CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a
confidential treatment request. This text has been separately filed with the
Securities and Exchange Commission

Exhibit 10.7

MAFA Term Sheet

Summary of Required Terms

Chrysler – GMAC Master Financial Services Agreement (GMAC MAFA)

Dated as of April 30, 2009

Following is a summary of the proposed principal terms for a proposed financial
services arrangement between Chrysler LLC (“Chrysler”), and GMAC LLC (“GMAC”) in
connection with Chrysler’s proposed industrial alliance with Fiat S.p.A. and
efforts to effect a restructuring with the support of the United States
Department of the Treasury. Both parties agree to be bound by the terms,
conditions, rights and obligations outlined in this Term Sheet until the Parties
execute definitive agreements which will more fully describe the agreement as
set forth in this Term Sheet, upon execution of which such rights and
obligations will be governed by the terms and conditions of such definitive
agreements.

 

1    Term of Agreement    Four year agreement; automatically renewed for
successive 1 year terms unless Chrysler or GMAC provide 12 months notice of
nonrenewal prior to the end of the current term. In consideration of the
wholesale and retail financing support being provided to Chrysler customers and
dealers, particularly in light of the efforts to support the Chrysler dealer
network, the agreement will have the exclusivity provisions provided herein. In
the event of a termination of this agreement, GMAC will reasonably cooperate in
good faith to assist Chrysler in facilitating the qualification of another
financial services provider during an appropriate transition period to be
agreed. 2    Territories   

The financial services to be rendered by GMAC will be offered for all brands
distributed through the Chrysler dealer network in the following countries for
the duration of the MAFA:

 

•        USA (including Puerto Rico on a reasonable best efforts basis)

 

•        Canada

 

•        Mexico

 

•        Other International markets as the parties may mutually agree from time
to time

3    Transition   

GMAC will use commercially reasonable efforts to facilitate a smooth transition
from Chrysler’s current agreements with Chrysler Financial. The parties will
develop separate transition plans for wholesale, and retail financing and
ancillary services (e.g., insurance and remarketing services).

 

As part of transition planning, GMAC will use commercially reasonable efforts to
(i) put in place new interim dealer funding for new and used inventory as
promptly as practicable with a target completion date of May 15, 2009, (ii)
promptly conduct a dealer credit assessment to determine whether to establish
longer-term credit lines of adequate amount and consistent with GMAC credit
policies (as determined by GMAC in good faith) for each Chrysler dealer within
180 days from the date of this Term Sheet, GMAC and Chrysler will collaborate to
establish, and GMAC will use commercially reasonable efforts to satisfy, interim
targets to be established by May 15, 2009 for the completion of such process and
(iii) begin to offer new retail financing accommodations to Chrysler dealers as
soon as reasonably practicable with an expected target date of May 15, 2009 for
standard retail financing and June 1, 2009 for subvention programs. GMAC will
provide Chrysler with regular reporting as to the

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a
confidential treatment request. This text has been separately filed with the
Securities and Exchange Commission

 

     

progress of the foregoing. All decisions to establish credit lines or to decline
to provide credit or to provide other products or services to a dealer or
consumer will be at GMAC’s sole discretion. To the extent that after the dealer
credit assessment GMAC determines not to establish longer-term credit lines for
dealers, GMAC will use commercially reasonable efforts to provide sufficient
advance notice to such dealers to enable them to determine whether financing
will be available.

 

As part of the transition plan, GMAC will provide new dealer funding in
accordance with this Term Sheet and (i) in the U.S. and Canada, the interim
program parameters attached as Annex A hereto and the program parameters
attached as Annex B hereto following the completion of the interim period and
(ii) in Mexico, the program parameters attached as Annex C hereto, in each case
absent a dealer default.

4    Financial Products   

GMAC shall provide the following financial services and products to Chrysler
dealers and customers, as GMAC deems appropriate from a credit and risk
management perspective in its sole discretion.

 

Dealer Financing and Services:

 

•        Vehicle Inventory Financing (New and Used);

 

•        Capital Loans;

 

•        Equipment Loans;

 

•        Real Estate Loans;

 

•        Dealer insurance products and services, subject to [***];

 

•        Remarketing (including GMAC SmartAuction and other auction services);
and

 

•        Electronic cash and drafting settlement systems

 

Retail Financing:

 

•        Consumer Retail Financing;

 

•        Commercial Retail Financing; and

 

•        Fleet Financing (Commercial Finance).

