Contribution Agreement Dated As of September 12, 2005

CONTRIBUTION AGREEMENT


dated as of


September 12, 2005


between


VISTEON CORPORATION


and


VFH HOLDINGS, INC.


TABLE OF CONTENTS


PAGE
----
ARTICLE 1
DEFINITIONS


Section 1.01. Definitions............................................. 2 Section 1.02. Other Definitional and Interpretative Provisions........ 11


ARTICLE 2
CONTRIBUTION


Section 2.01. Contribution............................................ 12 Section 2.02. Excluded Assets......................................... 15 Section 2.03. Assumed Liabilities..................................... 17 Section 2.04. Visteon Retained Liabilities............................ 17 Section 2.05. Transfer or Assignment of Contributed Contracts and
Rights.................................................. 20 Section 2.06. Closing................................................. 20 Section 2.07. Deliveries at Closing................................... 21


ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF VISTEON


Section 3.01. Corporate Existence and Power........................... 23 Section 3.02. Corporate Authorization................................. 23 Section 3.03. Governmental Authorization.............................. 24 Section 3.04. Noncontravention........................................ 24 Section 3.05. Statement of Assets; Financial Statements............... 24 Section 3.06. Absence of Certain Changes.............................. 25 Section 3.07. Material Contracts...................................... 26 Section 3.08. Litigation.............................................. 28 Section 3.09. Compliance with Laws and Court Orders................... 28 Section 3.10. Properties.............................................. 28 Section 3.11. Sufficiency of and Title to the Contributed Assets...... 29 Section 3.12. Products................................................ 30 Section 3.13. Intellectual Property................................... 30 Section 3.14. Customs................................................. 32 Section 3.15. Licenses and Permits.................................... 32 Section 3.16. Inventories............................................. 33 Section 3.17. Taxes................................................... 33 Section 3.18. ERISA Representations................................... 33 Section 3.19. Employees............................................... 35 Section 3.20. Labor Matters........................................... 35 Section 3.21. Environmental Compliance................................ 36


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---- Section 3.22. Finders' Fees........................................... 37 Section 3.23. No Other Representations or Warranties.................. 38


ARTICLE 4
COVENANTS OF VISTEON


Section 4.01. Conduct of the Business................................. 38 Section 4.02. Formation of Company Subsidiaries Prior to Closing...... 41 Section 4.03. Delivery of Final Statement of Assets................... 41 Section 4.04. Confidentiality......................................... 41 Section 4.05. Notices of Certain Events............................... 41 Section 4.06. Employee Matters........................................ 42 Section 4.07. Title Insurance and Surveys............................. 42


ARTICLE 5
COVENANTS OF THE COMPANY AND VISTEON


Section 5.01. Commercially Reasonable Efforts; Further Assurances..... 43 Section 5.02. Certain Filings......................................... 43 Section 5.03. Software License Fees................................... 43 Section 5.04. Access after Closing.................................... 44 Section 5.05. Public Announcements.................................... 45 Section 5.06. Salaried Employee Leasing............................... 45 Section 5.07. Mexican Assets.......................................... 45 Section 5.08. Agreement with respect to Certain Shared-Use Offsite
Tooling................................................. 46


ARTICLE 6
TAX MATTERS


Section 6.01. Allocation of Consideration............................. 46 Section 6.02. Filing of Returns and Payment of Taxes.................. 47 Section 6.03. Refunds and Credits..................................... 47 Section 6.04. Property Taxes.......................................... 48 Section 6.05. Transfer Taxes.......................................... 48 Section 6.06. Cooperation............................................. 48


ARTICLE 7
CONDITIONS TO CLOSING


Section 7.01. Conditions to Obligations of the Company and Visteon.... 49 Section 7.02. Conditions to Obligation of the Company................. 49 Section 7.03. Condition to Obligation of Visteon...................... 51


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ARTICLE 8
SURVIVAL; INDEMNIFICATION


