EXHIBIT 10.2

 

 

AMENDED AND RESTATED RELATIONSHIP AGREEMENT

 

This Amended and Restated Relationship Agreement (the “Agreement”) dated as of
April 30, 2015 (the “Effective Date”) is made and entered into between Ford
Motor Company, a Delaware corporation (“Ford”), and Ford Motor Credit Company
LLC, a Delaware limited liability company (“Ford Credit”).

 

RECITALS

 

A.  Ford Credit supports the sale of Ford’s products by providing, among other
things, wholesale, retail, and lease financing for the purchase and lease of
those products.

 

B.  Ford Credit is highly dependent on the public debt markets to raise funds
for its business.

 

C.  Ford Credit’s ability to raise funds in the public debt markets is highly
dependent on its credit ratings, which, in turn, are dependent on the level of
Ford Credit’s equity, the quality of its assets, and its liquidity.

 

D.  It is important to the success of Ford that Ford Credit remains a viable
finance company that can fund itself in the public debt markets and continue
supporting the sale of Ford’s products.

 

E.  Towards maintaining the viability of Ford Credit, the parties entered into
(i) an agreement dated October 18, 2001, as amended on December 12, 2006, and as
further amended on March 14, 2008 (the “Intercompany Agreement”), which provided
for certain agreements regarding transactions between them and the
creditworthiness of Ford Credit, and (ii) an Amended and Restated Support
Agreement dated November 6, 2008 (the “Support Agreement”), which provided for
Ford to make capital contributions to Ford Credit to keep its Managed Leverage
(as defined below) from exceeding 11.5 to 1.

 

F.  On April 30, 2014, the parties entered into a Relationship Agreement (the
“Original Relationship Agreement”) in order to (i) combine the provisions of the
Intercompany Agreement and the Support Agreement into a new, single agreement,
(ii) make certain revisions to those provisions, and (iii) allocate and make
available to Ford Credit a portion of Ford’s Credit Agreement (as defined
below).  On the Effective Date of the Original Relationship Agreement, the
Intercompany Agreement and the Support Agreement were terminated.

 

G.  The parties now desire to amend and restate the Original Relationship
Agreement to, among other things, increase the allocation to Ford Credit of a
portion of Ford’s Credit Agreement.

 

NOW, THEREFORE, for good and valuable consideration and the mutual agreements
herein provided, the parties agree as follows:

 

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1.  The parties agree that all Affiliate Receivables (as defined below) shall be
on arm’s-length terms.  For purposes hereof, “Affiliate Receivables” means any
advance, loan, extension of credit, or other financing to Ford or any affiliate
of Ford whose assets and liabilities are classified on Ford’s consolidated
balance sheet as Automotive (“Automotive Affiliate”).  Ford Credit shall
enforce, and cause any affiliate of Ford Credit whose assets and liabilities are
consolidated with Ford Credit’s on Ford Credit’s consolidated balance sheet
(“Credit Affiliate”) to enforce, all Affiliate Receivables in a commercially
reasonable manner, and Ford shall pay, shall cause its Automotive Affiliates to
pay, and shall guarantee its Automotive Affiliates’ payment of, Affiliate
Receivables in accordance with their terms.

 

2.  Ford Credit shall not, nor shall it permit any Credit Affiliate to,
guarantee any indebtedness of (other than Permitted Guarantees), or purchase any
equity securities issued by, or make any other investment in, Ford (parent
company only) or any Automotive Affiliate.  In addition, Ford Credit shall not,
nor shall it permit any Credit Affiliate to, purchase or finance any real
property (other than Permitted Mortgages) or manufacturing equipment (including
tooling) from or of Ford or any Automotive Affiliate that is classified as an
Automotive asset on Ford’s consolidated balance sheet.  Ford shall not, nor
shall it permit any Automotive Affiliate to request or require Ford Credit or
any Credit Affiliate to do any of the transactions prohibited by this paragraph
2.  For purposes hereof, “Permitted Guarantees” shall mean guarantees by Ford
Credit or Credit Affiliates of indebtedness of Ford or Automotive Affiliates
that are cash collateralized in full and guarantees that are not cash
collateralized in full but which at any time do not exceed $500 million in the
aggregate, and “Permitted Mortgages” shall mean financing by Ford Credit or
Credit Affiliates of real property of Ford or Automotive Affiliates which at any
time does not exceed $500 million in the aggregate.