 

Currently GMAC does not offer any leasing products other than standard rate
products, but GMAC may offer such products in the future subject to market
conditions and risk management policies and if offered by GMAC, will be
available to the Chrysler network on a non-discriminatory basis taking into
account that OEMs offer different products and programs and those products have
different residual values.

5    Risks   

Subject to GMAC’s credit policies and the terms below, GMAC shall provide all
financing and funding for the financial services offered and shall bear all
risks in connection with financing services including, but not limited to credit
risk; and residual value risk

 

Unless otherwise mutually agreed (e.g. in connection with a specific subvention
program), all such financing and funding will be on a non-recourse basis with
respect to Chrysler and pursuant to which Chrysler shall not bear the credit
risk.

 

[***]:

 

•     [***].

•     [***].

 

[***].

 

- 2 -

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a
confidential treatment request. This text has been separately filed with the
Securities and Exchange Commission

 

     

In the event that all or substantially all of the assets of Chrysler are sold in
a transaction that, in the judgment of GMAC, is likely to result in the
successful stabilization of Chrysler’s automobile manufacturing business (i.e.,
if Chrysler emerges from bankruptcy), [***].

 

In any event, the parties agree to negotiate in good faith on an annual basis
[***].

 

For the avoidance of doubt, each of Chrysler’s subsidiaries that are debtors in
Chrysler’s bankruptcy case will guarantee Chrysler’s obligations under this
agreement unless explicitly prevented by any preexisting agreement or applicable
law or to the extent that such guarantees would result in a material adverse tax
consequence to Chrysler.

 

Formal approval of dealership credit lines will be contingent upon having a
Vehicle Repurchase Agreement from Chrysler, in form and substance mutually
agreed between the parties, including the minimum terms outlined in Annex D of
this Term Sheet (the “Vehicle Repurchase Agreement”).

6    Retail Exclusivity for Subvention Programs   

Chrysler will, (i) beginning six months after the date of this Term Sheet, use
GMAC for at least [***] of Chrysler subvented volume and (ii) beginning twelve
months after the date of this Term Sheet, use GMAC for at least [***] of
Chrysler subvented volume (the “Volume Thresholds”).

 

Prior to the period during which the Volume Thresholds are in effect, Chrysler
will continue to offer subvented volume through GMAC on a non-exclusive,
side-by-side basis with any third party finance provider.

 

If there is no Capital Markets Disruption and [***], Chrysler may provide such
specific subvention program through third parties (without such volume being
counted in the Volume Threshold calculation). In such cases, Chrysler will
consult in good faith with GMAC as to the terms and conditions of the individual
situations in order to facilitate GMAC’s ability to service Chrysler’s retail
financing needs.

7    Capital Markets Disruption   

Capital markets disruption (“Capital Markets Disruption”) is defined as a period
of time in which global credit markets are such that credit is either “not
available” or “not available on any commercially reasonable terms” to borrowers
with credit rating and business prospects similar to GMAC for a period of three
months or longer. Chrysler and GMAC will mutually and reasonably determine
whether a Capital Markets Disruption has occurred, and if so when it ends.

 

During a Capital Markets Disruption, [***] Chrysler will be relieved from the
exclusivity provided under section 6 above and may work with other third party
financial providers to provide such financing products on a temporary basis (on
terms consistent with terms offered to GMAC) (“Alternative Volume”) until GMAC
has provided notice that the Capital Markets Disruption has ended. Upon such
notice, the Volume Thresholds will be immediately reinstated; provided that any
Alternative Volume shall not be counted against such Volume Threshold for six
months from the date of GMAC’s notice.

 

- 3 -

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a
confidential treatment request. This text has been separately filed with the
Securities and Exchange Commission

 

8    Retail Pricing Methodology   

US and Canada

 

Rate support pricing will be based on [***].

 

GMAC will represent to Chrysler that pricing will be determined using [***]. The
formula for the calculation of the pre-existing OEM support rate will be
adjusted by [***]

 

This dynamic approach is intended to [***].

 

The parties will be transparent in pricing methodology (including formula and
parameters).

