1
Exhibit 10.19
[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]
September 23, 1996
Xx. Xxxx Xxxxxx
National Car Rental Systems, Inc.
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Dear Xx. Xxxxxx:
This letter will confirm the agreement ("Agreement") reached between National
Car Rental Systems, Inc., ("National") and General Motors ("GM") regarding
National's purchase or lease of GM vehicles for model year 1997.
The details of this Agreement are as follows:
1997 MODEL YEAR
1. National will purchase or lease from GM dealers of their choice * 1997
model GM vehicles under the terms and conditions of GM's 1997 Model Year
Daily Rental Fleet 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 vehicles 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 * Eighty Eight *
Cavalier * DeVille *
Cavalier Cvt. * Riviera *
Sunfire * Aurora *
Sunfire Cvt. * Camaro *
Malibu * Venture Minivan *
Grand Am * Trans Sport *
Skylark * Astro Van *
Acheiva * Safari Van *
Lumina * Blazer *
Monte Carlo * S10 Pickup *
Grand Prix * Xxxxx *
Supreme * Chevy Full-size Van *
Bonneville * Tracker *
LaSabre * ------
Total Units: *
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Xx. Xxxx Xxxxxx
September 23, 1996
Page 2
2. National agrees that in all advertising and promotional materials which
National undertakes for the 1997 Model Year (September 1, 1996 through
August 31, 1997), 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 custom of the trade and industry.
3. In exchange for this Agreement to purchase, promote and service the
number of 1997 models and in a vehicle mix satisfactory to GM, as
described in Paragraph 1, GM will provide National * in addition to
any incentive due under terms and conditions of GM's 1997 Model Year
Daily Rental Fleet Program.
4. The pro rata portion of the sum described in Paragraph 3, will be paid
to National by the 25th 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 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 * 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 Consolidated Fleet
Redistribution 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, * to National as described in Paragraph
3 by General Motors will be reimbursed to GM on demand subject to
Paragraph 5.
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Xx. Xxxx Xxxxxx
September 23, 1996
Page 3
5. All volume and mix requirements are subject to reasonable minor
adjustments based on 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 1997 model year vehicles (model
year fleet plan) by division and car line, by month and model year.
National agrees to provide to GM, at the end of the each month, a
schedule of 1996 and 1997 model vehicle returns by vehicle size (e.g.,
economy, midsize, etc.) by month for the 1996 and 1997 calendar years.
*
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.
The Reclassification Program for the 1997 model year is under development and
will be mailed under a separate cover.
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Xx. Xxxx Xxxxxx
September 23, 1996
Page 4
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/ Xxxxxxx Xxxxxx
----------------------------------
Acknowledged and Agreed
National Car Rental Systsems, Inc.
Date: 10/4/96
-----------------------------
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1997 MY DAILY RENTAL REPURCHASE PROGRAM GUIDELINES
--------------------------------------------------
Attachment 1 - Part 1 of 2
GENERAL MOTORS CORPORATION
1997 MY DAILY RENTAL REPURCHASE PROGRAM GUIDELINES
1. PROGRAM NAME AND NUMBER:
1997 Model Year Passenger Car and Light Duty Truck 100% Repurchase
Program for Daily Rental Operators - Program No. 97-02.
2. PROGRAM DESCRIPTION:
To provide General Motors dealers certain repurchase information on
selected 1997 model year passenger cars and light duty trucks sold and
delivered by GM dealers to qualified daily rental operators and
eligible for repurchase by General Motors in accordance with the
guidelines herein.
3. PROGRAM ALLOWANCES:
The repurchase amount shall be calculated as a percent of dealer
invoice including freight. The repurchase 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 repurchase percentage)
- The daily repurchase rate equals the change in the monthly
rate divided by the number of calendar days for that month.
- Out-of-service date shall be the date the vehicle is returned
to an approved auction location 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: Cavalier Z24, Corvette, Astro
and Safari Cargo Vans, Suburban, Tahoe, Yukon, Van Conversions
(including Hi-Cube and Stepvan), and Full Size Cargo Vans.
Vehicles delivered from dealer inventory and NOT eligible for
enrollment in the 1997 Repurchase Program.
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1997 MY DAILY RENTAL REPURCHASE PROGRAM GUIDELINES
--------------------------------------------------
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 1997 model year program and
ending when dealers are notified that 1997 model year orders are no
longer being accepted.
Production, Delivery, In-Service - 1997 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, 1999 (whichever
occurs first).
Repurchase 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 repurchased by General Motors Corporation under this
program must be returned and accepted by July 31, 1999. NON-RETURNED
VEHICLES PURCHASED UNDER THIS PROGRAM MUST REMAIN IN SERVICE A MINIMUM
OF SIX (6) MONTHS (180 DAYS). Documented frame, fire, and/or
water-damaged vehicles, which are ineligible for repurchase, have no
minimum in-service period.
5. ELIGIBLE MODELS/REQUIRED OPTIONS AND/OR ORDER TYPES:
All new and unused 1997 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).
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1997 MY DAILY RENTAL REPURCHASE PROGRAM GUIDLINES
-------------------------------------------------
All qualified fleet orders for eligible models received from dealers
must contain a valid Fleet Order Type.
Ordering Instructions: All repurchase 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.
Dealer Order Acknowledgments must be checked to verify accuracy of
order submitted.
Dealer orders currently on hand or in the system that qualify under
this program, except that 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 Repurchase - Refer Mandatory Optional
Equipment.
Required Options - Processing Option VN9 and your customer assigned UPC
processing code must be ordered by the dealer on repurchase vehicles to
be enrolled in the 1997 Model Year Daily Rental 100% Repurchase
Program. PROCESSING OPTION VN9 WILL PROVIDE A NET INVOICE - LESS
HOLDBACK AND ADVERTISING.
6. COMPATIBLE INCENTIVE/ALLOWANCE PROGRAMS:
Vehicles enrolled in the 1997 Model Year 100% Repurchase Program are
NOT eligible for any other fleet/retail program, including, but not
limited to, the Dealer Fleet Ordering Assistance Program (VQ), Price
Assurance and Price Protection. Chevrolet GEO Dealer Rent A Car System
units (CGDRACS) and General Motors Dealer Rent A Car System units
(GMDRACS) are not eligible for the 1997 Model Year 100% Repurchase
Program.
7. METHOD OF APPLICATION: Not Applicable.
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1997 MY DAILY RENTAL REPURCHASE PROGRAM GUIDELINES
--------------------------------------------------
8. METHOD OF PAYMENT:
Check to titleholder or financial institution upon receipt and
clearance of proper paperwork at auction site and General Motors
Corporation.
Repurchase payment is made in the form of a check to the titleholder 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 repurchase checks to lending institutions as co-payee with the
titled owner.
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
X.X. 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 repurchase."
In the event a vehicle enrolled in the 100% Repurchase Daily
Rental 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 repurchase. GENERAL MOTORS HAS THE
RIGHT TO AUDIT THE CUSTOMER TO ENSURE COMPLIANCE WITH THE
PROGRAM GUIDELINES.
B. All dealers are responsible for maintaining a copy of a
current General Motors dealer allowance incentive programs
administrative manual, and, as such, all guidelines and terms
contained therein will be applied to this program.
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1997 MY DAILY RENTAL REPURCHASE PROGRAM GUIDLEINES
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C. Unless otherwise specified, all eligible units must be
purchased from General Motors and delivered to the ultimate
customer through a General Motors dealership. 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 termination of dealer sales and service
agreement.
F. Orders not produced during the 1997 model production period
will be canceled. There are no provisions for dealers to
receive any allowance for canceled orders.
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.
11. GENERAL POLICY GUIDELINES:
A. 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.
B. General Motors reserves the right to cancel, amend, revise, or
revoke any program at any time based on its sole business
judgments. Final decisions in all matters relative to the
interpretation of any rule or phase of this activity rests
solely with General Motors.
