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EXHIBIT 10.2
MASTER TRANSFER AGREEMENT
THIS MASTER TRANSFER AGREEMENT is entered into as of the 30th day of March,
2000, by and among VISTEON CORPORATION, a corporation organized under the laws
of Delaware, U.S.A., with offices at 5500 Auto Club Drive, Dearborn, Michigan
48126 ("Visteon"), and FORD MOTOR COMPANY, a corporation organized under the
laws of Delaware, U.S.A., with offices at The American Road, Dearborn, Michigan
48121 ("Ford").
R E C I T A L S
WHEREAS, Ford has determined it would be appropriate and beneficial to
separate the activities now being conducted under the name "Visteon Automotive
Systems, an enterprise of Ford Motor Company", including those activities
conducted by any entity in which Ford, directly or indirectly, owns or controls
50% or more of its stock or other equity interests (a "Subsidiary") and by any
entity in which Ford, directly or indirectly, owns or controls less than 50% but
more than 20% of its stock or other equity interests (an "Affiliate") which is
aligned with such enterprise, which presently includes the Chassis Systems,
Climate Control Systems, Interior and Exterior Systems, Energy Transformation
Systems, Glass Division, and the Visteon Technology Office (collectively, with
historic operations, including the former Automotive Products Operations,
Automotive Components Division, Electronics, Plastics and Trim, Climate Control,
Chassis, Electrical and Fuel Handling, and Glass Divisions, the "Business");
WHEREAS, Ford has concluded that the separation of the Business from its
automaking business would (i) alleviate competitive barriers to expanding the
Business beyond sales to Ford, Ford Subsidiaries and Ford Affiliates, (ii) allow
Ford to overcome competitive barriers to making purchases from third-party
automotive suppliers, and (iii) enhance the Business' ability to attract
employees and permit the Business to offer employee incentives more directly
tied to the performance of the Business;
WHEREAS, Ford has caused Visteon to be formed for the purpose of carrying
on and conducting the Business;
WHEREAS, Ford desires to transfer to Visteon certain entities and assets of
Ford (or its Subsidiaries) now devoted to the Business and to have Visteon
assume certain liabilities associated with the Business, as are more
particularly described below (the "Transfer");
WHEREAS, Visteon wishes to acquire such entities and assets from Ford and
is therefore willing to assume said liabilities;
WHEREAS, after the Transfer, the parties intend to either (i) effect an
initial public offering of shares of common stock of Visteon ("IPO"), have
Visteon distribute the proceeds of such offering to Ford, and use the proceeds
of such offering to pay Ford's creditors or
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shareholders, or (ii) not effect an IPO, but in either case, Ford intends to
effect a distribution of all of the shares of Visteon stock then owned by Ford
to Ford's shareholders (the "Distribution");
WHEREAS, the parties intend that the transactions contemplated by this
Agreement (including the intended Distribution) shall be treated as tax-free
transactions under Sections 351, 368(a) and 355 of the Internal Revenue Code of
1986, as amended (the "Code"); and
WHEREAS, in connection with the transactions contemplated by the parties,
and in order to support the purposes contemplated thereby, Ford and certain of
its Subsidiaries and Affiliates are entering into several ancillary agreements
with Visteon and its Subsidiaries and Affiliates, including, without limitation,
a Master Separation Agreement between Ford and Visteon, a Tax Sharing Agreement
between Ford and Visteon, an Hourly Employee Assignment Agreement between Ford
and Visteon, an Employee Transition Agreement between Ford and Visteon,
Information Technology Services Agreement between Ford and Visteon, a Purchase
and Supply Agreement between Ford and Visteon, an Aftermarket Relationship
Agreement between Visteon and the Automotive Consumer Services Group of Ford, a
Patent Cross-License Agreement, between Visteon Global Technologies, Inc.
("VGTI") and Ford Global Technologies, Inc. ("FGTI"), a Technology Cross-License
Agreement between VGTI and FGTI and various real estate leases. (The foregoing
agreements described above are collectively referred to as the "Ancillary
Agreements.")
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties agree as follows:
1. TRANSFERS TO VISTEON.
Ford shall assign, transfer, and convey to Visteon all of Ford's right,
title and interest in and to the following properties and assets relating to the
Business as a capital contribution (collectively, the items listed in Section 1
(a) through (l) are referred to as the "Visteon Assets"):
(a) Capital Stock. All of the capital stock owned by Ford in the
entities listed in Exhibit 1(a) attached hereto, to be effective as of the dates
specified on such Exhibit 1(a).
(b) Membership Interests. Ford's entire membership interest in the
entities listed in Exhibit 1(b) attached hereto, to be effective as of the date
specified on such Exhibit 1(b).
(c) Joint Ventures. Effective as of 12:01 a.m., Eastern Standard Time,
on April 1, 2000, (the "US Transfer Date"), Ford's equity interest (including
Ford's membership interest or capital stock and Ford's interest in all related
joint venture agreements) in the entities listed in Exhibit 1(c) attached
hereto.
(d) Owned Real Property. Effective as of 12:01 a.m., Eastern Standard
Time, on the US Transfer Date, all of Ford's right, title and interest in and to
the real property located and identified in Schedule A, attached hereto, and all
buildings, improvements and appurtenances thereto.
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(e) Leased Real Property. Effective as of 12:01 a.m., Eastern Standard
Time, on the US Transfer Date, the leasehold interests in real property held by
Ford under leases identified in Schedule B, attached hereto.
