EXHIBIT 10.2
MASTER EQUIPMENT BAILMENT AGREEMENT
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This Master Equipment Bailment 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 herein referred to as a
"party" and collectively the "parties."
R E C I T A L S
A. Pursuant to that certain Funding Agreement dated as of the date
hereof, Ford has, among other matters, agreed to acquire and pay for certain
Equipment (as defined below) associated with the production of Components for
Ford at the Plants.
B. This Agreement establishes the terms and conditions under which Ford
will loan such Equipment to Visteon to be held and used in accordance with this
Agreement. The loan of the Equipment shall be deemed to be a bailment.
The parties agree as follows:
1. Definitions: The following capitalized terms shall have the meanings
specified below unless otherwise specifically stated.
"Approved Capital Expenditure" means the following Capital Expenditures:
a. Capital Expenditures for Equipment listed on Exhibit A,
each of which represents a Capital Expenditure that was
committed by Visteon before January 1, 2005 where less
than one-half of the full amount of the Project was paid
as of January 1, 2005; and
b. Capital Expenditures for Equipment where the Capital
Expenditure has not yet been committed by Visteon and
which is subsequently approved in writing by Ford's
Executive Director, Global FM&SP Purchasing.
"Capital Expenditure" includes spending for Equipment that would be
carried on books of account as assets in accordance with United States
GAAP together with associated capitalized spending for installation.
Capital Expenditures may include expenditures for replacements of
Equipment, but will cover repairs only if title to the Equipment
undergoing the repair is transferred to Ford.
"commit" or "committed" or "commitment" refers to approved spending
related to an entire Project involving one or more purchase orders
between Visteon and an equipment supplier for the purchase of Equipment
related to a Ford product program.
"Components" has the meaning specified in the P&SA.
"Equipment" means the assets covered by this Agreement that are not
currently owned by Visteon, which shall include only machinery,
equipment, tooling, and fixtures that do not constitute real property,
and associated software, accessories and other assets that meet the
following criteria and otherwise meet the requirements for Ford to pay
for and acquire as provided in this Agreement:
a. They will be used primarily for the manufacture of Components,
unless otherwise agreed in writing by Ford; and
b. They will be installed in a Plant.
For the avoidance of doubt, the term "Equipment" does not include
tooling purchased by Ford and provided to Visteon in the ordinary
course of business.
"P&SA" means that certain Purchase and Supply Agreement dated as of
December 19, 2003 between Ford and Visteon.
"Plants" means the Visteon manufacturing facilities listed on Exhibit B
hereto.
"Project" refers to a group of Capital Expenditures that relate to a
single spending project designed to facilitate Visteon's manufacture of
a Component or group of related Components to Ford.
2. Purchase of Equipment: Upon Visteon's request, Ford will purchase Equipment
on the following terms:
2.1 (a) For Approved Capital Expenditures that are not listed on Exhibit
A, Ford will select the supplier and negotiate the price and project
detail with the supplier. At Ford's request and (subject to Section
2.1(b)) at Visteon's expense, Visteon will assist Ford with the
procurement of the Equipment. Such assistance shall include, without
limitation, identifying the supplier, negotiating the price and
project detail with the supplier and providing reasonable and
customary engineering and other expertise necessary or desirable to
assure that the supplier is capable of performing the work and that
the statement of work and specifications for the Equipment are
adequate. Ford (or its designee) and the supplier will enter into a
purchase order on terms specified by Ford. Visteon will then manage
the procurement of the Equipment and arrange and be responsible for
its proper installation.
(b) As Equipment for those Approved Capital Expenditures contemplated
by Section 2.1(a) above is received by Visteon, Visteon shall
promptly report to Ford its receipt and confirm that the payment was
properly due and payable (i.e., the work for which the payment was
due had been performed in accordance with the supply contract and the
equipment has proved out in accordance with Ford's requirements). At
Ford's request, Visteon shall provide appropriate supporting
documentation regarding its conclusion that the payment was properly
due and payable no later than ten (10) business days before the
payment is due or, if later, five business days after Ford requests
the documentation. As invoices for such Approved Capital Expenditures
are received from the suppliers and Visteon has confirmed receipt and
prove out, Ford (or its designee) shall promptly pay amounts due
under such invoices as required by subsection 2.1(a).
(c) For Approved Capital Expenditures that are included in Projects
listed on Exhibit A, Visteon will manage the procurement of the
Equipment and arrange for its installation. Ford (or its designee)
will pay the unpaid balance of Approved Capital Expenditures up to
the amount specified in the purchase order for any such Approved
Capital Expenditures, excluding any amounts that become due to the
supplier as a result of Visteon's default under the purchase order.
(d) Ford (or its designee) will take title to the Equipment related
to Approved Capital Expenditures. Visteon will pay for any costs
under a purchase order that do not constitute Approved Capital
Expenditures and for any costs that exceed the amounts originally
specified in the applicable purchase order unless otherwise approved
by Ford; provided that if cancellation costs become due and payable
under the purchase order as a result of Ford's cancellation of a
program, then Ford shall be responsible for such cancellation costs
in accordance with Visteon's standard purchase order terms and
conditions, subject to audit.
(e) Ford may, at its option, require Visteon to assign to Ford or its
designee the applicable purchase order for any Approved Capital
Expenditures that are included in Projects listed on Exhibit A. Such
assignment shall be in the form attached hereto as Exhibit C. If Ford
elects to require such assignment, then invoicing and payment will be
handled as described in Section 2.1(b). If any such purchase order is
not or cannot be assigned to Ford, then as invoices for Approved
Capital Expenditures that are included in Projects listed on Exhibit
A are received from the suppliers, Visteon shall pay the invoices and
then shall promptly submit such invoices to Ford for reimbursement,
along with appropriate supporting documentation showing that payment
was properly due and payable (i.e., the work for which the payment
was due had been performed in accordance with the supply contract and
the equipment has proved out in accordance with Ford's requirements).
Ford shall promptly reimburse Visteon for any such invoices, but in
any event within 30 days of Ford's receipt of any such invoice. All
such invoices shall be sent to:
Ford Motor Company
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Executive Director, Global FM&SP Purchasing
Fax: (000) 000-0000
(f) With respect to all Approved Capital Expenditures that are
included in the Projects listed on Exhibit A, Visteon shall provide,
within five business days after signing this Agreement, the following
information:
(i) Project information including line item detail
(ii) In addition to the purchase orders, which have been provided
to Ford prior to signing this Agreement, all documentation associated
with the project that reflect the agreements between Visteon and the
supplier; e.g., the statement of work, sourcing agreement, etc.; and
(iii) If available, the request from Ford that generated the
project. With respect to all other Approved Capital Expenditures,
Visteon shall provide all available project information including line
item detail within fifteen (15) days after Ford's request.
(g) If a purchase order associated with a Capital Expenditure for
Equipment included in Projects listed on Exhibit A has terms and
conditions that vary from the Visteon Terms & Conditions (rev4/03)
such that, in Ford's reasonable opinion, the rights or obligations of
an assignee of such purchase order would be materially and adversely
different than those anticipated under the Visteon Terms &
Conditions, then the parties will discuss in good faith a means by
which to handle such purchase orders by entering into some other
mutually acceptable accommodation for achieving the intent of this
Agreement.
2.2 Ford (or its designee) shall hold title to all Equipment for which Ford (or
its designee) either partially or wholly funds the Approved Capital
Expenditures. If the applicable purchase order was entered into between Visteon
and the supplier, then Visteon shall transfer title to Ford (or its designee)
when the Equipment is delivered to the Plant or, if already delivered, within
five business days after the date of this Agreement.
2.3 Visteon shall complete all spending for Capital Expenditures for Projects at
any Plant where one-half or more of the full amount of the Project was paid as
of January 1, 2005.
3. Term: The effective date of this Agreement shall be January 1, 2005. Ford or
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 the other party.
Notwithstanding any termination of this Agreement, Ford or its designee shall
continue to pay for all Approved Capital Expenditures and acquire the related
Equipment.
4. Installation and Use of Equipment: Visteon shall be responsible for the
proper installation of the Equipment and, except to the extent included in the
Approved Capital Expenditure, shall bear the cost thereof. Visteon shall use the
Equipment only for production of Components. Unless consented to in writing by
Ford, which consent shall not be unreasonably withheld, the Equipment may not be
used for any other purpose. While the Equipment is in the possession or control
of Visteon, Visteon shall, at its cost and expense, (a) properly use and
maintain the Equipment in accordance with its current internal preventive
maintenance policies and the instructions provided by the manufacturer of the
Equipment, including, without limitation the manufacturer's warranty and
preventive maintenance schedules and (b) keep it in good condition and repair.
5. Indemnification and Release:
(a) Visteon shall defend, indemnify and save harmless Ford, its subsidiaries,
its designees, and their respective officers, directors, agents and employees
(herein collectively called "Indemnitees") and hereby releases the Indemnitees
from and against any and all losses, damages, claims, actions, costs, and
expenses, including, but not limited to, reasonable and out-of-pocket fees and
expenses of legal counsel and expert witnesses, that may be imposed upon or
incurred by or asserted or entered against the Indemnitees, or any of them, by
reason of actual or alleged
(i) injury to or death of persons (including, without limitation,
any employee or employees of one or more of the Indemnitees or of
Visteon or of one or more of its contractors, subcontractors, vendors
or agents);
(ii) loss of or damage to the property of any person or legal
entity (including without limitation any property of any employee or
employees of one or more of the Indemnitees or of Visteon or of one or
more of its contractors, subcontractors, vendors or agents) or,
(iii) Violation of any law, ordinance or regulation of any
governmental authority (including, without limitation, the United
States of America or Mexico or any of their respective states or
localities) by Visteon or by any of its contractors, subcontractors,
vendors, agents or employees,
as a result of or arising out of or in connection with the testing, evaluation,
possession, installation, maintenance, repair, or use of the Equipment by or on
behalf of Visteon, or the condition thereof; provided, however, that the
foregoing agreement to indemnify and hold the Indemnitees harmless shall not be
applicable to the extent that any such loss, damage, claim, action, suit,
judgment, decree, order, cost, or expense are attributable to the sole
negligence or the willful or wanton misconduct of the Indemnitees. Visteon shall
promptly notify Ford of any event covered by this Paragraph of which Visteon has
actual notice, and the Indemnitees shall be entitled to participate in the
defense of any claim for expenses.
6. Return of Equipment: Upon Ford's request and at Visteon's expense, Visteon
promptly shall deliver without restriction any or all of the Equipment and all
related instructions and records to Ford, at Ford's option F.O.B. carrier
Visteon's plant or F.O.B. Ford's facility freight collect, properly packed and
marked in accordance with the requirements of the carrier and Ford. The
Equipment shall be returned in the same condition in which it was delivered to
Visteon, ordinary wear and tear excepted.
7. Title to the Equipment:
7.1 At all times title to the Equipment shall remain in Ford or its designee.
Visteon agrees to keep the Equipment free of all liens and encumbrances. Visteon
has no property rights or interest in the Equipment and may not grant any rights
or interest in such Equipment to a third party. Ford shall have the right to
enter Visteon's premises at reasonable times to inspect the Equipment and
Visteon's records with respect thereto.
7.2 Visteon authorizes Ford, at its option, to file UCC financing statement(s)
or similar notices for Equipment located in Mexico evidencing this bailment and
Ford's ownership of the Equipment.
8. Risk of Loss: Visteon shall bear the risk of loss of or damage to the
Equipment while it is in the possession or control of Visteon, including loss or
damage that occurs despite Visteon's exercise of reasonable care. Visteon shall
be responsible for any and all damage to the Equipment, whether caused by
accident or otherwise. In the event of any material damage to the Equipment,
Visteon shall notify Ford to that effect and follow such instructions as Ford
may provide with respect to repair or disposal of the Equipment. The Equipment
shall at all times be properly housed by Visteon and shall be marked "Property
of Ford Motor Company" by Visteon. Visteon agrees to advise Ford in writing as
to the location of the Equipment and shall not remove the Equipment from
Visteon's premises without the prior written consent of Ford.
9. Insurance: Visteon shall insure the Equipment against damage, loss and theft
and maintain insurance coverage and waive subrogation rights, all as provided in
Exhibit D to this Agreement.
10. Default
10.1. 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, or (ii) in the P&SA,
which default may not 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, then 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.
10.2. 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.
10.3 The provisions of this Section 10 are without prejudice to any other rights
or remedies either party may have by reason of the default of the other party
under this Agreement 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.
11. 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
With a copy to:
Ford Motor Company
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Executive Director, Global FM&SP Purchasing
Fax: (000) 000-0000
Notwithstanding the foregoing, invoices submitted by Visteon to Ford pursuant to
Section 2.2(b) hereof shall be sent as specified in Section 2.2(b).
The parties by notice hereunder may designate other addresses to which notices
will be sent.
12. Miscellaneous:
12.1 No Agency. This Agreement does not make 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.
12.2 Amendments and Conflicts. 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. In the event of a conflict between this Agreement
and the Funding Agreement, the terms of this Agreement shall control. Except as
specifically stated herein, nothing in this Agreement shall be construed to
amend or otherwise alter the responsibilities of the parties under any purchase
orders or other agreements between Ford (and its affiliates) and Visteon (and
its affiliates) for the purchase and supply of parts and components.
12.4 Assignments. This Agreement shall be binding upon and inure to the benefit
of the parties, and their respective successors and permitted assigns, but
Visteon may not assign this Agreement or delegate performance of any of its
obligations hereunder without the prior written consent of Ford. Ford may sell,
assign, transfer, or otherwise encumber any interest or right hereunder with
respect to the Equipment. No such action by Ford shall be interpreted as
releasing Visteon from any of its obligations as specified in this Agreement.
12.5 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.
12.6 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.
12.7 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.
12.8 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.
12.9 No Waiver: Failure by Ford to enforce any term, provision or condition
hereof, or to exercise any of its rights hereunder, shall not be construed as
thereafter waiving any such terms, provisions, conditions or rights. In no event
shall any course of dealing, custom or usage of trade modify, alter or
supplement any of the terms or provisions contained herein.
12.10 Right to Audit: (a) If requested by Ford, Visteon will permit Ford (which,
for purposes of this Section 12.10, includes its authorized representatives) to:
(i) Examine all pertinent documents, data and other information
relating to Visteon's obligations under this Agreement, any payment
made to Visteon or to any Equipment supplier or installer or any claim
by Visteon;
(ii) View the Equipment and any of Visteon's activities relating
to the Equipment; and
(iii) Audit any facility or process to determine compliance with
the requirements of this Agreement.
Any examination under this Section 12.10 will be conducted during
normal business hours and upon advance written notice to Visteon.
(b) If requested by Ford, Visteon will use its best efforts to permit
Ford to obtain from the subcontractors of, and suppliers to, Visteon
the information and permission to conduct the reviews specified in
Section 12.10, regardless of any other right Ford may have to that
information or facilities.
(c) Visteon will keep all relevant documents, data and other written
information for at least two years following the termination of this
Agreement.
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
