{"id":40756,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/agreement-ford-motor-co-and-ford-motor-credit-co.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-ford-motor-co-and-ford-motor-credit-co","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/corporate\/agreement-ford-motor-co-and-ford-motor-credit-co.html","title":{"rendered":"Agreement &#8211; Ford Motor Co. and Ford Motor Credit Co."},"content":{"rendered":"<pre>                                    AGREEMENT\n\n         This Agreement is dated as of October 18, 2001 between Ford Motor\nCompany, a Delaware corporation (\"Ford\"), and Ford Motor Credit Company, a\nDelaware corporation (\"Ford Credit\").\n\n         RECITALS:\n\n         A.       Ford Credit supports the sale of Ford's products by providing,\namong other things, wholesale, retail and lease financing for the purchase and \nlease of those products.\n\n         B.       Ford Credit is highly dependent on the public debt markets to \nraise funds for its business.\n\n         C. Ford Credit's ability to raise funds in the public debt markets is\nhighly dependent on its credit ratings, which, in turn, are dependent on the\nlevel of Ford Credit's equity capital, the quality of its assets and its\nliquidity.\n\n         D. It is important to the success of Ford that Ford Credit remains a\nviable finance company that can fund itself in the public debt markets and\ncontinue supporting the sale of Ford's products.\n\n         E.       Towards maintaining the viability of Ford Credit, the parties \ndesire to provide for certain agreements regarding transactions between them \nand the creditworthiness of Ford Credit.\n\n         NOW, THEREFORE, for good and valuable consideration and the mutual\nagreements herein provided, the parties agree as follows:\n\n         1. The parties agree that all Affiliate Receivables (as defined below)\nshall be on arm's-length terms. For purposes hereof, \"Affiliate Receivables\"\nmeans any advance, loan, extension of credit, or other financing to Ford, The\nHertz Corporation (\"Hertz\") or any affiliate of Ford whose assets and\nliabilities are classified on Ford's consolidated balance sheet as Automotive\n(\"Automotive Affiliate\"). Ford Credit shall enforce, and cause its subsidiaries\nto enforce, all Affiliate Receivables in a commercially reasonable manner, and\nFord shall pay, and cause its Automotive Affiliates to pay, Affiliate\nReceivables in accordance with their terms.\n\n         2. Ford Credit shall not, nor shall it permit any of its subsidiaries\nto, guarantee any indebtedness of, or purchase any equity securities issued by,\nor make any other investment in, Ford (parent company only), Hertz or any\nAutomotive Affiliate. In addition, Ford Credit shall not, nor shall it permit\nany of its subsidiaries to, purchase or finance any real property or\nmanufacturing equipment (including tooling) from or of Ford or any Automotive\nAffiliate that is classified as an Automotive asset on Ford's consolidated\nbalance sheet. Ford shall not, nor shall it permit Hertz or any Automotive\nAffiliate to, request or require Ford Credit, or Ford Credit's subsidiaries, to\ndo any of the transactions prohibited by this Section 2.\n\n         3. Ford and Ford Credit agree that Ford Credit's total stockholder's\nequity as stated on or reflected in its consolidated financial statements shall,\nat the end of any calendar quarter during which this Agreement is in effect, be\nmaintained at a commercially reasonable level appropriate to support the amount,\nquality and mix (i.e., retail finance receivables, wholesale finance receivables\nand lease receivables) of Ford Credit's assets as stated on or reflected in its\nconsolidated financial statements for the same calendar quarter, taking into\naccount general business conditions affecting Ford Credit.\n\n\n\n                                       2\n\n         4. Ford Credit shall, and shall cause each of its finance subsidiaries\nto, conduct its business, including its finance and lease business, in a prudent\nand commercially reasonable manner, including maintaining and adhering to credit\nrisk underwriting standards for finance and lease receivables and residual\nassumptions for lease receivables it acquires or originates that are consistent\nwith industry standards. Ford shall not, nor shall it permit any Automotive\nAffiliate to, require Ford Credit or any of its subsidiaries to accept credit or\nresidual risk beyond what it would be willing to accept acting in a prudent and\ncommercially reasonable manner. For avoidance of doubt, acquisition or\norigination of finance or lease receivables having terms that are not\nmarket-based shall be considered to be prudent and commercially reasonable if\nsubsidies (in the form of interest rate subvention payments, guarantees,\nresidual risk sharing arrangements or otherwise) are provided by Ford or an\nAutomotive Affiliate in an amount sufficient to assure that Ford Credit or a\nfinance subsidiary of Ford Credit, as the case may be, will receive the economic\nbenefits of such receivables as if they had been acquired or originated on\nmarket-based terms. Notwithstanding the foregoing, in recognition of the fact\nthat Ford uses Ford Credit as the exclusive provider of financial services for\nspecial retail and lease programs to support the sale of products manufactured\nby Ford and other Automotive Affiliates, it is understood that it would be\ncommercially reasonable and prudent for Ford Credit to accept, to a limited\nextent, higher levels of credit risk than it might otherwise accept in order to\ncontinue as the exclusive provider of financial services to Ford and the other\nAutomotive Affiliates with respect to such programs.