 

3.  As used herein, “Managed Leverage” means, as of the end of each calendar
quarter, Ford Credit’s managed leverage reported in, and calculated in
accordance with the managed leverage formula as set forth in, Ford Credit’s
periodic report (Form 10-Q or Form 10-K, as the case may be) covering such
calendar quarter filed with the United States Securities and Exchange
Commission.  In the event that Ford Credit’s Managed Leverage as of the end of
any calendar quarter, beginning with the calendar quarter ending June 30, 2015,
is higher than 11.5 to 1, then, upon demand by Ford Credit, Ford shall make or
cause to be made a capital contribution to Ford Credit in an amount sufficient
to have caused such Managed Leverage to have been 11.5 to 1.  Such capital
contribution, if required, will be made not later than 30 days after the filing
by Ford Credit of its Form 10-Q or Form 10-K, as the case may be, covering such
calendar quarter.

 

4.  Ford Credit shall, and shall cause each Credit Affiliate to, conduct its
business, including its finance and lease business, in a prudent and
commercially reasonable manner, including maintaining and adhering to credit
risk underwriting standards for finance and lease receivables and residual
assumptions for lease receivables it acquires or originates that are consistent
with industry standards.  Ford shall not, nor shall it permit any Automotive
Affiliate to, require Ford Credit or any Credit Affiliate to accept credit or
residual risk beyond what it would be willing to accept acting in a prudent and
commercially reasonable manner.  For avoidance of doubt, acquisition or
origination of finance or lease receivables having terms that are not
market-based shall be considered to be prudent and commercially reasonable if
subsidies (in the form of interest rate subvention payments, guarantees,
residual risk sharing arrangements, or otherwise)

 

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are provided by Ford or an Automotive Affiliate in an amount sufficient to
assure that Ford Credit or a Credit Affiliate, as the case may be, will receive
the economic benefits of such receivables as if they had been acquired or
originated on market-based terms.  Notwithstanding the foregoing, in recognition
of the fact that Ford uses Ford Credit as the exclusive provider of financial
services for special retail and lease programs to support the sale of products
manufactured by Ford and other Automotive Affiliates, it is understood that it
would be commercially reasonable and prudent for Ford Credit to accept, to a
limited extent, higher levels of credit risk than it might otherwise accept in
order to continue as the exclusive provider of financial services to Ford and
the other Automotive Affiliates with respect to such programs.   For any given
program, Ford Credit may waive its right to be the exclusive provider of
financial services to Ford and the other Automotive Affiliates.

 

5.  Ford and Ford Credit agree that (a) Ford Credit shall at all times maintain
its books, records, financial statements, and bank accounts separate from those
of Ford and any Automotive Affiliate; (b) Ford Credit shall maintain its assets
in such a manner that it will not be costly or difficult to segregate,
ascertain, or identify its assets from those of Ford and any Automotive
Affiliate; (c) the funds and other assets of Ford Credit shall not be commingled
with those of Ford or any Automotive Affiliate; (d) Ford Credit shall at all
times hold itself out as a legal entity separate and distinct from Ford and any
Automotive Affiliate; (e) except with respect to the agreements set forth in
Paragraph 3 hereof and Paragraphs 9 through 16 hereof, each will act in a manner
and conduct its business such that creditors of Ford, acting reasonably, will
rely primarily on the creditworthiness of, and look solely to the assets of
Ford, for repayment of indebtedness, and creditors of Ford Credit, acting
reasonably, will rely primarily on the creditworthiness of, and look solely to
the assets of Ford Credit, for repayment of indebtedness; and (f) they otherwise
will take such reasonable and customary action so that Ford Credit will not be
consolidated with Ford or any Automotive Affiliate in any case or other
proceeding seeking liquidation, reorganization, or other relief with respect to
Ford or any Automotive Affiliate or its debts under any bankruptcy, insolvency,
or other similar law.

 

6.  In the event that Ford or any of its subsidiaries engages in a corporate
transaction that causes the Pension Benefit Guaranty Corporation (“PBGC”) to
threaten to terminate the pension plans sponsored by Ford or any of its
subsidiaries, Ford shall, or shall cause any of its subsidiaries to, seek to
negotiate a settlement with the PBGC to avoid an involuntary plan termination. 
In connection with such negotiated settlement, Ford shall endeavor not to grant
to the PBGC a security interest in the assets of Ford Credit that has priority
over the claims of unsecured creditors of Ford Credit.

 

7.  All determinations to be made under this Agreement shall be made in
accordance with, or with reference to financial statements prepared in
accordance with, United States generally accepted accounting principles.  For
purposes of this Agreement, the term “lease receivables” shall mean “net
investment in operating leases” as stated on or reflected in Ford Credit’s
consolidated financial statements.