 

Mexico and other agreed international markets

 

Support rate pricing methodology for other agreed international markets,
including Mexico, will be negotiated separately. Pricing methodology will be
consistent with subvented pricing GMAC uses for other OEMs in that country.

9    Credit Policies    GMAC shall provide the financing services under its
credit policies. GMAC’s credit policies shall be the sole responsibility and
under the sole control of GMAC. Upon reasonable request, GMAC shall provide
Chrysler with copies of its credit policies currently in effect at the time of
such request. 10    Information and Reporting   

GMAC will meet with Chrysler periodically via the Coordinating Committee, as
well as upon reasonable request, to discuss current and projected financing
needs for Chrysler dealers and retail customers; GMAC will provide Chrysler a
periodic funding plan designed to meet these financing needs. Chrysler and GMAC
will use commercially reasonable efforts to prepare and deliver to each other on
a regular, timely basis, such information and reports as the other reasonably
requests from time to time regarding any and all aspects of the dealings under
the MAFA, unless privileged or subject to legal restrictions on disclosure.

 

GMAC will provide, through the monthly Coordinating Committee meetings,
benchmark pricing and standard rates of other automotive retail lenders.

 

Chrysler will also provide GMAC with customary information concerning the GMAC
financed dealer network, including, without limitation, monthly dealer financial
statements, daily retail sale reporting and direct access to Chrysler’s
information systems to assist GMAC in monitoring dealer accounts and dealer
inventories and facilitate direct billing of new vehicle inventory.

 

GMAC will, at Chrysler’s request, provide Chrysler with information and regular
reports to facilitate Chrysler’s understanding of wholesale and retail financing
dynamics and GMAC's volume, breadth, and depth of credit buying including, but
not limited to, daily application volume and approvals by credit tier by
business center, daily cashing volume and rates by credit tier by business
center, monthly penetration reports by subvented and standard rates (e.g.
book-to-approval rates), by vehicle line.

 

- 4 -

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a
confidential treatment request. This text has been separately filed with the
Securities and Exchange Commission

 

11    Service Levels    GMAC will provide Chrysler with current service level
metrics including without limitation application response time, call center
performance metrics and website performance, which are monitored in the ordinary
course by GMAC. The parties will then agree which of these metrics will be used
by the Coordinating Committee to measure performance. These metrics, along with
a bi-annual NADA survey will be reviewed in the monthly Coordinating Committee,
and that committee will determine scorecards to apply against these metrics and
paths to remedy any shortfall in performance against the agreed scorecard. 12   
Organizational Set Up   

In recognition of the fact that GMAC’s long term major customer is a principal
competitor of Chrysler, GMAC will work in good faith with Chrysler (i) to
develop and enter into a private label financing plan and service agreement and
(ii) establish such other dedicated or customized services as the parties may
mutually agree from time to time on such terms and conditions as may be mutually
agreed between the parties. The parties will agree on a plan (including
milestones, deliverables and cost sharing) with respect to implementation.

 

GMAC will transition to a dedicated Chrysler sales force in each of GMAC’s metro
markets and other regions agreed between the parties (with exceptions to be
agreed upon, for example multi-franchise operators)

13    Forms of customer agreement    The forms of all dealer and consumer
finance and/or leasing agreements will be in GMAC’s sole discretion and
responsibility. 14    Review Rights    Each party will provide the other party
reasonable access, during regular business hours, to its files, books, and
records pertaining to the services contemplated by the MAFA. Neither Chrysler
nor GMAC shall be entitled to such a review more than once in any six-month
period. Any such review will be limited in duration, manner, and scope
reasonably necessary and appropriate to confirm compliance with the terms and
conditions of the MAFA. Neither party is obligated to provide any access or
information if such action would violate any obligation of confidentiality or
applicable law. 15    Data — confidentiality and mining   

GMAC will not, directly or indirectly, share data about Chrysler dealers and
their customers to other OEMs, authorized car distributors, or authorized car
dealers, absent consent of Chrysler, the affected Chrysler dealers and their
customers (as applicable), and will put in place appropriate safeguards to
protect such information. These restrictions do not apply to GMAC’s “own
experience” data about Chrysler dealers and customers, or data that is otherwise
public.

 

In the event of termination, the parties will agree in good faith on parameters
for the sharing of information contained in the customer database maintained by
GMAC.