Section 8.01. Survival................................................ 51 Section 8.02. Indemnification......................................... 51 Section 8.03. Procedures.............................................. 52 Section 8.04. Mitigation.............................................. 54 Section 8.05. Calculation of Losses................................... 54 Section 8.06. No Consequential Damages................................ 55 Section 8.07. Exclusive Remedy........................................ 55 Section 8.08. No Double Recovery...................................... 55


ARTICLE 9
TERMINATION


Section 9.01. Grounds for Termination................................. 56 Section 9.02. Effect of Termination................................... 56


ARTICLE 10
MISCELLANEOUS


Section 10.01. Notices................................................. 57 Section 10.02. Amendments and Waivers.................................. 58 Section 10.03. Expenses................................................ 59 Section 10.04. Successors and Assigns.................................. 59 Section 10.05. Governing Law........................................... 59 Section 10.06. Dispute Resolution...................................... 59 Section 10.07. Jurisdiction............................................ 60 Section 10.08. WAIVER OF JURY TRIAL.................................... 61 Section 10.09. Counterparts; Effectiveness; Third Party Beneficiaries.. 61 Section 10.10. Entire Agreement........................................ 61 Section 10.11. Bulk Sales Laws......................................... 61 Section 10.12. Severability............................................ 61 Section 10.13. Specific Performance.................................... 61


Exhibit A Assignment and Assumption Agreement Exhibit B Bill of Sale Exhibit C Company-Visteon Purchase and Supply Agreement Exhibit D Intellectual Property Contribution Agreement Exhibit E Master Services Agreement Exhibit F Mexico Asset Purchase Agreements Exhibit G Software License and Contribution Agreement Exhibit H Visteon-Company Purchase and Supply Agreement Exhibit I Visteon Hourly Employee Lease Agreement Exhibit J Visteon Salaried Employee Lease Agreement Exhibit K VPAC Agreement Exhibit L VTC Agreement


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CONTRIBUTION AGREEMENT


CONTRIBUTION AGREEMENT (this "AGREEMENT") dated as of September 12, 2005 between Visteon Corporation, a Delaware corporation ("VISTEON"), and VFH Holdings, Inc., a Delaware corporation (the "COMPANY").


WITNESSETH:


WHEREAS, Visteon and its Affiliates (as defined below) conduct the Business (as defined below);


WHEREAS, Visteon formed the Company pursuant to the Delaware General Corporation Law by filing the Certificate of Incorporation of the Company with the office of the Secretary of State of the State of Delaware on July 15, 2005;


WHEREAS, Ford Motor Company, a Delaware corporation ("FORD"), and Visteon are parties to a Master Agreement (the "MASTER AGREEMENT") dated as of the date hereof pursuant to which, among other things, Visteon has agreed to enter into this Agreement with the Company and to consummate, subject to the terms and conditions set forth herein, the contribution of certain assets related to the Business as set forth herein to one or more newly-formed, wholly-owned Subsidiaries of the Company and the assumption by the Company of certain liabilities related to the Business as set forth herein; and


WHEREAS, Ford and Visteon have entered into, concurrently with the execution and delivery of this Agreement by Visteon and the Company, (i) a Visteon "B" Purchase Agreement (the "VISTEON "B" PURCHASE AGREEMENT") pursuant to which, among other things, Visteon has agreed to sell to Ford, and Ford has agreed to purchase from Visteon, on the day following the Closing Date (as defined below), all of the issued and outstanding shares of common stock of the Company (which shares may be held in a trust of which Ford or a Subsidiary of Ford is beneficiary) subject to the terms and conditions set forth therein and (ii) a Visteon "A" Transaction Agreement (the "VISTEON "A" TRANSACTION AGREEMENT") pursuant to which, among other things, and subject to the terms and conditions set forth therein Ford has agreed to provide financial assistance to Visteon in connection with the restructuring of its businesses, Visteon has agreed to issue to Ford a Warrant to purchase shares of common stock, par value $1.00 per share, of Visteon, and Ford and Visteon have agreed to enter into certain commercial arrangements or to make certain modifications to existing commercial arrangements between Ford and Visteon.


NOW THEREFORE, in consideration of the above premises and the mutual covenants herein contained, and for other good and valuable consideration given by each party hereto to the other, the sufficiency and receipt of which are


hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:


ARTICLE 1
DEFINITIONS


Section 1.01. Definitions. (a) The following terms, as used herein, have the following meanings:


"AFFILIATE" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such other Person. For the purpose of this definition, the term "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as used with respect to any Person, means having the right to elect a majority of the board of directors or other comparable body responsible for management and direction of a Person, or otherwise having, directly or indirectly, the power to direct or cause the direction of the management and policies of such Person, by contract or by virtue of share ownership. For the avoidance of doubt, from and after the consummation of the closing under the Visteon "B" Purchase Agreement, Ford shall be deemed to be an Affiliate of the Company.


"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and Assumption Agreement substantially in the form of Exhibit A hereto.


"ASSUMED ENVIRONMENTAL LIABILITIES" has the meaning ascribed to such term in the Visteon "B" Purchase Agreement.


"BILL OF SALE" means the Bill of Sale substantially in the form of Exhibit B hereto.


"BUSINESS" means the operations (including assembly, manufacturing, engineering, testing, technical, product development, independent aftermarket, service, sales and administrative operations) conducted by Visteon and its Affiliates at the Plants, together with all assets and properties listed on Schedule 2.01(ii)(B) associated with the engineering, testing, technical, product development, sales and administrative operations that primarily support the operations conducted by Visteon and its Affiliates at the Plants; provided that the operations at the Visteon Technical Center and the Visteon Product Assurance Center in Dearborn, Michigan shall only be included in the Business to the extent that they support the operations at the other Plants.


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"BUSINESS DAY" means a day, other than Saturday, Sunday or other day on which commercial banks in Detroit, Michigan are authorized or required by law to close.


"CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and any rules or regulations promulgated thereunder.


"CLOSING DATE" means the date of the Closing.


"COFECO" means the Comision Federal de Competencia (Federal Antitrust Commission) of Mexico.


"COMPANY-VISTEON PURCHASE AND SUPPLY AGREEMENT" means the Purchase and Supply Agreement Regarding Sales of Components from VFH Holdings, LLC to Visteon substantially in the form of Exhibit C hereto.


"CONFIDENTIALITY AGREEMENT" means the Confidentiality Agreement between Ford and Visteon dated October 1, 2004, as extended.


"CONTRIBUTION AGREEMENT TRANSACTION DOCUMENTS" means:


(i) this Agreement;


(ii) the Assignment and Assumption Agreement;


(iii) the Bill of Sale;


(iv) the Company-Visteon Purchase and Supply Agreement;


(v) the Intellectual Property Contribution Agreement;


(vi) the Master Services Agreement;


(vii) the Mexico Asset Purchase Agreements;


(viii) the Software License and Contribution Agreement;


(ix) the Visteon-Company Purchase and Supply Agreement;


(x) the Visteon Hourly Employee Lease Agreement;


(xi) the Visteon Salaried Employee Lease Agreement;


(xii) the VPAC Agreement;


(xiii) the VTC Agreement; and


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(xiv) any and all other agreements and documents required to be
delivered by any party hereto prior to or at Closing pursuant to the terms
of this Agreement.


"DISCLOSURE SCHEDULE" means the disclosure schedule delivered by Visteon to the Company on the date hereof as attached hereto.


"ENVIRONMENTAL LAWS" means any federal, state, local or foreign law (including common law), treaty, judicial decision, regulation, rule, judgment, order, decree, injunction, permit or governmental restriction or any agreement with any Governmental Authority or other third party, whether now or hereafter in effect, relating to the environment, human health and safety or to pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substances, wastes or materials.


"ENVIRONMENTAL LIABILITIES" means any and all Liabilities arising in connection with or in any way relating to the Business (as currently or previously conducted), the Contributed Assets or any activities or operations occurring or conducted at the Contributed Real Property (including offsite disposal), which (i) arise under or relate to any Environmental Law and (ii) relate to actions occurring or conditions existing on or prior to the Closing Date (including any matter disclosed or required to be disclosed in Section 3.21 of the Disclosure Schedule).


"ENVIRONMENTAL PERMITS" means all permits, licenses, franchises, certificates, approvals and other similar authorizations of Governmental Authorities relating to or required by Environmental Laws and affecting, or relating in any way to, the Business.


"ERISA AFFILIATE" of any entity means any other entity which, together with such entity, would be treated as a single employer under Section 414 of the Code.


"GAAP" means generally accepted accounting principles in the United States.


"GOVERNMENTAL AUTHORITY" means any court, administrative agency or commission or other federal, state, local, foreign or supranational governmental or regulatory authority, agency, body, instrumentality or official.


"HAZARDOUS SUBSTANCES" means any pollutant, contaminant, waste or chemical or any toxic, radioactive, ignitable corrosive, reactive or otherwise hazardous substance, waste or material or any substance, waste or material having any constituent elements displaying any of the foregoing characteristics including petroleum, its derivatives, by-products and other hydrocarbons, and any substance, waste or material regulated under any Environmental Law.


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"INDEBTEDNESS" means, with respect to any Person, without duplication, (i) all obligations of such Person for borrowed money, or with respect to deposits or advances of any kind, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (iii) all obligations of such Person upon which interest charges are customarily paid (other than trade payables incurred in the ordinary course of business consistent with past practices), (iv) all obligations evidenced by any securitization or factoring arrangements, (v) all obligations of such Person under conditional sale or other title retention agreements relating to any property purchased by such Person, (vi) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding obligations of such Person to suppliers for raw materials, inventory, services and supplies incurred in the ordinary course of business consistent with past practices), (vii) all lease obligations of such Person capitalized on the books and records of such Person in accordance with GAAP, (viii) all obligations of others secured by a Lien on property or assets owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (ix) all obligations of such Person under interest rate, currency or commodity derivatives or hedging transactions, (x) all letters of credit or performance bonds issued for the account of such Person (excluding letters of credit issued for the benefit of suppliers to support accounts payable to suppliers incurred in the ordinary course of business consistent with past practices) and (xi) all guarantees and arrangements having the economic effect of a guarantee of such Person of any Indebtedness of any other Person.


"INTELLECTUAL PROPERTY CONTRIBUTION AGREEMENT" means the Intellectual Property Contribution Agreement substantially in the form of Exhibit D hereto.


"INTELLECTUAL PROPERTY RIGHTS" means all worldwide (i) inventions, whether or not patentable; (ii) patents and patent applications; (iii) trademarks, service marks, trade dress, logos, Internet domain names and trade names, whether or not registered, and all goodwill associated therewith; (iv) rights of publicity and other rights to use the names and likeness of individuals; (v) copyrights and related rights, whether or not registered; (vi) mask works; (vii) computer software, data, databases, files, and documentation and other materials related thereto; (viii) trade secrets, know-how and confidential, technical and business information, including product design and proprietary technology, processes and formulae; (ix) all rights to sue or recover and retain damages and costs and attorneys' fees for past, present and future infringement or misappropriation of any of the foregoing; and (x) any other similar type of proprietary intellectual property right.


"KNOWLEDGE" as it applies to the knowledge of Visteon means the actual knowledge after due inquiry of the individuals identified on Schedule 1.01(a).


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"LIABILITIES" means liabilities, obligations or commitments of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise.


"LICENSED INTELLECTUAL PROPERTY RIGHTS" means all Intellectual Property Rights owned by a third party and licensed or sublicensed to Visteon or an Affiliate of Visteon and held for use or used in the conduct of or associated with the Business.


"LIEN" means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, covenant, transfer restriction, right of way, easement, servitude, option, lease, license, encroachment, zoning, land use or similar requirement or other encumbrance or exception, defect, title defect or other adverse claim, of any kind in respect of such property or asset. For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any property or asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset.


"MASTER SERVICES AGREEMENT" means the Master Services Agreement substantially in the form of Exhibit E hereto.


