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[DRAFT 2/5/96]
February , 1996
Associates First Capital Corporation
000 X. Xxxxxxxxx Xxxxxxx
Xxxxxx, XX 00000
Dear Sirs:
Management Services Agreement
This letter shall serve to confirm the agreement between you ("AFCC")
and us ("Ford") under which Ford will provide certain management, financial,
administrative and insurance services to you.
1. Services to be Provided. Except as otherwise provided by separate
agreement of the parties, when and as reasonably requested by AFCC or its
subsidiaries, Ford shall provide, or cause to be provided, to AFCC assistance,
advice and services in respect of the following matters:
(a) Management and other technical and professional (e.g., legal and tax)
support;
(b) Accounting and bookkeeping, including policies, principles and procedures,
budget and cost controls, and audit programs;
(c) Pension asset management;
(d) Sales, marketing and operational planning, including providing AFCC with
Ford customer data to facilitate cross- marketing; and
(e) Insurance coverage under Xxxx's property and casualty insurance policies
such as liability, crime, property, workers' compensation and directors and
officers insurance.
2. Fees for Services. With respect to the services enumerated in
Section 1(a) through (d) above, an annual fee of $3.5 million shall be paid by
AFCC to Ford in equal quarterly installments on the last business day of March,
June, September and December of each year during the term of this Agreement,
commencing March 29, 1996. Such fee shall be adjusted upward or downward each
year to reflect any increase or decrease in the Consumer Price Index for the
immediately prior calendar year, as published by the U.S. Department of Labor.
With respect to insurance coverage provided pursuant to Section 1(e) above,
AFCC shall pay to Ford its proportional share of the premium costs of such
coverages. Ford shall from time to time provide written notice to AFCC of
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the portion of the insurance premiums paid by Ford that are attributable to
AFCC, whereupon AFCC shall promptly pay such amounts.
3. Termination. Ford and AFCC may terminate this Agreement at any
time so desired, at will and without cause, by giving the other party at least
180 days' prior written notice; provided, however, if at any time Ford ceases
to own (either directly or indirectly) more than 50% of the outstanding voting
stock of AFCC or ceases for any reason, as determined in Ford's reasonable
discretion, to have effective control of AFCC, then this Agreement shall
terminate automatically. In the event of termination hereof other than at the
end of a calendar year, AFCC shall pay a pro rata portion of the fees provided
for in Section 2 hereof for the that portion of the calendar year during which
this Agreement was in effect. However, there will be no return of insurance
premiums for any mid-policy term cancellation. Further, AFCC will be
responsible for any future retrospective premium adjustments for the periods
AFCC participated in Ford's insurance programs.
If the provisions hereof are acceptable, please confirm your
acceptance by signing, dating and returning to us the copy of this letter
enclosed for that purpose.
Sincerely,
FORD MOTOR COMPANY
By:
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Xxxx X. Xxxxxxxxx
Secretary
AGREED AND ACCEPTED:
ASSOCIATES FIRST CAPITAL CORPORATION
By:
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Name:
Title:
