to the Base Amount for each Model Year, as specified in
Paragraph 5 hereof):
The Applicable Payment
The Ford Vehicle Increase Over the
Share Should Reach Base Amount Shall Be
------------------ --------------------
(Millions)
XXX $ XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
(b) Additional payments due Budget under the above schedules shall
be paid to Budget as soon as the numbers necessary for the
required calculations are determined by the parties, but in no
event later than December 31 following the conclusion of the
applicable Model Year.
7. Budget Certificates on Acquisition.
(a) As soon as practicable after each Model Year, but not later
than December 31 of the following Model Year, Budget shall
deliver to Ford a certificate by an executive officer of
Budget certifying the following information for the preceding
Model Year: (i) the total number of Vehicles Acquired for use
at all Budget Locations for such Model Year; and (ii) the
total number of Ford Vehicles Acquired for use at all Budget
Locations for such Model Year; and (iii) the Ford Vehicle
Share for such Model Year.
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CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
(b) To assist reporting pursuant to this Paragraph,
Budget undertakes to establish an Acquisition
reporting system consistent with the Vehicle
reporting requirements of this Agreement for all
Budget Locations for each Model Year. This reporting
system shall specify Ford Vehicles Acquired by model
line and Vehicles Acquired from other manufacturers
or importers. Ford may periodically examine
such reporting data upon reasonable notice to Budget.
(c) No increased payments for Promotional Programs due to
Budget each Model Year from Ford under Paragraph 6
above shall be paid until after Ford shall have had
30 days to examine the reporting data described in
(b) above. If Ford shall request, in writing,
clarification of such data, Budget shall furnish the
requested information to Ford's satisfaction before
any increased payment shall be due.
8. No Use of Ford in Script, Etc. Budget will not use or permit any
Budget Affiliate to use, and will use all reasonable efforts to prevent the use
at any Budget Location not owned by Budget or a Budget Affiliate, any
advertising or promotional materials that contain: the Ford script-in-oval
trademark; the word "Ford" in script; or any statement that is detrimental to
Ford or any of Ford's Affiliates, or to the good name of Ford or any of its
Affiliates, or to any product made or sold by Ford or its Affiliates.
9. Pictures of Ford Vehicles.
(a) Ford will furnish to Budget, from time to time,
pictorial representations of Ford Vehicles for use by
Budget in its advertising and promotion.
(b) Each pictorial representation of a Ford Vehicle used
in a Promotional Program originally released more
than one month after the public introduction of a new
model of such Ford Vehicle will, if practicable, be a
pictorial representation of such new model.
10. Disposition of Budget Corporate Locations.
(a) Budget represents that it can ensure implementation
of the Promotional Programs only at Budget Corporate
Locations. Accordingly, the benefit to Ford of the
Promotional Programs would be substantially reduced
if Budget or Budget Affiliates ceased
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CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
to exercise operational control over any Budget
Corporate Location that had an average fleet size of
150 vehicles or more during the prior twelve months.
The benefit of such Promotional Programs would be
further reduced if a Budget Corporate Location came
under the control of an unaffiliated Budget Licensee
that declined to participate in the Promotional
Programs.
(b) Therefore, if a change of control or Transfer
affecting a Budget Corporate Location that had an
average fleet size of 150 Vehicles or more during the
prior twelve months should occur during the term of
this Agreement, Budget or the appropriate Budget
Affiliate shall make best efforts to ensure that the
affected former Corporate Location will continue to
participate in the Promotional Programs to the same
extent it participated in such Promotional Programs
while controlled or operated by Budget or a Budget
Affiliate, notwithstanding any change of control or
Transfer affecting such Budget Corporate Location. As
used herein, the term "Transfer" means the sale,
lease, assignment, franchise, license, transfer or
other disposition of all or any portion of any Budget
Corporate Location or any fixed assets, real
properties, or other property or assets reasonably
necessary for the conduct of the Budget Rent A Car or
Budget Rent A Truck business at such Location.
(c) If the total purchases of Ford Vehicles by Budget in
any Model Year shall drop below the total of the
purchases of Ford Vehicles in the Model Year of 1997,
whether as a result of a change of control or
Transfer of one or more Budget Corporate Locations,
as a result of any change in control of Budget or any
Budget Affiliate, or otherwise, then Ford may take
one of the following actions at its sole discretion:
(i) reduce the base payment for promotional
programs set forth in Paragraph 5 for that
Model Year by the percentage by which the
purchases of Ford Vehicles for that Model
Year dropped below the Model Year of 1997;
or
(ii) reduce the increased payments for
promotional programs set forth in
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CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
Paragraph 6 for that Model Year by the
percentage by which the purchases of Ford
Vehicles for that Model Year dropped below
the Model Year of 1997.
