Master Supply And Advertising Agreement

Exhibit 10.1

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE SYMBOL " ****" HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO OMITTED.

MASTER SUPPLY AND ADVERTISING AGREEMENT

This Agreement (" Agreement" ) is made this 5th day of July, 2005, by and among Ford Motor Company, a Delaware corporation (" Ford" ), and The Hertz Corporation, a Delaware corporation (" Hertz" ), and Hertz General Interest, LLC, a Delaware limited liability company (" Entity" ).

WHEREAS, the purpose of this Agreement is to set forth the terms and conditions under which Ford will provide and Hertz will acquire Ford Vehicles for use in or in support of businesses conducted by Hertz at various locations in the United States, and for Hertz to advertise Ford Vehicles in the United States and for Ford to provide a portion of the funds for Advertising Programs.

Ford and Hertz agree as follows:

1. Term of Agreement . This Agreement shall be effective for the period beginning as of the date first written above and ending on August 31, 2010. Either party wishing to renew this Agreement must give written notice to the other party by June 1, 2010. This Agreement may, upon written agreement of the parties entered prior to August 31, 2010, be renewed for an additional five year term.

2. Definitions . The terms set forth below shall have the following meanings:

Acquire - to obtain, by purchase or lease, Ford Vehicles for use in or in support of operations at Hertz locations.

Acquisition - the act of Acquiring Vehicles.

Acquisition Year - each period of 12 months from and including September 1 to and including the next following August 31 during the term of this Agreement. Each such Acquisition Year shall be referred to by the calendar year next following the commencement of the Acquisition Year. For example, the 2005 Acquisition Year shall commence on September 1, 2004, and end on August 31, 2005. Acquisition Year may also be referred to as " Model Year" . " Advertising Year" shall refer to the same time period.

Advertising Programs - Programs carried out by Hertz in the United States, subject to the terms and conditions of this Agreement, that feature Ford Vehicles and promote the rental thereof.

Annual Acquisition Plan - a written plan for Acquisitions by Hertz of Ford Vehicles for an Acquisition Year (see Section 4.1).

Base Annual Volume - defined in Section 5.2.


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Confidential Material - defined in Section 27.

Control - " 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 or other legal entity, whether through the ownership of voting securities, by contract, or otherwise.

Eligible Advertising - defined in Section 13.

Ford Dealer - an independent entity in the United States authorized by Ford to sell new Ford Vehicles under one or more dealer sales and service agreements.

Ford Fleet Programs - price incentives, guaranteed resale or repurchase incentives or similar programs offered by Ford to purchasers of Ford Vehicles for daily rental service in the United States.

Ford Vehicles - any new and previously unregistered Vehicles bearing the marks " Ford" , " Mercury" or " Lincoln" as from time to time are offered for sale by Ford in the United States to Ford Dealers for resale.

Hertz Licensee - an independent person or entity that is authorized by Hertz to conduct a daily motor vehicle rental business in the United States under the Hertz trademark.

Minimum Annual Volume - defined in Section 5.2.

Program Letter - the document reflecting the specific arrangements agreed by Hertz and Ford for Ford Fleet Programs to meet the specific needs of the parties for each Acquisition Year. The Program Letter will be subject to the terms and conditions of this Agreement.

Vehicle - any new and unused passenger car, van or truck.

[Supply Provisions]

3. Ford' s Fleet Programs . Ford will offer to Hertz, as soon as practicable prior to the commencement of the Acquisition Year, the Ford Fleet Programs then being offered to other daily rental companies for the upcoming Acquisition Year. Ford reserves the right in its sole discretion to terminate, discontinue, amend, supplement, or modify any such Ford Fleet Programs at any time and without cause, provided that any such action will be discussed in advance with Hertz, in meetings attended by persons with decision-making authority, to attempt in good faith to resolve any disagreement. After consultation between Ford and Hertz, the parties will annually execute a Program Letter incorporating the detailed terms of the Ford Fleet Program and modifications thereto for the coming Acquisition Year; changes to Ford Fleet Programs will not affect the terms of the Program Letter specifically negotiated with Hertz.

4. Annual Acquisition Plan .

4.1 On or before July 1 of each Acquisition Year, Hertz shall prepare and submit to Ford a plan for Acquisitions by Hertz of Ford Vehicles for the following Acquisition Year (the " Annual


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Acquisition Plan" ) which must be agreed to by Ford. The Annual Acquisition Plan shall specify the total volume, by model, for Acquisitions of Ford Vehicles. In order for Hertz to prepare the Annual Acquisition Plan, not later than June 1 of each Acquisition Year Ford will provide Hertz with the volume and mix of Ford Vehicles likely to be made available for Acquisition for the upcoming Acquisition Year.