(f) Owned Tangible Personal Property. Effective as of 12:01 a.m.,
Eastern Standard Time, on the US Transfer Date, except as otherwise provided
herein, all tangible personal property, including all equipment, machinery,
vehicles, leasehold improvements, furniture, fixtures, signs, inventories, tools
(other than customer owned tools) and other personal property owned by Ford and
(i) reflected on the combined balance sheet for the Business as of March 31,
2000, as prepared by Ford (the "Balance Sheet"), including assets written off or
expensed but still used exclusively by the Business, or (ii) which are located
on the properties referred to in Schedules A and B and used exclusively in the
Business, provided, however, with respect to inventories, including raw
materials, stores, spare parts, containers, work in process, finished goods and
other supplies and materials, those (A) located on the properties referred to in
Schedules A and B or in transit to or from such locations or in the possession
of the suppliers of the Business as of the US Transfer Date and (B) either
reflected on the Balance Sheet or used exclusively in the Business, are
included, or (iii) used exclusively in the Business, wherever located, to the
extent that Visteon identifies and requests, in writing prior to October 1,
2000, such assets from Ford and Ford determines such assets are not useful to
Ford for its operations. In the event Visteon requests assets pursuant to clause
(iii) immediately above, and Ford determines not to transfer any such assets,
Visteon will be provided with the use of such assets under the terms of the
Master Separation Agreement for the provision of transitional services. The
Balance Sheet will be prepared using the same accounting principles under which
the balance sheet of the Business, at December 31, 1999, was prepared.
(g) Leased Personal Property. Effective as of 12:01 a.m., Eastern
Standard Time, on the US Transfer Date, except as otherwise provided herein, all
leasehold interests in equipment, vehicles, machinery, furniture, fixtures,
signs and other tangible personal property held by Ford and used exclusively in
the Business as of the US Transfer Date.
(h) Contract Rights and Other Intangible Property. Effective as of
12:01 a.m., Eastern Standard Time, on the US Transfer Date, except as otherwise
provided herein, (i) cash, accounts receivable, accruals, interests as
beneficiary under letters of credit, prepaid expenses, deposits and other
retentions held by third parties owned by Ford and reflected on the Balance
Sheet, and (ii) Ford's rights under all contracts, agreements, licenses,
equipment leases, sales orders, purchase orders, understandings, arrangements,
plans and documents relating to the Business and existing on the US Transfer
Date, together with the right to purchase goods and services under existing
blanket purchase orders of Ford relating to the Business.
(i) Claims. Effective as of 12:01 a.m., Eastern Standard Time, on the
US Transfer Date, claims, causes of action, rights of recovery, rights of set
off and rights of subrogation to the extent they are related to the Visteon
Assets, the Visteon Liabilities or the Business. Visteon acknowledges that Ford
has entered into settlements with its insurance carriers with respect to
existing and future environmental conditions and claims and Visteon has been
allocated $15
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million of the proceeds of such settlements. Neither Ford nor Visteon have any
remaining rights under those policies to make claims and Visteon agrees that it
will not attempt to make any claims under such policies.
(j) Permits. Effective as of 12:01 a.m., Eastern Standard Time, on the
US Transfer Date, except as otherwise provided herein, and the rights of Ford
under all licenses, franchises, permits, authorizations and approvals used
exclusively in the Business.
(k) Intellectual Property. Effective as of 12:01 a.m., Eastern
Standard Time, on the US Transfer Date, the name "Visteon" and associated logo,
and all the trademarks (including the applications and registrations for
trademarks) listed on the attached Schedule D, together with all goodwill and
going concern value of the Business.
(l) Records. Financial, accounting and operating data and records
relating exclusively to the Business and located in the locations listed on
Schedules A or B, or at the Dearborn Glass Plant, or located in record storage
locations maintained by Ford and sent to storage by personnel associated with
the Business, including, without limitation, books, records, electronic data,
financial and corporate systems manuals, notes, sales and sales product data,
advertising materials, credit information, cost and pricing information,
customer and supplier lists, facility blueprints and plant layouts.
Additionally, Ford shall transfer to Visteon all minute books, stock ledgers,
and other corporate documents of Visteon Subsidiaries and Visteon Affiliates, to
the extent in the possession of Ford. In addition, Visteon may copy any other
records relating to the Business in the possession of Ford, at Visteon's
expense.
2. OTHER TRANSFERS AND ACTIONS.
(a) Ford has or will assign, transfer, and convey the properties and
assets listed on Exhibit 2(a), attached hereto, to the applicable Visteon
Subsidiaries by the dates specified on such exhibit;
(b) In addition, Ford has caused or will cause the actions listed on
Exhibit 2(b), attached hereto, to be taken by its Subsidiaries by the dates
specified on such exhibit;
(c) As a result of the transfers described in this Agreement, the parties
acknowledge and agree that Visteon will also have an indirect interest in the
entities listed on Exhibit 2(c) attached hereto.
(d) Each entitiy that is to be transferred under Section 1 above or is
described in Exhibits 2(a), 2(b) or 2(c) will be operated for the benefit of
Visteon on and after the US Transfer Date.
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3. EXCLUDED ASSETS.
Notwithstanding anything, express or implied, to the contrary contained
herein, the following properties, assets and rights used in, or related to, the
Business are excluded from the Transfer:
(a) Certain real property and related improvements thereon known as the
Dearborn Glass Plant (provided Visteon will be given the right to continue to
occupy such plant until July 31, 2000 as it winds up operations in accordance
with the applicable lease agreement) and the Canton Forge Plant and the vacant
land associated therewith;
(b) All of the assets primarily associated with Ford's telecommunications
network, such as the Ford Communications Network, that are located at any of the
Visteon facilities;
(c) Tooling which is owned by Ford or other third party customers and is
not carried on the Balance Sheet, wherever located;
(d) Vehicles provided by Ford or Ford Motor Credit Company for use by the
Business and not carried on the Balance Sheet, including management lease,
executive, commercial, sales, pool, prototype and quality focus test fleet
vehicles;
(e) All blanket purchase orders issued by Ford with respect to goods and
services purchased both for the Business and for other operations at Ford (with
the understanding that Ford will continue to provide the benefit of existing
blanket purchase orders to the Business, at the cost of Visteon with respect to
such goods and services); and
(f) All contracts and agreements of Ford relating to employees of the
Business, including, without limitation, collective bargaining agreements,
employee benefit plans, and other commitments to such employees, subject to the
terms of the Hourly Employee Assignment Agreement and the Employee Transition
Agreement.