"MASTER TRANSFER AGREEMENT" means the Master Transfer Agreement dated as of March 30, 2000 between Visteon and Ford.


"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the condition (financial or otherwise), business, assets or results of operations of the Business (taken as a whole) or (ii) the ability of Visteon to perform its obligations under this Agreement or to consummate the transactions contemplated by this Agreement, other than, in each case of clauses (i) and (ii), an effect to the extent resulting from any one or more of the following: (A) any change in the United States or foreign economies or securities or financial markets in general; (B) any change that generally affects any industry in which the Business competes, including changes in the price of energy, supplies and raw materials; (C) any change arising in connection with hostilities, acts of war, sabotage or terrorism or military actions or any material escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing or underway as of the date hereof (but only to the extent not disproportionately impacting or affecting the Business); (D) any volume reductions in Ford's business with Visteon; or (E) the loss of customers, suppliers or employees resulting from the public announcement of this Agreement, compliance with the terms of this Agreement or the consummation of the transactions contemplated by this Agreement.


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"MEXICO ASSET PURCHASE AGREEMENTS" means each of the Mexico Asset Purchase Agreements substantially in the forms of Exhibit F hereto.


"MOU" means the Memorandum of Understanding dated as of May 24, 2005 between Ford and Visteon.


"1934 ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


"OWNED INTELLECTUAL PROPERTY RIGHTS" means all Intellectual Property Rights owned by Visteon or an Affiliate of Visteon and held for use or used in the conduct of or associated with the Business.


"PERMITTED LIENS" means (i) all defects, exceptions, restrictions, easements, rights of way and encumbrances (other than (A) mechanics', carriers', workers', repairers' or other like Liens which shall only be "Permitted Liens" to the extent covered by clause (iii) of this definition, and (B) any tax warrants, lawsuits and financing statements) to the extent disclosed in title commitments issued by Lawyers Title Insurance Corporation or certificates of property status issued by the public registries in Mexico, in each case which have been made available to Ford prior to the date hereof; (ii) statutory Liens for current taxes, assessments or other governmental charges which are not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings; (iii) mechanics', carriers', workers', repairers' or other like Liens arising or incurred in the ordinary course of business which are not yet due and payable or which are being contested in good faith by appropriate proceedings; (iv) zoning, entitlement and other land use and environmental regulations by any Governmental Authority provided that such regulations have not been violated; (v) title of a lessor under a capital or operating lease disclosed on Section 3.07(a) of the Disclosure Schedule; (vi) such other imperfections in title, charges, easements, restrictions and encumbrances not securing any monetary obligation of record as of the date hereof which do not materially detract from the value or materially interfere with the present use of the property or asset to which they relate; (vii) with respect to Visteon and its Affiliates, any Liens securing obligations under the Secured Promissory Note (as defined in the Master Agreement); and (viii) any Liens existing on the Spin-Off Date.


"PERSON" means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.


"PLANTS" means each of the following plants:


(i) Nashville, Tulsa, Lebanon Distribution Warehouse, Autovidrio,
VCPS-D Lab, and Glass Systems;


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(ii) Sterling I and II and Sterling Test Labs;


(iii) Rawsonville, including GTC;


(iv) Ypsilanti;


(v) Milan;


(vi) Monroe;


(vii) Indianapolis;


(viii) Chesterfield Foam;


(ix) Utica;


(x) Sandusky and Bellevue lighting service plant;


(xi) Saline;


(xii) Sheldon Road (excluding the Crow Property);


(xiii) Kansas City VRAP;


(xiv) El Jarudo;


(xv) Lamosa I and II; and


(xvi) Visteon Technical Center and Visteon Product Assurance Center.


"PRE-CLOSING TAX PERIOD" means any Tax period (or portion thereof) ending on or before the date of consummation of the closing under the Visteon "B" Purchase Agreement.


"RELATED PARTY" means, with respect to Visteon or any of its Affiliates: (i) any Person directly or indirectly owning, controlling or holding with power to vote, 5% or more of the outstanding voting securities of Visteon or any of its Affiliates; (ii) any Person 5% or more of whose outst ...