EXHIBIT 10.1
FUNDING AGREEMENT
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This Funding Agreement is dated as of March 10, 2005 (this "Agreement") and is
by and between FORD MOTOR COMPANY ("Ford") and VISTEON CORPORATION ("Visteon").
Each of Ford and Visteon is referred to as a "party" and collectively, the
"parties."
R E C I T A L S
X. Xxxx has agreed to provide certain financial assistance to Visteon
so as to protect and provide for the continued supply of Components to Ford.
B. In exchange for the actions taken by Ford, Visteon has agreed to
undertake certain actions with respect to the supply of Components to Ford.
The parties agree as follows:
1. Definitions: The following capitalized terms shall have the meanings
specified below unless otherwise specifically stated.
"Components" has the meaning specified in the P&SA.
"Defaulting Party" has the meaning specified in Section 8.1.
"Event of Default" has the meaning specified in Section 8.1.
"HEAA" means that certain Amended and Restated Hourly Employee
Assignment Agreement dated as of December 19, 2003 between Ford and
Visteon.
"Master Agreement Plant" has the meaning specified in the P&SA.
"New Business" has the meaning specified in the P&SA.
"Non-Defaulting Party" has the meaning specified in Section 8.1.
"Plants" means the Visteon manufacturing facilities listed on
Attachment A hereto.
"P&SA" means that certain Purchase and Supply Agreement dated as of
December 19, 2003 between Ford and Visteon.
"Termination Date" means the date on which termination is effected
either pursuant to Section 7 or Section 8 hereof.
2. Capital Expenditures: Ford will pay for and acquire certain machinery and
equipment not currently owned by Visteon that will be associated with the
production of certain Components for Ford in accordance with the terms of the
Master Equipment Bailment Agreement (the "Master Equipment Bailment Agreement"),
which agreement will be executed and delivered by Ford and Visteon
simultaneously with this Agreement. The effective date of the Master Equipment
Bailment Agreement will be January 1, 2005.
3. Payment Terms: Notwithstanding the provisions of Section 9.1(a) of the P&SA,
(a) On or before March 31, 2005, Ford will pay to Visteon, by wire
transfer in immediately available funds to the EFT account previously
designated by Visteon, not less than $120 million of payables of
Ford's choice that are not currently due and payable to Visteon until
after March 31, 2005 for shipments received into Ford plants; and
(b) Commencing with payables covered by Section 9.1(a) of the P&SA
associated with Components and tooling received from and after April
1, 2005, payment terms shall average 26 days after the applicable
entry date rather than 33 days. For payables associated with
Components and tooling received before April 1, 2005, the payment
terms shall remain at 33 days after the applicable entry date. If this
Agreement is terminated for any reason, then the payment terms for all
payables associated with Components and tooling received from and
after the Termination Date shall revert to the payment terms specified
in Section 9.1(a) of the P&SA.
4. Labor Reimbursement: For each Pay Period, Visteon's obligation to reimburse
Ford on the corresponding Pay Date pursuant to Section 7(i) (wages) of the HEAA
shall be reduced using the following formula:
Wages reimbursable for each Pay Period o 23.75% = Amount of reduction in
Visteon's reimbursement obligation
Where:
"Wages" means the elements of wages listed on Attachment B hereto. Nothing
herein contained shall be construed to change the definition of "wages" under
Section 7(i) of the HEAA, but the change to the definition of wages as described
in Attachment B is intended solely for the purpose of calculating the amount of
the discount.
"Pay Date" means each Friday following a Pay Period through the Termination
Date.
"Pay Period" means each week from Monday through Sunday commencing Monday,
February 21, 2005.
5. Profit Sharing. Notwithstanding anything to the contrary in Section 7(viii)
of the HEAA, beginning with profit sharing accrued during 2005 and payable in
2006, Visteon shall not be required to reimburse Ford for Ford profit sharing
payments made to the Ford hourly employees assigned to work at Visteon.
6. Visteon Commitments. In exchange for the actions to be taken by Ford as
outlined in the preceding four sections, Visteon shall undertake the following
actions commencing on the date hereof:
6.1 Visteon shall in accordance with the terms of the P&SA or any applicable
purchase orders or other written agreements between the parties:
(a) Provide an uninterrupted supply of Components to Ford in the
quantities, quality, specifications and timing required by
the applicable purchase orders;
(b) Supply all prototypes, design and engineering required for
Ford programs;
(c) Comply with the terms of existing agreements with Ford; and
(d) To the extent that the actions do not compromise Ford
production and program support, withdraw and not implement
its list of Potential Cost Improvement Actions dated
February 17, 2005 attached hereto as Attachment C.
6.2 Visteon shall meet its commitments to the UAW, as set forth in the existing
collective bargaining agreement or other written agreements binding on Visteon.
