Form Of Advertising Agreement

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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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 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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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: $ XXX 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
$XXX 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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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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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 ...