4. ASSUMED LIABILITIES.
(a) General Assumption. Except as otherwise specifically retained by Ford
in writing, including those retained in this Section 4, Section 5 below and in
any Ancillary Agreement, Visteon will, as of the US Transfer Date, assume, and
agrees to perform, the debts, liabilities, guarantees, indemnities,
contingencies, and obligations of Ford, whether asserted or unasserted, fixed or
contingent, accrued or unaccrued, known or unknown, and howsoever arising,
relating to the Business, that are (i) reflected in the Balance Sheet and which
remain outstanding on the US Transfer Date, (ii) arise in connection with the
Business between the date of the Balance Sheet and the US Transfer Date and
would be reflected on the financial statements of Visteon as of the US Transfer
Date if such statements were prepared as of the US Transfer Date in accordance
with the same accounting principles on which the Balance Sheet was prepared,
(iii) are expressly provided by this Agreement, any Ancillary Agreement or other
written agreement signed by Visteon in connection with the Separation (as
hereafter defined) to be transferred to and assumed
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by Visteon, or (iv) are related to or arise out of or in connection with the
Visteon Assets or the Business, whether before or after the date of the Balance
Sheet (collectively referred to as the "Visteon Liabilities").
(b) Limitations on General Assumption. Notwithstanding the foregoing,the
Visteon Liabilities are subject to and shall not be deemed to include any item
specifically excluded or retained by Ford pursuant to this Section 4(b).
(i) Product Liability. All liabilities for any causes of action,
however presented, alleging that parts, components or systems that have
been (i) manufactured by the Business or (ii) manufactured by a third
party, whether sold or otherwise supplied separately, or incorporated into
components or systems of the Business ("Visteon Products"), in each case,
which have been sold or otherwise supplied by the Business, have caused
personal injuries, injuries to property or other damages regardless of the
theory of liability on which the claim is based ("Visteon Product Claims")
to the extent that such parts, components or systems were provided to Ford
or Ford Subsidiaries for model year 1996 and before, will be retained by
Ford. Visteon's liability for all other Visteon Product Claims for parts,
components or systems supplied to Ford or Ford Subsidiaries for vehicles in
model year 1997 and thereafter will be governed in accordance with the
terms of Ford's global purchase order terms and conditions promulgated by
Ford with respect to its supply contracts with third parties as in effect
at the time such parts, components or systems were delivered, as
customarily applied to Tier 1 suppliers in the automotive parts industry by
Ford.
(ii) Warranty and Recall. All Visteon Products, in each case, which
have been sold or otherwise supplied by the Business for use in model year
1997 vehicles (or later model years) manufactured or sold by Ford or Ford
Subsidiaries are deemed to be subject to the warranty provisions of the
global purchase order terms and conditions promulgated by Ford with respect
to its supply contracts with third parties as in effect at the time such
parts, components or systems were delivered. Visteon agrees it will be
liable to Ford and the Ford Subsidiaries for all warranty claims for such
parts, components or systems to the same extent as another Tier 1 supplier
would be liable if it had supplied such parts, components or systems, and
Ford agrees it will apply the same customary practices to Visteon as Ford
applies to other Tier 1 suppliers in the automotive parts industry.
(iii) Environmental Claims. The Visteon Liabilities include any
existing or future Environmental Claims to the extent they relate to or
arise from the ownership of or operations on (at any time) the sites listed
on Schedules A and B (other than the Monroe Plant, which is treated
separately below). In addition, the Visteon Liabilities include the
Environmental Claims listed on the attached Schedule E, to the extent of
the allocation of such claim to Visteon reflected on such Schedule.
Notwithstanding anything to the contrary herein, Ford shall retain, and
Visteon will have no liability for, any Environmental Claims which relate
to or arise from (A) the ownership of or operations on (at any time) the
sites listed on the attached Schedule C or (B) Ford's allocation of
liability as reflected on Schedule E. Each party shall have the control
over any investigation, remediation
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activities, litigation or claim process relating to the sites for which it
has full responsibility hereunder. For sites with shared liability, control
will be given to the party with the majority of the liability. For purposes
of this Agreement, the following definitions apply:
"Environmental Claims" shall mean any cleanup, response or removal
activities or any claim, action, cause of action, investigation or notice
(written or oral) by any person or entity alleging potential liability
(including, without limitation, potential liability for investigation
costs, cleanup costs, governmental response costs, natural resource
damages, property damages, personal injuries, or penalties) arising out of
or resulting from: (i) the presence or release, or threatened release, of
any Hazardous Substance; (ii) circumstances forming the basis of any
violation or alleged violation of any Environmental Law; or (iii) on-site
or off-site disposal or dumping activities.
"Environmental Law" shall mean any and all applicable laws (including all
common law, consents, licenses, permits, certificates, variances,
exemptions, franchises and other approvals issued, granted, given, required
or otherwise made available by any governmental authority) issued,
promulgated or entered into by any governmental authority relating to the
environment or the protection or preservation of human health or safety.
"Hazardous Substance" shall mean any pollutant, hazardous, acutely
hazardous, or toxic substance, waste or contaminant, or any other material,
including, without limitation, petroleum hydrocarbons and asbestos,
regulated under any Environmental Law.
(iv) Monroe Environmental Claims. All liability for Environmental
Claims relating to the ownership or operations of the Monroe, Michigan
plant will be subject to the agreement of the parties set forth on the
attached Schedule F.
(v) Current Claims. The Visteon Liabilities specifically include,
without limitation, the existing litigation identified on Schedule G,
attached hereto.