11. Confidentiality.
(a) This Agreement, or any part of the contents hereof,
and all records, statements and matters relating
hereto and all information and data disclosed by the
parties to each other hereunder except information
that is also publicly disclosed or information
obtained from third parties (collectively
"Confidential Material") shall be treated as
confidential and Ford and Budget each shall take or
cause to be taken the same degree of care in
preventing disclosure to third parties of the
Confidential Material as it does with its own
confidential trade or business information. Further,
except as may otherwise be required by law or by
subpoena or civil investigative demand, neither party
shall provide the Confidential Material, or any part
thereto, to any other person or legal entity, without
the prior written consent of the other (which consent
shall not be withheld unreasonably), other than to
the following persons or legal entities having a need
to know: (i) its accountants, attorneys and
investment bankers; or (ii) any financial institution
that it a creditor of or is making or negotiating
loans to, or equity investments in, Budget or Ford,
as the case may be. In disclosing the Confidential
Material to any of the persons or legal entities
referred to in clauses (i) and (ii) above, the
disclosing party will impose on the receiving party
the same degree of confidentiality and care that Ford
and Budget have undertaken in the first sentence of
this Paragraph or, in the case of Confidential
Material supplied to any person or governmental
agency pursuant to subpoena or civil investigative
demand, request of the Securities and Exchange
Commission or similar request, the disclosing party
will seek an appropriate protective order or
confidential treatment, and will use its best efforts
to assure that the receiving persons or entities
return all copies of all the Confidential Material
that shall have been furnished to it, promptly after
the receiving party shall
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CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
have completed its required analysis or review of
such Material.
(b) Ford and Budget each shall use its best efforts to
keep, and shall cause its respective Affiliates to
keep, confidential the terms and conditions of this
Agreement and, without the express prior written
consent of the other, shall not in any manner or for
any reason disclose any part or the whole of this
Agreement except to its officers, directors, and key
employees on a need-to-know basis.
12. Furnishing Copies of Promotional Programs. Budget will furnish to
Ford, upon request made at any time not more than twice a year, copies or
examples of all Promotional Program materials (including, without limitation,
print advertisements, collateral material, mat services, telecommunication
material and outdoor displays) prepared for Budget or on Budget's behalf and
placed by or through its advertising agencies during the month preceding such
request.
13. Budget to Control Promotional Programs. Budget will have sole
discretion and control over all copy, art work, editorial matter, media and
release dates for all Promotional Programs.
14. No Copyright Violation. Budget warrants that no Promotional Program
or other information or material released by Budget or under its control
that contains any pictorial representation of a Ford Vehicle or any reference to
Ford or its Affiliates will violate the copyright or right of privacy of, or
constitute a libel or slander or actionable derogation of, or violate any legal
or equitable right of, any person or entity; and in all other respects Budget
agrees, in the performance of its services hereunder, to comply with all laws,
rules and regulations and other legal requirements applicable to the performance
of such services.
15. Budget's Indemnity of Ford. Budget will indemnify and hold harmless
Ford, its dealers, its Affiliates and their dealers from and against all claims,
damages, liabilities, losses, costs and expenses (including, without limitation,
reasonable attorneys fees) arising out of or connected with any advertising,
promotion or publicity released by Budget or under Budget's control and with any
failure by Budget to perform its obligations hereunder.
16. Ford's Indemnity of Budget. Ford will indemnify and hold harmless
Budget, its Affiliates and Budget Licensees from and against all claims,
damages, liabilities, losses, costs and expenses (including, without limitation,
reasonable attorneys fees) arising out of or connected with the proper use of
any pictorial representation, information or data furnished by Ford
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CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
hereunder and with any failure by Ford to perform its obligations hereunder.
17. Agreement Not in Connection with Vehicle Sales. This Agreement is
not made in connection with or as a part of any transaction related to the sale
of any Ford Vehicle or Vehicles, and nothing contained herein will be construed
as imposing, directly or indirectly, any obligation on anyone to purchase or
supply any Ford Vehicles.
18. No Advertising of Competitive Products. Budget shall not, except as
otherwise specifically provided, publish, place or pay for any advertising or
promotion of any make of Vehicle other than a Ford Vehicle which Ford, in its
sole discretion, believes has reduced or may reduce the value to Ford or its
Affiliates of the Promotional Programs or other services to be provided by
Budget. Budget shall, to the extent practicable, prevent Affiliates and any
Budget Licensee from conducting such promotions or publishing any of such
advertising as referred to in this Paragraph.
19. Termination by Either Party. If either Budget or Ford fails to
fulfill its obligations under this Agreement, the other may terminate this
Agreement as of the last day of any succeeding month by giving at least 30
days, prior notice of termination to the party in breach unless such breach be
cured in such notice period, or, if not capable of being cured in such notice
period, the curing thereof is commenced and proceeds with all due diligence
during such notice unless such breach be cured in such notice period, or, if not
capable of being cured in such notice period, the curing thereof is commenced
and proceeds with all due diligence during such notice period and is cured with
60 days; provided, however, in case of such termination, Ford agrees to pay
Budget on a monthly pro rata basis for all commitments for Promotional Programs
discussed at the quarterly meetings described in Paragraph 3, provided that such
commitments shall be carried out in full by Budget.