6.3 Visteon shall use its best efforts to quote competitive prices for New
Business to be produced at a Master Agreement Plant.
6.4 Visteon shall not request (a) any material cost surcharges for any of the
Components that are produced at the Plants; and (b) reimbursement for material
cost surcharges for Components that are produced at the Plants prior to the
Termination Date.
6.5 Without the consent of Ford which shall not be unreasonably withheld,
Visteon shall not sell, transfer, close or otherwise dispose of any assets at
the Plants except for the sale of inventory and disposal of obsolete equipment
in the ordinary course.
7. Term: Ford may terminate any one or all of its commitments under Sections 2,
3, 4 and 5 of this Agreement or this Agreement itself at any time on or after
January 1, 2006 by giving at least ten (10) business days' notice in advance to
Visteon. Visteon may terminate this Agreement at any time on or after January 1,
2006 by giving at least ten (10) business days' notice in advance to Ford. The
Master Equipment Bailment Agreement shall not be deemed terminated upon any
termination of this Agreement, but rather its termination shall be governed by
the terms specified therein.
8. Default
8.1. A party (a "Non-Defaulting Party") may give notice to the other party (the
"Defaulting Party"), upon occurrence of any of the following events, any one of
which, after the expiration of the applicable cure period if such default is not
cured by the end of such period, will be considered to be an "Event of Default":
(a) Default by a Party. Any default by the Defaulting Party in the
performance of any obligation or in the observance of any covenant or
agreement (i) in this Agreement, (ii) in the P&SA, or (iii) in the
Master Equipment Bailment Agreement, which default cannot be cured or
is not effectively cured after a period of 30 days after written
notice thereof has been given by the Non-Defaulting Party; provided
that if such default cannot be cured within 30 days, but can be cured
within 60 days, then if the Defaulting Party so requests, the
Defaulting Party shall have a reasonable period to cure the default
(not to exceed 60 days), during which period the Defaulting Party
shall at all times diligently pursue a cure;
(b) Termination of Existence Initiated by a Party. The Defaulting Party
commences any proceeding to wind up, dissolve, or otherwise terminate
its legal existence;
(c) Termination of Existence Initiated by Another Person. Any proceeding
is commenced against the Defaulting Party or any significant
subsidiary (as defined in Section 1-02(w) of Regulation S-X to the
Securities Act of 1933, as amended) (a "Significant Subsidiary") that
seeks or requires the winding up, dissolution, or other termination of
its legal existence, unless the proceeding is defended or contested in
good faith by the Defaulting Party or such Significant Subsidiary
within 30 days of the commencement of the proceeding in a manner that
stays it and such defense or contest is pursued diligently thereafter;
(d) Bankruptcy. Either (a) the Defaulting Party or any Significant
Subsidiary seeks relief by any proceedings of any nature under any
applicable laws for the relief of debtors; or (b) the institution
against the Defaulting Party or any Significant Subsidiary of a
proceeding under any applicable bankruptcy or similar law of any
jurisdiction in which the Defaulting Party or such Significant
Subsidiary carries on its business and thereafter continues unstayed
and is not dismissed within 60 days of the commencement of the
proceeding;
(e) Appointment of a Receiver. The appointment of a receiver,
receiver-manager, trustee, custodian or like officer for all or a
substantial part of the business or assets of the Defaulting Party or
any Significant Subsidiary, unless the appointment is defended or
contested in good faith by the Defaulting Party or such Significant
Subsidiary within 30 days of the commencement of the appointment in a
manner that stays the appointment and then only so long as such
defense or contest is pursued diligently thereafter; or
(f) Assignment for Benefit of Creditors. The Defaulting Party or any
Significant Subsidiary makes an assignment of a substantial part of
its assets for the benefit of its creditors. For the avoidance of
doubt, an assignment for the benefit of creditors does not include a
bona fide financing arrangement, whether secured or unsecured, entered
into with a third party.
8.2. Upon the occurrence of an Event of Default, the Non-Defaulting Party may
terminate this Agreement, in whole or in part, and any such termination shall
not be deemed a waiver or release of, or otherwise prejudice or affect, any
rights, remedies or claims, whether for damages or otherwise, which the
Non-Defaulting Party may then possess under this Agreement or which arise as a
result of such termination.
8.3 The provisions of this Section 8 are without prejudice to any other rights
or remedies either party may have by reason of the default of the other party
under this or any other agreement between the parties. Nothing in this Agreement
shall be construed to extend the time period to cure a default under any other
agreement between the parties.
9. Notices. All notices and other communications required or permitted hereunder
shall be in writing and shall be deemed to have been duly given (a) when
delivered, if sent by first class mail, (b) when delivered, if delivered
personally, (c) when delivered, if sent by telephonic facsimile, or (d) on the
second following business day, if sent by overnight mail or overnight courier,
in each case to the parties at the following addresses (or at such other
addresses as shall be specified by like notice);
If to Visteon:
Visteon Corporation
Xxx Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx Xxxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
If to Ford:
Ford Motor Company
Office of the Secretary
One American Road
00xx Xxxxx Xxxxx Xxxxxxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
The parties by notice hereunder may designate other addresses to which notices
will be sent.