(vi) Intellectual Property. Except as provided on the attached
Exhibit I, for any causes of action, however presented, alleging that
Visteon Products infringe or otherwise violate the intellectual property
interests of others ("IP Claims"), (A) for Visteon Products sold or
supplied to Ford or Ford Subsidiaries on or prior to July 31, 1999,
liability shall be retained by Ford, (B) Visteon will be liable for such IP
Claims related to Visteon Products sold or supplied to Ford or Ford
Subsidiaries after July 31, 1999, to the same extent as other Tier 1
suppliers would be liable if they had supplied such parts, components or
systems to Ford, and (C) for Visteon Products sold to third parties at any
time, any liability will be included in the Visteon Liabilities. Ford and
Visteon agree to cooperate to establish defenses against liabilities
arising from sales to Ford and identify any licenses to Ford or Visteon
which would be useful in such defenses.
(vii) Topics Not Covered. The parties have reached agreement with
respect to certain Visteon Liabilities in the area of employee matters
which are covered in the Hourly
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Employee Assignment Agreement and the Employee Transition Agreement. They
have also entered into certain other agreements with respect to taxes which
are covered in the Tax Sharing Agreement.
(c) The parties acknowledge and agree that they have undertaken a good
faith effort to identify all material outstanding liabilities of the Business
pertaining to the substantive areas identified in Section 4(b) above. To the
extent that, subsequent to the US Transfer Date, and prior to December 31, 2001,
the parties discover additional material liabilities or potential material
liabilities of the Business relating to pre-Transfer events, actions or
occurrences, in the areas governed by subsections (iii), (v), (vi) or (vii) of
Section 4(b), or the business operations of the Business, the parties undertake
that they will consider a mutually agreeable allocation of responsibility for
such items. However, nothing herein obligates Ford to accept any such liability
and Ford will only be liable to the extent it signs a written agreement
accepting all or a portion of the liabilities. The parties agree that they will
consider such allocation through meetings of persons with appropriate decision
making authority, and in no event will the parties be required to pursue the
matter beyond the Vice President level of authority. For purposes of this
section, a claim (or series of related claims) must have a potential exposure
exceeding $50,000,000 (including defense costs) to be considered material.
5. RETAINED LIABILITIES/CONFLICTS.
(a) Retained Liabilities. Notwithstanding anything to the contrary
contained in Section 4 hereof, Visteon shall not assume any obligation or
liability of Ford with respect to the following (collectively referred to as the
"Retained Liabilities"): (i) cases or claims arising out of the production or
sale of thick film ignition modules which were sold prior to the US Transfer
Date, including, without limitation, those listed on Schedule H hereto, (ii)
Michael Jones, et al. v Ford Motor Company, filed on June 9, 1993 in U.S.
District Court, District of Minnesota, alleging race discrimination, (iii) J. A.
Jones Co. v Ford, filed in July, 1999 in U.S. District Court, Eastern Division,
Michigan regarding construction litigation arising out of environmental
remediation of environmental site at Monroe, Michigan, and (iv) liabilities of
the Business explicitly retained by Ford with respect to such matters as are
identified in Section 4(b) above, in any Ancillary Agreement or in any other
writing between the parties.
(b) Conflicts. The parties acknowledge and agree that, except to the
extent this Agreement specifically provides that other agreements control (such
as employment and tax matters), the allocation of liabilities between the
parties and their respective Subsidiaries and Affiliates in connection with the
transfer of the various parts of the Business as contemplated in Sections 1 and
2 above, will be governed and controlled by the principles of allocation set
forth in Section 4 hereof, with appropriate changes for fact specific
differences, as agreed to by the parties, such as the applicable locations of
the Business, and any specific litigation or other claims identified in the
agreement which are peculiar to that Subsidiary or Affiliate or the laws of the
applicable jurisdiction. In that regard, that parties acknowledge that Exhibit E
contains a description of existing global environmental liabilities that apply
to certain Visteon Subsidiaries as well as to Visteon itself and this list will
control over general assumption language in any other
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agreements. In accordance with the foregoing, this Agreement supersedes any
prior or subsequent agreements executed in connection with the Transfer to the
contrary and Ford and Visteon agree that they will each cause their respective
Subsidiaries to abide by these allocation principles, regardless of the actual
wording of the operative transfer documents.
6. COVENANTS.
(a) Ford agrees that to the extent that Ford has not transferred to
Visteon all of the assets needed to conduct the Business as conducted
immediately prior to the US Transfer Date, Ford will provided transitional
services to Visteon which are necessary for the conduct of the Business on such
date, with the exception of services which Ford would not be legally permitted
to provide to Visteon (or its Affiliates) from time to time. The terms under
which such transitional services will be provided are to be set forth in the
Master Separation Agreement between Ford and Visteon. Visteon further agrees
that to the extent Ford or a Ford Subsidiary or Ford Affiliate has guaranteed
any obligations of a Visteon Subsidiary or Visteon Affiliate ("Ford Guaranty"),
(i) Visteon will execute a guaranty of such obligations as requested by Ford,
(ii) Visteon will take reasonable steps to release Ford (or the applicable Ford
Subsidiary or Ford Affiliate) from any Ford Guaranty, and (iii) Visteon
indemnifies Ford and any applicable Ford Subsidiary or Ford Affiliate for any
claims made on a Ford Guaranty.
(b) Visteon agrees to take such steps to replace any indemnities, bonds or
other assurances given by Ford (or Ford Subsidiaries that are not Visteon
Subsidiaries) to any governmental authorities for the Business, including those
issued in connection with environmental permits and licenses, and customs and
import/export laws, as soon as practicable, but in any event, on or before
December 31, 2000, and will be liable to Ford for any claims made against such
indemnities, bonds or assurances by such authorities relating to the Business.
Ford acknowledges that until such indemnities, bonds or other assurances are
replaced, it will continue to honor them subject to Visteon's foregoing
agreement.