\n\n         5. Ford and Ford Credit agree that (a) Ford Credit shall at all times\nmaintain its books, records, financial statements and bank accounts separate\nfrom those of Ford and any Automotive Affiliate; (b) Ford Credit shall maintain\nits assets in such a manner that it will not be costly or difficult to\nsegregate, ascertain or identify its assets from those of Ford and any\nAutomotive Affiliate; (c) the funds and other assets of Ford Credit shall not be\ncommingled with those of Ford or any Automotive Affiliate; (d) Ford Credit shall\nat all times hold itself out as a legal entity separate and distinct from Ford\nand any Automotive Affiliate; (e) except with respect to the performance of\ntheir respective obligations under that certain Amended and Restated Profit\nMaintenance Agreement dated as of January 1, 1999 between Ford and Ford Credit\n(as it may be amended from time to time), each will act in a manner and conduct\nits business such that creditors of Ford, acting reasonably, will rely primarily\non the creditworthiness of, and look solely to the assets of Ford, for repayment\nof indebtedness and creditors of Ford Credit, acting reasonably, will rely\nprimarily on the creditworthiness of, and look solely to the assets of Ford\nCredit, for prepayment of indebtedness and (f) they otherwise will take such\nreasonable and customary action so that Ford Credit will not be consolidated\nwith Ford or any Automotive Affiliate in any case or other proceeding seeking\nliquidation, reorganization or other relief with respect to Ford or any\nAutomotive Affiliate or its debts under any bankruptcy, insolvency or other\nsimilar law.\n\n         6. The sum of (i) the aggregate amount of unused committed bank line\nfacilities, (ii) the unutilized portion of the aggregate dollar amount of\nreceivables that bank-sponsored, commercial paper issuers (conduits) are\ncontractually committed to purchase from Ford Credit and (iii) cash and\nmarketable securities (and any other sources of liquidity that may be agreed\nupon from time to time) of Ford Credit and its consolidated subsidiaries shall\nat all times be at least equal to 100% of the outstanding commercial paper of\nFord Credit and its consolidated subsidiaries.\n\n         7. In the event that Ford or any of its subsidiaries engages in a\ncorporate transaction that causes the Pension Benefit Guaranty Corporation\n(\"PBGC\") to threaten to terminate the pension plans sponsored by Ford or any of\nits subsidiaries, Ford shall, or shall cause any of its subsidiaries to, seek to\nnegotiate a settlement with the PBGC to avoid an involuntary plan termination.\nIn connection with such negotiated settlement, Ford shall endeavor not to grant\nto the PBGC a security interest in the assets of Ford Credit that has priority\nover the claims of unsecured creditors of Ford Credit.\n\n         8. All determinations to be made under this Agreement shall be made in\naccordance with, or with reference to financial statements prepared in\naccordance with, United States generally accepted \n\n\n\n                                       3\n\naccounting principles. For purposes of this Agreement, the term \"lease \nreceivables\" shall mean \"net investment in operating leases\" as stated on or \nreflected in Ford Credit's consolidated financial statements.\n\n         9. During the term of this Agreement, Ford Credit shall continue to\nmake inventory and capital financing generally available to dealers of vehicles\nmanufactured or sold by Ford or its Automotive Affiliates and shall continue to\nmake retail and lease financing generally available to such dealers' customers\nto substantially the same extent that Ford Credit has historically made such\nservices available, so long as providing such services to such an extent would\nnot result in a breach of any of the foregoing provisions. Nothing herein\nprecludes Ford Credit from providing or continuing to provide financial services\nto automotive manufacturers other than Ford or its Automotive Affiliates.\n\n         10. This Agreement shall be construed and interpreted in accordance\nwith, and governed by, the internal laws of the State of New York, excluding any\nchoice of law rules that may direct the application of the laws of another\njurisdiction.\n\n         11. This Agreement shall terminate on the Termination Date, which shall\ninitially be October 17, 2006. On October 17, 2002, and on each October 17\nthereafter during the term of this Agreement, the Termination Date shall be\nextended automatically for an additional one-year period (ending on the October\n17 next following the then-current Termination Date) unless either party shall\nhave given the other party written notice during the period beginning on the\nJuly 1 and ending on the October 1 immediately preceding such October 17,\nspecifying its election not to extend the Termination Date beyond the\nthen-current Termination Date and that the term of this Agreement shall,\ntherefore, expire on such then-current Termination Date.\n\n\n         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be\nduly executed as of the day and year first above written.\n\nFORD MOTOR COMPANY                          FORD MOTOR CREDIT COMPANY\n\n\n\nBy:  \/s\/Elizabeth S. Acton                By: \/s\/Bibiana Boerio\n     ----------------------------             ---------------------------\n     Elizabeth S. Acton                       Bibiana Boerio\n     Vice President and Treasurer             Executive Vice President and Chief\n                                              Financial Officer\n\n\n\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7565],"corporate_contracts_industries":[9388],"corporate_contracts_types":[9553,9556],"class_list":["post-40756","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-ford-motor-co","corporate_contracts_industries-autos__autos","corporate_contracts_types-corporate","corporate_contracts_types-corporate__govern"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40756","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40756"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40756"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40756"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40756"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}