4.2 Each month Hertz shall prepare and submit to Ford during the last week of the month a revision of the Annual Acquisition Plan showing the detail of Acquisitions of Ford Vehicles by Hertz by month and by vehicle line. Each revision will show a firm plan for Acquisitions of Ford Vehicles by month and by vehicle line for the next three months and, effective with the September submission, an estimate of Acquisitions for the remainder of the Acquisition Year. Hertz will also provide Ford a schedule of repurchase program vehicle returns, by month and geographic area, for Ford Vehicles anticipated to be returned in the current month and the following two months.

4.3 The mix of Ford Vehicles to be Acquired will be recorded in the Program Letter for an Acquisition Year. Ford will use reasonable efforts to achieve the agreed mix, and Hertz recognizes that changes to mix shall be changes determined necessary by Ford to accommodate changes to the Ford Vehicle production plans or Ford Vehicle option content. Hertz agrees that it will request Ford Dealers to submit orders on a timely basis in order for Ford to schedule production of Ford Vehicles prior to December 31 of an Acquisition Year accounting for at least 30% of the total Ford Vehicles to be Acquired in that Acquisition Year.

5. Annual Supply Program .

5.1 Ford will develop fleet offerings for use in the daily rental business that shall be generally competitive with those similar offerings by other automotive manufacturers, as to terms and conditions. Hertz, in its discretion, may enter into vehicle supply agreements with other automotive manufacturers or brands in the United States and in other countries.

5.2 Ford agrees to provide for Acquisition by Hertz a planned volume of at least **** Ford Vehicles for the 2005 Acquisition Year, **** Ford Vehicles for the 2006 Acquisition Year, **** Ford Vehicles for the 2007 Acquisition Year, **** Ford Vehicles for each of the 2008 and 2009 Acquisition Years, and **** Ford Vehicles for the 2010 Acquisition Year (" Base Annual Volume" for the applicable Acquisition Year). Failure to achieve total Acquisitions of **** Ford Vehicles for any Acquisition Year (" Minimum Annual Volume" ) will be a material breach by Hertz of this Agreement; provided, however, that if such failure results from the failure of Ford to offer at least **** Ford Vehicles for Acquisition pursuant to the terms of this Agreement such failure will not be considered a material breach and may be subject to the provisions of Section 29. A minimum of 50% Ford Vehicles Acquired in each Acquisition Year shall be non-risk Vehicles (repurchase).

5.3 Within 15 days after the end of an Acquisition Year, Hertz shall cause its officer most familiar with the fleet programs offered by Ford and other manufacturers and its Chief Financial Officer to furnish to Ford a certification that the Ford Fleet Programs provided to Hertz are reasonably necessary for Ford to be competitive with programs offered by other manufacturers to Hertz, or reasonably available to Hertz.


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5.4 Anything in this Agreement to the contrary notwithstanding, the parties acknowledge that the only entities authorized to purchase Ford Vehicles pursuant to the terms of this Agreement are Hertz and Entity, and the only entities that will purchase Ford Vehicles pursuant to the terms of this Agreement are Hertz and Entity. Hertz shall have the right to substitute or designate another entity or entities controlled by Hertz as the Entity.

6. Ford Vehicle Allocation .

6.1 In consideration of the obligations undertaken by Hertz, Ford shall cooperate with Ford Dealers with which Hertz negotiates the Acquisition of Ford Vehicles (consistent with the sales and service agreements between Ford and Ford Dealers) to make reasonable allocations of Ford Vehicles available for resale to Hertz, giving due consideration to the provisions of the applicable Program Letter. Subject to any reduced allocation described in Section 6.2 or disruption described in Section 6.3, such reasonable allocation of Ford Vehicles in any Acquisition Year shall not be fewer than the number of Ford Vehicles Hertz has agreed to acquire in the applicable Program Letter in a reasonable mix.

6.2 Ford may allocate fewer than the applicable Base Annual Volume of Ford Vehicles in an Acquisition Year, it being understood that Ford is subject to concurrent commitments to provide Ford Vehicles to Ford Dealers for other purposes, including demand for Ford Vehicles for retail sales. In the event Ford determines such commitments cannot be satisfied from existing Ford Vehicle production capacity, Ford shall have the right to allocate available Ford Vehicle production to balance those commitments in the manner it deems most appropriate in its business judgment. In these circumstances, Ford will use reasonable efforts to allocate to Hertz the maximum number of Ford Vehicles in short supply.

6.3 If, because of (a) shortage or curtailment of material, labor, transportation, or utility service; (b) any labor, product or production difficulty; (c) any governmental action; or (d) any cause beyond the reasonable control of Ford, Ford Vehicle production is disrupted and material numbers of Ford Vehicles to be Acquired by Hertz are delayed as a result, then Hertz and Ford shall negotiate in good faith to revise the affected Annual Acquisition Plan or Plans and Program Letters so that the applicable Minimum Annual Volume of Ford Vehicles can be Acquired.