10. GENERAL PROVISIONS
10.1 No Agency. This Agreement does not constitute either party the agent or
legal representative of the other party. Neither party is authorized to create
any obligation on behalf of the other party.
10.2 Subsidiaries and Affiliates. Subsidiaries and affiliates of Ford and
Visteon are bound by the provisions herein to the extent that they are bound by
the P&SA.
10.3 Amendments. No amendment to this Agreement will be binding upon either
party unless it is in writing and is signed by a duly authorized representative
of each party. Except as specifically modified herein, the P&SA and the HEAA
shall remain in full force and effect. In the event of a conflict between the
terms of the Master Equipment Bailment Agreement and this Agreement, the terms
of the Master Equipment Bailment Agreement shall apply.
10.4 Assignments. This Agreement shall be binding upon and inure to the benefit
of the parties, and their respective successors and permitted assigns, but no
rights, interests or obligations of either party herein may be assigned without
the prior written consent of the other, which consent shall not be unreasonably
withheld.
10.5 Severability. If any provision of this Agreement, or portion thereof, is
invalid or unenforceable under any statute, regulation, ordinance, executive
order or other rule of law, such provision, or portion thereof, shall be deemed
reformed or deleted, but only to the extent necessary to comply with such
statute, regulation, ordinance, order or rule, and the remaining provisions of
this Agreement shall remain in full force and effect.
10.6 Governing Law. This Agreement will be construed and enforced in accordance
with the laws of the State of Michigan, excluding its conflict of laws rules.
Each party consents, for purposes of enforcing this Agreement, to personal
jurisdiction, service of process and venue in any state or federal court within
the State of Michigan having jurisdiction over the subject matter.
10.7 Disputes. If a dispute arises between the parties relating to this
Agreement, the following shall be the sole and exclusive procedure for enforcing
the terms hereof and for seeking relief, including but not limited to damages,
hereunder; provided, however, that a party may seek injunctive relief from a
court where appropriate solely for the purpose of maintaining the status quo
while this procedure is being followed:
(a) The parties promptly shall hold a meeting of senior managers of each
party who have decision-making authority to attempt in good faith to
negotiate a mutually satisfactory resolution of the dispute; provided,
however, that no party shall be under any obligation whatsoever to
reach, accept or agree to any such resolution; provided further, 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.
(b) If the parties are unable to negotiate a mutually satisfactory
resolution as provided above, any party may so notify the other. In
that event, the parties agree to participate in good faith in
mediation of the dispute. Such mediation shall conclude no later than
forty-five (45) days from the date that the mediator is appointed. If
the parties are not successful in resolving the dispute through
mediation, then the parties agree to submit the matter to binding
arbitration before a sole arbitrator in accordance with the CPR Rules
for Non-Administered Arbitration. Within five business days after the
selection of the arbitrator, each party shall submit its requested
relief to the other party and to the arbitrator with a view toward
settling the matter prior to commencement of discovery. If no
settlement is reached, then discovery shall proceed. Upon the
conclusion of discovery, each party shall again submit to the
arbitrator its requested relief (which may be modified from the
initial submission) and the arbitrator shall select only the entire
requested relief submitted by one party or the other, as the
arbitrator deems most appropriate. The arbitrator shall not select one
party's requested relief as to certain claims or counterclaims and the
other party's requested relief as to other claims or counterclaims.
Rather, the arbitrator must only select one or the other party's
entire requested relief on all of the asserted claims and
counterclaims, and the arbitrator will enter a final ruling that
adopts in whole such requested relief. The arbitrator will limit
his/her final ruling to selecting the entire requested relief he/she
considers the most appropriate from those submitted by the parties.
(c) Mediation and, if necessary, arbitration shall take place in the City
of Dearborn, Michigan unless the parties agree otherwise or the
mediator or the arbitrator selected by the parties orders otherwise.
Punitive or exemplary damages shall not be awarded. This clause is
subject to the Federal Arbitration Act, 28 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 may be entered by
any court having jurisdiction.
10.8 Counterparts. This Agreement may be executed by the parties in separate
counterparts, each of which when so executed and delivered will be an original,
but all such counterparts will together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their authorized representatives as of the date first above
written.
FORD MOTOR COMPANY VISTEON CORPORATION
By: /s/ Xxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxx
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Xxx X. Xxxxxxx Xxxxx X. Xxxxxx
Title: Executive Vice President and Title: Executive Vice President and
Chief Financial Officer Chief Financial Officer
Date: March 10, 2005 Date: March 10, 2005