16    Governance    The Parties shall establish and maintain a Coordinating
Committee to review and consider the performance of the MAFA and resolve any
disputes that may arise, including a dispute escalation process. 17    [***]   
[***] 18    Indemnity    The parties will provide customary cross-indemnities
with respect to obligations and liabilities that are primarily the obligations
and liabilities of one of the parties. 19    Cross-Selling    The parties intend
to develop a relationship in which GMAC will become Chrysler’s preferred
financial services provider. The parties will explore cross-selling and revenue
share opportunities with respect to financial and other services not explicitly
set forth in this agreement.

 

- 5 -

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a
confidential treatment request. This text has been separately filed with the
Securities and Exchange Commission

 

20    Confidentiality    The terms and conditions of this Term Sheet shall be
confidential information and shall not be disclosed to any third party without
the consent of both parties hereto, except as required by applicable law and
except that either party may disclose the terms and conditions described in this
Term Sheet to their respective officers, directors, employees, attorneys and
other advisers, provided that such persons agree to the confidentiality
restrictions contained herein. 21    Governing Law    This Term Sheet is
governed by New York law without regard to its conflicts of law rules. This Term
Sheet may be executed in one or more counterparts, each of which is deemed an
original and all of which taken together constitute one and the same instrument.
22    Country Adaptions    The parties recognize that this agreement was
prepared based on GMAC’s standard practices in the U.S. and, to the extent
necessary, agree to make such reasonable changes as may be necessary to
accomodate GMAC’s standard practices or applicable law in other countries
subject to this agreement so long as such practices are non-discriminatory with
respect to Chrysler. 23    Termination Rights   

GMAC may terminate this agreement and the transactions contemplated hereby may
be abandoned by GMAC from and after May 16, 2009 without liability hereunder to
GMAC, GMAC Bank or any GMAC subsidiary, if on or prior to that date:

 

(i) the Bankruptcy Court administering the cases of Chrysler and its
subsidiaries shall not have entered one or more orders reasonably acceptable to
GMAC (x) approving the MAFA, the Vehicle Repurchase Agreement and related
transactions and (y) requiring that in connection with any sale, disposition or
other transfer (whether by merger, consolidation, reorganization or otherwise)
of all or substantially all of the assets of Chrysler and its subsidiaries in
the bankruptcy cases, the transferee of such assets shall assume all of the
obligations of Chrysler under the MAFA, the Vehicle Repurchase Agreement and
related transactions in accordance with documentation reasonably acceptable to
GMAC; it being understood that Chrysler shall not be released from such
obligations as may exist at the time of such transfer; or

 

(ii) GMAC shall not have obtained regulatory approvals as previously discussed
between the United States Department of the Treasury (“Treasury”) and GMAC
required to permit GMAC to perform its obligations under this agreement; or

 

(iii) Treasury shall not have (A) provided GMAC with an amount and form of
equity capital consistent with prior discussions between Treasury and GMAC and
(B) entered into a binding agreement with GMAC with respect to the GMAC Dealer
Transition Financing Support Program providing for reimbursement by the U.S.
government of certain losses incurred by GMAC, GMAC Bank or any other GMAC
subsidiary in connection with this Agreement in an amount and on terms
previously discussed with and mutually agreed by Treasury and GMAC.

 

The Vehicle Repurchase Agreement contemplated by this Agreement survives
termination of this Agreement.

[Signature Page Follows]

 

- 6 -

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a
confidential treatment request. This text has been separately filed with the
Securities and Exchange Commission

 

IN WITNESS WHEREOF, the Parties have executed this MAFA Term Sheet effective as
of the date first written above.

 

CHRYSLER LLC By:     Name:   Title:   GMAC LLC By:     Name:   Title:  

 

- 7 -

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a
confidential treatment request. This text has been separately filed with the
Securities and Exchange Commission

 

ANNEX A

[***]

 

- 8 -

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a
confidential treatment request. This text has been separately filed with the
Securities and Exchange Commission

 

ANNEX B

[***]

 

- 9 -

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a
confidential treatment request. This text has been separately filed with the
Securities and Exchange Commission

 

ANNEX C

[***]

 

- 10 -

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT

[***] Indicates that text has been omitted which is the subject of a
confidential treatment request. This text has been separately filed with the
Securities and Exchange Commission

 

ANNEX D

[***]

 

- 11 -