7. Hertz Certificates on Acquisitions . As soon as practicable after each Acquisition Year, but not later than November 30 after such Acquisition Year, Hertz shall deliver to Ford a certificate signed by the officer of Hertz most familiar with Acquisitions of Ford Vehicles and its Chief Accounting Officer certifying for such Acquisition Year total Ford Vehicle Acquisitions by Hertz and Hertz Licensees, separately stated if available. Hertz will continue a Vehicle reporting system with respect to Ford Vehicles providing at least the same information on Ford Vehicles provided by the system in operation upon the execution of this Agreement. Ford may periodically examine such reporting data on reasonable request and notice to Hertz as provided in Section 23.

8. Hertz Purchase Decision .

8.1 In the event Hertz shall Acquire fewer than the Minimum Annual Volume of Ford Vehicles in any Acquisition Year, and the failure is not attributable to the conditions described in


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Sections 6.2 or 6.3, Hertz recognizes that Ford may be harmed by the consequent loss of profit, production and exposure of Ford Vehicles to rental customers of Hertz who are potential purchasers of Ford Vehicles, and that the damages to Ford would be difficult to ascertain. Accordingly, Hertz agrees to pay Ford liquidated damages of **** per vehicle for any shortfall below the Minimum Annual Volume of Ford Vehicles Acquired by Hertz in any Acquisition Year; provided, however, no payment will be made if the shortfall is attributable to the conditions described in Sections 6.2 or 6.3 or to an agreement in the applicable Program Letter for Acquisitions below the Minimum Annual Volume. Such payment shall be in lieu of all other rights and remedies.

8.2 Such liquidated damages shall be paid 15 days after the delivery of the officer' s certificate required by Section 7 of this Agreement. Upon prior written notice to Hertz, Ford may offset the amount of any such damages against any payments then due or thereafter becoming due from Ford to Hertz subject to the provisions of Section 24, without limiting any right or remedy Ford may have to collect such liquidated damages from Hertz.

9. Option Allocation Agreements . Hertz agrees that so long as it purchases Ford Vehicles that are subject to Ford' s Daily Rental Repurchase Program (one of the Fleet Programs referenced in Paragraph 3 of this Agreement), Hertz will enter into an Option Allocation Agreement in which the amount allocated to the repurchase option shall equal the value, reasonably determined by Ford, of such option. Each such agreement will provide that the parties will reflect the allocations set forth therein in all federal, state and local income tax returns.

[Advertising Provisions]

10. Advertising Program . The Advertising Program will be conducted in the United States of America and will be conducted in such media or manner as Hertz may select, provided that not more than 10% of the expense of the program per Advertising Year will be in purely local advertising and not more than 15% of the expense of the program per Advertising Year will be in collateral material, such as direct mail literature, primarily associated with the Hertz # 1 Club Gold and related programs. Hertz will have sole discretion and control over all copy, art work, editorial matter, media and release dates for Eligible Advertising. Hertz, in its discretion, may enter into vehicle advertising agreements with other automotive manufacturers or brands in the United States and in other countries.

10A. Hertz Licensee Program .

10A.1 Hertz agrees that in each Advertising Year it will develop a program to promote the Acquisition of Ford Vehicles by Hertz Licensees (" Licensee Acquisitions" ) for rental use in the daily motor vehicle rental business in the United States. Ford acknowledges that Hertz does not control the selection of Vehicles Hertz Licensees Acquire for their rental fleets.

10A.2 Hertz will include Licensee Acquisitions in the applicable Annual Acquisition Plan. The Licensee program will be reviewed with Ford prior to each Acquisition Year and any concerns expressed by Ford will be considered by Hertz prior to implementation. The Licensee program will permit Hertz Licensees the opportunity to Acquire Ford Vehicles on terms that will allow them to derive substantially the same benefit as agreed to between Ford and Hertz in the


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applicable Program Letter (allowing for any variations agreed to between Hertz and Hertz Licensees). Hertz will be responsible for coordinating Licensee Acquisitions with Ford, including forecasting Acquisitions, communications and certain payments to Hertz Licensees.

11. Advertising Payment .

11.1 Subject to Section 11.2, Ford will pay one-half of the costs of the Advertising Programs to the extent that it is considered Eligible Advertising under Section 13.

(a) Ford' s base advertising payment will be **** in the Advertising Year ending on August 31, 2005 (the " 2005 Advertising Year" ). However, the parties recognize that the quarterly payments for the 2005 Advertising Year were calculated and paid by Ford in an amount provided ...