20. Termination for Illegality. If, in the opinion of Ford's legal
counsel, this Agreement or any substantial part is rendered illegal by enactment
of a statute or a final decision by a court of competent jurisdiction or would
require Ford to make similar payments to or for the benefit of Ford franchised
dealers or others, either party may terminate this Agreement, effective
immediately, by giving notice to the other party, whereupon neither party shall
have further obligation to the other except as to such obligations that are due
and payable as of the date of termination.
21. Examination of Budget Records. Budget agrees that Ford will have
the right, through its duly authorized agents or representatives, to examine all
pertinent records of Budget and its Affiliates, including, without limitation,
records as to any Budget Location, at reasonable times for the purposes of
determining, and to the extent necessary for the determination
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CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
of, the accuracy of all information that may be furnished by Budget to Ford
hereunder. Such records will include all documents of Budget and its Affiliates
and such Licensee information as Budget may have in their custody and control
pertaining to the Promotional Programs or to Acquisitions or the number of
Vehicles at Budget Locations.
22. Changes. This Agreement may not be changed in any way except by an
instrument in writing signed and delivered by the duly authorized
representatives of Ford and Budget.
23. Notices. Any notice or other communication required or permitted
hereunder shall be in writing, will be given by registered or certified United
States mail, and shall be deemed given when deposited in the mail, postage paid
and addressed as follows:
As to Ford:
Ford Motor Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Executive Director,
Rental, Lease and Remarketing Operations
with a copy to:
Ford Motor Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
As to Budget:
Budget Rent A Car Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Such addresses and persons may be changed by notice given in like
manner.
24. Michigan Agreement. This Agreement shall be construed in accordance
with and governed by the laws of the State of Michigan without giving effect to
the principles of conflicts of law thereof.
25. Dispute Resolution. If a dispute arises between Ford and Budget
relating to this Agreement, the following procedure shall be implemented, and
neither party shall pursue other available remedies, except that either party
may seek injunctive relief from a court where appropriate in order to maintain
the status quo while this procedure is being followed:
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CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
(a) Ford and Budget shall hold a meeting promptly, attended by
persons with decision-making authority regarding the dispute,
to attempt in good faith to negotiate a resolution of the
dispute; provided, however, that no such meeting shall be
deemed to vitiate or reduce the obligations and liabilities of
the parties hereunder or be deemed a waiver by a party hereto
of any remedies to which such party would otherwise be
entitled hereunder.
(b) If, within 30 days after such meeting, Ford and Budget have
not succeeded in negotiating a resolution of the dispute, they
shall submit the dispute to mediation in accordance with the
then current Model Procedure for Mediation of Business
Disputes of the Center for Public Resources and to bear
equally the costs of mediation.
(c) Ford and Budget will jointly appoint a mutually acceptable
mediator, seeking assistance in such regard from the Center
for Public Resources if they have been unable to agree upon
such appointment within 20 days from the conclusion of the
negotiation period.
(d) Ford and Budget shall participate in good faith in the
mediation and negotiations related thereto for a period of 30
days. If the parties are not successful in resolving the
dispute through mediation, then the parties agree to submit
the matter to binding arbitration in accordance with the
Center for Public Resources Rules for Non-Administered
Arbitration of Business Disputes, by a sole arbitrator.
(e) Mediation or arbitration shall take place in Detroit,
Michigan, unless otherwise agreed by the parties. The
substantive and procedural law of the State of Michigan shall
apply to the proceedings. Equitable remedies shall be
available in any arbitration. Punitive damages shall not be
awarded. This Section 19 is subject to the Federal Arbitration
Act, 9 U.S.C.A. Section 1 et. seq. and judgment upon the award
rendered by the arbitrator, if any, may be entered by any
court having jurisdiction thereof.
26. Entire Agreement. This Agreement supersedes any prior agreements
and understandings, written and oral, between Budget and Ford with respect to
the subject matter hereof; provided, however, the Agreement dated as of July 31,
1990, as amended, shall remain in full force and effect to and including August
31, 1997.
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15
CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
27. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of Budget and Ford and their respective successors and
assigns; provided, however, no assignment of the obligations of Budget or Ford
hereunder shall release Budget or Ford, as assignor, from the performance of its
obligations hereunder.
28. Headings. The paragraph headings herein are included for
convenience of reference only and shall not be deemed a part of this Agreement.
15
16
CERTAIN PORTIONS OF THIS EXHIBIT, WHICH ARE INDICATED BY "XXX," HAVE
BEEN OMITTED BASED UPON A REQUEST FOR CONFIDENTIAL TREATMENT AND
SUCH PORTIONS HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
effective as of the day and year first above written.
FORD MOTOR COMPANY
By:
--------------------------
Its:
--------------------------
BUDGET RENT A CAR CORPORATION
By:
--------------------------
Its:
--------------------------
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