 

8.  During the term of this Agreement, Ford Credit shall continue to make
inventory and capital financing generally available to dealers of vehicles
manufactured or sold by Ford or its Automotive Affiliates and shall continue to
make retail and lease financing generally available to

 

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such dealers’ customers to substantially the same extent that Ford Credit has
historically made such services available, so long as providing such services to
such an extent would not result in a breach of any of the foregoing provisions. 
Nothing herein precludes Ford Credit from providing or continuing to provide
financial services to automotive manufacturers other than Ford or its Automotive
Affiliates.

 

9.  Subject to the terms set forth in Paragraphs 10-16 hereof, Ford previously
designated Ford Credit as a Subsidiary Borrower under the Third Amended and
Restated Credit Agreement, dated as of December 15, 2006, as amended and
restated on November 24, 2009, as amended and restated as of April 30, 2014, and
as further amended and restated as of April 30, 2015 (as further amended,
supplemented, or modified from time to time, the “Credit Agreement;” unless
otherwise defined herein, capitalized terms used in this Agreement have the
meanings ascribed to them in the Credit Agreement), among Ford Motor Company,
the Subsidiary Borrowers from time to time party thereto, the several banks and
other financial institutions or entities from time to time party thereto,
JPMorgan Chase Bank, N.A., as administrative agent, and the other agents party
thereto.

 

10.  During the term of the Credit Agreement, Ford Credit shall have the
irrevocable right to borrow for any purpose (i) up to the total amount of any
RMB Revolving Commitments, and (ii) up to $2,000,000,000 of any Revolving
Commitments other than the RMB Revolving Commitments ((i) and (ii),
collectively, the “Maximum Amount”) under the terms and conditions of the Credit
Agreement and agrees not to have any outstanding borrowings thereunder at any
time in excess of the Maximum Amount.

 

11.  Ford shall not terminate the Credit Agreement prior to its maturity or take
any other action that would impair Ford Credit’s ability to borrow the Maximum
Amount under the Credit Agreement, in each case without Ford Credit’s prior
written consent.

 

12.  Notwithstanding the foregoing, Ford may take actions with regard to the
Credit Agreement (e.g., amendment, restatement, cancellation, and replacement)
so long as the resulting credit available thereunder to Ford Credit up to the
Maximum Amount is not materially adversely affected.

 

13.  Ford agrees in advance to approve all Ford Credit actions pursuant to its
right as a Subsidiary Borrower under the Credit Agreement that would require
Ford’s consent.  No written Ford approvals to Ford Credit’s actions under the
Credit Agreement will be required except those written consents explicitly
required by the terms of the Credit Agreement (e.g., guarantee, legal opinions).

 

14.  Ford agrees to guarantee the Obligations of Ford Credit as a Subsidiary
Borrower as required by and in accordance with the terms of the Credit
Agreement.

 

15.  Ford Credit will reimburse Ford for a proportion of the total costs
incurred by Ford under the Credit Agreement that is equal to the proportion that
the Maximum Amount bears to the total Commitments under the Credit Agreement.

 

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16.  Ford and Ford Credit will promptly and duly execute and deliver such
further documents and assurances and take such further actions as may from time
to time be necessary to carry out the intent and purpose of Paragraphs 9 through
15 of this Agreement.

 

17.  This Agreement shall be construed and interpreted in accordance with, and
governed by, the internal laws of the State of New York, excluding any choice of
law rules that may direct the application of the laws of another jurisdiction.

 

18.  This Agreement shall terminate initially on April 30, 2020 (the
“Termination Date”).  On April 30, 2016,  and on each April 30 thereafter during
the term of this Agreement, the Termination Date shall be extended automatically
for an additional one-year period (ending on the April 30 next following the
then-current Termination Date) unless either party shall have given the other
party written notice during the period beginning on the January 1 and ending on
the April 1 immediately preceding such April 30, specifying its election not to
extend the Termination Date beyond the then-current Termination Date and that
the term of this Agreement shall, therefore, expire on such then-current
Termination Date.

 

19.  No person other than Ford and Ford Credit, and their permitted successors
and assigns, shall have any right to enforce any term of this Agreement.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.

 

 

FORD MOTOR COMPANY

FORD MOTOR CREDIT COMPANY LLC

 

 

 

 

 

 

 

 

 

 

 

 

By:

   /s/ Neil M. Schloss

 

By:

/s/ Michael L. Seneski

 

 

Neil M. Schloss

 

Michael L. Seneski

 

Vice President and Treasurer

 

Chief Financial Officer and Treasurer

 

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