(c) Ford agrees that it will, and will cause its Subsidiaries to, not
pursue any product liability and warranty and recall claims against Visteon, the
Visteon Subsidiaries and Visteon Affiliates transferred to Visteon as part of
the Transfer to the extent Ford would have no claim against Visteon under the
allocation of liabilities set forth in Sections 4(b)(i) and (ii) if Visteon had
supplied the parts, components or systems.
(d) It is anticipated by the parties that Ford and Visteon, either
directly or indirectly through their respective Subsidiaries or Affiliates, may
provide services to the other which involve the discharge of waste (i) generated
by Visteon, Visteon Subsidiaries or Visteon Affiliates from Ford controlled
facilities under environmental permits issued to Ford or (ii) generated by Ford,
Ford Subsidiaries or Ford Affiliates from Visteon controlled facilities under
environmental permits issued to Visteon, Visteon Subsidiaries or Visteon
Affiliates. Visteon agrees that it will reimburse Ford for any Losses (defined
in Section 7 below) resulting from any violations of such environmental permits
issued to Ford, a Ford Subsidiary or a Ford Affiliate caused by changes in the
discharge of waste associated with the operations of Visteon, any Visteon
Subsidiary or any Visteon Affiliate, as applicable, to the extent the violation
is caused by such discharge. Ford
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agrees that it will reimburse Visteon for any Losses resulting from any
violations of such environmental permits issued to Visteon, a Visteon Subsidiary
or a Visteon Affiliate caused by changes in the discharge of waste associated
with the operations of Ford, any Ford Subsidiary or any Ford Affiliate, as
applicable, to the extent the violation is caused by such discharge. To the
extent a violation is caused by actions of both parties, the liability will be
split proportionally to the amount of changes made by the parties. The parties
intend to investigate and identify sites that this will apply to and enter into
an agreement to cover these situations in more detail.
(e) A certain press located at the Monroe, Michigan plant ("Monroe
Facility") and identified as TLSE 3000 Transfer Press, Vendor/Mfg.: Verson, Tag
No. F733872 (the "Monroe Press") is leased by Ford pursuant to a Lease dated as
of August 15, 1991, between Ford, as Lessee, and Wilmington Trust Company and
William J. Wade, as Owner Trustees for AT&T Capital Holdings International Inc.
[Equipment Trust No. 1991 F] (the "ATT Lease"). The ATT Lease covers various
equipment used by Ford at other locations as well as the Monroe Press. Ford will
retain its leasehold interest in the Monroe Press and the Monroe Press will be
located at its present location at the Monroe Facility. If Ford becomes the
legal owner of the Monroe Press in the future, Ford will be deemed to
automatically transfer title to the Monroe Press to Visteon, all at no charge to
Visteon. Visteon, as transferee of legal title to the Monroe Facility,
acknowledges and agrees with respect to the Monroe Press: (i) the Monroe Press
is subject to the ATT Lease subject to the Lessor Parties' interests,
inspection, and other rights, including rights to exercise remedies under the
ATT Lease and the Indenture (including the remedy to repossess the Monroe
Press), (ii) Visteon will not move the Monroe Press from the Monroe Facility
without Ford's written consent, (iii) Visteon has not and will not subject the
Monroe Press to any liens, (iv) Visteon will not interfere with the Lessor
Parties' rights to the Monroe Press, and (v) Visteon will maintain and repair
the Monroe Press, and will otherwise abide by the terms of the ATT Lease that
apply to the Monroe Press and its use thereof. Capitalized terms used herein
that are not otherwise defined shall have the meanings ascribed to them in the
ATT Lease.
(f) Ford is pursuing a license from Bosch for the ETC Microprocessor
Monitor (i.e., Quizzer), and Ford agrees to make a license inquiry on behalf of
Visteon as well.
7. INDEMNIFICATION.
(a) Visteon agrees to indemnify and save and hold harmless Ford, all Ford
Subsidiaries and all Ford Affiliates, and the officers, directors, employees,
agents, consultants, attorneys, accountants and other representatives thereof
(collectively, the "Ford Indemnitees") from and against any damages,
liabilities, obligations, losses, investigation and remediation of Environmental
Claims, penalties, claims, actions, disputes or settlements (collectively,
"Losses"), arising out of or resulting from or in connection with (i) any
Visteon Liabilities or other obligations or liabilities assumed by Visteon or
any entity controlled by Visteon (collectively, the "Visteon Group") pursuant to
this Agreement or any other agreement executed by Visteon or any member of the
Visteon Group in connection with the legal separation of the Visteon Group as
contemplated in this Agreement and the offering and/or distribution of the
shares of Visteon (collectively, the "Separation"), (ii) any failure of any of
the Visteon Group to perform any
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agreement or covenant contained herein or therein, (iii) the costs of operating,
maintaining and carrying any Restricted Interests during the Restricted Period
(defined below), and (iv) any tax consequences suffered by the Ford Group as a
result of the failure of the transfer of any Restricted Interests (defined
below) to be treated, for U.S. federal income tax purposes, as transfers to
Visteon as of the date on which Visteon International Holdings, Inc. is
transferred to Visteon. Visteon agrees to reimburse, or cause a member of the
Visteon Group to reimburse, each of the Ford Indemnitees for any reasonable
attorneys' fees or any other expenses reasonably incurred by any of them in
connection with investigating and/or defending any Loss.
(b) Ford agrees to indemnify and save and hold harmless Visteon, all
Visteon Subsidiaries and all Visteon Affiliates, and the officers, directors,
employees, agents, consultants, attorneys, accountants and other representatives
thereof (collectively, the "Visteon Indemnitees") from and against any Losses,
arising out of or resulting from or in connection with (i) any Retained
Liabilities or other obligations or liabilities of Ford or any entity controlled
by Ford (collectively, the "Ford Group") not assumed by Visteon or any member of
the Visteon Group pursuant to the Agreement or any other agreement executed by
Visteon or any member of the Visteon Group in connection with the Separation,
(ii) any Environmental Claims arising from ownership or operation of the plant
in Lansdale, Pennsylvania which has been shut down by Ford Electronics and
Refrigeration LLC, or (iii) any failure of any of the Ford Group to perform any
agreement or covenant contained herein or therein. Ford agrees to reimburse, or
cause a member of the Ford Group to reimburse, each of the Visteon Indemnitees
for any reasonable attorneys' fees or any other expenses reasonably incurred by
any of them in connection with investigating and/or defending any Loss.
(c) The Ford Indemnitees or the Visteon Indemnitees (in either case, an
"Indemnitee"), as applicable, shall promptly give the party giving the
indemnification (the "Indemnifying Party") written notification of any third
party claim or any other indemnification claim, together with a copy of any
legal pleadings or other written demands from such third party, if applicable;
provided, however, that the failure to give such notice will not relieve an
Indemnifying Party of its obligations hereunder, except to the extent that the
Indemnifying Party is actually and materially prejudiced by such failure to give
notice. In particular, in case of any investigation or audit, the Indemnitees
shall inform the Indemnifying Party at the beginning of such investigation or
audit, to the extent practical, so that the Indemnifying Party may participate
therein.
(d) Except where a Ford Indemnitee has reserved or been given the right to
manage or defend a Loss or claim in a written instrument signed by Visteon (or
other member of the Visteon Group involved in such Loss or claim), Visteon shall
be entitled, at its own expense, to conduct the defense of any third party claim
with counsel of its own choice. However, the respective Ford Indemnitees shall
always be entitled to participate in such defense with counsel of their own
choice and at their own expense and Visteon will cooperate with the Ford
Indemnitees and will consult with the Ford Indemnitees (and give reasonable
consideration to all proposals and suggestions made by the Ford Indemnitees in
connection with all material matters arising in the conduct of such defense).
The Ford Indemnitees shall comply with Visteon's instructions in the defense
unless the Ford Indemnitees believe the instruction to be unreasonable. The Ford
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Indemnitees will use reasonable efforts to mitigate the amount of any Losses
that may give rise to indemnification hereunder. In the event the Ford
Indemnitees have the right to manage or defend the Loss, the involved member of
the Visteon Group shall always be entitled to participate in such defense with
counsel of its own choice and at its own expense and the Ford Indemnitees will
cooperate with the Visteon Group and will consult with the Visteon Group (and
give reasonable consideration to all proposals and suggestions made by the
Visteon Group) in connection with all material matters arising in the management
of such Loss or conduct of such defense.
(e) The Visteon Group may not settle any other third party claims covered
by this Section without the prior written consent of the Ford Indemnitees
involved therein and the Ford Group may not settle any other third party claims
covered by this Section without the prior written consent of the Visteon
Indemnitees involved therein; except, in either case, if such settlement is
solely for money damages and the applicable Indemnitees are reasonably satisfied
that the responsible party will directly pay such amount in full.
(f) For tax purposes, the parties agree to treat any payment pursuant to
this Section as a capital contribution by Ford to Visteon or a distribution by
Visteon to Ford made in the last taxable period beginning before the
Distribution and, accordingly, as not includible in the taxable income of the
recipient or deductible by the payor.
(g) A party's liability with respect to any Loss for which an Indemnitee
actually recovered amounts from third parties (including, without limitation,
proceeds under any policy of insurance available for the purpose) shall be
reduced to the extent of the amounts actually recovered. A party's Loss shall
not include any consequential damages or lost profits that may be suffered by
such party. The parties will also take into account the time cost of money
(using the then-current LIBOR, or any replacement index, as the applicable rate)
in determining amount of the Loss suffered by the any Indemnitee.
(h) The amount of any Loss for which indemnification is provided under
this Agreement shall be first reduced by the tax benefit (determined in the
reasonable judgment of the Indemnitee) to any Indemnitee of the applicable loss
item, and such net loss amount shall then be increased to take account of the
net tax cost, including interest and penalties (the "Tax Cost"), if any,
incurred by an Indemnitee arising from the receipt or accrual of an indemnity
payment hereunder (grossed up for such increase). The computation of such Tax
Cost shall reflect the hypothetical tax consequences of the receipt or accrual
of any indemnity payment, defined using the maximum statutory rate (or rates, in
the case of an item that affects more than one tax) applicable to the Indemnitee
for the relevant taxable periods, and reflecting, for example, the effect of the
deductions available for interest paid or accrued and for taxes such as state
and local income taxes. Any indemnity payment hereunder shall initially be made
without regard to this paragraph (h) and shall be increased or reduced to
reflect any such Tax Cost (including gross-up) only after the Indemnitee has
actually realized or received such cost. The amount of any Tax Cost payment
hereunder shall be adjusted to reflect any final determination (which shall
include the execution of Form 870-AD or successor form) with respect to the
Indemnitee's liability for taxes, and payments between Ford and Visteon to
reflect such adjustment shall be made if necessary.
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(i) Ford has the right to offset any amounts owed by Visteon, any Visteon
Subsidiary or any Visteon Affiliate to any member of the Ford Group against any
amounts owed by Ford to Visteon pursuant to this Section 7. Visteon has the
right to offset any amounts owed by Ford, any Ford Subsidiary or any Ford
Affiliate to any member of the Visteon Group against any amounts owed by Visteon
to Ford pursuant to this Section 7.
(j) For purposes of this Agreement, the term "controls" or "controlled"
means the possession, directly or indirectly, of the power to direct or cause
management to direct the policies of an entity, whether through the ownership of
equity, by contract or otherwise. "Visteon Subsidiary" means any entity that is
or would be a subsidiary of Visteon after the completion of the transactions
described in Section 1 or described on Exhibits 2(a), 2(b) or 2(c). "Visteon
Affiliate" means any entity that is or would be an Affiliate of Visteon after
the completion of the transactions described in Section 1 or described on
Exhibits 2(a), 2(b) or 2(c). "Ford Subsidiary" means any Subsidiary of Ford,
other than Visteon or a Visteon Subsidiary. "Ford Affiliate" means any Affiliate
of Ford other than a Visteon Affiliate.
8. FURTHER ASSURANCES/EFFECT OF ASSIGNMENTS.
(a) Each party shall execute and deliver to the other such undertakings,
assumption agreements, assignments, deeds, leases, bills of sale, stock
certificates, endorsements, notices, consents and other instruments as shall be
necessary or appropriate to transfer, convey or assign the those properties,
assets and interests of the Business as are described in Sections 1 and 2 hereof
to be transferred to Visteon or any Visteon Subsidiary and for Visteon to carry
out and perform its obligations under this Agreement. Further, the parties agree
that they shall undertake such further actions, consistent with the terms of
this Agreement and the Ancillary Agreements, as may be reasonably necessary to
assure that Visteon has access to the assets and services needed to conduct the
Business in substantially the same manner as conducted on the US Transfer Date,
subject to the time limitations in the Master Separation Agreement or other
Ancillary Agreement for transitional services. If any assets are transferred to
Visteon as part of the Separation which are not part of the Visteon Assets
described herein, then Visteon will reconvey such assets to Ford, at the request
and expense of Ford.
(b) To the extent that any interest in the shares, equity, interests,
contracts, lease permits, or other assets, properties, rights, or interests
comprising a part of the Transfer is not capable of being assigned, transferred,
or conveyed without the consent, waiver, or authorization of a third party to
such transfer or conveyance, or if an attempted assignment, transfer, or
conveyance would constitute a breach of any of the contracts, lease permits, or
other assets, properties, rights, or interests, or a violation of any law,
statute, decree, rule, regulation, or other governmental edict or is not
immediately practicable, then this Agreement shall not constitute an assignment,
transfer, or conveyance of such interest, or an attempted assignment, transfer,
or conveyance of such interest (collectively, the "Restricted Interests"). The
entire beneficial interest in any asset or entity subject to a restriction as
described above, and any other interest in such asset or entity, which are
transferable notwithstanding such restriction, shall be deemed transferred. To
the extent that the consents, waivers, and authorizations referred to above are
not
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obtained by Ford or Visteon, or until the impracticalities of transfer referred
to therein are resolved to Visteon's reasonable satisfaction, Ford shall use
commercially reasonable efforts, at the expense of Visteon to (i) provide to
Visteon the benefits and burdens of any Restricted Interests (including, without
limitation, the benefit of all voting rights related to any Restricted Entity,
as defined below), and (ii) enforce, at the request of Visteon for the account
of Visteon, any rights of Ford arising from any Restricted Interests (including
the right to elect to terminate such Restricted Interest in accordance with the
terms thereof upon the advice of Visteon). In addition, from the time during the
period commencing on the latest date such Restricted Interest was to have been
transferred under the terms of this Agreement and terminating at the close of
business on the date such Restricted Interests are legally transferred (the
"Restricted Period"), Ford will give Visteon exclusive rights to manage the
Restricted Interests (including the right to run operations without consultation
with Ford) until such time as the Restricted Interests are legally transferred.
In the event that prior to the transfer of a Restricted Interest, the legal
holder of such Restricted Interest is the subject of any bankruptcy action,
assignment for the benefit of creditors or other insolvency proceeding, then
such Restricted Interest will be deemed to be legally transferred immediately
prior to the onset of such proceeding, regardless of any restrictions.
(c) In the event that a Restricted Interest applies to the transfer of
Ford's or a Ford Subsidiary's interest in a legal entity ("Restricted Entity"),
then during the Restricted Period, if the Restricted Entity makes any
distributions to Ford or a Ford Subsidiary (collectively, the "Ford Entity")
with respect to profits, or in liquidation or otherwise, whether in cash or in
kind, the Ford Entity shall (i) within 60 days following receipt of the
distribution, remit the amount of any such cash distributions by wire transfer
in the currency in which such distribution was received to an account designated
by Visteon, and (ii) with respect to any in-kind distributions, take all steps
reasonably necessary to cause the transfer, by no later than 60 days following
the date of such distribution to the Ford Entity, of all of Ford's right and
title to and interest in each such distribution to Visteon. Visteon shall bear
the costs and expenses incurred in connection with the transfer of such
distributions. In the event that, at any time during the Restricted Period, (I)
the Ford Entity is obligated to make a capital contribution (whether in cash or
in kind) with respect to, or other payment arising out of its ownership of, the
Restricted Entity, or (II) any indemnification obligation of Visteon becomes
payable because of its management of the Restricted Entity, Visteon shall remit
the amount of any such capital contribution or indemnification obligation by
wire transfer to an account designated by Ford within 60 days following receipt
by Visteon of notice of such obligation from Ford. In the event that any
obligation of the Ford Entity arises hereunder with respect to an in-kind
capital contribution by the Ford Entity, the amount to be remitted by Visteon
hereunder with respect to such capital contribution shall equal the fair market
value of such in-kind contribution, and, notwithstanding the foregoing, shall,
in the event the parties are unable to agree on the fair market value of the
contribution, be remitted within 30 days following the issuance of an appraisal
by the independent appraiser mutually agreeable by Ford and Visteon.
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9. EMPLOYEES.
It is contemplated that certain employees of Ford assigned to the Business
shall become employees of Visteon. The transition of such employees to Visteon
is provided for in the Employee Transition Agreement. In addition, Ford will
provide certain other employees to Visteon under the terms of the Hourly
Employee Assignment Agreement.
10. MISCELLANEOUS.
(a) This Agreement, including all Exhibits and Schedules attached hereto,
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior written and oral and all contemporaneous
oral agreements and understandings with respect to the subject matter hereof.
The covenants, representations, and indemnities of the parties herein shall
survive the closing and the transfer of the Visteon Assets, and continue in full
force and effect.
(b) This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Michigan.
(c) This Agreement is for the sole benefit of the Parties hereto and no
third party may claim any right, or enforce any obligation of the Parties,
hereunder.
(d) All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered in person, by fax with
confirmation of receipt, by express or overnight mail delivered by a nationally
recognized air courier (delivery charges prepaid), or by registered or certified
mail (postage prepaid, return receipt requested) to the respective parties as
follows:
If to Ford:
Ford Motor Company
The American Road
Dearborn, MI 48121
Attention: Secretary
Fax: (313) 337-9591
If to Visteon:
Visteon Corporation
5500 Auto Club Drive
Dearborn, MI
Attention: General Counsel
Fax: (313) 390-2718
or to such other address as the party to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery. Any notice or communication sent by fax or by overnight courier shall
be deemed effective on the next business day. Any notice or
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communication sent by registered or certified mail shall be deemed effective on
the fifth business day after such notice or communication was mailed.
(e) This Agreement shall be binding upon and inure to the benefit of each
party hereto and the respective successors and assignees of the parties. In no
event will a party be released from their indemnity obligations without the
written consent of the other party.
(f) If a dispute arises between the Parties relating to this Agreement,
the following procedure shall be implemented except that either Party may seek
injunctive relief from a court where appropriate in order to maintain the status
quo while this procedure is being followed:
(i) The Parties shall hold a meeting promptly, attended by persons
with decision-making authority regarding the dispute, to attempt
in good faith to negotiate a resolution of the dispute;
provided, however, that no such meeting shall be deemed to
vitiate or reduce the obligations and liabilities of the Parties
or be deemed a waiver by a party hereto of any remedies to which
such Party would otherwise be entitled.
(ii) If within thirty (30) days after such meeting, the Parties have
not succeeded in negotiating a resolution of the dispute, they
agree to submit the dispute to mediation in accordance with the
then-current Model Procedure for Mediation of Business Disputes
of the CPR Institute for Dispute Resolution ("CPR") and to bear
equally the costs of the mediation. The Parties will jointly
appoint a mutually acceptable mediator, seeking assistance in
such regard from the CPR if they have been unable to agree upon
such appointment within twenty (20) days from the conclusion of
the negotiation period.
(iii) The Parties agree to participate in good faith in the mediation
and negotiations related thereto for a period of thirty (30)
days. If the Parties are not successful in resolving the dispute
through the mediation, then the Parties agree to submit the
matter to binding arbitration in accordance with the CPR Rules
for Non-Administered Arbitration, by a sole arbitrator.
(iv) Mediation or arbitration shall take place in the City of
Dearborn, Michigan. Equitable remedies shall be available in any
arbitration. Punitive or exemplary damages shall not be awarded.
This clause is subject to the Federal Arbitration Act, 9
U.S.C.A. Section 1 et seq., or comparable legislation in
non-U.S. jurisdictions, and judgment upon the award rendered by
the arbitrator, if any, may be entered by any court having
jurisdiction thereof.
(g) If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse
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to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the fullest extent
possible.
(h) No failure or delay on the part of any party hereto in the exercise of
any right hereunder shall impair such right or be construed to be a waiver of
agreement herein, nor shall any single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
(i) The descriptive headings herein are for reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.
(j) No change or amendment will be made to this Agreement except by an
instrument in writing signed on behalf of each of the parties to such agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Master Transfer
Agreement to be executed by their fully authorized representatives as of the day
and year first above written.
VISTEON CORPORATION
By: /s/ Dan R. Coulson
------------------------------------
Name: Dan R. Coulson
Title: Executive Vice President and
Chief Financial Officer
FORD MOTOR COMPANY
By: /s/ Malcolm Macdonald
------------------------------------
Name: Malcolm Macdonald
Title: Vice President and Treasurer
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DEFINED TERMS
Affiliate Recitals
Ancillary Agreements Recitals
ATT Lease Sec. 6(e)
Balance Sheet Sec. 1(c)
Business Recitals
Code Recitals
Controls Sec. 7(j)
CPR Sec. 10(f)(i)
Distribution Recitals
Environmental Claims Sec.4(b)(iii)
Environmental Law Sec. 4(b)(iii)
FGTI Recitals
Ford Introduction
Ford Affiliate Sec. 7(j)
Ford Entity Sec. 8(c)
Ford Group Sec. 7(b)
Ford Guaranty Sec. 6(a)
Ford Indemnitees Sec. 7(a)
Ford Subsidiary Sec. 7(j)
Fuchang Ex. 2(a), Sec. (xii)
Fu Hua Ex. 2(b), Sec. (vii)
Hazardous Substance Sec. 4(b)(iii)
Indemnitee Sec. 7(c)
Indemnifying Party Sec. 7(c)
IPO Recitals
Losses Sec. 7(a)
Monroe Facility Sec. 6(e)
Monroe Press Sec. 6(e)
Retained Liabilities Sec. 5(a)
Restricted Entity Sec. 8(c)
Restricted Interests Sec. 8(b)
Restricted Period Sec. 8(b)
Separation Sec. 7(a)
Subsidiary Recitals
Subsidiary Transfer Date Ex. 1(a), Sec. (i)
Tax Cost Sec. 7(h)
Transfer Recitals
UARCO Ex. 2(a), Sec. (C)(ix)
US Transfer Date Sec. 1(c)
VDH Ex. 2(a), Sec. (b)(v)
VGTI Recitals
<PAGE> 19
VIHI Ex. 1(a), Sec. (i)
Visteon Introduction
Visteon Affiliate Sec. 7(j)
Visteon Assets Sec. 1
Visteon Group Sec. 7(a)
Visteon Indemnitees Sec. 7(b)
Visteon Liabilities Sec. 4(a)
Visteon Products Sec. 4(b)(i)
Visteon Product Claims Sec. 4(b)(i)
Visteon Subsidiary Sec. 7(j)
VPCSI Ex. 2(a), Sec. (A)(vi)
Yan Feng Ex. 2(a), Sec. (C)(viii)
